First Nation Reserve Land Tenure Regimes

This module addresses First Nation Reserve land tenures, which encompasses Indigenous people’s rights to land only under Canadian common law.  The matter of Indigenous rights and title to land is separate, and addressed in other case materials and the Learning Module on Indigenous Title and Rights.

Reserve lands were created in accordance with the Indian Act (R.S.C., 1985, c. I-5). Under this Act, the use, control, and disposition of Reserve lands by Indigenous peoples are severely constrained.  The issues with this state-controlled Reserve system are pronounced when compared to two other regimes that are available to First Nations, which are:  (1) self-determined tenures under the Framework Agreement on First Nations Land Management (hereafter, Framework Agreement); and, (2) fee simple treaty settlement lands offered under the BC Treaty Commission Process.  Collectively, the three regimes represent a continuum from limited property rights under the Indian Act to full property rights after treaty settlement.

Prior to European contact, Indigenous peoples determined territorial boundaries through a system of laws and customary rights.  The extent to which property rights were practised and how formally they were managed varied significantly among Indigenous Nations across continent.  Generally, customary rights were established usually through ritual and ceremony, and were enforced according to cultural practices and protocols.  Customary rights are still practised today by many Indigenous peoples to grant and reaffirm private interest in areas of reserve land and traditional territory, and are increasingly recognised within Canadian legal and political realms.  This particular nature of land use planning for Indigenous peoples demonstrates to Canadians that “the relationships that people have with land and with each other, concerning the acquisition, use, transfer and distribution of land and its products” are outcomes of negotiations.^[1]  Indigenous land use planning also illustrates how the intricacies of land tenure and property rights creates many avenues for debate within negotiation processes and often leads to verbal, legal, and sometimes physical conflict among stakeholders.

The particular struggle of Indigenous peoples can be characterised as an ongoing effort to devise an equitable and ethical system of rights that satisfies both Western and Indigenous notions of communal and private property.  In addition to customary rights, the result is a continuum of property ownership from less to more bundles of rights.  As noted, this continuum ranges from state-controlled tenures of the Indian Act, to self-determined tenures under the Framework Agreement, to fee simple treaty settlement lands offered under the BC Treaty Process.

When considering the range of tenures available to Indigenous peoples, one must also consider “tenure security” and “transaction costs.”  In conventional terms, tenure security has a strong association with legal title, that is, registration and protection under state law.  This narrow view of legal title must be extended to include other forms of recognition, such as oral tradition, customs, and rituals, as well as resolutions enacted through traditional systems of governance.  Security of tenure is also associated with duration, whereby there is the real or perceived expectation that tenure will continue without infringement or interference by others for the long term.  Tenure security is also related to the right to reap benefits from the land or resource.  Thus, a high degree of security implies little risk of the state or other claimants impinging upon another’s land rights.  Correspondingly, a higher degree of tenure security is a foundation for investing in, conserving, and protecting property.  Baxter and Trebilcock highlight these aspects of tenure security, as well as some related issues, as follows.

Where some of the community’s goals are to use resources more efficiently and to promote growth by participating in national and international economies, harmonizing land tenure inside the community with regimes outside and enforcing rights at the level of the state may provide greater tenure security for interest holders and produce net economic benefits.  However, these reforms may entrench inefficient regimes, undermine traditional tenure systems, pose serious threats to community cohesion and fail to consider crucial supporting institutions, thus creating greater uncertainty and diminishing prospects for community-led development.^[2]

The term transaction cost describes the administrative burden incurred when dealing with property rights through the legal system, including financial and non-financial costs, as well as time.  Both tenure security and transaction costs influence how one weighs the advantages and disadvantages of holding interest in lands.

 

The Indian Act:  Reserve Tenure

The Indian Act was enacted in 1876.  Although amendments have been made since its inception, the tenets of the legislation remain intact.  Among Indigenous peoples, the Act is viewed as a form of discrimination and paternalistic oppression that regulates their lives.  Among other things, the Act imposed band councils as the only legally-recognised form of governance and restricted traditional cultural practices.

