Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 26 - Evidence - November 7, 2012
OTTAWA, Wednesday, November 7, 2012
The Standing Senate Committee on Aboriginal Peoples met this day at 7:15 p.m. to examine the subject matter of those elements contained in Division 8 of Part 4 of Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012, and other measures.
Senator Vernon White (Chair) in the chair.
[English]
The Chair: Welcome, minister and staff. Good evening. I would like to welcome all honourable senators and members of the public who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples on CPAC or the web.
I am Vern White from Ontario and am chair of the committee. The mandate of this committee is to examine legislation and matters relating to the Aboriginal peoples of Canada generally. Under this mandate we have been given an order of reference to study the subject matter of those elements contained in Division 8 of Part 4 of Bill C-45, A second Act to implement certain provisions of the budget tabled in Parliament on March 29, 2012 and other measures.
Today we begin our study of this subject matter by hearing from Minister Duncan and officials of Aboriginal Affairs and Northern Development Canada and the Department of Justice Canada. Before hearing from our witnesses I would like to take this opportunity to introduce the members of the committee who are present this evening.
They are Senator Nick Sibbeston from the Northwest Territories; Senator Lillian Dyck from Saskatchewan, who is the deputy chair of the committee; Senator Larry Campbell from British Columbia; Senator Charlie Watt from Quebec; Senator Nancy Greene Raine from British Columbia; Senator Selma Ataullahjan from Ontario, Senator David Tkachuk from Saskatchewan; and Senator Michel Rivard from Quebec.
Members of the committee, please help me in welcoming the Honourable John Duncan, Minister of Aboriginal Affairs and Northern Development, and the officials who are supporting him this evening.
Minister Duncan, we look forward to your presentation to be followed by questions from senators.
Hon. John Duncan, P.C., M.P., Minister of Aboriginal Affairs and Northern Development: Thank you very much for the introduction. I am pleased to be here to speak to amendments in Bill C-45 that will enhance economic development opportunities on reserve. Amendments in Division 8 of Bill C-45 concerning the land designation process will address barriers in the Indian Act that stand in the way of economic progress on First Nation lands. More specifically, these amendments will streamline the current land designation process on reserve and allow First Nations to operate at the speed of business.
The vast majority of First Nations operate under the land management provisions of the Indian Act. Under the Indian Act, when a First Nation wishes to lease land to business partners for economic development, the land must first be designated for this purpose. The business may then temporarily operate on the specified portion of the reserve while the First Nation retains underlying title to and jurisdiction over the lands.
Financial institutions regard these leases as assets. They are particularly valuable to First Nations in that they can be used as collateral to secure loans or finance other economic development projects.
As you can see, land designations are an essential component of economic development on reserve, whether developing land for small- and medium-size businesses, parks and public spaces, or major industrial projects. A designation is also the first step in developing First Nation petroleum and mineral resources under the Indian Act.
However, under the current provisions of the Indian Act, getting a land designation is rarely a simple or speedy task. I have heard from First Nations across Canada that the length of time and amount of red tape and cumbersome requirements involved in the current designation process is unreasonable and impedes their ability to take advantage of economic development opportunities. I will explain how the system works currently.
Aboriginal Affairs and Northern Development Canada acts as the lessor for reserve lands, granting and administering land use leases on behalf of First Nations under the Indian Act. The department ensures that First Nations obtain fair market rent, and that any activity on leased land respects the terms and conditions of land designations and any pertinent regulations. However, it can take more than two years to finalize a lease from the time of initial discussion at the band level to the time of final Governor-in-Council approval of the designation. The length of time required to execute the lease means that investors often lose interest or never develop an interest in developing on-reserve lands. The Auditor General has also identified the designation and leasing process as causing unnecessarily lengthy approval times for projects on reserves.
Numerous First Nations have expressed to me their frustration with the current voting threshold required to approve a land designation. They have indicated it is unreasonable to expect them to attain the current "majority of a majority" threshold, which requires that the majority of eligible voters must participate in the vote and the majority of those voting must vote in favour of the designation. I think we have all seen this at the municipal level, where we often get turnouts of less than 50 per cent.
