Proceedings of the Standing Senate Committee on
Issue 9 - Evidence
OTTAWA, Tuesday, June 22, 2010
The Standing Senate Committee on Aboriginal Peoples, to which was referred
Bill C-24, An Act to amend the First Nations Commercial and Industrial
Development Act and another Act in consequence thereof, met this day at 9:30
a.m. to give consideration to the bill; to examine the federal government's
constitutional, treaty, political and legal responsibilities to First Nations,
Inuit and Metis peoples, and other matters generally relating to the Aboriginal
Peoples of Canada (topic: issues concerning First Nations Education); and to
consider a draft budget.
Senator Lillian Eva Dyck (Deputy Chair) in the chair.
The Deputy Chair: Welcome to all honourable senators, members of the
public and others across the country who are listening to these proceedings on
the web. My name is Lillian Dyck. I am from Saskatchewan. I am deputy chair of
the committee and presiding today at the request of the chair, Senator Gerry St.
Germain, who could not be present today.
The purpose of today's meeting is to study Bill C-24, An Act to amend the
First Nations Commercial and Industrial Development Act and another Act in
consequence thereof. This bill was introduced in the House of Commons on May 12,
2010 and is usually referred to by its short title, the First Nations Certainty
of Land Title Act.
Bill C-24 will enable participating First Nations communities to request that
the Government of Canada make regulations respecting the establishment and
operation of a system for the registration of interests and rights in reserve
lands that will replicate the provincial land title or registry system.
For the record, the clerk of the committee received a letter from Chief Gibby
Jacob of the Squamish First Nation addressed to Senator St. Germain and me in
which Chief Jacob urged that we support Bill C-24. I will read a couple of
sentences from his letter:
I write to you today to seek your support of Bill C-24 — An Act to amend
the First Nations Commercial and Industrial Development Act and another Act in
Legislative initiatives such as this are an example of the positive things
that we can achieve when First Nations, Local Governments, Provincial
Governments and the Federal Government work together.
That is a good indication of the support from the Squamish First Nation for
This morning we have as witnesses representatives from Indian and Northern
Affairs Canada and the Department of Justice Canada. Before hearing our
witnesses, however, I will introduce the members of the committee. On my left,
we have Senator Sandra Lovelace Nicholas from New Brunswick, Senator Elizabeth
Hubley from Prince Edward Island and Senator Larry Campbell from the province of
British Columbia. On my right, we have Senator Carolyn Stewart Olsen from New
Brunswick, Senator Patrick Brazeau from Quebec, Senator Nancy Greene Raine, also
from British Columbia, and Senator Rose-May Poirier from New Brunswick.
Members of the committee, please help us in welcoming our witnesses. From
Indian and Northern Affairs Canada, we have Kris Johnson, Associate Director
General, Lands Management Services; and from the Department of Justice Canada,
we have Paul Salembier, General Counsel.
Witnesses, I ask that you keep your presentations brief so there is time for
a full exchange with the members during the question and answer period. I ask
all honourable senators as well to keep their questions to the point as much as
possible and please keep in mind that there will be a second in-camera portion
of the meeting to discuss future business, once the exchange with the witnesses
Please begin, Mr. Johnson.
Kris Johnson, Associate Director General, Lands Management Services,
Indian and Northern Affairs Canada: Thank you for the invitation to appear
before this committee to discuss Bill C-24.
I would like to introduce my colleague, Paul Salembier, who is senior counsel
at the Department of Justice. Fostering business development and job
opportunities for Aboriginal people is one of the department's top priorities
and is also the number one priority of most Aboriginal people.
This is also the number one priority of most Aboriginal people.
This was clear based on the results of the department's engagement with
Aboriginal groups from August 2008 to early 2009 when the new Federal Framework
for Aboriginal Economic Development was developed. We heard repeatedly — as
Chief Clarence Louie, Chair of the National Aboriginal Economic Development
Board is often quoted as saying — that the single-most important key to First
Nations self-reliance is economic development.
Probably the next most frequent thing we are told is that there is a pressing
need to address the barriers that the Indian Act poses to on-reserve economic
This is precisely what Bill C-24 is designed to do.
Honourable senators, so that we can appreciate why this legislation is so
important, I will now touch upon briefly some of the roadblocks to First Nations
Under the Indian Act, property rights on reserve land are registered in a
deeds-type registry that does not provide the same level of certainty as many
provincial land titles systems. To determine if a title to land is true, it is
necessary to trace all the previous owners and verify the legality of each
transfer of title. This process is slow and costly, and most importantly, it
does not provide certainty of title to buyers and investors.
