Land Interests in Reserves
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1 Native Courtworker and Counselling Association of B.C. Aboriginal People and the Law Programme Land Interests in Reserves Prepared by Gary Campo and Holly Vear April 15, 2011 Woodward & Company Lawyers LLP 2 nd Floor, 844 Courtney Street Victoria, British Columbia V8W 1C4
2 Table of Contents LAND INTEREST IN RESERVES... 1 I- Legal Framework... 1 II- Types of Holdings... 1 A- Custom Allotment Interest... 2 B- Buckshee Interest (non-indian Act)... 2 C- CP Interest (s.20, 24 and 58(3));... 3 D- Permit Interest (s. 28)... 5 E- Land Designation Leasing Interests (ss 37-41, and 53(1))... 5 F- Matrimonial Property Interests... 6 G- Estate Interests (ss. 4(3), 42, 45(3), 46(d), 48, 49, 50)... 7 H- First Nations Land Management Act... 8 I- Treaty... 9 J- Bylaw Implications (ss. 81, 83 and 85.1) K- Expropriation by Municipal/Provincial/Federal government (s.35) L- Indian Lands Registry System (ILRS) (ss. 21 and 55) III- Concluding Remarks... 11
3 LAND INTEREST IN RESERVES I- Legal Framework II- Types of Holdings 1 Due to the use of the word Band in the Indian Act, the authors use the word Band and First Nations interchangeably. 2 See also Derrickson v. Derrickson, [1986] 3 W.W.R 193 at 200 (SCC). 3 Indian Act, section 20(1). 4 See exception George v. George [1993], 2 C.N.L.R. 112 (BCSC), affirmed, [1997] 2 C.N.L.R. 62 (SCC). Based on some exceptional factors, although a CP did not exist, the Band member was held to be in lawful possession of land in a reserve; See also Section 22 wherein an Indian who possess and improves land before they are made reserve lands, will be deemed to have lawful possession at the time they are made reserve lands. 5 Joe v. Findlay, [1981] 26 B.C.L.R. 376 (B.C.C.A); See also Tatoosh v. Sayers, 2001 BCSC 699 (BCSC). [1]
4 A- Custom Allotment Interest A custom allotment or holding is a right to occupy reserve land which is granted to an individual by a resolution of a First Nation council, or pursuant to some form of written or unwritten band custom. However, the First Nation does not request approval or registration of the custom allotment with the Minister, and a formal CP is not issued. Because there is no approval or registration by the Minister, a custom allotment is not considered lawful possession under the Indian Act, or under Canadian law, and is not treated as a legal interest in land. Rights of individual possession in this manner are based on mutual agreement between Council and the individual member. B- Buckshee Interest (non-indian Act) A Buckshee interest is an unregistered agreement/lease entered into between a member of a First Nation, or the First Nation itself and an individual who may or may not be a member. Essentially, a Buckshee interest, similar to a custom allotment, is an agreement that has not been approved or registered by the INAC, as required by the Indian Act. Therefore, Buckshee interests do not carry with them security of tenure. The Indian Act requires two steps in order for a member to validly occupy reserve land, which is enforceable against the First Nation: (1) the First Nation must allot the land to the member; and (2) the Minister must approve the area so allotted (S.20(1)). 8 If the Minister has not approved the allotment, then the member/tenant may have difficulty enforcing any lease/agreement against the First Nation. 6 Upper Nicola Band et al v. Trans-Can Displays et al 2000 BCSC Upper Nicola Band et al v. Trans-Can Displays et al 2000 BCSC 1209; See also Francis v. Canada, [F.C. 2000] full cite. 8 Upper Nicola Band et al v. Trans-Can Displays et al 2000 BCSC 1209 at 128. [2]
5 In order for a lease between a First Nation and a non-member to be valid, the lease must be approved and granted by INAC, and must be registered in the Indian Land Registry (s.28). Parties to a Buckshee interest do not have a right to possession of the property against the First Nation or member. The lease is subject to the continued goodwill of the First Nation or member. However, the courts have recognized that even if a lease agreement is not approved and registered by the Minister, and therefore not valid, Section 28 does not automatically dissolve all of the landlord s (the band or member s) obligations to the tenant, particularly if the leased lands include both on and off-reserve lands 9. Yet, Buckshee interests are not uncommon, particularly when a First Nation has trouble navigating the land related policy requirements of INAC. Buckshee interests can be seen when dealing with leasing arrangements for campgrounds and recreational properties, primary residences, and in some cases even in the commercial context. Accordingly they can represent a significant amount of value. As an example, the Okanagan Indian Band estimates that over 1,500 Buckshee leases exist on their reserve lands. 10 In addition to the insecurity of tenure and enforceability of any agreement, Buckshee interests cannot be mortgaged. C- CP Interest (s.20, 24 and 58(3)); Under s. 20(2) of the Indian Act the Minister may issue a CP to an Indian 11 who is lawfully in possession of land in a reserve as evidence of his right to possession of the land described therein. Consequently, a CP is legal evidence of the right to possess reserve land and to occupy that land. Land granted under a CP is approved and registered with INAC and therefore is a much stronger property right (legally valid) than customary or Buckshee interests (legally invalid). However, the property rights flowing from a CP are not identical to fee simple ownership. It entitles the holder to exclusive use and possession in much the same manner as fee simple; however, a CP cannot be transferred or willed to a non-member. A CP can only be transferred or willed to the band or a member of the band (s.24). 