Additions to  Reserve 
Discussion Paper  

Warren Johnson  New Road Strategies     

Working Draft October 10, 2009 

Table of Contents

Introduction Objective Background 1. The Communal Nature of Reserve Land 2. Title to Reserve Lands 3. The Existence of the Indian Act Additions to Reserve A) ATR Policy B) ATR Process C) ATR Legislation 1. National ATR Legislation

3 4 4 5 6 7 10 10 13 14 15 16 17 18 18 19 20 20 22 23 24 27 27

2. Other Types of ATR 3. Surface Access 4. Ministerial Approval of Indian Act Sec 35 Interests 5. Ratification Procedures for Pre-Reserve Designations 6. Other “Housekeeping” Items. Regulatory Barriers 1. Resource Management 2. Land Management and Registry 3. Delegation Instruments and Ratification Thresholds 4. Environmental Management 5. Band Law Making Conclusion; Issues and Options

There are 584 First Nations in Canada with reserve land. This involves 3,049 reserves distributed nationally, totalling approximately 3.4 million hectares, an area about the size of Vancouver Island. Additions to reserve resulting from specific claims and treaty land entitlement settlements have the potential to more than double the reserve land base in Canada1. From a reserve land management perspective this represents a real challenge, as INAC’s capacity to discharge even the federal government’s basic responsibilities for reserve land management under the Indian Act has historically been very limited. Moreover, The Political Agreement between the Minister of Indian Affairs and Northern Development and the National Chief of the Assembly of First Nations in Relation to Specific Claims Reform states that: “While the Tribunal will, under the proposed Bill, only have jurisdiction to award monetary damages, the parties recognize the particular cultural, spiritual, social and economic significance to First Nations of the lands that have been lost. In situations where a First Nation seeks to re-acquire or replace lands that were the subject of a Specific Claim, the Minister will review with First Nations, policies and practices respecting additions to reserves with a view to ensuring that these policies and practices take into account the situation of bands to which the release provisions of the proposed Specific Claims Tribunal legislation apply. In particular, the Minister will provide priority to additions to reserve of lands affected by the consequences of the release provisions in the legislation or to lands required to replace them.” The efficient and effective transfer of land and additions to reserve resulting from legal agreements; specifically Treaty Land Entitlement (TLE) and the anticipated acceleration of specific claims settlement agreements, has been subject to comment by the Auditor General. As such, this is already one of Indian and Northern Affairs Canada’s key Report on Plans and Priorities (RPP) forward priorities and INAC has undertaken to review the ATR policy and process from this perspective as well2. Finally, on the advice of the National Aboriginal Economic Development Board, the new Federal Framework for Aboriginal Economic Development included the following among the principal barriers to Aboriginal economic development:3 Access to Lands and Resources – “The resolution of land claims and faster processes for additions to reserves are considered essential to economic progress. Government processes need to adapt to the speed of business”. The Legal and Regulatory Environment – “There is a pressing need to address barriers in the Indian Act and replace outdated regulations that impede economic development and investment, particularly on reserves”.                                                             
 This estimate was done at the time of the AFN/INAC Joint Initiative and ATR/Urban Reserve Task Force and is  some ten years old. It was based on claims then settled or accepted. For instance the Manitoba and Saskatchewan  TLE’s allow for the addition to reserve of 1.7 million hectares alone, and less than 50% of the claims submitted to  Canada to date have been settled. Better estimates may now be available.  2  2009‐2010 Report on Plans and Priorities – Lands Strategic Outcome, Page 23.  3  Federal Framework for Aboriginal Economic Development, Page 8. 

As a result, the Framework committed that the Government of Canada will “remove legislative and regulatory barriers that deter business development and modernize land management regimes to enhance the value of assets”. 4 In simple terms, it appears that the government is committed on the one hand to speeding up the additions to reserves (ATR) process, taking into account the situation of First Nations to which the release provisions of the Specific Claims Tribunal Act apply, while removing regulatory barriers to economic development on reserve on the other.

This discussion paper was commissioned as an overview of issues and options relating to improved ATR and reserve land management in Canada, to help animate discussions between First Nations and INAC in support of the above political and economic objectives. As such the views expressed are those of the author. While it is assumed that the immediate priority is to meet the undertakings of the Political Agreement to review with First Nations the policies and practices respecting additions to reserves (with a view to providing priority to additions to reserve of lands affected by the consequences of the release provisions in the Tribunal Act, or to lands required to replace them), this paper takes a broad approach to the subject. In doing so it includes a discussion of both ATR specific issues and Indian Act regulatory barriers/land modernization issues, given the significant potential overlaps which are evident between the two. The analysis presented here is without prejudice to the either the form or potential results of the dialogue between First Nations and INAC on these issues. The political commitments noted in the Introduction may be met through one or a series of processes; however, each should likely be informed of the broader ramifications of the issues involved. As a result, this analysis is presented more as a potential road map of the range of issues that may need to be considered in any process. It is hoped that this approach will help provide a context for not only an informed discussion of the specific issues, but also consideration of their potential packaging and sequencing.

Generally, the characteristics most commonly thought of in relation to reserve lands are the following:   reserve lands are held for the use and benefit of “the respective bands for which they were set apart”5; the aboriginal interest in reserve lands is: 1. inalienable except to the Crown; 2. sui generis or unique in its characteristics; 3. a right to exclusive use and occupation subject to limits; 4. a personal and usufructory right; and, 5. communal. the Crown holds underlying title in reserve lands; and, the default legal regime on reserve is the Indian Act (in the absence of self government).

 
4 5

 Federal Framework for Aboriginal Economic Development, Page 12/13.   Indian Act Section 18(1) 

These characteristics then will pervade any analysis of ATR and reserve land management. Three issues appear to be common and overriding; first, the communal nature of reserve land, second, the underlying title to reserve lands and, third, the continued existence of the Indian Act itself. Dealing with each in turn: 1. The Communal Nature of Reserve Lands Much criticism has been levelled in the recent period against the communal nature of reserve land and the lack of individual property rights on reserve. Some go so far as to call for the abandonment of the communal interest altogether, in favour of individual property holdings, calling the “reserve system” a failure. These criticisms ignore the modern and sophisticated practices in place off reserve, and throughout the world, for the creation of private (usufructory) interests in communal property and/or the regularization of traditional holdings, which were never given a chance to work on reserve. Indian reserve lands are held by the Government of Canada for the use and benefit of First Nations. As a result, Indian and Northern Affairs Canada (INAC) and First Nation governments are each responsible for managing different aspects of reserve lands and resources, with the rules and regulations for managing reserve lands set out in the Indian Act. These rules are antiquated and inadequate and serious gaps are evident throughout. They do, however, provide basic direction on allotting lawful possession of reserve land to a First Nations person (Certificate of Possession), designating and leasing reserve land to a non-band member or company (including a First Nation corporation) for business purposes, providing land use rights to local or other governments for projects such as roads, power lines, or pipelines, and registering interests. To quote the conclusions of one overview study6: a. Customary property rights may have been adequate when reserve populations were small and the reserves were largely isolated from the rest of society, but they are a shaky base for participating in a modern economy where boundaries need to be clearly defined, land may need to be transferred from one user to another in order to realize its value, and investors require security. Customary rights will eventually have to be formalized on many reserves…. b. Leases can work effectively to create tradable property rights…. c.In various circumstances, both leases and CPs have suffered from the uncertainty caused by the dual decision-making power of the Department of Indian Affairs and of band councils, often harming third parties who thought they had entered into valid agreements only to find them no longer enforceable. Transfer of decision-making power to band authorities…. may eventually resolve such problems….. Being aware of these and other problems, we do not present private property rights as a panacea for all the economic and social ills of native communities. Nonetheless, their intelligent application will help many reserve residents obtain better housing and business opportunities while remaining connected to their ancestral communities.


 Fraser Institute, Public Policy Sources Number 60, Individual Property Rights on Canadian Indian Reserves, Tom  Flanagan and Christopher Alcantara, August 2002. 

2. Title to Reserve Lands: Even setting aside questions of aboriginal title and historical treaties, the issue of Crown title to reserve lands and resources is an arcane subject with which few in Canada are familiar. The four initial provinces (Ontario, Quebec, Nova Scotia and New Brunswick) brought title to their lands and resources to Confederation such that the 1867 Constitution Act (Sec. 109) provides that public lands and resources belonged to the provincial governments, while the federal government had exclusive authority (Sec. 91-24) for “Indians and lands reserved for Indians”. These provinces understood that they held underlying title to reserve lands and understood reserves to be surface only, with reversion of surface title to them in the event of surrender. This was confirmed in a number of subsequent court decisions7. The result is the 1924 agreement between Ontario and Canada and similar later agreements with BC, New Brunswick and Nova Scotia to allow for the federal government to preserve the reversionary interest in reserve lands and resources surrendered to the Crown for the benefit of First Nations. The Ontario agreement covered all Reserve lands situated in Ontario (with special provisions for the Treaty 3 area) and provided that: 1) the federal government was empowered, upon a surrender by First Nations, to sell or dispose of Reserve lands surrendered and apply the proceeds for the purposes of the band; if a band no longer existed, or if lands were no longer required for the use of a band, the land reverted to the Province of Ontario; and, the federal government may manage reserve mineral rights, but the government revenue from mineral exploitation was to be shared by the federal government (for the benefit of the band) and the provincial government.