In contrast, under the Torrens land title system, which many provinces use,
the act of registering land title itself provides certainty of title. In the
event of a dispute, the last recorded owner maintains the title to the land, and
a title assurance fund compensates any previous owners who lost their title due
to fraud. The Torrens land title system provides the greatest certainty of
title, and allows property purchasers to buy and invest with confidence.
Since the Indian Act does not provide the same level of certainty that buyers
and investors enjoy off-reserve, this puts First Nations at a disadvantage in
two important ways.
First, without certainty of land title, on-reserve commercial real estate
property has a lesser value compared to similar property off-reserve. There is
often a 5 per cent to 10 per cent discount applied to property on reserve when
compared to an identical property off the reserve.
Secondly, the lack of certainty leads some interested investors to believe
that the risks of doing business on-reserve are just too great to take. So, they
invest elsewhere and First Nations miss out on an economic development
Unfortunately, this scenario is not theoretical. Too many communities have
found themselves in this exact situation.
The department recognizes that there are many gaps between the Indian Act and
provincial regimes. The First Nations Commercial and Industrial Development Act
was originally developed to address regulatory gaps that hinder on-reserve
It is optional and available to any community that has a commercial or
industrial proponent and a province willing to participate.
The legislation was developed in consultation with five partnering First
Nations: Squamish Nation in British Columbia, Fort McKay First Nation and Tsuu
T'ina Nation in Alberta, Carry the Kettle First Nation in Saskatchewan, and Fort
William First Nation in Ontario. It was passed with all-party support in late
2005 and came into force on April 1, 2006.
While the legislation was a good start, Squamish Nation came back asking for
further changes. They discovered that the First Nations Commercial and
Industrial Development Act, in its current form, does not allow them to
capitalize fully on a commercial condominium development on their reserve land
in West Vancouver. The market value of this commercial real estate project has
been estimated at $10 billion, but this economic opportunity can be fully
realized only if certain regulatory hurdles can be overcome.
The amendments proposed under Bill C-24 will enable a First Nation to
establish a title assurance fund and to register land title in a Torrens title
system. Without these amendments, buyers and investors will not enjoy the same
level of certainty that they enjoy off-reserve.
That prospect was not considered when the original legislation was developed
five years ago.
At the time, no large-scale commercial real estate projects were advanced
enough to reveal the need for the amendments now proposed. This legislation is
required to provide the certainty needed to proceed with large scale commercial
real estate development projects.
With so much money at stake, neither the Squamish Nation nor its private
sector partner is willing to proceed with the project unless the issue is
Passage of this legislation sets the stage for significant job creation and
economic stimulus, both on reserve and in neighbouring Greater Vancouver.
With the passage of the First Nations certainty of land title act and
regulations to be made under it, the necessary provincial laws will be
This would allow First Nations to move confidently ahead with large scale
commercial housing development projects on-reserve.
In the case of Squamish Nation in B.C., the proposed amendments will set the
stage for the construction of between 700 and 900 commercial housing units, with
gross sales estimated from $560 million to $720 million. Of that amount,
Squamish Nation will receive as much as $108 million. That is only for the first
phase of the project. Over the course of the next 10 years to 15 years, a total
of 12,500 commercial housing units can be completed.
I should also point out that several other communities have indicated their
interest in seeing this bill become law.
Kamloops and Musqueam First Nations in British Columbia, Tsuu T'ina in
Alberta and Carry the Kettle in Saskatchewan are monitoring Bill C-24 with
There is a growing interest within the private sector to partner with First
Nations. As a June 2009 report by TD Bank Financial Group noted:
There is a rising recognition among Canadian companies that employing
Aboriginal people and partnering with Aboriginal Communities is a smart
The First Nations Commercial and Industrial Development Act and Bill C-24
facilitate these partnerships by providing private investors with familiar
Bill C-24 addresses an important barrier to economic development on reserves.
Its passage will foster immediate job opportunities and further support
economic development opportunities for First Nations.
The Deputy Chair: Mr. Salembier, please proceed with your
Paul Salembier, General Counsel, Department of Justice Canada: I am
only here to answer questions you might have. Thank you.
The Deputy Chair: I shall pose the first question and then we will ask
honourable senators to indicate if they wish to ask questions.