9 M.D. Sloan Consultants Ltd. v. Derrickson (1991) B.C.L.R. (2d) 370 (B.C.C.A.); leave to appeal refused (1992) 68 B.C.L.R. (2d) xxi (note) (S.C.C.). 10 Okanagan Indian Band. Draft Property Taxation Information Package. N.d Interestingly, s.20 provides that a CP can be issued to an Indian, and does not stipulate that only Band members of that particular First Nation can be allotted CP s. However, it is likely that only a Band member of that First Nation can be allotted a CP to that particular Band s reserve lands. Section 18 provides that reserves are set aside for the use and benefit of that Band. Section 24 provides that CP s can only be transferred to the Band or a Band member. Section 25 provides that an Indian that is no longer entitled to reside on the reserve (i.e. a non-member) must transfer the right to possession of the reserve land to the Band or a Band member. Section 50(1) provides that a person that does not have a right to reside on that particular reserve cannot obtain possession by way of a will. [3]
6 The use of CPs varies from First Nation to First Nation. Some reserves have no, or only one or two CPs, and other reserves are almost completely covered by allocated CPs. However, Council s must be mindful of the fiduciary duty owed to the membership at large when allocating CP lands 14. Arguably, Council has a duty to keep sufficient reserve lands to accommodate the needs of the community at large, and not allocate all of the reserve to a few individuals. Therefore, it is advisable that Council be cautious when allocating CP s, and to balance the interests of individual members with the membership at large. 12 Tsartlip Indian Band v. Canada (Minister of Indian Affairs and Northern Development [2000] 3 C.N.L.R. 386 (FCA). 13 Louie and Beattie v. Indian and Northern Affairs Canada, 2011 CHRT 2; Judicial Review filed. 14 Lower Nicola Indian Band v. Trans-Canada Displays Ltd., 2000 BCSC 1209 (BCSC). [4]
7 D- Permit Interest (s. 28) A permit is a right to use reserve land granted to non-indian and/or Indian third parties under s.28(2) of the Indian Act. Permits are generally used to grant short-term rights of use, licenses or rights of occupancy on reserve land. Long-term use is generally granted by the Minister through a s.53(1) lease, after the land is designated by the First Nation under s.38 of the Indian Act. Although permits have been found to apply in some circumstances to long-term use 15, INAC prefers permits to be used for short-terms. One of the main differences between a permit and lease is that a permit grants non-exclusive use, whereas a lease grants an interest that is exclusive to others. As such, permits create a lesser interest in land than a lease, and are sometimes more attractive to a First Nation. However, they are generally not appropriate for ostensibly permanent structures. With respect to process, the Crown is the permitter (landlord), the party receiving the permit is the permittee (tenant), and the permit revenues accrue to the benefit of the First Nation. Whereas section 28(2) of the Indian Act provides the ability for an individual to obtain a valid permit to legally use reserve land, section 28(1) is the restrictive section that voids any agreement that purports to do so without the approval of INAC. Essentially, any agreement whereby a First Nation, or an individual member of that First Nation, purports to grant, to any non-member, rights to use, occupy, reside on or otherwise exercise any rights on a reserve, without INAC approval is void. Such unapproved and unregistered agreements would merely be Buckshee interests. However, as stated above, void or invalid agreements do not necessarily mean that the parties have no obligation to each other. Technically, the Minister may issue permits without band council consent if the term is for less than one year, and with band council consent for longer than one year. However, in practice, it appears INAC obtains Council s consent for most, if not all, permits. E- Land Designation Leasing Interests (ss 37-41, and 53(1)) Designation is a process whereby the band electors give the Federal Government, represented by the Minister, the authority to grant leases or other interests in reserve lands that have not been allotted to band members. Generally, designations are done in order for a First Nation to carry out economic development activities. Designation is a form of surrendering reserve lands for leasing (s. 38(2)), but the term designation is generally used to refer to a non-absolute surrender. The process for designating reserve land is set out in section 39 of the Indian Act; the goal of the process is to ensure that the land is designated with the requisite consent of the band membership. Therefore, reference to the 15 Opetchesaht Indian Band v. Canada, [1997] 2 S.C.R [5]
8 Indian Referendum Regulations is required as a community vote must take place to approve a designation. Once the community approves the designation it must be approved by the Governor in Council. It usually takes 12 months or more to complete the designation process with INAC, and can sometimes take years. lease revenues accrue to the benefit of the First Nation F- Matrimonial Property Interests 16 Section 89(1.1) states that a leasehold interest in designated lands is subject to charge, including a mortgage. 17 [1986] S.C.J. No. 16 ( Derrickson ). [6]
9 - use, occupation and possession of family homes on reserves; - exclusive occupation in cases of family violence; and - division of value of interests or rights held in structures or lands on reserves. G- Estate Interests (ss. 4(3), 42, 45(3), 46(d), 48, 49, 50) 18 Darbyshire-Joseph v. Darbyshire-Joseph, [1998] BCJ No. 2765; and George v. George, [1997] 2 C.N.L.R FNLMA, Sections 6(1)(f) and 17. [7]