The Indian Act is also the primary legal mechanism of the Government of Canada for enforcing power over all “Indians and Lands reserved for the Indians” (s. 91(24) of The Constitution Act, 1867).  As stated in Section 20(1), “no Indian is lawfully in possession of land in a reserve unless…possession of the land has been allotted to him by the council of the band.”  However, the lawful possession of land by individual band members provides few property rights under the reserve tenure regime of the Indian Act.  Legally, First Nations possess usufructuary rights, which refers to the right to use and enjoy the property of another (the Crown), provided its substance is neither impaired nor altered.

For Reserve lands, band councils may grant possession of an on-reserve land parcel to a band member through either customary rights or a Certificate of Possession.  It must be noted, however, that all formal band council decisions are subject to approval by the Federal Minister of Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC), an arrangement that can make on-reserve land development a protracted and difficult process.^[3]  If a band council adopts a Land Code, in accordance with the Framework Agreement and Framework Agreement on the First Nations Land Management Act^[4] (S.C. 2022, c. 19, s. 121), it can operate much like a municipal government and exercise authority over many aspects of land management, including the granting of possessory rights, zoning, and subdivision regulations, as well as processing development applications.

Since the Crown retains legal title to Reserve land, all Reserve lands are inalienable.  This means that the land cannot be sold and can only be bequeathed to band members.  Similarly, land obtained through customary rights cannot be leased to outside parties, mortgaged, or used as collateral for a loan.  However, Section 38 of the Indian Act does permit a band to “surrender” all rights and interests in a property to the Crown or to “designate” land for the purpose of establishing a leasehold interest.  This provision helps to use this land as collateral to get financing from off-reserve institutions, since lands surrendered in this manner may be seized in the event of a loan or mortgage default.  However, since leasehold administration is conducted directly through CIRNAC with the leasee, the potential exists for disagreement between a land user and the Crown over specifics of the contract.

 

Customary Rights

One method an individual band member can acquire interest in property is through customary rights, which are established through a range of traditions and practices unique to each band.  The administrative systems for managing customary rights may range from informal, socially-determined mechanisms to those that are “highly structured with detailed, explicit rules regarding land use, value appropriation, title transfer and inheritance, and the initial allocation of rights by a central authority.”⁴

Once granted customary title, an individual user may occupy a parcel of land so long as the land use remains consistent with the wishes of band council.  For example, a band member granted customary possessory rights may be enabled to build a home, operate a business, or cultivate the land for agricultural purposes.  However, in cases of dispute, most courts have prioritised communal customary interests in Reserve lands over an individual member’s customary rights.  Since customary rights are not legally recognised under the Indian Act, a land user has no mechanism for appeal.  Thus, depending on the nature of the property and the member’s relationship with council, the land user may be subject to significant tenure insecurity.

There are some transaction costs associated with customary rights.  With regard to the Indian Act, ministerial approval is rarely obtained since customary rights are not legally recognised.  To remove timber or minerals from properties occupied under customary rights, the land user must apply to the Minister and pay the band for a temporary permit.  The revenue from these transactions is collected communally as “Band moneys” and may only be spent with the Minster’s approval.

 

Certificate of Possession

A band member who is in lawful possession of land (i.e., under section 20(1), approved by the council of the band) and wishes to increase tenure security may apply for a Certificate of Possession (CP) under section 20(2) of the Indian Act.^[5]  A CP provides lawful “evidence of his [the successful applicant’s] right to possession of the land,” thus providing an individual member with use and possession rights, but not title to the land itself.  In these terms, CPs are closest to, but fall short of, fee simple ownership on Reserve lands.  A CP holder has the right to build a home on the land, extract resources from the land, and lease the land to another band member or non-member.  A CP holder is not able to mortgage the property or use it as equity for a business venture.