What is happening is that something just over 80 per cent, or four out of five, of these votes fail on the first vote due to the difficulty to ensure adequate participation by the majority of the eligible electorate. As a result, in most cases, the First Nation is required to hold a second vote by "simple majority" of those who do vote, which delays the process and adds administrative cost for the First Nation.
Even once a First Nation succeeds in holding a successful vote, it must then wait for final approval of the designation by the federal authority. Many First Nations have made it clear to me that this part of the process is unnecessarily long and cumbersome.
Our government is responding to these concerns by finding ways to streamline internal processes for granting land designations without detracting from the quality of service provided to First Nations or the ability of First Nations to provide their informed consent to a land designation. We know that land designation is one of the keys to unlocking on-reserve economic development across Canada. That is why these amendments contained in Bill C-45 are designed to reduce red tape and streamline the land designation process.
We plan to take action on two important fronts. First, Bill C-45 would expedite the voting process by lowering the community voting threshold from a "majority of a majority" to a "simple majority" on the initial designation vote. This would reduce the time to conduct a vote by as much as two months and would also eliminate the cost of administering a second vote.
A "simple majority" voting threshold is the norm for most other major decisions made on-reserve. It is currently sufficient to elect the chief and council of a First Nation, to accept multi-million dollar out-of-court settlements, and to accept a settlement of a specific claim valued between $3 million and $7 million.
The second amendment would reduce the red tape involved in getting final approval by the department by changing the requirement for Governor-in-Council approval to ministerial approval. This amendment would streamline the internal approval process and reduce the time it takes to obtain final approval for a land designation.
Both First Nations and their private sector partners are aggravated by unnecessary delays caused by the current regime. They want to strike land lease deals quickly and efficiently so they can get on with business. With these amendments, they will be able to do so. First Nations need to be able to move at the speed of business to seize time-sensitive economic opportunities. Both of these proposed amendments would reduce in a major way the average length of time it takes to process land designations on reserve.
Informed community consent will remain a critical aspect of land designations. Currently the designation process requires that all eligible members of the band receive detailed information packages about the proposed use of the land and that an information session be held prior to a vote. Members are notified by notices being posted in various places on reserve, and off-reserve voters are mailed the notice, the information document and a mail-in ballot. First Nations are also encouraged to have information sessions even before the designation process officially starts. None of these things would change under our proposed amendments to the process.
Mr. Chair, this government has been clear that job creation and economic growth are our top priorities. We are committed to empowering First Nations so they can respond to emerging economic development opportunities. We know that when First Nations are able to lease their lands, they create jobs in their communities. These jobs enable people to improve the standard of living and quality of life for themselves and their families.
These improvements deliver on the Prime Minister's pledge at the Crown-First Nations Gathering in January 2012 to provide options for practical, incremental and real change for First Nations to overcome the obstacles of the Indian Act.
Amending the land designation process is practical because it has widespread impact. It is incremental in that it strategically targets only a few provisions of the Indian Act for amendment. It is real in that it will immediately lead to a more efficient designations process and greater flexibility for first Nations to seize economic opportunities.
Mr. Chair, this is another example of how our government is working with First Nations to overcome barriers to success and to create conditions for stronger, more self-sufficient First Nation communities. While these amendments may appear to be relatively minor, they have the potential to profoundly impact the lives of First Nation people.
This bill is good for First Nation communities, it is good for business, and ultimately it is good for all of us.
The Chair: Thank you very much. Minister, so I know ahead of time, how much time do we have with you this evening?
Mr. Duncan: Until a quarter to the hour; another 18 minutes or so.
Senator Campbell: Welcome, minister. It is good to see you here. I think that these are good steps. I am in favour of anything that opens up the act and allows things to flow more freely and more in keeping with the real world.