2) 3)

Meanwhile, the new Dominion had reserved title to Crown lands and resources in the rest of Canada to itself, giving rise to the Natural Resource Transfer Acts (NRTA’s) with the Prairie Provinces, which included direct reference to the Ontario agreement. Subsequent to this and through to the current period, individual provinces have entered into a variety of agreements with the federal government on these issues, both province-wide and on a reserve specific basis. While there is some danger of oversimplifying a very complex situation, especially as surface and subsurface interests may vary, the net cumulative current result of all of this, including later legislation and agreements is represented in Table 1, where major distinctions exist with respect to:    Quebec with neither a surface (reversionary) or subsurface (administration and revenue) agreement;    Newfoundland and PEI in a similar position in the Atlantic;   BC which reserves precious metals and maintains subsurface administration on behalf of First Nations; and,   The mix of mineral revenue sharing arrangements across provinces. 


 See for instance St. Catharines Milling and Lumber Co. v. R., (1887), 13 S.C.R. 577 

    Table 1  Reserve Title and Reversionary Interests by Province    B. C.    Underlying    federal title to  Reserve     Surrender   no   Reversion to  Province  federal b)  Mineral Title  provincial  Sub‐surface  Administration  50/50  Mineral  Revenues 
Notes:  a)

  provincial    no  provincial  federal  50/50 c)

  provincial    no  provincial  federal  fed.(FN) d)

  provincial    yes  provincial  provincial  provincial 

N.B./N.S. a) 
  federal     no  provincial  federal  fed.(FN) 

  provincial    yes  provincial  provincial  provincial 

by way of 1959 agreements for specified reserves  b) Treaty 8 only, excluding precious metals  c) for reserves created after 1930 NRTA, before federal, except for TLE surface only reserves.  d) by way of 1986 agreement  Any initiative with respect to either ATR or regulatory barriers must then contend with these circumstances and the resulting geographic mix of federal, provincial and First Nation interests. That is not to say that the situation is unworkable, especially where there is a will to make it so. Witness the effective operations of Indian Oil and Gas Canada with respect to reserve oil and gas exploitation; the successful use of ATR as part of the Marshall strategy; the tripartite Prairie Treaty Land Entitlement Agreements; and, the agreements between provinces, industry and First Nations facilitating resource development off reserve in traditional territories which are subject to title claims and/or the duty to consult. Having said that, the Supreme Court has determined that as long as they remain reserve lands, the federal government administers them and has exclusive legislative authority over them.8 3. The Existence of the Indian Act There has yet to be a full and lasting reconciliation of First Nations with the rest of Canada. “Canada had the goal and expectation that its indigenous peoples would eventually disappear as distinct communities as a result of dying out, intermarriage, migration to cities and cultural assimilation. Various policies were adopted to speed up this process; stripping aboriginal peoples of their lands; encouraging residential schooling of their children away from their home communities; restricting the practice of traditional culture, language and


  Derrickson v. Derrickson, [1986] 1 S.C.R. 285, Para. 21. 

religion; making cultural assimilation a condition of acquiring citizenship; and undermining their institutions.”9 While some progress has been made since the 1969 White Paper (notably with Treaty Land Entitlement and Specific Claims, and now the Tribunal, dealing with the issue of the two thirds of the original reserve land base which was no longer there10, the settlement of a number of Comprehensive Claim and Self Government agreements and the Statement of Apology on Residential Schools in 2008) as the Ipperwash Inquiry concluded, “The road to reconciliation may be long and difficult, but it is a road that all peoples, Aboriginal and non-Aboriginal must walk together”11. In the meantime, the majority of First Nations people remain with no modern expression of their historic treaties and their reserve lands managed under the Indian Act, a colonial instrument sustaining their political, psychological and economic isolation. In terms of land and resource management, it provides rules and regulations, in an antiquated and unfamiliar mix of Band and Ministerial authorities, on allotting lawful possession of reserve land to a First Nations person (Certificate of Possession), leasing reserve land to a non-band member or company for business purposes and/or providing land use rights to local or other governments for projects such as roads, power lines, or pipelines, and includes regulations for the exploitation of natural resources on reserve including timber, sand and gravel, and minerals (through surrenders and/or Ministerial permits). As a result, both replacement interests for third parties with existing interests in land being converted to reserve, and new interests being granted in existing reserves to promote economic and social development, must meet its exigencies and deal with its antiquated nature and obvious failings. This complicates life for reserve additions, which must meet these requirements in the process of transferring land to reserve status, for example by providing satisfactory replacement interests before the reserve is created (for which there is no provision in the Indian Act). First Nations have long rejected any changes in the Indian Act, however pragmatic their motivation – insisting rather on full reconciliation (witness the current call for Recognition and Implementation of First Nations Governments) - with some singular modern exceptions such as the Kamloops amendment12. This was aimed at allowing for designations rather than surrenders, in the light of the above title issues, and was the first time in Canadian history that First Nations had led an amendment to the Indian Act. At the same time, because of the lack of transparency, and unfamiliar and antiquated nature of the resulting federal/provincial – First Nation relationship, there is often little understanding and much confusion (if not open antagonism and suspicion) with this situation in the Canadian public and those in the local business and political communities with whom First Nations should otherwise be partnering. In this environment, which is too often negative and mistrustful, progress is slow and solutions are by definition second best. The implications are that:                                                             
 Ethnocultural Diversity in a Liberal State: Making Sense of the Canadian Model(s) , Will Kymlicka, Queens,     Couchiching Conference,  2007  10  This estimate was used by INAC in communications leading up to the Specific Claims Resolution Act, which  passed Parliament on November 4, 2003, but which was never proclaimed.  11  Sydney B. Linden, Commissioner, Report of the Ipperwash Inquiry, Volume 1, Page 691.  12  Bill C‐115, An Act to Amend the Indian Act – 1988, commonly referred to as the "Kamloops amendment." 

As noted above private property rights may not be a panacea but their intelligent application, respecting the communal nature of reserve lands and resources and giving modern expression to traditional practices, can do much to further First Nations socioeconomic development; the complexity of the title issues and views of the provinces will have to be accounted for directly, and special circumstances (such as that of Quebec) examined in the context of specific issues (the fact that this was not done during the AFN/INAC Joint Initiative contributed to the AFNQL withdrawing from the ATR Working Group); the lack of complete reconciliation and understanding will limit results and imply a continuing need for outreach, communications and education, recognizing the important role First Nations institutions can and are playing to build bridges; and, First Nations natural reluctance to improve the Indian Act will frame options within the context of the limitations of the Act and the potential for Federal/First Nation partnering on optional and/or sectoral self-government approaches.

The more recent period has witnessed some success in work on these issues, when First Nations interests have been respected and the work has been First Nation led/conducted in real partnership, including;  2001 improvements in the ATR policy as part of the AFN/INAC Joint Initiative and ssubsequent release of the joint AFN/INAC ATR communications toolkit.  2002 expansion of the First Nations Land Management Act to allow more individual First Nations (a rolling 30) to opt out of the Indian Act and enter into this sectoral selfgovernment arrangement for reserve land and resource management.  2004-2005 work with the National Aboriginal Lands Mangers Association (NALMA) to establish the new Reserve Land and Environment Management Program (RLEMP).  2005 passage of the First Nations Commercial and Industrial Development Act, the First Nations Oil and Gas and Money Management Act and the First Nations Fiscal and Statistical Management Act. Early in the above process, the department adopted an approach which is reflected in the current strategy for the Land Strategic Outcome of INAC. This strategy is focussed on: First Nations Governance over Lands and Resources — Work with interested First Nations to develop the necessary legislative tools and intergovernmental agreements to enable individual First Nations to assume governing authority and responsibility over their lands, resources and environment. Responsible Federal Stewardship — Support sound horizontal federal stewardship in those areas of responsibility remaining with the federal government including ATR’s and clarification of title. During the transition to First Nations governance, the first priority is always to invest in building First Nations institutions, capabilities and authorities, whereas ongoing risk assessment will determine where exceptional investments will be required in strengthening federal institutions, capabilities and authorities.

In the context of the recent political and economic commitments noted at the outset, the analysis contained in this paper assumes that this strategy continues to have currency both with INAC and First Nations.

Additions to Reserve
ATR broadly covers both additions to existing reserves and the creation of new ones. It is an exercise of the Royal Prerogative through an Order in Council (OIC) 13. An OIC is a notice of an administrative decision issued by the Governor General of Canada on the advice of Cabinet (Governor in Council – GIC). In the case of ATR’s this is done on the recommendation of the Minister of DIAND. The following sections provide a summary and update of issues identified with respect to the ATR policy, process and legislation.