Bill C-24 provides that, for the purposes of registration, reserve lands will
be deemed to be fee simple lands. Can you tell us how, if at all, this provision
will affect the Crown's underlying title to First Nations land? What is the
purpose and effect of this provision?
I think some people might wonder how this provision will affect the reserve
itself, with the lands that are being put up for commercial development and
still, in the long term, belonging to the reserve. Will that land somehow be
lost to the reserve? Will ownership be by someone else who is not a First
Nations person? Can you explain how that provision works?
Mr. Salembier: That is a good question. In some jurisdictions, in
order to fit well within a land title regime, it might be beneficial to start
with what is called a fee simple title. That is the same kind of title that you
or I would have if we were to buy land off-reserve. If we buy a house, we have a
fee simple title. It is something that everyone understands, and it is something
that the land title systems are designed to handle.
In those cases, yes, regulations made under the act can deem the title of
either Her Majesty or, if a First Nation is operating under the First Nations
Land Management Act, can deem the title of the First Nation to be fee simple.
Doing so, however, will not affect the underlying title of Her Majesty in the
reserve land, nor will it affect the Indian interest in the reserve land. Those
titles stay exactly the same as they are. It is simply a creation of an interest
in the land that is suitable for registration in a land title system. Everything
else stays the same and the land definitely stays as reserve land.
Senator Lovelace Nicholas: Welcome. You said Bill C-24 addresses an
important barrier to economic development on reserves, and its passage will give
job opportunities, but what happens in poorer communities that are in remote
areas? Some communities do not have enough land to lease out or partner up with
non-native industries. Therefore, they will give up land that should go to the
next generation of children. What happens with the taxes? Who pays the taxes?
Who receives the taxes?
Mr. Johnson: The application of the current First Nations Commercial
and Industrial Development Act, as well as the proposed amendments under this
act, are designed to be specific to certain projects. It will not necessarily
apply to every reserve in Canada. It is designed to allow the realization of
benefits when there is a circumstance of a particular development in a community
that requests it, as I mentioned in my remarks, with the cooperation of a
private sector investor and the cooperation of the provincial government.
The existing act is not limited to commercial real estate development. Other
types of projects can occur. Already we had developed regulations for an oil
sands refinery, I believe, for Fort McKay First Nation in Alberta and for the
operation of a commercial sawmill for Fort William First Nation in Ontario.
There are other types of projects that may be suitable for some of the other
types of communities that you spoke of.
In terms of the question of taxation, I believe, as Mr. Salembier mentioned,
nothing changes. Once they apply this piece of legislation and the regulations
to be made under it, the land will still be reserve land. The current system of
taxation will apply in the same manner.
Senator Lovelace Nicholas: If the commercial building or whatever is
developed is set in the First Nation community, what happens if it does not work
out? Do they sell the land back to the people?
Mr. Johnson: In the case of a situation like that with on-reserve
land, they would be selling an interest in the land. Therefore, they can
potentially negotiate an early termination of a lease or a permit, depending on
what is required, to enable that interest.
As Mr. Salembier mentioned in his response to the first question, the
underlying title remains the same. In such an event, it will return back to the
Senator Stewart Olsen: I am having a bit of difficulty with this
question. The band, as a community, negotiates this sale. They have title to the
land, and this title allows them to sell the land?
Mr. Salembier: No, that is not what will happen. What will happen is,
for example, if a First Nation is operating under the Indian Act, the title to
the land will be registered often in many jurisdictions in fee simple in the
name of Her Majesty. That is what happens under the Indian Act right now.
Then they would issue something like a 99-year lease to a developer. That
lease would be a lease from Her Majesty, on behalf of the First Nation, to the
developer. That same thing normally happens under the Indian Act. The difference
is, however, because you are not registered in a land title system, that lease
is more valuable because the title is guaranteed.
In a case like the Squamish development, the plan will be to issue a 99-year
or 100-year lease to the developer, who will then create a condominium setup in
British Columbia, a strata title corporation. Then hundreds of different people
will purchase condominium units in those buildings. The real addition of value
comes because now, when they go to their lawyer down the street that they have
always dealt with, and that lawyer looks at the development, it looks exactly
the same as a leasehold condominium development would look on off-reserve land.