A land user who obtains a CP from the Minister may be more likely to invest in the land and its buildings, since (a) risk of appropriation is greatly reduced; (b) ministerial and/or council approval of entrepreneurial activities is likely not required; and (c) profits from land use (through leases to third parties, primarily) are retained by the CP holder.  Land held under a CP can also be used as collateral for a loan from the Band.

Notably, a land user is not permitted to transfer or subdivide a CP to non-band members; however, under section 58(3), the federal government may establish long-term leases for CP land with non-members or corporations, effectively selling the property.  This latter arrangement does not require consent from band council and is obtained directly through CIRNAC.  Nonetheless, the reserve tenure system may serve as a disincentive to outside investors.

Acquiring a CP involves considerable transaction costs.  Resolution by a band council and approval by CIRNAC may take anywhere from 6 months to 11 years.^[6]  Transfer applications to other band members are also burdened in this manner.

 

Framework Agreement on First Nations Land Management:  Self-determined Tenure

The Framework Agreement on First Nations Land Management, agreed upon in 1999, represents a government-to-government initiative to improve Indigenous governance through the development of self-determined Reserve land management regimes for each participating band council.  This agreement allows for the transfer of administration and control over land management (but not Indigenous title) from CIRNAC to a band council.  In effect, the Framework Agreement strengthens the communal (or collective) rights of participating bands and is a step toward developing culturally appropriate on-reserve land tenure regimes.  In collaboration with its members, a band council is empowered to decide through which tenure regime land users, both members and non-members alike, may occupy, manage, transfer, and profit from Reserve properties.

The transfer of administration and control is accomplished through the creation of a Land Code, which replaces specific land-related provisions of the Indian Act. As of 2020, 96 band councils across Canada have an operational agreement, with 48 agreements under development.^[7]

Section 6(1) of the Framework Agreement outlines the requirements for adoption of a Land Code, including a legal description of the land that will be subject to the Code.  The Land Code includes the rules and procedures governing a range of land uses and associated rights, such as the following:

• use, occupancy, transfer, expropriation, or exchange of reserve land;
• division of interest in cases of breakdown of marriage;
• management of revenues gained through natural resource exploitation on Reserve land;
• enactment and publication of laws;
• delegation of authority, potential conflicts of interest, and dispute resolution; and,
• amendment of the Land Code.

 

The Framework Agreement contains a number of other sections relevant to Reserve land use planning, including the following:

• empowering First Nations to enact laws pertaining to environmental management, protection, and conservation;
• requiring band approval for adoption of the Land Code;
• establishing a Lands Management Committee to aid in development and administration of the Land Code; and,
• creating a Canada-wide First Nations Land Register for bands operating under the Framework Agreement.

 

Prior to ratification of its Land Code, band councils must complete an Individual Agreement, also known as a Transfer Agreement, with the Government of Canada.  This agreement details the transfer of Federal interests and administrative duties to a band, and the financial resources required to capably administer these new jurisdictions.  Upon member ratification of this agreement and the Land Code, a band acquires full legal powers to manage all its lands and resources as outlined in the Framework Agreement.

Tenures issued under this regime will be registered in the First Nations Land Register, which is administered by CIRNAC.  A participating nation may also choose to create their own on-reserve registry system that duplicates information provided to the federal land register.

Under the Framework Agreement, all Reserve land continues to be held in trust by the Crown, thereby prohibiting outright transfer of title to non-members.  Nonetheless, outside investment may be enticed by reduced transaction costs, where Ministerial approval is no longer required for land use arrangements.

Given the stipulations for member approval and a formalised lands registry, it may be assumed that tenure security for individual band members will be improved under the Framework Agreement.  Furthermore, tenure security is increased by allowing council or land users to negotiate lease contracts directly with third party lessees, a power not afforded under the Indian Act.  However, imprecise or vague language employed when drafting a Land Code may actually decrease security for land users when compared to the more firmly entrenched CP system.  Furthermore, the variability of self-determined tenures makes analysing the security of property rights of individual land users more complicated.