A) ATR Policy
The existing ATR policy was clarified in 2001 as part of the AFN/INAC Joint Initiative, to create three categories of ATR; legal obligations, community additions and new reserves/other policy issues. The policy clarified that normal community additions and legal obligations will be given positive recommendation (subject to site specific criteria), while new reserves or proposals going beyond “normal” community growth requirements or legal obligations (raising other policy issues) will be restricted. 1. Legal Obligations: This category recognizes that Canada must fulfill its legal obligations to First Nations and will normally recommend reserve status for ATR proposals in this category. It addresses proposals that seek reserve status for land based on: a) specific claim settlement agreements which include ATR; b) court orders; or, c) legal reversions of former reserve land. Unless there is legal obligation to grant reserve status to a particular parcel of land, and subject to the land selection specifics of the settlement agreement, the site specific criteria of the ATR policy must be satisfied. 2. Community Additions: This category recognizes that there is a class of routine proposals seeking the addition of land to an existing reserve community (as opposed to the establishment of a new reserve) based on: a) normal growth requirements of the reserve community; b) natural geographic enhancements of the existing reserve land base; or, c) returns of unsold surrendered land to the existing reserve land base, where INAC will normally recommend reserve status (subject to site specific criteria). 3. New Reserves / Other Policy: This category covers all proposals which are not “Legal Obligations” or normal “Community Additions” proposals and where the policy is highly restrictive. The types of proposals covered under this category include: a) the establishment of new reserves  for social (e.g., residential, institutional) or commercial purposes,  resulting from provincial land offerings,                                                             
 In Canada, the royal prerogative refers to the rights, powers and privileges exercised by the Crown, usually the Governor General of Canada - 


 resulting from unsold surrendered land not within the service area of an existing reserve community,  for landless bands/communities, or  to relocate existing bands/communities outside existing reserve boundaries; b) additions to reserves or new reserve proposals resulting from legal obligations, (e.g., claims settlement agreements) where the proposal goes beyond the commitment in the relevant legal agreement (e.g., in terms of funding, land selection etc.); or, c) community addition proposals with unresolved questions of community need, funding source, etc. The site specific criteria referred to above include the need: to consult/respect the treaty and aboriginal rights of other First Nations that may be affected; for local consultations and (where relevant) negotiations (e.g.: land use, zoning, tax loss etc); to undertake environmental assessments; and, for good title and respect for existing third party interests. This then is the context for the federal government’s commitment to review the ATR policy with First Nations - in order to give priority to potential ATR’s resulting from lands purchased as a result of a Tribunal decision. Since Tribunal decisions do not create legal obligations for ATR and since such ATR’s could not be categorized as intended to meet normal community growth requirements, it is likely that this would necessitate the creation of a new policy category, potentially along the following lines: Tribunal Decisions: This category would cover ATR proposals resulting from lands purchased with compensation flowing from Tribunal decisions: a) where s.21(1) of the Act applies “for an unlawful disposition of all of the interests or rights of a claimant in or to land and the interests or rights have never been restored to the claimant, then all of the claimant’s interests in and rights to the land are released”; or, b) where the Tribunal decision is based on Canada’s breaching a lawful obligation to provide reserve lands. The two categories in a) and b) above appear to cover the areas in the Tribunal legislation specific to the desire to “re-acquire or replace lands that were the subject of a Specific Claim”. Given the undertaking in the Political Agreement to “provide priority to additions to reserve of lands affected by the consequences of the release provisions in the legislation or to lands required to replace them”, then it seems useful to define this class of ATR as a priority category, where INAC will normally recommend reserve status subject to site specific criteria and the need to agree on a policy respecting quantum and selection area criteria for this category of ATR (as discussed in Annex A). A second ATR policy issue, which has arisen since the last AFN/INAC Joint Review, is the need to agree on the definition of the concept of service area for existing reserves. As noted above, ATR proposals which are not legal obligations but are within the service area of an existing reserve can be processed much more expeditiously and are more likely to be accepted than those which are outside that area – since the latter effectively result in the creation of new reserves, with potential for significant incremental funding requirements. Moreover this concept

of service area is also used by the specific claims land selection policy and will have an impact on the approach to Tribunal decisions giving rise to ATR’s. While the concept of service area (within which local schooling and other social, economic and institutional infrastructure could be shared) would appear relatively straight forward, it is claimed that regional offices of INAC have had some difficulty with it, to the extent that some regions define this as anywhere within the province, while others define it as contiguous to the existing reserve (both of which are inconsistent with the policy intent). There may well be a communications if not a policy issue here which should be examined at an early stage. A third area, which has been subject to recurring ATR discussion, surrounds the issue of “economic” reserves. This issue originally arose in the context of requests for the creation of new reserves or additions to existing reserves for economic purposes. Since the Indian Act tax exemption is not seen by the federal government as an economic development incentive, economic reserves were seen to create a potentially unfair tax advantage, despite the limited real tax benefit involved. This issue then came forward again when First Nations and the federal and provincial governments used TLE and other claims settlements in the Prairies to allow reserve land selections anywhere in the province and/or in urban areas, resulting in a variety of urban and other economic and commercial reserve proposals in the mid 1990’s. Because of the spill over local economic benefits that was seen to flow from these ventures and the resulting support of both provincial and municipal leaders in Saskatchewan (and later in Manitoba) this strategy met with some success. This precedent then created pressure on INAC regions to liberalize the land selection area for other types of ATR (especially for economic purposes). This was directly considered as part of the 2001 improvements in the ATR policy done under the AFN/INAC Joint Initiative, resulting in; 1 the explicit inclusion of economic development as one of the legitimate “normal community growth” requirements for additions (as opposed to new reserves) which would be positively considered in the context of the new policy and 2 the use of the concept of service area for additions to existing reserves to allow more flexibility in land selection for community additions, although it now appears that there may be some confusion on this point (specifically or in relation to the definition of service area noted above) and some clarification is likely required. The final ATR policy area which has been identified from early exercises is the difficulty caused by the lack of an ability to formally define different types of reserves. Under the Indian Act and the ATR policy “a reserve is a reserve is a reserve”. As a result, the federal government has historically been very cautious in the ATR process, on the basis that any ATR can be used for residential purposes and could result in demands for infrastructure and programming, which might raise significant cost issues especially if the addition where to be located outside the “service area” of an existing reserve. An ability to define a reserve as other than for residential purposes might obviate this problem where there was an interest in promoting other types of reserve. This has been used in Specific Claim settlements to allow for a wider land selection area, with the legal undertaking that the new reserve land not be used for residential purposes included in the settlement agreement itself. Consistent with this, there was also some discussion in the AFN/INAC Joint Initiative of the use of ATR to create non-residential reserves within traditional areas, to protect land that

had special cultural, spiritual and social significance to First Nations, especially in the light of growing resource developments in historical treaty areas, but this issue was never pursued further.

B) ATR Process
The work of the AFN/INAC Joint Initiative resulted in a number of process improvements and new operational targets for processing all ATR’s which the department had difficulty achieving. Subsequent concerns over backlogs in TLE ATR’s were documented by the Auditor General. This finally resulted in a strong Ministerial commitment and enhanced resourcing, such that the Department has been able to convert over 315,000 acres to reserve status in the provinces of Saskatchewan and Manitoba since 2005, representing a 42 percent increase in land conversions in just three years.14 More intensive process improvement work has been undertaken recently, as outlined to the Commons Committee on Aboriginal Affairs and Northern Development on April 28, 200915:  We are poised to roll out a national additions to reserve tracking system, known as NATS, in the current fiscal year. NATS will greatly enhance the department's ability to plan and manage human resources and the various expenditures involved in the ATR process, such as for surveys and environmental assessments. The system will also address the data integrity issues the Auditor General expressed concern about, and it will provide for the consistent file structure the Auditor General recommended.  In addition, the entire ATR process has been mapped in detail to identify options to combine or eliminate steps and to gain any efficiencies that may be possible. At the beginning of the 2008-09 fiscal year, a service standard of 100 business days was established for phase three of the ATR process, the final stage undertaken in headquarters. Whereas there was some initial difficulty meeting the standard in the first quarter, it was met in the final three quarters and, on average, for the entire year.  Through discussions with regional officials and first nations, it became clear that one of the main difficulties in increasing the processing times is the lack of definition and structure around the front end of the ATR process—or phase one—that is, the part in which first nations select provincial crown land or acquire fee simple land they would like added to their reserve. To overcome this difficulty, the department partnered with the National Aboriginal Lands Managers Association, or NALMA, to talk to first nation and departmental practitioners across the country and to develop an approach to assist first nations with phase one. NALMA has recently recommended that first nations take a “diligent buyer” approach to land selection and acquisition and has produced a draft manual based on this approach, which will be finalized in the next few months and be distributed widely to first nations. We believe this will further decrease processing times and enable service standards to be established for phase two, which is the work the regional offices undertake.