I have a question about page 3. The department ensures that First Nations obtain fair market value and that the activity on leased land respects terms and conditions. Can the First Nations not be responsible themselves for this? I am wondering why the department would be in it. Let us take the Squamish. They are quite capable of sitting down and cutting deals.
Mr. Duncan: Are you talking about page 3 of the —
Senator Campbell: Of your written document. The sentence says:
The Department ensures that First Nations obtain fair market rent and that any activity on leased lands respects the terms and conditions of land designations and any pertinent regulations.
I can see where the department would have to step in with some First Nations that do not have the capacity, but is this in every case?
Mr. Duncan: What you are pointing out is a practical and pragmatic approach to how we would administer this. Indeed, we just approved a land designation in Chemainus, which is along the Island Highway near Ladysmith.
We are designating land that we know is commercially inviting but there are no specific arrangements yet. However, we know the First Nations have all the capacity in the world. We know that our fiduciary obligation is not going to be in question. They will carry out all the necessary due diligence.
You are quite right; we only do this when it is necessary to make sure we are not exposing ourselves in terms of down-the-road court action based on dereliction of fiduciary obligation.
Senator Raine: Thank you for being here.
I see this as another device to unlock the potential of our First Nations. The concept of designated lands was first introduced in 1988 and it was commonly referred to as the "Kamloops Amendment." I have watched the Kamloops Indian Band, where I come from, manage their leased land to become a tremendous economic driver for their First Nation. Anything that we can do to unlock this process I see as really positive.
My only question would be this: When you are looking at this in terms of the rationale for eliminating the second vote, I understand completely why having a double vote is very time-consuming and can stop really good projects. Could you expand on the rationale for eliminating the need for a second vote?
Mr. Duncan: When four out of five votes go to a second vote and almost inevitably pass with the simple majority, that delivers a very strong message. In the meantime, we have lost a lot of time.
Interestingly, I have a letter here from the Penticton Indian Band. This is from Chief Jonathan Kruger. We know that Penticton is quite a well situated and progressive First Nation: "In our experience, it is almost impossible to hold a vote and have a majority of our membership attend. Votes are expensive and time-consuming to hold and in some cases it poses a burden for band members to attend a second vote. It is our opinion that holding two designation votes is almost a foregone conclusion. We do not see any logic or efficiency in requiring a `majority of majority' to vote in the affirmative in the first place, given that this will fail. We feel that one vote with a simple majority requirement would prove to be effective, efficient and certainly more than adequate."
This letter came to us as a result of the chief and council paying attention to what is going on here. It did not come from any solicitation from the department or from anything else. Chief Kruger is quite happy that I am entering this into the record. He also says some other things, but basically all of the input I have received everywhere has been very positive towards these measures.
On October 22 I wrote to every chief and council across Canada explaining what we were doing with sections 37, 39 and 40 of the Indian Act, which is what this is all about. We have really received no input that I am aware of, and no complaints, and I have talked with the national chief. It seems like this is just a no-brainer. This is something to proceed with. I am very happy that things have gone that way.
Senator Sibbeston: Minister, thank you for coming forward with such an amendment. A number of years ago our Senate committee did a study on economic development for First Nations in our country. Particularly, we looked at the matters that could advance First Nations' economic development. It was a thorough study. One concern that was expressed at the time was the matter of land. Many felt that the present law was a hindrance, as it were. As you say, it was trying to do business at the speed of business. I am glad you have come forward with this amendment. It is very positive. This committee is dedicated to the advancement of First Nations and Aboriginal people in our country. We invite you every week, as it were, to come forward with amendments such as this, which will advance the state of native people in our country. These amendments will be supported wholeheartedly and we encourage you to do more.
The Chair: Was there no question there? Thank you very much. That was a great statement.
Senator Ataullahjan: Minister, for the record, can you clarify further the current designation process and how it will change as a result of the proposed amendments?
Mr. Duncan: Are you asking how the land designation process will change?
Senator Ataullahjan: Yes, how it will change.
Mr. Duncan: I would be happy to do that. I will just respond to Senator Sibbeston's comment, even though he did not ask a question.