 

Critical reflections on the Framework Agreement

While the Framework Agreement represents a significant step towards developing culturally appropriate Reserve land tenure regimes, the rights of Indigenous peoples remain subsumed under s. 91(24) of the Constitution Act, 1867 and the largely archaic Indian Act.  This restriction on land tenure persists under the Framework Agreement because the adoption of a Land Code has no bearing on title.  In other words, as stated in the Framework Agreement, the land management agreement is not a treaty or land claim.

Three issues regarding the Framework Agreement should be noted.^[8]  The first is the cost of administering a land code, which requires time and expertise.  Some funds are provided initially to support administration, but bands have stated that the funding is inadequate.  Second, these costs include environmental assessments and land surveys.  Liability is another major concern.  Under their own land code, a band assumes legal and financial responsibility for everything that happens on their land, including disasters and problems.  Given these issues, as Flanagan and Alcantara note, the options afforded under the Framework Agreement appears, in some respects, to be a process of the federal government devolving some responsibilities to band councils.

Sharlene Jobin and Emily Riddle offer a harsher critique.^[9]  While not rejecting the Framework Agreement outright, Jobin and Riddle express strong concern that the Framework Agreement must be viewed as part of a larger context of colonisation and alienation.  They state,

In our view, as treaty people, the threat of the First Nations Land Management Regime is that it overwrites our treaty history and obligations.  Beyond this, for people whose nations do not have historical or contemporary treaties with the Crown, the threat of the politics of distraction is also at play in that we believe we should be having a larger, more robust conversation with the Crown regarding jurisdiction and management of lands and resources in Canada.  It is important to state at the outset that the Indian Act, the First Nations Land Management Act, and the Framework Agreement on First Nation Land Management make no substantive reference to treaties.  This regime is about a very limited type of self-governance and does not substantively implement the self-determination envisioned by our ancestors through treaty or inherent rights. (p. 5)

Jobin and Riddle characterise the Framework Agreement as a process of “Reserve marketisation.”  They argue that the First Nations Land Management Act prioritises economic development, thus favouring First Nations with aligned interests. “Ultimately, the aim of the First Nations Land Management Act is to put reserve land on the global market, subjecting communities to increased market forces” (p. 6).  The effect is to serve economic interests at the expense of Indigenous philosophy, practices, and lands.

 

Treaty Settlement Lands

Fee simple is the highest estate a land user may be granted in Canada.  Title holders may exercise the fullest extent of property rights afforded under Canadian law (subject to legislation, taxation, Crown reservations and/or any stipulations on the deed or certificate of title).  Thus, land users may enjoy a high degree of tenure security and minimal transaction costs associated with their property.  For these reasons, some argue that fee simple title is best suited to empower Indigenous peoples to “define their relationship with the land as they wish,” with minimal risk of interference or expropriation from government or other claimants.^[10]  Furthermore, the self-governing authority and law-making power of a treaty allows Indigenous peoples to ensure cultural values are enshrined within an appropriate legal framework.

In British Columbia, the process for formalising fee simple rights and title to land is established through a six-stage negotiation process administered through the BC Treaty Commission.  While the specific details of provincial treaties are unique to each Indigenous Nation, each treaty will normally include common provisions such as:

• establishment of treaty boundaries and title to a unique fee simple estate known as treaty settlement lands;
• a clear system for Indigenous self-governance, including a constitution, taxation frameworks, financing agreements and law making authority;
• emancipation from all provisions included in the Indian Act (other than provisions affecting Indian status and certain wills and estates);
• specific rights to use natural resources; and,
• a role for Indigenous Nations in land and resource management within traditional territories not included in the treaty boundaries.