 Opening Statement to the Standing Committee on Aboriginal Affairs and Northern Development, Treaty Land  Entitlement Obligations—Indian and Northern Affairs Canada, April 2009, Sheila Fraser FCA, Auditor General of  Canada.  15  Sara Filbee, Assistant Deputy Minister, Lands and Economic Development, Department of Indian Affairs and  Northern Development. 

Given the imminent release of the new ATR Toolkit for First Nations, the rest of this analysis of ATR focuses on potential legislative issues.

C) ATR Legislation
It was noted at the outset that ATR is an exercise in the Royal Prerogative, and as such is subject to policy discretion but not legislative oversight. However, at about the same time as the AFN/INAC Joint Review was working on the ATR policy clarification, optional claims implementation legislation was being put in place in Alberta, Saskatchewan and Manitoba16 to help expedite the extraordinary volume of ATR’s arising from TLE and Specific Claim Agreements. These two acts provide tools that significantly accelerate the ATR process and provide additional certainly to third party interests during the process. This legislation provides that, at the request of the relevant First Nation, ATR in those provinces flowing from claims agreements could be subject to:  Ministerial approval rather than requiring an OIC process;  a pre-reserve designation vote to facilitate replacement of third party interests; and,  the Minister issuing temporary permits recognizing existing third party interests. According to INAC, reserves created in accordance with the Royal Prerogative on average require another 6 to 12 months of additional processing (for OIC, designation votes, issuing replacement interests etc). 55% of the 250 ATR’s arising from the Prairie settlements since 2006 was processed in accordance with this legislation. However, all of the ATRs currently on the DIAND Manitoba TLE Year Two and Year Three Dashboard and most of the ATRs being processed in Saskatchewan are now proceeding in accordance with the legislation.

Table 2 Additions to Reserve By Policy Category by Region 2006-2009*
Legal   Obligations  Atlantic  4  Quebec  0  Ontario   4  Manitoba**  77  **  Saskatchewan 165  Alberta**  5  British Columbia  0  North West Territories  2  Yukon  0                                                              


Community  Additions  16  6  3  0  0  3  12  0  1 

New Reserve  Other Policy  1  0  0  0  0  0  0  0  0 

Total  21  6  7  77  165  8  12  2  1 

See Claim Settlements (Alberta and Saskatchewan) Implementation Act, 2002, and Manitoba Claim Settlements  Implementation Act, 2000.   





* as of July 1, 2009 ** 55% of ATR’s approved by Minister of INAC Source: Analysis and Financial Planning Directorate, Additions to Reserve Directorate.

As can be seen from Table 2, most of the current ATR work relates to implementation of TLE in Saskatchewan and Manitoba. However, as noted above, it is expected that specific claim settlements from across the country resulting from the Justice At Last initiative will be an increasing proportion of the ATR business. While all ATR’s stand to benefit from the work on process improvements, nothing comparable to the Claims Implementation legislation is available in other provinces and territories and other types of ATR (including those resulting from Tribunal decisions) are excluded from the application of this legislation, even in the Prairies. Continued pressures on the TLE process in the Prairies, and experience with the ATR process nationally are revealing other impediments to efficient reserve additions which would also affect Tribunal decision ATR’s and which might also benefit from policy and/or legislative improvement. Many of these issues are directly connected with gaps and historical idiosyncrasies in the Indian Act reserve land regulatory environment (discussed in more detail in the next section) which are independently becoming apparent as obstacles to economic development. While other issues may arise in discussion with the AFN, in a canvass of regional officials of DIAND responsible for the ATR process, the following potential legislative issues emerged: 1. the need for national ATR legislation. 2. the need for ATR legislation to address more than just than Legal Obligations flowing from claims agreements. 3. the ability to have Ministerial rather than GIC approval of Indian Act Section 35 (Land Taken for Public Purposes) easements/interests in land to be converted to reserve. 4. the potential to have a different ratification procedure for pre-reserve designations. 5. the need for ATR legislation to provide for some dispute resolution mechanism to provide certainty in situations where surface access provisions for pre-existing third party interests are to be defined after reserve creation (e.g.: sub surface mineral development). 6. other “housekeeping” items. Each of these is then discussed in turn: 1. National ATR Legislation

There is no apparent rationale for restricting legislative improvements to the processing of ATR’s to the three prairie provinces, other than that at the time of the legislation this is where the vast majority of ATR’s were arising and that as a result of the TLE and Claims process these three provinces had become politically engaged. Having said that, there is evidence of the specific claims business broadening out nationally. Additionally, the Maritimes have become more sensitized post Marshall, with significant ATR activity as indicated in Table 2, as has Ontario (especially post Ipperwash). The situation in PEI, Newfoundland and Quebec appears more complicated as these jurisdictions have no title reversion/subsurface agreements in place, such that they may raise

concerns with any proposed legislation and/or it may be seen to be inoperative (even ignoring the bijuralism issue in Quebec). More work is required here. On the other hand, the objective of the legislation presumably would be to expedite ATRs that would normally be approved. On this basis it is hard to see what grounds any province would have to raise concerns, given adequate consultations. 2. Other Types of ATR

Under the ATR policy there are legal obligations other than “provisions of first nations claim settlements, which relate to the creation of reserves or the addition of land to existing reserves’17, which could be facilitated by legislation. These include court orders as well as legal reversions of former reserve land. In addition, if the ATR policy category of “normal” Community Additions is also an area where the Minister will recommend reserve status (subject to site specific criteria); and given that there is no recent record of the GIC ever having overruled a Ministerial proposal for an ATR (or that an ATR approved by the Minister created any subsequent difficulties), then it is not clear why one would not include this category in facilitating legislation as well. Questions have also been raised over reserves which (for some historical reason) have never been subject to OIC, but which are publically understood to be reserves. Finally, we have the potential “new” category of ATR’s arising from Claims Tribunal decisions which, while not legal obligations per se, have already received a federal commitment that they will be given priority. If all these categories were included in a new legislative package, then (subject to request by the First Nation and to meeting the relevant site specific criteria) the following would benefit from the more certain and accelerated provisions of ATR legislation:  claims settlements which include ATR commitments.  court orders.  reversions of former reserve land.  re-acquiring or replacing lands subject to Claims Tribunal decisions.  existing reserves which were never subject to OIC.  natural geographic enhancements of the existing reserve land base.  returns of unsold surrendered land to the existing reserve land base.  normal growth requirements of the reserve community. These all comprise categories of ATR where the existing policy is for the Minister to recommend OIC’s. One might then ask why not all ATR’s? While this issue is worthy of further analysis and discussion, any other type of ATR is seen as exceptional and the norm would be for the Minister not to make a recommendation. In fact, only one such recommendation has been made since 2006, according to Table 2. As a result, there is some basis for excluding those ATR’s in the New Reserve Other Policy category which only exceptionally might achieve a Ministerial recommendation. Some parliamentarians and members of the public might take comfort that the Minister does not have complete discretion and there is the appearance of GIC oversight for exceptional                                                             

Introduction ‐ Claim Settlements (Alberta and Saskatchewan) Implementation Act, 2002

proposals, even if in practice these are infrequent and rarely if ever overturned. These ATR’s are often subject to Cabinet approval in any event since they presumably involve new band and/or reserve creations and/or relocations with significant incremental funding requirements. This might also avoid a problem that could arise in drafting legislation for all ATR’s, where parliamentarians might then look to define the whole ATR policy in legislation. On the other hand, much of the ATR policy would be implicitly defined in legislation if all of the above referenced categories were listed. Additional considerations arise in that for some First Nations the GIC is seen symbolically as the Crown, while the Minister is seen as representing a political party and the government of the day. This is one reason put forward for why not all First Nations opt to use the existing claims implementation legislation and why the legislation is optional – a practice which should likely be followed for any new legislation. 3. Surface Access

In the 1980’s the decision was made to allow surface only reserves to facilitate the settlement of specific claims and treaty land entitlements in the Prairies, since this would allow the selection of lands which already contained subsurface interests under provincial authority and/or where the value of the subsurface resources might inhibit a First Nation’s ability to acquire the property. This created the difficulty of guaranteeing, prior to the ATR, future surface access for a third party that might already have mineral rights in relation to the selected property, when the only legislative means of doing so is through a surrender under the Indian Act subsequent to the ATR. While at that time the decision was made to utilize a contractual remedy through the Federal Real Property Act, the Saskatchewan Treaty Land Entitlement Agreement appears to acknowledge some concern with this approach, as evidenced by the text of Article 5.05(b): Subject to applicable federal legislation, the provisions of section 5.05 (contractual approach) shall no longer be applicable if Canada enacts legislation to provide for mechanisms which ensure surface access to a Fee Simple Mineral Owner or a Mineral Disposition Holder in respect of Entitlement Reserves on terms and conditions similar to those contained in The Surface Rights Acquisition and Compensation Act, R.S.S. 1978, c. S-65 Over the years the Government of Saskatchewan has pressed Canada to legislate in this area. A surface access dispute resolution mechanism (DRM) was dropped from the legislative drafting instructions for the Claims Implementation legislation on the basis that:    unlike the three mechanisms that work only up to reserve creation, it would apply after; a surface access (or lands) third party DRM is potentially relevant to more than just surface only claims ATRs; and, more research and consultation was required on DRM options, including an examination of that used by Indian Oil and Gas Canada (IOGC).