I would like to say that I do bring good news every week because I tabled the proposed northern jobs and growth act this week as well, which has been very well received, as was the Nunavut planning and project assessment act, changes in the Northwest Territories Surface Rights Board Act, and some minor changes in the Yukon. So far, so good; everyone to date has received it very well.
The other thing I wanted to make reference to is very often, when we get something that is not so well received by all parties, it is said that we did not do enough consultation. In this case, the consultation came to us and we are responding. I am very pleased with that as well.
In terms of how the land designation will change, we have talked a lot about the voting process and shortening things by two months. What we have not talked about so much is by avoiding having to go through a Governor-in- Council process, which is a federal internal process, we are actually saving much more than two months. All that this requires now is the due diligence of the department and sign-off by the minister — by me.
Usually I am trying to remove myself from the process because that is what is getting in the way. In this case we are doing something much greater but I am still in the process. If they are under the First Nations Land Management Act, which we have talked about in other sessions, and there are about 65 First Nations currently under that, in those provisions I am already taken out of the equation and they can already designate their own land without any reference to the federal authority. They have already got it through an act of Parliament.
Senator Dyck: Thank you for appearing tonight, minister. When you were talking about the consultation coming to you, how many First Nations came to you saying they wanted these sorts of amendments done to the Indian Act?
Mr. Duncan: That is a good question. It is just cumulative. It is not just me. I, my parliamentary secretary and the committee have traveled extensively. This was a common refrain whenever the subject came up. It is not something we tracked. One of the positives of the way this has come about is the ability to deal with it as an economic development measure under the budget implementation bill as opposed to creating a whole new piece of legislation to deal with this simple, universally acceptable change. Because we never contemplated taking it through a full legislative process, there was never a consultation engagement process either.
Senator Dyck: You mentioned the First Nations Land Management Act in your presentation. Why would this be superior to other First Nations coming under the First Nations Land Management Act? Is this a better route?
Mr. Duncan: No, this is an alternate route. Different communities have different priorities and different philosophies. A community with a large number of individuals who have certificates of possession might be more inclined to go with this land designation option than with the FNLMA. That is not necessarily the case, but I suspect that that would be their route simply because there are many more individuals involved, and this would only apply to the communal lands.
I am really not too sure. I cannot speak for individual First Nations, but this is simply another option. I would not call one superior to the other, but I would say that under the First Nations Land Management Act there is no reference any longer to the federal authority, so obviously they have more independence and they can control the timing exactly to their needs. There is still some time here.
Senator Dyck: In terms of streamlining, you are saying that switching to a simple majority will save time. There are other aspects of the process that could be streamlined such as getting the information out to the band members. Which portion of the process takes the most time?
Mr. Duncan: The First Nation controls the timing on everything leading up to the vote.
Senator Dyck: I thought you said the information came from the department.
Mr. Duncan: No.
Senator Dyck: No?
Mr. Duncan: Once the First Nation forwards the vote and the ratification and details to the department it is an internal process. We are doing our very best to operate at the speed of business, too. I know that stuff does not sit on my desk and I am hoping that it does not sit on other peoples' desks either.
Senator Watt: It is nice to see you again. My question is supplementary to what Senator Dyck asked about consultation. Could your officials provide detailed information about the number of First Nations consulted, the form of consultations and the result of those consultations?
Mr. Duncan: As I said, we did not have an official consultation. We sent an official letter to every chief and council explaining what we were doing and we have had no push back. We have only had supportive responses.
Senator Watt: You received indications from various chiefs across the country that they support this bill?
Mr. Duncan: Yes.
Senator Watt: But no direct consultations have ever taken place on this bill; is that correct?
Mr. Duncan: Not on these two amendments specifically, since tabled, but we had lots of requests previously for these kinds of changes to be made.
Senator Watt: Minister, we seem to be —
The Chair: We only have a few minutes.
Senator Watt: Can you put me on the second round?
The Chair: Yes, I can.