In half an hour, their lawyer can say, Yes, everything is fine, go ahead and buy
Because there is this lack of uncertainty, there is a certainty given and the
title assurance and everything looks the same, they will get a higher price for
If they are under the Indian Act, the same lawyer would say, Hold on a
minute, I need about a week to research this; I have to research the whole title
and I have to satisfy myself that there are no claims; and I am not that
acquainted with the Indian Act, so I will have to spend $2,000 or $3,000 of my
time just researching it.
At the end of the day, the lawyer will tell the client, I am pretty sure it
is a good deal, but I cannot give you the same type of title assurance that I
could if it is registered in the land titles system.
Senator Stewart Olsen: Does this work in the same way as Crown land
Mr. Salembier: No, not exactly; Canada has administration control over
Crown land leases, and we issue them under a different statute. They are not
issued under the Indian Act.
Yes, we can issue leases, but they are not registered in a land titles
system. There is probably a little more guarantee because people figure that the
Crown, being the owner, probably holds title, and if they do not, we can
recover. I think it is a different situation, but it is not a land titles system
for leases of Crown land.
Senator Stewart Olsen: It offers a developer a bit more security. Is
Mr. Salembier: It offers a developer more security, but beyond that,
it offers the second level of buyer far more security, and that is where the
added value comes in.
In the case of the Squamish project, the developer, which was Larco, a big
firm, has lawyers and it does not mind if it has to spend $50,000 researching
the title to satisfy itself. It is the 10,000 other buyers that Larco will sell
condominium units to that are the ones who will not want to spend $10,000 or
$20,000 or $50,000 researching title. They are the ones who want to see
something they can recognize, and because they can recognize it, they will pay
top dollar for it. That is where the added value for this comes in.
Senator Campbell: The Squamish Nation is in British Columbia, but more
specifically, it is in Vancouver. Perhaps as a little background to this issue,
the land that is involved here was taken from them by the railways. They were
loaded onto barges and shipped across the Burrard Inlet to the North Shore where
they were given a reserve.
They fought and won this land back. It is not big. For some reason, people
see this land as a huge piece of land. It is not big, but it is incredibly
valuable. It sits at the south end of the Burrard Street Bridge. If anyone is
familiar with the Molson's brewery, this land is sometimes referred to by that
name. It goes over to the other side where they have the docks.
This bill is hugely important to the Squamish Nation and I believe, as was
stated by the witnesses, it is hugely important to other First Nations who find
themselves in the same kind of position where they have property that, in and of
itself, is not worth that much because of the way it is set up. With this bill,
it becomes very valuable. This bill is important to the Squamish Nation and, by
extension, to other First Nations.
I know that was not a question, but if people know Vancouver, they will
understand exactly where the land is and why it is so important.
I might add that there was some concern in Vancouver about this land. It
consists of scrub brush, blackberry bushes and nothing especially large. Some of
the residents there thought it should be considered green space. It was pointed
out by Chief Jacob that he thought the Musqueam Nation had contributed to the
green space in Vancouver; Stanley Park, Kitsilano Beach and the Pacific Spirit
Park are owned by them. In his opinion, he thought they did a fairly good job in
keeping Vancouver green. I will end it at that.
The Deputy Chair: Thank you, Senator Campbell. It has come to my
attention that at one point not long ago, the Musqueam First Nation had rental
property on their reserve that was leased out. In that case, the lease was
apparently negotiated by the Crown, so the conditions of the lease were not as
favourable to the Musqueam Nation as they could have been.
With Bill C-24, then, who will negotiate the lease? Will the Crown be
involved? I believe you said that the Crown still holds the title to the land.
How is it set out within the bill that if something is negotiated, which parties
will be involved in the negotiations?
Mr. Salembier: This bill will not change the way the Squamish Nation,
for example, or other First Nations in British Columbia or elsewhere, will
handle the leases.
Right now, the Squamish Nation, if we can use them as an example, is under
the Indian Act, but they are in the process of orchestrating a move to the First
Nations Land Management Act. There are two different scenarios, depending upon
which of those acts they are under. Under the Indian Act, in theory, the Crown
is responsible for the lease of the land. At the end of the day, when they see
the lease, it will say from Her Majesty the Queen to the eventual lessee.
However, in fact, under the Indian Act, it will be the Squamish Nation and
their lawyers who will negotiate all the commercial aspects of the lease with
the developer. They will then approach the Department of Indian and Northern
Affairs and the Department of Justice, who together will put together the lease
from the Crown for the developer. Even under the Indian Act, a First Nation like
Squamish is the one in charge of all negotiations.