It is not clear why the IOGC approach was referenced in that discussion, as it does not appear a likely avenue to pursue. IOGC is in the business of regulating the exploitation of First Nation oil and gas resources where there is a contractual relationship between the First Nation and the oil and gas company, and the First Nation has a real monetary interest (it is both the surface and subsurface owner). The surface access issue outlined above is a completely different context, more like the classic provincial surface access issue. The surface owner (First Nation) has no interest in the sub surface and no incentive to provide access to the third party which holds the subsurface interest issued by the province. A closer model might be the (joint) surface access

boards established under modern treaties in the North (Nunavut Surface Rights Tribunal for instance) or the DRM’s called for under FNLMA. The passage of the Claims Implementation Legislation removed some of this pressure, specifically with respect to existing mineral interests where the surface access requirement was pre-defined and could be dealt with by the pre-reserve designation provisions of the new legislation. The question, however, remains with respect to disputes which would occur subsequently (where the access provisions were not definable prior to ATR or were subject to change). Unfortunately, the analysis outlined above remains to be done and work should be commissioned on this subject. One option which could be considered would be to adapt the existing provincial regimes, for example using province specific generic FNCIDA regulations which individual First Nations could opt in to, so as not to be seen to be providing for provincial jurisdictional intrusion on reserve. Some customization of the provincial regime would then be possible to provide for First Nation Board members and the consideration of First Nation socio-cultural issues by the Board. Presumably there is some incentive for provincial cooperation since the end result is to their benefit. 4. Ministerial Approval of Indian Act Sec. 35 Interests

Even in the Prairie Provinces, when a pre-existing easement on prospective reserve land must be replaced with an Indian Act Section 35 interest, there is currently a requirement to have this approval made by the Governor in Council (GIC), even though the reserve creation can be approved by the Minister. This is dictated by the wording of Section 35, which refers directly to GIC approval. Where the First Nation selects/purchases land with an existing public purpose easement on it, it is aware that this is a condition of the ATR. To take the approval to the GIC when the Minister can approve the ATR itself appears a completely unnecessary additional step. Correcting this would, however, require legislation. 5. Ratification Procedures for Pre-Reserve Designations

For lands to be designated for leasing or absolutely surrendered to the Crown for metallic minerals and oil and gas exploitation, there must be a surrender (as in the surface access issue discussed above) assented to by a majority of the band by way of referendum or meeting. As the Supreme Court decision in Corbiere pointed out, off reserve members cannot be excluded from such process as they share ownership in the “assets of the nation”. With the large number of First Nations members living off reserve and the constant flux of eligible voters moving back and forth between reserves and urban centres, it has become more and more difficult to achieve a majority of all members for ratification. In addition, this is already a very high threshold, of the type reserved in other jurisdictions for constitutional issues. 58.8% of eligible voters voted in the last federal election. If this was a First Nation surrender vote, then 85% of those voting would have had to vote in favour. This is a threshold few governments could operate with. As a result, as a matter of policy, DIAND and First Nations have already moved to other thresholds, more consistent with modern electoral practices elsewhere, to achieve community consent for activities not covered by the Indian Act. These include ratification of claims settlements and negotiated agreements and opt in

provisions for Indian Act alternative/sectoral self-government legislation such as FNLMA, FNOGMMA etc. The accepted practice has become that:  a majority of eligible voters must participate;  a majority of those participating must vote affirmatively; and,  more than 25% of all eligible voters must vote affirmatively. Since this policy was not in place when the Claims Settlements Implementation Acts were being drafted it is not reflected in that legislation, such that pre-reserve designations to facilitate the replacement of existing third party interests still must meet the exigencies of the Indian Act surrender procedures. This is clearly a difficult and costly process for First Nations to go through and could also be prejudicing First Nations choices of lands. Since the ratification policy outlined above is already accepted practice and has been put forward by INAC, Justice and First Nations, and accepted by parliamentarians, in a variety of pieces of recent federal First Nation legislation, there appears no reason not to consider such an approach in any new ATR legislation, specifically with respect to pre-reserve designation/surrender votes. 6. Other “Housekeeping” Items

If there is to be a legislative package on ATR’s involving the transfer of OIC authority to the Minister, then there is an opportunity to include other related housekeeping issues by way of “clean-up”, notably for items that are not contentious and might not otherwise warrant such attention. One item which has been brought forward is the issue of reserve name changes. DIAND’s practice has been to accept BCR’s for reserve name changes and to register such changes in the Indian Lands Registry. Justice has been concerned for some time with this practice as leases, permits and designations which refer to a reserve under a changed name could be challenged as void if that name change was later found not to be legally effective. The concern here is that since reserves are created (and named) through an exercise of the Royal Prerogative, then name changes must also be done under authority of that same prerogative if they are to be legally effective. If a legislative package is to be considered to facilitate ATR’s, dealing inter alia with OIC authorities and other issues improving the economic regulatory environment, then this issue could be dealt with by providing the Minister with this OIC authority. In this context it might be useful to consider whether the same authority could be transferred to the Minister for the naming of Bands. The salient part of Section 2(1) of the Indian Act defines a band as “a body of Indians declared by the Governor in Council to be a band”18. Analogous to the practice of accepting BCR’s for reserve name changes, BCR’s are also accepted for band name changes and OIC’s are only employed where bands are named in legislation (as in the annexes to the recent suite of “First Nations” legislation – FNLMA, FNCIDA, FNOGGMA, FNFSM). The same question of legal prudence and security for economic development purposes may be relevant here. A complicating factor is that any ATR legislation is likely to be optional or opt in legislation whereas the above two issues should apply to all name changes. This is an issue to be considered in the context of consultations. While this is an issue that may not raise political concerns for First Nations, it is also one which could also be considered if there was to be                                                             

 Bradford W. Morris, Providing Lands and Resources for Aboriginal Peoples, Institute of Intergovernmental  Relations, Queens University, 1987. 


support for a broader regulatory package which went beyond the above legislative issues related to ATR.

Regulatory Barriers
Two distinct areas have been identified by First Nations and Canada for improvement in reserve land management: Additions to Reserve, involving speeding up the process to achieve reserve creation, and the creation of “economic ready reserves” (not needing months or years of regulatory clean up afterwards); and, Regulatory Barriers, involving removing Indian Act (and potentially other) regulatory barriers to effective land and resource management on reserve and facilitating economic development.


While the first is a commitment in both the INAC Report on Plans and Priorities and the Political Agreement between the Minister of Indian Affairs and Northern Development and the National Chief of the Assembly of First Nations in Relation to Specific Claims Reform, both are referenced as priorities under the new Aboriginal Economic Development Framework and, as noted in a number of sections above, many issues are either common or represent overlaps between the two. Since both involve potential legislative and regulatory initiatives and both are to be subject to work in partnership with First Nations, there may be a variety of process and legislative packaging options available. To facilitate the analysis of regulatory barriers, and the need for joint work with First Nations on their potential legislative implications and relationship to ATR issues, the following overviews the fairly extensive analysis on Indian Act regulatory impediments which already exists (flowing from the work of the Auditor General, work on Smart Regulations and numerous First Nation and interdepartmental consultative exercises since the launch of the original Canadian Aboriginal Economic Development Strategy in 1989). As such it is very much an overview of topics and, while there is some danger in oversimplifying, it is hoped the essential features are adequately mapped to allow for their relationship (in substance and in packaging) to the previous analysis on ATR to be clear. For convenience the analysis is broken down into the following categories: 1. Resource Management Land Management and Registration  Delegation Instruments and Ratification Thresholds  Environmental Management  Band Law Making    Resource Management

The recent period of quickly evolving jurisprudence on aboriginal rights, title and treaties coincides with the period in which resource and infrastructure developments in Canada have become relatively more significant features of the Canadian economic landscape. They have also been moving further afield into less and less accessible areas (NWT diamonds; Alberta tar

sands; Voisey’s Bay nickel, copper and cobalt; Manitoba hydro; Arctic ports, etc.) involving the “taking up” of land in aboriginal traditional territories subject to treaty and/or subject to new or outstanding claims. The result has been an explosion in the use of interim measures and impact benefit agreements (IBA’s) between First Nations and the resource sector in Canada to facilitate the opening up of new projects in both historic treaty and land claim areas, despite the fact that only the Inuit land claims agreements contain formal IBA requirements. In addition, the resource sector in Canada appears to have figured out that, much like in the west and the north (if not the whole of) Canada, their future economic potential may in large part be determined by how well they partner in terms of aboriginal community and labour market relations. To use the mining industry as an example, some 1200 Aboriginal communities are located within 200 kilometres of 190 principal producing mines and 1900 active mineral exploration projects. Moreover, in the last two decades there have been virtually no new mining communities constructed to accompany new mine projects in Canada. In this context, the mining industry has identified a looming human resources gap over the next ten years. Growth in the industry, coupled with an aging and retiring Canadian workforce, is estimated to result in a shortage of some 92,000 workers. The relatively younger underemployed Aboriginal population and its often geographic proximity to principal producing and active exploration properties are increasingly recognized as important potential solutions to addressing this growing gap. Couple this with the ability for First Nations to strategically select lands as a result of claims settlements and there is a growing interest in on reserve resource developments. Major resource developments on reserve (mining, oil and gas, forestry, non-metallic minerals, sand and gravel) require surrender of the resource to be exploited to the Crown (oil and gas, minerals) and/or the long-term designation and leasing of land for the surface facilities (sand and gravel). Smaller scale developments (forestry, non-metallic minerals) may be exploited by Ministerial permit (Table 3).