10 H- First Nations Land Management Act The Indian Act can restrict First Nations management and development of reserve land. In response to this criticism, an alternative to the scheme provided under the Indian Act was developed in the Framework Agreement on First Nations Land Management ( Framework Agreement ) and the First Nations Land Management Act ( FNLMA ). The Framework Agreement and FNLMA were ratified and implemented by Canada in The FNLMA grants signatory First Nations authority to create their own land management systems through individualized land codes to manage their reserve lands. Under the FNLMA, a signatory First Nation has the power to enact laws respecting the environment and the development, conservation, protection, management, use and possession of First Nation land. 21 The First Nation and Canada must also enter into an individual agreement to determine the level of operational funding for land management and to set out the specifics of transition to the new regime (the First Nation land code). Both the land code and the individual agreement must be ratified by the First Nation membership. Canada will continue to hold title to the First Nation land, but will not have any management authority over the land 22. Under the FNLMA, a First Nation cannot sell its reserve lands, but it is permissible to exchange First Nation lands for other lands which become reserve lands, provided the community approves the exchange Songhees First Nation v. Canada (Attorney General), 2002 BCSC 255 (S.C.). 21 FNLMA, s S.5 of the FNLMA 23 Section 14 of the Framework Agreement and s. 27 of the FNLMA 24 Director of Operational and Developmental Services West, First Nations Lands Management Resource Centre; see also 2009 Fall Report of the Auditor General of Canada, Chapter 6, at [8]
11 The FNPO is an initiative that would allow for First Nation ownership of lands, and the ability of First Nations to grant fee simple titles, without the involvement of the federal government. Proponents of the FNPO initiative claim the system will enable the use of land as security, enable registration of interests in land in a Torrens style registry, and provide options to ensure that reserve property can be transferred to non-status members 29. Critics of the FNPO initiative warn of potential difficulties in implementing such an initiative similar to those faced by First Nations engaged in the treaty negotiation process and implementing aboriginal title 30. Critics also point out that outside of the fee simple land and Torrens style registry, the tools provided for in the FNPO Initiative already exist under the Indian Act, and the FNLMA, which have been underutilized. I- Treaty 25 Ibid. 26 Ibid Fall Report of the Auditor General of Canada, at Fall Report of the Auditor General of Canada, at First Nations Tax Commission, Who Should Own Reserve Lands? The First Nations Property Ownership Initiative A Discussion Paper, October H. Mahoney & M. Browne, The First Nations Property Ownership Initiative and existing alternatives, Aboriginal Writes, the CBA Aboriginal Law Section Newsletter, February [9]
12 J- Bylaw Implications (ss. 81, 83 and 85.1) Section 81 bylaws vary in scope and include such powers as regulating the reserve with respect to health, traffic, law and order, disorderly conduct, nuisance, roads, bridges watercourses, trespass, residence on reserve and other such topics. Although Section 81 bylaws can address the rights of spouses and children on reserve, Section 18.1 provides that bylaws cannot be used to limit the right of band members to live on-reserve with their dependent children or children of whom they have custody, whether or not those children are band members themselves. Section 83 bylaws are related to the regulation of taxation on reserve, taxation assessment and rates, expenditures, financial administration, and business licensing. Section 85.1 bylaws are related to regulating intoxicants. Bylaws are useful in maintaining control over reserve lands, particularly CP owned lands. For example, if Council has zoning bylaws in place that restrict particular uses such as toxic dumping, a CP owner arguably cannot violate the bylaw and lease his or her CP lands out to a corporation that wants to dump and store toxic waste. K- Expropriation by Municipal/Provincial/Federal government (s.35) 31 Osoyoos Indian Band v. Oliver (Town), [2001] 3 S.C.R. 746 (SCC) at para Osoyoos Indian Band v. Oliver (Town), [2001] 3 S.C.R. 746 (SCC) at para 54. [10]
13 L- Indian Lands Registry System (ILRS) (ss. 21 and 55) The registry was established under the Indian Act and is operated by INAC for the purpose of recording and prioritizing transactions involving reserve land (e.g., lawful possession, CPs, Certificates of Occupation, transfers of lawful possession, locatee leases, mortgages of locatee leasehold interests, designations and surrenders, leases, etc. (ss.21, and 55(1)). The procedure for registering interests can also be found in the INAC Lands Management Manual. 33 III- Concluding Remarks he Indian Act creates a unique and complex framework regarding land interests, which is much different than the off-reserve Provincial system. Therefore, it is in all First Nations interests to understand the framework in order to best navigate the Indian Act, INAC s interpretation of the Indian Act, INAC s policies, other land management system options, and the economic opportunities available in the commercial world. Hopefully, this paper is a start to that understanding. 33 Section III. Registration of Reserve Land Transactions [11]
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