If they were to move under the First Nations Land Management Act, the key
difference is that the Department of Indian Affairs and the Department of
Justice will have nothing to do with the lease in the end. Then they will go and
negotiate all the commercial elements of the lease, but once that is done, their
own lawyers will draw up the lease and the lease will be issued by the Squamish
Nation itself directly to the developer. It will then be registered federally in
Ottawa, but that is the limit of any involvement of the government. In fact,
with respect to the registration, there is no discretion on the part of
government officials. It is simply like any other registry under the First
Nations Land Management Act; they register the document.
What I will point out, since I have thrown the First Nation land registry in
there, is that this is not a land title registry, so it does not give the
assurance of title that this act will give. Even for First Nations under the
First Nations Land Management Act, using the amendments to the First Nations
Commercial and Industrial Development Act will constitute a real advance and a
real increase in value.
Senator Hubley: Good morning and welcome. Although the Squamish First
Nation has spearheaded the proposed amendments to — I will not use the acronym —
the First Nations Commercial and Industrial Development Act, and views the
introduction of Bill C-24 as a significant step forward in promoting economic
development on reserve lands, Chief Gibby Jacob of the Squamish First Nation has
expressed concerns that the legislative amendments did not go far enough. In
particular, he is asking the federal government also to allow the Squamish First
Nation to enact a property transfer tax, which will be similar to the province's
Can you explain to our committee how that property tax transfer will function
and, if indeed, this property tax transfer will help enable development projects
on First Nations reserves?
Mr. Johnson: I have with me my colleague from the Department of
Finance, Annie Carrier. This is a matter of Aboriginal tax policy, which is the
responsibility of the Department of Finance, and I ask permission from the
committee that she be permitted to respond to the question.
Hon. Senators: Agreed.
Annie Carrier, Principal Manager, Aboriginal Tax Policy Section,
Department of Finance Canada: I will try to answer your question. A property
transfer tax is a sales tax. Basically, it is a tax levied on the transaction if
someone purchases a house or condominium. This tax occurs when there is a change
of ownership, so it is different than the real property tax that we all pay for
garbage services and snow removal. Property transfer tax is a sales tax
collected on the transfer of ownership.
In Canada, those property transfer taxes are collected mostly by provinces,
and some provinces delegate some of those powers to municipalities but rarely.
Most often, provinces levy those taxes.
Yes, there was some discussion at the time of preparation for this bill that
Squamish had shown an interest in, and wanted to discuss, property transfer tax
authority. It became clear that, because those tax fields are occupied by the
provinces, we needed to engage in dialogue and discussions with British Columbia
and provinces because it is a tax field that is occupied, and currently British
Columbia occupies that tax field within the province.
We did not want to delay the passage of this bill. Discussions with provinces
at that time were not advanced enough and British Columbia was not supportive at
that time, so in the future, the federal government remains willing to discuss
further interests of First Nations. However, at this time, for the passage of
the bill, there is no element of property transfer tax without full and clear
support of the provincial government.
Mr. Salembier: If I can add a comment and clarify one of the comments
made by Ms. Carrier, technically, the concept of occupying a field is a concept
of constitutional law, but it does not apply in the situation of provinces
vis-à-vis the federal government.
The province does not occupy the field in this tax. There are no taxes at all
issued by provinces; no property transfer taxes imposed by provinces on any
transfers of reserve land. If both levels of governments want, they can tax in
this area, but neither level of government has chosen to do so. Technically, the
concept of occupying a field does not apply. The Department of Finance has its
other reasons, but I want to clarify the legal reason. This is not a case of
occupying the field.
Senator Patterson: In principle, this is progress. The Nunavut Land
Claims Agreement signed in 1993 basically says there shall be no fee simple
title in municipalities in Nunavut unless there is a referendum held in that
municipality. The first is to be held within 21 years of the signing of the
claim, so it will not happen quickly or easily in Nunavut.
There has been no problem, generally, involving banks to finance on leased
land, so we should not be afraid of that concept in principle. I suggest there
have been large commercial developments built in Nunavut on leased land, as well
as individual homes. Banks adjust.
I find this issue complicated, and the last exchange about tax is an example
of only one of the many complexities and nuances. To be simple about this issue,
or to try to understand this issue simply, the bill we are considering allows
the federal government to establish an improved land registry system by
I am thinking about all these busy beavers making regulations. Does the
regulation that will cover, say, the Squamish that will be made under this
legislation cover only that specific First Nation, or will the registry be
established for the whole province of B.C. so that others can benefit? Is the
registry created on a province-wide basis?