Table 3 Indian Act Resource Authorities
Timber, Non-Metallic Substances: Sec 58(4) (b) Permit – exploitation without an absolute surrender or designation. Sec 53(1) Lease – with a designation for more permanent surface facilities. Timber. Mines and Minerals Sec 57(a) Timber on surrendered land or with band consent. Sec 57(c) Disposition of surrendered mines and minerals. When the federal government became concerned with the scale of oil and gas developments on reserve, and the need to more properly manage its fiduciary obligations under the Indian Act in the 1970’s, it put in place the Indian Oil and Gas Act and established Indian Oil and Gas Canada (IOGC). Revisions to the Indian Oil and Gas Act (IOGA) received Royal Assent on May 14, 2009 in order to support the third set of revisions to the original IOGA regulations, which are currently under development. The mining and forestry regulations under Indian Act Section 57 have never been revised. From a variety of perspectives these regulations have long been seen to be inadequate: their lack of enforceability; the minimal scale of fines/penalties; they are missing many of the elements expected of modern resource management regimes, etc. In addition, modern standards appear to require a more fulsome legislative base for regulations of this type than is provided for by the Indian Act – witness the current need to update the more substantive and recent Indian Oil and Gas Act prior to modernizing its regulations.

If there is concern with potential resource developments on reserve, and the Indian Act is understood to be an insufficient legislative base for modern regulation which cannot be changed (see earlier Background section) then there are two options, unless the First Nation in question is already self governing or can employ the First Nations Land Management Act: 1. develop new federal sectoral legislation and institutional capacity as with IOGC and the Indian Oil and Gas Act; or, 2. use the First Nations Commercial and Industrial Development Act (FNCIDA) to referentially incorporate the relevant provincial regime, subject to agreement between the First Nation and province. At the moment there are no producing mines on reserve. There is one major quarrying operation and seven recent exploration permits (diamonds, potash and uranium in Alberta and Saskatchewan). Since the scale of mining activity does not appear to be such as to warrant the investment in the development of a standalone federal regulatory regime, then FNCIDA becomes the obvious choice. This was in fact its stated purpose: “Whereas existing Acts of Parliament do not provide sufficient authority for Canada or first nations to establish such regimes”. While this approach may make sense for larger projects, it is likely not practical for smaller scale activities in forestry, sand and gravel, etc. which do not require a surrender of the resource. Standard practice has been to reference provincial standards in a lease, but this carries the risk of relying on contractual remedies. It has often been pointed out that it would be much more effective to have these more local projects (those that do not require surrender) regulated locally by the First Nation though improvement in the band law making powers under the Indian Act (see later section on Law Making). 2. Land Management and Registry

As noted earlier, initiatives to improve the regulation, administration and registration of private interests (traditional holdings, CP’s and Leases) in First Nations communal land held under the Indian Act can have significant social (e.g. housing) and economic benefits for First Nations. Sectoral self government instruments such as FNLMA can be extremely useful in this regard. However not all First Nations can justify that level of effort and expense, nor may they have the necessary community support for opting out of the Indian Act and into FNLMA or comprehensive self-government. To date there are 44 First Nations exercising self government authority, FNLMA or comprehensive, over their lands. For the majority of First Nations now under the Indian Act for land management purposes, leasing may provide some early gains if improvements can be made in the designation and delegation processes (see later sections). The problem with C.P.s appears to run somewhat deeper, with:  concerns over the experience of some reserves, where a few individuals have been seen to take control of much of the reserve landholding;  problems with the fractionation of individual holdings as a result of the INAC estate process, which has effectively tied up land holdings in a number of other reserves and prevented those First Nations from assuming self government authority;  lack of a well understood (or any) regulatory environment for the administration and management of C.P.s, other than what has been read in by the courts; and,

recurring issues of unregulated (by either the First Nation or Canada) CP commercial activities, such that further research is likely required here. This discussion does however put the focus on the adequacy of the Indian land registry to support any improvement in the creation and administration of individual interests in reserve land. The difficulty is that:  the Indian Lands Registry is a simple repository of information on property interests in reserve lands and provides no legal certainty as to title19;  its IT infrastructure is antiquated and it is difficult to access;  it is incomplete (i.e. it does not include information on all reserve land parcels) and is not underpinned by a well developed legislative base; and,  it appears the existing registry information is suspect and surveys are missing or inadequate. The evidence can be found in the significant efforts required to clean up survey, mapping and title information on reserve lands so that they can move from the Indian Act (where the federal government is responsible) to FNLMA (where the responsibility and liability shifts to the First Nation). As populations grow, more and more land is added to reserve to operate within the registry and local infrastructure and economic investments multiply, these problems of the lands registry [encompassing a registry of interests vs. title and the lack of quality control of the information in it] can only multiply. Expansion of FNLMA and funding to clean up the survey and registry system have been priorities for both DIAND and First Nations for a number of years. In addition First Nations have been examining a number of approaches to improvement in the registry and title system and proposals may be brought forward here as well. As a result these issues are not further developed here, however, there importance in combination with and/or to support and underpin the other regulatory issues discussed here, should not be underestimated.

3. Delegation Instruments and Ratification Thresholds
Earlier sections raised the issue of the Indian Act’s outdated ratification procedures for surrenders and designations and their implications for pre-reserve designations, resource projects on reserve and leasing of land for commercial purposes. The requirement for a vote of the majority of members/electors (often with a large component living off reserve) is a requirement few if any other governments could achieve on most matters put before their citizens. The section on ATR’s raised the issue of providing for a provision in legislation for a more reasonable (majority of those voting – minimum 25% of members) threshold for prereserve designations. One growing trend is for First Nations to designate the whole or major parts of their reserve for certain purposes, and do a head lease to a band owned company who would sub-lease and manage the lands according to the terms (land use plan) of the band. This is one way of addressing some of the issues raised with respect to Land Management raised earlier, at least                                                             
 In contrast, Torrens title is a system of land title where a register of land holdings maintained by the state  guarantees an indefeasible title to those included in the register. The system was formulated to combat the  problems of uncertainty, complexity and cost associated with old‐system title, which depended on proof of an  unbroken chain of title back to a good root of title. 

with respect to leasing, but it still requires the First Nation to meet the designation ratification threshold of the Indian Act. If there is an opportunity to put a legislative package together which deals with on reserve regulatory barriers, then the topic of alternative ratification procedures for surrenders and designations is one which should be considered for inclusion. Going one step further, delegations of Indian Act land management authority to First Nations is authorized under Sections 53 and/or 60 of the Indian Act, under which: 53. (1) The Minister or a person appointed by the Minister for the purpose may, in accordance with this Act and the terms of the absolute or surrender or designation, as the case may be, (a) manage or sell absolutely or surrendered lands; or (b) manage, lease or carry out any other transaction affecting designated lands. 60. (1) The Governor in Council may at the request of a band grant to the band the right to exercise such control and management over lands in the reserve occupied by the band as the Governor in Council considers desirable. . First, Section 53 still requires the surrender/designation. Second, since Section 2 (3) (a) of the Indian Act reads: “a power conferred on a band shall be deemed not to be exercised unless it is exercised pursuant to the consent of a majority of the electors of the band”. This creates the same hurdle for Section 60 delegations as is the case for surrenders and designations discussed above. This is significant since “The transfer of control over land management to First Nations is part of an overall departmental approach to facilitating assumption by First Nations of control over their communities. The department’s program is made up of four separate components: a) Regional Lands Administration Program (RLAP); b) Delegated Lands Management Program (53/60); c) First Nation Land Management Act (FNLMA); and, d) Full Self-Government”. 20 The end result being that the ratification hurdle rate for the first two steps in this governance continuum is in fact as high as or higher than for the last two. Currently, of 615 First Nations: 36 are in lands training and development; 114 operate administratively under RLAP or RLEMP; 13 have 53/60 delegated authority; 22 operate outside the Indian Act under FNLMA; and, 22 operate under comprehensive self-government agreements, for a total of 207. This leaves 408 First Nations not on the governance continuum/not receiving any land management funding and less than 10% of all reserve based bands exercising any form of delegated or self government authority over their lands. Clearly there are compelling reasons to consider legislative opportunities to either amend the Indian Act in this area, or provide some other legislative option for First Nations to use in lieu of                                                             
 INAC Lands Management Manual (not yet updated to reflect overlaps with the newer Reserve Land and  Environment Program – RLEMP)  

the Indian Act (perhaps something like the Claim Settlement legislation which defines a prereserve designation as meeting the Indian Act designation requirement). 4. Environmental Management