For these provisions, some advocates describe the BC Treaty Process as fundamentally distinct from past attempts at enfranchisement in that, rather than take away status, the self-governing authority and law-making power of a treaty allows Indigenous Nations to ensure cultural values are enshrined within an appropriate legal framework.

As an example, the Nisga’a in the Nass River Valley sought and ratified a unique treaty agreement in 2000, which contains provisions for self-government and fee simple ownership.¹¹   For the Nisga’a, the treaty established a “modified” form of title to land, which included areas of land dedicated as Nisga’a Lands (communal lands) and Nisga’a Fee Simple Lands.  The Nisga’a Fee Simple Lands refer to 33 sites located outside of Nisga’a Lands.  Eighteen of these sites are former reserve lands, to which the Nisga’a have close to full fee simple tenure (referred to as Category A lands), which includes full rights to subsurface resources, i.e., minerals.  Fifteen sites are located elsewhere with limited fee simple tenure (Category B Lands).  The treaty established the authority of the Nisga’a Government to make laws dividing property and regulating activities.

In its annual report for 2022, the BC Treaty Commission identifies 39 First Nations involved in the BC treaty process.  Seven First Nations are implementing modern treaties; 31 First Nations are actively negotiating at different stages of the process. The Nisga’a Treaty was negotiated prior to the BC Treaty Commission process.

 

Fee Not-So-Simple?

Despite the many apparent freedoms offered under fee simple estate, a debate exists whether or not freehold tenure is desirable for Indigenous peoples.  In the United States, the much maligned Dawes Act (1888) enforced private interests through fee simple ownership of Reserve lands upon Indigenous peoples.  The campaign was a failure, with hindsight suggesting that private land holdings “actually increased poverty rather than reducing it” by providing non-Indigenous speculators with the legal mechanisms to purchase Reserve lands.^[11]  For similar reasons, some argue that fee simple title would fundamentally alter the relationships between Indigenous peoples and their lands.  This perspective was reinforced by the Assembly of First Nations’ rejection of the proposed First Nation Property Ownership Act (POA).^[12]

The First Nations Tax Commission, a Federally-legislated body, proposed the POA in 2009.  In their rejection of the POA, the Assembly of First Nations argued that:

• First Nations have a relationship with their territories that is rooted in their spirituality as a gift from the Creator.
• Their spiritual connection with their territories is the foundation of their life as Peoples.  First Nations have a sacred responsibility to honour and preserve their spiritual connection to their territories.
• The proposed POA would endorse “fee simple title” of First Nation reserved lands, a concept that is in direct contradiction to First Nation sacred responsibilities and distinct relationship to their territories.
• The proposed POA would enable First Nation lands to be “transferred to non-First Nation persons” and would erode their collective rights in their reserved lands.
• Fee simple title will lead ultimately to the individual privatisation of Indigenous collective lands and resources and impose the colonizer’s model on First Nations Peoples.
• The POA literature ignores the ultimate risk that all First Nation lands, currently held in trust by them for their future generations, could disappear through “fee simple title” thereby violating their responsibility to subsequent generations and sacred treaties.

In contrast, the First Nations Property Ownership Initiative, a group, argued in favour of the POA because it would allow Indigenous Nations to transfer title of lands from the Federal Government to Indigenous Nations and to issue fee simple title.^[13]

The debate about fee simple rights transcends arguments about the advantages and disadvantages of this tenure.  As reflected in the landmark Supreme Court of Canada case, Delgamuukw v. British Columbia (1997),

‘Aboriginal title’ is based on the continued occupation and use of the land as part of the Aboriginal peoples’ traditional way of life.  This sui generis interest is not equated with fee simple ownership; nor can it be described with reference to traditional property law concepts.^[14]

Fundamentally, the debate strikes at the heart of ‘tenure formalisation,’ about whether or not the Western system of land tenure and property rights is compatible with Indigenous concepts of ‘ownership,’ and about the possibility of an equitable and ethical system of rights that satisfies both Western and Indigenous notions of property.