Mr. Salembier: Yes; any regulations would almost certainly be made on
a province-wide basis, and the regulations that are being developed in
anticipation of passage of legislation of this sort are province-wide. Any First
Nation in British Columbia, once the regulations are in place, can opt into the
registry simply by their counsel advising Ottawa that they wish to come into the
registry and identifying the land they want to bring in under it. It will be
open to all of B.C., and it should be a quick and simple system to come under.
Senator Patterson: That is good. Thank you.
The other question relates to what you said about the underlying title of the
Crown or First Nation not being affected. I think that title will probably be
important because I believe that when we legislate relating to land that there
are many vigilant Aboriginal rights advocates who will want to ensure that we
are not eroding Aboriginal title.
Can you elaborate a little more? Is this situation comparable to the fee
simple title in a conventional provincial land registry system where you say the
Crown ultimately holds the title? Is it now comparable to the Crown interest in
fee simple in a provincial system?
Mr. Salembier: It is comparable only in the most limited sense. In a
provincial system, individuals will end up holding the fee simple title. In this
system, the only two entities that can hold a fee simple title will be Her
Majesty in Right of Canada or the First Nation, depending on whether the First
Nation is under the Indian Act or under the First Nations Land Management Act.
Individuals who, for example, purchase condominiums will buy a leasehold
condominium. These leasehold condominiums exist off reserve land as well. Right
next door to the Lions Gate Bridge in West Vancouver there are two towers that I
believe are owned by the City of West Vancouver, and those towers are leasehold
condominiums. When someone buys a condominium there, they are buying a 99-year
interest in the property. The price, though, for a 99-year interest is virtually
the same as if they were buying leasehold, but they are buying a leasehold
interest. In that sense, the condominium owners here will be different from most
condominium owners who will have a fee simple interest in their condominium.
Yes, it is more technical, but it is a type of interest that is known
off-reserve, and there are several other places in Vancouver where there are
leasehold condominiums, so there will be something that to buyers will at least
be a recognizable interest.
Senator Patterson: This is probably a naive question, but we have
provincial land registry systems that are well functioning and efficient. They
use the Torrens system, I believe. In designing this legislation, did you
consider piggybacking onto, or integrating with, the existing provincial land
I do not know how elaborate the registry will be, but we have to set up a
parallel bureaucracy for these provincial land registries under Bill C-24. Was
there any thought about working with the existing registries to save money and
be more efficient?
Mr. Salembier: Yes, we considered it, definitely. To achieve the type
of legal certainty we need, the regulations and the system have to operate under
a federal statute, which is what we have here. However, in British Columbia, the
system that will be put in place by regulation essentially will replicate in
almost identical detail the provincial system. In fact, the land title and
survey authority of British Columbia will run the system for the federal
government. We will avail ourselves of their expertise and even their computer
systems. This system will be run in an identical manner, and will be run under
contract by the Province of British Columbia. When a lawyer outside logs into
the system, that lawyer will log into the provincial system. This land will show
up. There will be a little asterisk saying, by the way, this is federal land,
but everything will be done through the provincial system. They will implement
the federal regulations for us. That approach will be much more cost effective,
as you point out, than the federal government establishing, staffing and running
its own registry.
The Deputy Chair: If I can follow up on that line of questioning, will
that same sort of system apply to other provinces? You said that, in British
Columbia, you will use the system that is set up in that province. In
Saskatchewan, Carry the Kettle First Nation is one of the First Nations that was
involved in setting up this act. Is the Saskatchewan government willing to work
in partnership with the federal government to allow this act to operate within
Mr. Johnson: That is the intention. I will clarify one point. Carry
the Kettle has not been a proponent of this particular set of amendments, but
they are monitoring the amendments with some interest.
The way the current First Nations Commercial and Industrial Development Act
operates, to accept a regulatory project, and that is how we view it, we need,
as I mentioned earlier, a private-sector partner and a willing provincial
government. Then we will enter into discussions to establish a tripartite
agreement. In the scenario you described, we will approach the provincial
government and discuss with them their willingness to operate registry services
and other needed services, much the same as is intended in British Columbia.
The Deputy Chair: Who will pay for setting up the new system? Does the
federal government pay for it?