It is clear from the discussion of title that there is something unique about reserve lands. Title may be vested with her Majesty but that title is fettered unlike the situation of “other” Crown land. Amazingly, in the midst of this, Canada’s environmental laws treat reserve land much the same as federal land and treat DIAND as the responsible agency for the land in the same way it treats DND or any other Department with land holdings and responsibilities, ignoring that there are communities with governments on those lands,21 where the range of municipal services and commercial and industrial activities on reserve mirrors that found off reserve, only on a much smaller scale. As noted earlier, the total amount of reserve land in Canada is more than doubling, as a result of specific claims and Treaty Land Entitlement settlements already in place, and the total population on reserve is growing at a rate at least twice the national average. There is also a significant increase in the scale and sophistication of development projects being put forward by First Nations that raises questions concerning how they will be regulated. Federal environmental laws set national standards and apply on reserve, but do not provide a comprehensive regulatory framework on reserve. Federal environmental laws focus on: - Project planning and environmental assessment: Canadian Environmental Assessment Act (CEAA) - Setting emission standards for specific toxic substances: Canadian Environmental Protection Act (CEPA) - Pollution prevention: CEPA - Protecting species and their habitat: Species At Risk Act (SARA), Fisheries Act, Migratory Birds Act Provinces, on the other hand, have comprehensive regulatory regimes that regulate the full life cycle of activities including their location, development, operation and decommissioning. Provincial environmental laws focus on the operational and land use aspects of activities applications, licensing, permitting, setting operational standards, certification, as well as monitoring, reporting, investigations and corrective actions. The courts have ruled that while Section 88 of the Indian Act provides for provincial laws of general application to apply on reserve, provincial laws pertaining to the “use of land” do not, leaving an environmental regulatory gap on reserve. In accordance with CEAA, INAC must ensure that an environmental assessment is undertaken for all projects it approves on reserve. Under the Indian Act, INAC uses a contractual process (permitting or leasing) rather than regulations to manage land use activities on reserve. INAC only has regulations for mining, timber and waste and, as noted above, these are largely                                                             
 For a fuller treatment see: FEDERAL INITIATIVES AFFECTING FEDERAL LANDS: IMPLICATIONS FOR FIRST  NATIONS  AND THE GOVERNMENT OF CANADA, BACKGROUND NOTE By Dr. Peggy J. Blair,  John Graham and Serge Larose,  Institute On Governance,  February 11, 2003 


ineffective since they are not up to date and the Indian Act does not itself contain adequate authority in most instances for comprehensive and effective regulations. Protecting the environment under the Indian Act and its regulations is then difficult, because the Indian Act does not directly address environmental matters. Further, it does not provide for a proper enforcement regime; with: - the maximum penalty for non-compliance at $1000; - only civil remedies are available when using contract conditions; - there is no authority to search and seize property where violations are known or suspected; and, - neither INAC or First Nations have the necessary professional capacity and resources to effectively monitor and enforce environmental protection requirements in the first place. Section 81 of the Indian Act provides authority for FNs to develop by-laws. There is a limited scope of by-law authorities and the provisions are generally antiquated. (e.g. beekeeping and poultry raising as principal authorities), such that First Nations are hampered by the same problems as the Federal Government when attempting to use the Indian Act authorities. In addition, as noted above, a number of land use activities take place on reserves that are managed by First Nations through Certificates of Possession, customary holdings and subleasing from a band owned company head lease (not to mention buckshee holdings22). Fortunately, the new RLEMP program has taken a more formal approach to environmental capacity building on reserve and the gap for large commercial and industrial activities has recently been closed with passage of the First Nations Commercial and Industrial Development Act (FNCIDA), which provides for incorporation by reference of the complete provincial regulatory system (incl. environment) for any given project on reserve. However, since 1992, more than 2,500 contaminated sites have been identified on reserve. On reserve, hydrocarbons are the lead sources, accounting for 60% of all environmental issues. They are emitted into the environment primarily through improper fuel storage and handling, which in turn is mainly the result of poorly regulated community infrastructure projects and small to medium size commercial and industrial projects. In addition, approximately 25% of known contaminated sites on reserve are derived from waste management activities, such as storage and disposal of solid, liquid and industrial waste. There are Indian Act regulations for waste management on reserve, but they are limited in their influence with a maximum fine of up to $100.00 and/or up to three months imprisonment. This makes it difficult if not impossible for First Nations to encourage reserve economic development in an environmentally responsible manner, representing a major regulatory barrier. A potential strategy for dealing with it could include work with First Nations (FNs) to create a fundamentally new approach to environmental management on reserve that is comprehensive in nature, advances First Nations self government interests and modernizes and updates the current regime. It would have to recognize that First Nations exercise land management responsibilities separate from that of INAC’s under the Indian Act and that reserve lands are different from other federal lands. It could look at providing First Nations with local environmental law making                                                             
 “It is estimated that there are approximately 1500+ buckshee leases on Okanogan Indian Reserve Lands”,  Okanogan Indian Band, Property Taxation Panels, Information Package, 2007 

capacity (below the scale of FNCIDA) and, finally, it could include a commitment from other departments to develop regulations for and promote capacity development among FNs as in: - CEAA - no regulations yet under 59(l) to enable FNs to undertake EAs for projects where they are making decisions - Environment Canada (EC) administrative agreements between EC and FNs under CEPA


Band Law Making

The Indian Act’s Sec. 81 by law authorities are universally accepted as anachronistic and inadequate to support modern community development (ignoring the intrusive aspect of the Minister’s disallowance authority). Outside of self government arrangements, various recommendations for improvements to band law making authority under the Indian Act have been made in the past in relation to:  the protection, conservation and exploitation of reserve resources not subject to the surrender provisions of the Indian Act (i.e.: other than oil and gas and minerals) and withdrawal of the Indian Timber regulations;  the provision of services on behalf of the band, including local works, utilities and waste management;  residential tenancies;  regulation of business, zoning and land use;  environmental management; and,  ticketing, fines, penalties and enforcement, where the Indian Act’s authorities are inadequate or entirely missing. A fairly simple package of local law making authorities could complete a package on resource and environmental management (as noted above) while directly addressing general economic development requirements (local services, rental housing, zoning and regulation of business etc.).

Conclusions – Issues and Options
From the preceding discussion, and without prejudice to the discussions between INAC and First Nations, it may be possible to draw some tentative conclusions. I.


First, if First Nations are satisfied with the processes being used and progress being made to improve ATR process and resourcing issues then the focus of discussions would be on policy and legislative issues. Second, focussing on policy, it does not appear that ATR’s intended to re-acquire or replace lands that were the subject of a Tribunal decision are a clean fit with any of the existing ATR policy categories. This would imply the need to define a unique ATR policy category for them (perhaps as outlined on page 11), subject to the need to agree on a policy respecting quantum and selection area criteria for this category of ATR (as discussed in Annex A).

Third, if there is to be an ATR policy discussion then, having settled on the above, consultations could include a range of overlapping policy issues flowing from the last review under the Joint Initiative, including: 1. the definition of service area nationally/provincially; and, 2. the ability to define reserve types or uses (including economic reserves, the use of reserves to protect sites in traditional areas etc). the results of which could also be important for Tribunal ATR’s. Fourth, from the experience in Alberta, Saskatchewan and Manitoba with the Claims Implementation (ATR) legislation, there is a range of legislative initiatives that could potentially benefit and give priority to Tribunal ATR’s as well as others, including: 1. a national version of the current Prairie Claims Implementation Legislation (maintaining essential features incl. optionality etc); 2. inclusion of all categories of ATR, or at least those where the ATR policy is positive, including:  claims settlements which include ATR commitments.  court orders.  reversions of former reserve land.  ATR’s arising from Claims Tribunal settlements.  existing reserves which were never subject to OIC.  natural geographic enhancements of the existing reserve land base.  returns of unsold surrendered land to the existing reserve land base.  normal growth requirements of the reserve community; 3. the ability to have Ministerial rather than GIC approval of Indian Act Sec 35 (Land Taken for Public Purposes) easements/interests in land to be converted to reserve; 4. a more reasonable ratification procedure for pre-reserve designations reflecting current legislative policy; 5. provision for a dispute resolution mechanism (DRM) to provide certainty in situations where surface access provisions for pre-existing third party interests are defined after reserve creation (e.g.: sub surface minerals); and, 6. other “housekeeping” items such as band/reserve name changes. Fifth, while other legislative issues may arise in the context of a joint review between INAC and First Nations, from the above list it is likely some subjects will warrant fairly intensive analysis and scrutiny, while others may be more straightforward. While ratification procedures (4.) may be borderline, it is likely the last two items DRM (because of its complexity and provincial implications) and housekeeping items (because of their potential non-optionality) will require significant analysis and discussion. If there is an interest in these, then work should likely be commissioned early in any consultations to help inform the discussions. If there was some interest in putting legislation forward in a time frame which would not allow for an adequate assessment of any of the above then the relevant items would have to be excluded from this package. This would be a more comfortable option to consider if there was to be a separate regulatory/economic development package being developed on a later time track that could serve as an “off-ramp” for individual items. In any event, a number of the ATR items referenced above potentially overlap with any potential package targeted at removing or reducing Indian Act regulatory impediments to sustainable reserve economic development. This would be the case for;