Senator Tkachuk: I have just a few questions. Do the proposed amendments for land apply to First Nations communities north of 60?
Mr. Duncan: Only where there is reserve status, and we only have two of those that I am aware of, both in the N.W.T.
Senator Tkachuk: Is designated land not the same as surrendered land?
Mr. Duncan: No, it is not the same at all. Surrendered land is what it sounds like. I do not believe that we have a provision for surrendered land, but I will let Mr. Johnson respond to that.
The Chair: Could we have him respond to that after the minister leaves rather than losing the opportunity to ask a few more questions of the minister?
[Translation]
Senator Rivard: Welcome, minister. As regards amendments to the act that will benefit First Nations, having just one vote could lead to savings for them. On the government side, apart from the administrative burden, going ahead with these amendments will generate savings, will it not?
[English]
Mr. Duncan: Yes, I agree absolutely. This is a win-win for everyone.
[Translation]
Senator Rivard: Are the savings for the government significant or not? Given that it is in the Economic Action Plan and Bill C-45, will the impacts for the government be neutral? For the First Nations, the potential savings will surely be significant, but for the government, administratively speaking, do you see any real savings?
[English]
Mr. Duncan: No, I do not. It will simplify the administration. I do not think this was a huge consumer of time; it was just a delay mechanism. The key thing here is not so much on the savings front but on the incentive for investment in economic development. That is the major payback here.
The Chair: If I may, Mr. Minister, I would like one last supplementary from Senator Watt, and then we will keep your staff for a few minutes.
Senator Watt: I have been looking through these documents to see whether I could find something that indicates opting in. That does not seem to be in there. Since they have not been fully consulted beforehand, does the opting-in provision have room in this legislation?
Mr. Duncan: No. We are streamlining a process that benefits everyone, so it would apply to everyone.
Senator Watt: That is even though they have not been consulted beforehand? I am concerned about the fact that this will become law probably even before they get consulted.
Mr. Duncan: No, they have been informed of the changes. So far, everyone is very happy with the changes; they are most welcome.
The Chair: Thank you very much, minister. I will give you a few minutes to leave and we will keep your staff here for a couple of minutes.
Mr. Duncan: Thank you very much.
The Chair: I believe we were left with Mr. Johnson responding to Senator Tkachuk's question. Is that correct? Please carry on.
Kris Johnson, Senior Director, Lands Modernization, Aboriginal Affairs and Northern Development Canada: I believe the question was regarding the difference between designated land and surrendered land.
Senator Tkachuk: Yes.
Mr. Johnson: There is a distinction between the two. Land designation is frequently confused with land surrender. The way that the act differentiates between the two is that it makes a distinction between an absolute surrender and a designation, which technically is a form of surrender although it is only partial in nature. In an absolute surrender, the First Nations surrenders all of its interests in the land and it ceases to be reserve land, whereas with land designation, First Nations retain their rights and interests in the land and they remain as reserve lands.
Senator Raine: Would you say, then, that designated land is more like zoning?
Mr. Johnson: It is often compared to the practice of zoning. Whenever you talk about reserve land, it is difficult to make those comparisons precisely.
Senator Raine: It designates that land as being able to be used for a certain purpose in the common good.
Mr. Johnson: That is my understanding. It is a development approval.
Senator Ataullahjan: Can land surrender also be reduced to a simple majority on the initial designation vote?
Mr. Johnson: No, these amendments do not affect the provisions for absolutely surrendering lands at all. They are only to the designation provisions.
Senator Tkachuk: Previous to these amendments, or as it stands now, if some farmer came to a reserve and he wanted to lease agricultural land, did he have to go through this whole process just for a simple thing like that? What I am trying to get at is this: Is this for simple, ordinary things like that, or is it just for extraordinary things? Did it take just as long for a farmer to get a lease, two years?