Mr. Johnson: The costs are borne by various parties. In terms of their
participation in developing regulations and negotiating these agreements, each
party is responsible for their own costs. The costs of operating the registry
service will be a subject of negotiation between the federal government, the
provincial government, the First Nation and the private sector partner. In
British Columbia, I do not believe the federal government will bear any of the
costs of operating the registry.
Senator Lovelace Nicholas: What will happen where there are disputed
lands? Will it affect them from being in partnership? If there is a land
dispute, this bill will not benefit these First Nations, will it?
Mr. Salembier: The type of land that will go under a system like this
registry will not be land that is subject to a dispute. First, it has to be
reserve land for this act to apply. By virtue of that requirement, the land that
is subject to this act will have to be within a reserve and, of course, an
individual reserve is always a reserve that is assigned to an individual First
Nation. If it were to happen, as has happened on rare occasions, that the actual
ownership of a particular reserve is disputed by two different First Nations,
then obviously that land will not be a good candidate for this registry, because
the whole idea behind the registry is to give certainty of title to improve
property values, and they will not have that certainty if the land is subject to
Senator Lovelace Nicholas: Communities that are in a land claim
dispute will not have access to Bill C-24?
Mr. Salembier: The vast majority of land claim disputes we have either
involve land that used to be reserve land that was lost by the First Nations
sometime in the past and they are seeking to regain it or lands that were
subject to treaty or Aboriginal rights claims that are currently registered in
the name of a third party and are not federal or reserve lands. In any of those
cases, if the claim was settled and the land became reserve land, then this act
will be available to it. Until that time, the land will not be reserve land.
This act will apply on reserve, and it will not have any impact on claimed lands
until they become reserve.
Senator Lovelace Nicholas: If it is a disputed land, that means it
does belong to First Nations. It is only a matter of settling the land claim.
Senator Patterson: The Chief Commissioner of the First Nations Tax
Commission, Manny Jules, has talked about improving legislation relating to
First Nation property ownership. I believe he has proposed a First Nations
property act patterned on changes enacted by the Nisga'a government. Are you
familiar with that initiative and, if so, can tell us in what way the proposal
from the First Nations Tax Commission may be met by Bill C-24 or may be
different from what is proposed?
Mr. Johnson: We are aware of the proposal put forth by Chief
Commissioner Jules on behalf of the First Nations Tax Commission. The two are
quite different, though both will be voluntary legislation as First Nations will
have the choice to opt in. The bill we are discussing today, the First Nations
Certainty of Land Title Act, will provide certainty of title to allow specific
economic projects to proceed, primarily on collectively held land that is
reserve land. The proposal to develop legislation concerning property ownership,
the proposal from Mr. Jules, is intended to provide certainty of title for both
collectively held and individually held lands. There is no direct link to
economic development projects other than potentially reducing costs and
transaction delays that deter investors.
In terms of the legal environment, Bill C-24, as my colleague has explained,
will not change the underlying land title and will create a seamless regime
within the province on and off reserve. The proposal to develop legislation
concerning First Nations property ownership, on the other hand, will affect the
underlying title in the sense that the underlying title will be deemed to belong
to the First Nation and not to either the provincial or federal Crown, and will
create fee simple interest and a Canada-wide Torrens system of land title
registration. Such a system exists in only seven provinces and three
territories. In at least three provinces, the proposed regime will not be
seamless on and off reserve.
Senator Patterson: I anticipate the support we will want to see for
this bill when we give our recommendation to the Senate.
If I understand correctly, the proposal by Manny Jules will be the next
evolution or, if it were to gain currency, will be a further step in giving
Aboriginal title. Would you say that this bill, if we recommend it for passage,
will not prejudice the Manny Jules proposal? I wonder whether someone will say
that Bill C-24 undermines what is envisioned with more radical property
legislation reform. Will Bill C-24 get in the way of that reform?
Mr. Johnson: I do not foresee that. We view them as quite distinct
because they serve to achieve different objectives, primarily as relates to the
nature of the underlying title. The amendments that we propose are practical and
meant to enable specific types of development. The scope and intended purpose of
the proposal by Mr. Jules is much more extensive. We will assess it on those
merits and not within the narrow scope of these amendments.
Senator Patterson: That is helpful, thank you.
Senator Stewart Olsen: I have a quick question on consumer protection
from any resulting litigation or problems with the implementation of this bill.
A good many things can go wrong, for example, a band may reverse its decision.
Who will be the final decision-maker and ultimately responsible? Will the
federal government bear the costs of any failed experiments? I am not sure where
consumers are protected?
