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Proceedings of the Standing Senate Committee on
Aboriginal Peoples

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.

[English]

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 consequence thereof.

He concludes:

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 Bill C-24.

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 is complete.

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.

[Translation]

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.

[English]

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 development.

[Translation]

This is precisely what Bill C-24 is designed to do.

[English]

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 economic development.

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.

[Translation]

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.

[English]

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.

[Translation]

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 opportunity.

[English]

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 commercial development.

[Translation]

It is optional and available to any community that has a commercial or industrial proponent and a province willing to participate.

[English]

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.

[Translation]

That prospect was not considered when the original legislation was developed five years ago.

[English]

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.

[Translation]

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 resolved.

[English]

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 replicated.

[Translation]

This would allow First Nations to move confidently ahead with large scale commercial housing development projects on-reserve.

[English]

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.

[Translation]

I should also point out that several other communities have indicated their interest in seeing this bill become law.

[English]

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 interest.

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 business strategy.

The First Nations Commercial and Industrial Development Act and Bill C-24 facilitate these partnerships by providing private investors with familiar regulatory regimes.

[Translation]

Bill C-24 addresses an important barrier to economic development on reserves.

[English]

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 presentation.

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 community's interest.

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 that.

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 that land.

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 leases?

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 that right?

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 rates.

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 regulation.

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 registry system?

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 that province?

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 a dispute.

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. Thank you.

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 particular liability.

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 Management Act.

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 collected.

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 Act?

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, stand postponed?

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 title, carry?

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 meeting.

(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.)