Mr. Johnson: There are a few different types of instruments that can be granted. Often, agriculture is dealt with by way of a permit, which would not require this, but a simple lease versus a more complicated lease, if we discuss it that way, there would not be a distinction. That was one of the complaints that we received: The act as it currently stands before these amendments makes no distinction between surrendering all of the rights and interests in the land and what would be more transactional in nature to enable a simple lease to be put in place.
Senator Sibbeston: I was going to comment that the word "surrender" is from the treaty. Treaties talk of surrendering, cede and release rights. It is a serious word. That is where the word "surrender" comes from. When that was said, it reminded me of the treaties because the Indians hereby surrender, cede and release all of their rights.
Senator Watt: I just want to make sure that we all get it right when we are talking about the question of surrender. This is not an ordinary surrender, what we are normally used to, when we are dealing with land claims issues.
Rather than using the word "lease," if you use the word "sell," then if you sell it you cannot get it back. This is why, if I understand this correctly, it is not an absolute surrender. It is not an absolute surrender because you can get it back, because you are only leasing it. Am I correct to assume that is the case?
Mr. Johnson: Right. This only authorizes a temporary use of the land.
Senator Dyck: What are the potential problems with the bill? Every bill has unintended side effects, just like every prescription pill. What are the problems?
Senator Tkachuk: Not our bills; they are all perfect.
Senator Dyck: You be quiet, Senator Tkachuk. You are the bad boy in the back of the classroom, okay?
Mr. Johnson: It is a very good question and one we did consider as we were drafting these amendments. There is a new requirement that appears in designating lands that does not appear in the bill, either current or amended, for absolutely surrendering the lands, and that is after the vote, according to what is proposed in this bill, the band council of that community would have to recommend that the minister accept the results of the vote.
Senator Dyck: I am sorry, but I did not quite catch that. What would the minister have to recommend?
Mr. Johnson: The band council would have to recommend to the minister that he accept as valid the results of that vote, the inference being that if for any reason that community had doubts that that particular vote represented the informed consent of their community, they could choose not to recommend the minister accept it and therefore stop the process. There was a new control mechanism put in place at the community level, just in case there were any circumstances that cast any doubt.
Senator Dyck: Could a band member or a number of band members initiate some kind of complaint that would cause the chief to do that, or is it only up to the chief?
Paul Salembier, General Counsel, Operations and Programs, Department of Justice Canada: If there are any allegations of impropriety in the vote, or simply that the vote was not properly carried out, any member can present the evidence to the minister. If the minister has cause to think that the vote was not properly done, he can simply indicate that he will not be accepting it and have a new vote done properly. The same mechanisms apply as apply now.
Senator Dyck: That is actually reassuring. If there is a situation where there is doubt about the process that was used to do the voting, there is some sort of fail-safe mechanism.
Senator Sibbeston: This is a little comment and I think it is very significant. I know the minister was asked and the minister alluded to the First Nations Land Management Act. This was passed in our time. It actually gives the First Nations total control of their lands. It is very progressive. He said 65 First Nations have opted into this that have control of all of their lands in respect to taxing it and so forth. I think it is worth noting that fact.
The Chair: It was worth noting. Thank you very much, senator.
Now I have a supplementary question from Senator Raine.
Senator Raine: I want to remind people that Bill C-115 in 1988, the Kamloops Amendments, clarified that leased lands remained part of reserve lands, thereby enabling First Nations to enact property taxation bylaws in respect of those lands. The Kamloops Amendments further provided that leasehold interest in the designated lands could be mortgaged, establishing an exception to the statutory rule that reserve lands could not be mortgaged.
That has been going on since 1988 and it has provided tremendous economic advantages to those First Nations that utilize it. This just makes it easier for First Nations to move into that realm.
The Chair: Is there a question in there, senator?
Senator Raine: Do you not agree that this is a continuation of what has been going on but it is getting better?
Mr. Johnson: You are exactly right. This is intended simply to make an existing process that has proven benefits easier.
Senator Raine: Thank you.
The Chair: Thanks to both of you for staying around. We appreciate it.
We will close off the public session and go in camera for a few minutes.
(The committee continued in camera.)