Mr. Salembier: No, the federal government will not bear any costs.
These amendments ensure that by virtue of the fact of registering, it cannot
give rise to any claims. The situation essentially in the commercial world will
be the same with or without this legislation. If a First Nation were to proceed
under the Indian Act, designate land and sign a 99-year lease with a developer
and put up apartments or condominiums, a First Nation council cannot thereafter
reverse and back out of a deal. The interest will have transferred to the other
party, so they will hold a legal interest. Trying to back out of a deal will
constitute a breach of contract.
In either case, whether under this bill, the Indian Act or the First Nations
Land Management Act, a change of heart by a future council likely will not have
any impact on the actual deal. It can give rise to litigation between the
developer and the First Nation but in either case, Her Majesty will not have any
Senator Stewart Olsen: I hear what you are saying about the developer
but, in the end, generally speaking it comes down to the consumer — the little
guy who bought the condominium — what happens if things fall through?
Mr. Salembier: The little guy, as you put it, will be far more
protected because there will be a title assurance fund. The title assurance fund
is in place if anything goes wrong or there is a defect in the title. The end
purchaser will be able to claim and receive full value for their property.
In that sense, end purchasers who will occupy the land, as opposed to the
developer, have far more certainty under the system that we propose to put in
place than under the systems of the Indian Act or the First Nations Land
Senator Raine: Following up on that point, I want to be clearer on the
assurance fund. Is that set up by the First Nation, the developer or the federal
government under the Torrens land registration system?
Mr. Salembier: The assurance fund is established by the regulations.
How it will be funded will be subject to negotiations between Canada, the
province and the First Nation, which have not been completed. Perhaps Mr.
Johnson can elaborate.
Mr. Johnson: As Mr. Salembier said, that is the subject of discussions
for the tripartite agreement that will be needed to operate under this proposed
act. That point is still under discussion. We are looking for the greatest
economies to fill that fund, and various options are being explored.
Senator Raine: Will each project have its own fund?
Mr. Salembier: No, a single fund will be established. Under the
regulations contemplated for British Columbia, each person who registers a
property has to pay a registration fee. Currently, the title assurance fund in
British Columbia is covered completely by the registration fee of $60. It covers
all the operations of the land title and survey authority and leaves enough to
maintain the fund and provide revenue to the Province of British Columbia. The
fee in British Columbia has been sufficient to operate the system completely.
Senator Raine: Setting up this Torrens system of land registration for
these projects will be done in the same way. The registration fee will cover the
cost and build a pool of money for more assurance in terms of title.
Mr. Salembier: We hope so. There will be start up costs, as there are
to anything like this system. With the tripartite agreement between Squamish,
Canada and the Province of British Columbia, Squamish is contemplating borrowing
money to cover its start-up costs, which will be recouped later from the fees
The Deputy Chair: On behalf of all members of the committee, I thank
our witnesses for appearing this morning, for their excellent presentations and
for answering all questions from senators.
We will move to our second item of business. Honourable senators, is it
agreed that the committee proceed to clause-by-clause consideration of Bill
C-24, An Act to amend the First Nations Commercial and Industrial Development
Hon. Senators: Agreed.
The Deputy Chair: Shall the title stand postponed?
Hon. Senators: Agreed.
The Deputy Chair: Shall clause 1, which contains the short title,
Hon. Senators: Agreed.
The Deputy Chair: Shall clause 2 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 3 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 4 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 5 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 6 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 7 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 8 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 9 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 10 carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall clause 1, which contains the short
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall the title carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Shall the bill carry?
Hon. Senators: Agreed.
The Deputy Chair: Carried. Does the committee wish to consider
appending observations to the report?
Some Hon. Senators: No.
The Deputy Chair: Is it agreed that I report the bill to the Senate?
Hon. Senators: Agreed.
The Deputy Chair: We will now proceed to the in-camera portion of the
(The committee continued in camera.)
(The committee resumed in public.)
Honourable senators, you have before you a budget that contemplates travel
for our study of First Nations education. The total requested is $220,000. Is
there a mover for adoption of this budget?
Senator Campbell: I so move.
The Deputy Chair: It is moved by Senator Campbell that the budget
before you in the amount of $220,000 be adopted. Is it agreed?
Hon. Senators: Agreed.
The Deputy Chair: Thank you very much. The meeting is adjourned.
(The committee adjourned.)