1. provision for a dispute resolution mechanism to provide certainty in situations where surface access provisions for pre-existing third party interests are defined after reserve creation (e.g.: sub surface minerals) - an ADR mechanism would apply after reserve creation and might be called for in relation to other land and resource management disputes, as part of a process of more general land management improvement; and, 2. a more reasonable ratification procedure for pre-reserve designations reflecting current legislative policy - if pre-reserve designations procedures need to be more reasonable then many would likely note the same applies to post-reserve creation procedures. Sixth, as a result of these overlaps and/or due to the separate call for work with First Nations on land modernization and regulatory gaps on reserve it may be worth reviewing the range of such issues which have accumulated over the last number of years which have not yet been the subject of joint review and/or First Nation led initiatives including: 1. modernized band law making to improve resource and environmental management (FNCIDA for large projects, modern band law making for smaller projects) and to fill other local regulatory gaps in Indian Act law making important to economic development and housing, including authorities for:  protection, conservation and exploitation of reserve resources not subject to the surrender provisions of the Indian Act (i.e.: other than oil and gas and minerals) with subsequent withdrawal of the Indian Timber regulations;  provision of services on behalf of the band, including local works, utilities and waste management;  residential tenancies;  regulation of business, zoning and land use;  ticketing, fines, penalties and enforcement; and,  environmental Management – directly or through CEPA delegation, 2. a more reasonable ratification procedure for designations and surrenders (as recommended for pre-reserve designations); and, 3. potential land management (53/60, leasing, CP issues etc) and Land Registry improvements.



While both First Nations and INAC will have their own mandating and approval processes, it is worth noting that ATR policy clarifications are more likely to be able to be approved by the Minister than any new policy approaches (which are more likely to require Cabinet approval). Also, since First Nations will have to be involved in drafting any potential ATR (or broader) legislative package to affect a real partnership, it should be noted that the Minister of INAC will need to seek Cabinet approval for both the legislative drafting instructions (which should be developed in partnership with First Nations) and the joint drafting process. Since the policy and legislative issues outlined above clearly fall into at least two categories – those less technically complex and politically sensitive and those which are not, then it is likely progress on all the above should be considered in at least two stages: 1. what can be done relatively quickly, but produce a substantive package – in terms of policy clarification/development and legislative drafting instructions; and, 2. what is more complex and requires extra time and effort which should be part of a subsequent package or packages?

It appears that the ATR policy - with respect to the Tribunal - needs to be dealt with first. Once that is confirmed, an ATR package can likely be constructed fairly expeditiously (with or without the ADR, naming and referendum mechanisms). Given that a Regulatory package would have more direct bearing on the Indian Act and may be seen to raise more complex issues (lawmaking etc) then a two stage process could be employed if these items were not ready at the same time (taking longer to consider and consult on), which would also serve to provide an “off ramp” for items that might be holding up the ATR package as noted above. As a final consideration, there are a series of overlapping federal commitments to work on either all or parts of the ATR and regulatory barriers (or both) with First Nations/the AFN. An early decision will be required as to whether this is to be one or several processes and what their potential sequencing should be. The overlapping nature of many of the issues creates some challenges here, which may be more easily handled through a single (albeit potentially multistaged) process. Multiple processes will likely demand a high level of communication and coordination between them.

Annex A ATR’s resulting from Tribunal Decisions Reacquisition of Land and Additions to Reserve
The Political Agreement between the Minister of Indian Affairs and Northern Development and the National Chief of the Assembly of First Nations in Relation to Specific Claims Reform states that: “While the Tribunal will, under the proposed Bill, only have jurisdiction to award monetary damages, the parties recognize the particular cultural, spiritual, social and economic significance to First Nations of the lands that have been lost. In situations where a First Nation seeks to re-acquire or replace lands that were the subject of a Specific Claim, the Minister will review with First Nations, policies and practices respecting additions to reserves with a view to ensuring that these policies and practices take into account the situation of bands to which the release provisions of the proposed Specific Claims Tribunal legislation apply. In particular, the Minister will provide priority to additions to reserve of lands affected by the consequences of the release provisions in the legislation or to lands required to replace them.” While priority is to be provided to ATR’s for lands reacquired or replacing those that were subject of a Specific Claim, it appears reasonable to assume that the approach to these ATR’s should be one which would not impact on either the Crown’s or the First Nation’s decision as to whether to negotiate a settlement or apply to the Tribunal, or else this would have been dealt with in the legislation. This means that a First Nation should not be significantly better or worse off with respect to ATR outcomes in the ATR policy and process to be established to meet the above commitment, than they would have been in negotiation. For this to be the result, the rules

with respect to ATR following a Tribunal decision should be generally consistent with ATR provisions in negotiated settlements. If this is a principle both parties can agree on, then it would follow that the general policy approach to these ATRs, as well as the treatment of attendant issues such as the eligible class of Claim/Tribunal decision, land selection area, land quantum and selection period should be both transparent, to allow for informed decisions on the use of the Tribunal, and provide ATR results not dissimilar to those which would be found in a comparable claim negotiation. This would also help avoid setting up the requirement for new negotiations which go beyond those inherent in the normal ATR process. POLICY APPROACH The policies and practices respecting additions to reserve are found in the DIAND Lands Manual. That manual states that there are two categories of ATR that can be given favourable consideration: legal obligations for reserve additions/new reserve creation, including those resulting from claim settlements; and, additions to existing reserves to meet normal community growth requirements. All other categories of ATR, such as new reserve proposals not resulting from a legal obligation or additions which go beyond normal growth requirements, are not given favourable consideration. Since ATR’s which would result from Tribunal decisions are neither legal obligations nor “normal community growth”, it appears they would need their own category to give them at least the same priority provided legal obligations. ELIGIBLE CLASS It is then likely that this would necessitate the creation of a new policy category, potentially along the following lines: Tribunal Decisions: This category would cover ATR proposals resulting from lands purchased with compensation flowing from Tribunal decisions: c) where s.21(1) of the Act applies “for an unlawful disposition of all of the interests or rights of a claimant in or to land and the interests or rights have never been restored to the claimant, then all of the claimant’s interests in and rights to the land are released”; or, d) where the Tribunal decision is based on Canada’s breaching a lawful obligation to provide reserve lands. The two categories in a) and b) above appear to cover the areas in the Tribunal legislation specific to the desire to “re-acquire or replace lands that were the subject of a Specific Claim”. There appears no reason, however, why “Tribunal Decisions” should not be treated consistently with other ATR categories, including Legal Obligations, with respect to the site specific criteria of the ATR policy. Site specific criteria include the need: - to consult/respect the treaty and aboriginal rights of other First Nations that may be affected; - for local consultations and (where relevant) negotiations (e.g.: land use, zoning, tax loss etc); - to undertake environmental assessments; and, - for good title and respect for existing third party interests.

LAND QUANTUM The general principle in land selection negotiations is that ATR should be provided in a 1:1 ratio to the lands lost. In the context of Tribunal decisions, this could also then be applied to breach of lawful obligation to provide lands, in relation to the quantum of lands not provided (subject to the practical consideration of the quantum of land available for First Nations to purchase). LAND SELECTION AREA Community growth ATR’s must be within the “service area” of the existing reserve. Legal Obligation ATR’s follow the specifics of the legal obligation. In the case of specific claim negotiations, preference is within the service area of existing reserve(s) but may be varied based on differing regional definitions of service area, as well as based on the planned use of the reserve land and the general availability of land within the traditional area of the First Nation, relative to the quantum involved. A policy for Tribunal decisions should be consistent with this and be informed by the disposition of ATR policy issues on: 1. definition of service area 2. ability to distinguish between types of reserve (by use). Further work is suggested here based on analysis of actual settlements over the last 5 years and the general ATR policy context noted above. SELECTION PERIOD Specific Claims settlements can vary considerably. This issue should be reviewed on the basis of data on actual settlements along with the Land Selection Area above. PROCESS A protocol should be agreed to which allows INAC’s Lands Branch to work at an early stage with First Nations to confirm its interpretations of Tribunal decisions, in terms of the application of the ATR rules. This would allow for any questions to be worked out early on while the information was still fresh in everyone’s minds.  

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