Conveyance of a Leasehold Interest in First Nations Lands

I. Introduction

We have all heard the phrase, “there is no such thing as a simple conveyance”.  This is especially true for a conveyance of a leasehold interest in First Nation lands.  What makes a leasehold conveyance of First Nation lands potentially challenging is the fact that with a few exceptions, the Land Title Act, S.B.C. 1996, c. 250 (the “LTA”)does not apply to First Nation lands.  Furthermore, there is no one statute or set of rules that apply to the management of all First Nation lands in British Columbia.

In this paper, I will provide a general overview of the different land management regimes applicable to First Nation lands in British Columbia.  The PowerPoint presentation that accompanies this paper will provide practical tips and advice on handling a conveyance of a leasehold interest in First Nation lands, and pitfalls to avoid.

II. First Nation Lands

When I use the phrase “First Nation Lands” in this paper, I am referring to “lands reserved for the Indians” within the meaning of the Constitution Act, 1867 (“Reserve Lands”) which are within the exclusive authority of the Parliament of Canada and lands transferred in fee simple to First Nations pursuant to treaties over which the First Nations have jurisdiction. The latter category does not include any Reserve Lands.

In British Columbia, the land regimes governing Reserve Lands will fall under one of the following categories:  Indian Act,R.S.C. 1985, c. I-5 (the “Indian Act”), First Nations Land Management Act, S.C. 1999, c.24(“FNLMA”) and self-government legislation.

The three modern day treaties in effect in British Columbia transferred ownership of former Reserve Lands and Crown lands to each of the treaty First Nations.  All three treaties expressly provide that all of the lands owned by the treaty First Nations are not “lands reserved for the Indians” with the meaning of the Constitution Act, 1867 nor are they “reserves” as defined in the Indian Act.

Prior to engaging in a transaction involving First Nation lands, it is critical that lawyers identify the particular legal regime that applies to the First Nation land in question and fully appreciate the requirements of that First Nation land regime and the differences between our provincial Torrens system and the registration system of that First Nation land regime.

III. Legal Regimes Applicable to First Nation Lands in British Columbia

The four legal regimes applicable to First Nation lands in British Columbia – Indian Act, FNLMA, self-governing legislation and treaties- demonstrate the varying degrees of autonomy that First Nations have over their lands.  At one end of this continuum are those First Nations whose lands are managed under the Indian Act.  They have the least control over the management of their lands.  At the other end of this continuum are treaty First Nations who hold title, as well as have jurisdiction over, their treaty lands.  First Nations, whose lands are governed under FNLMA or self-governing legislation, fall somewhere in between these two groups.

A. Indian Act

The Indian Act remains the most common legal regime applicable to Reserve Lands in British Columbia.  Reserve Lands managed under the Indian Act may be divided into “locatee lands” or “band lands”.  The distinction between these two categories of land continues, in one form or another, under each of the other more autonomous regimes.  Therefore, it is helpful to be aware of this distinction, which originates from the Indian Act.

1. Locatee Lands

The phrase “locatee lands” or “CP lands” are commonly used to refer to lands subject to a certificate of possession issued to a First Nation member(s) by the Minister of Indian Affairs and Northern Development (the “Minister”).[1]  The “locatee”, or the holder of the certificate of possession, acquires rights similar to private property rights except that locatees are  permitted to transfer their certificates of possession only to another member of the same First Nation.

The Indian Act provides that on application by a locatee, the Minister may lease lands for the benefit of the locatee.[2]  Although the Indian Act does not prescribe any First Nation approval process as a precondition to the Minister granting a lease of locatee lands (which is not the case with leases of band lands, as discussed below), as a policy requirement, the Indigenous Affairs and Northern Development Canada (“AANDC”) requires all proposed locatee leases with a term exceeding 49 years be put to a vote of the members of the First Nation and achieve a favourable majority before they can proceed.

AANDC’s policy of requiring a band vote for long term locatee leases was developed in response to the decision of the Federal Court of Appeal in Tsartlip Indian Band v. Canada, [2000] 2 F.C. 314 (C.A.) (“Tsartlip”).  Prior to Tsartlip, the Federal Court of Appeal held in Boyer v. Canada, [1986] 2 F.C. 393 that the Minister was not required to obtain the consent of the First Nation in order to grant a lease of locatee lands.  However, in Tsartlip, the Federal Court of Appeal held that while the Crown did not have a duty to the First Nation or an obligation to obtain the consent of the First Nation when granting a lease of locatee lands, the Minister did have a duty to ensure that the objectives of the Indian Act as a whole were not defeated and to consider the concerns of the First Nation with respect to impacts of long term leases.

For proposed locatee leases with a term of 49 years or less, it is AANDC’s policy to request confirmation from the First Nation council that it does not object to the proposed lease.  Where council objects to a proposed lease, AANDC will consider the validity of the concerns expressed and exercises its discretion accordingly.

2. Band Lands

Reserve Lands managed under the Indian Act that are not subject to a certificate of possession, commonly referred to as “band lands”, must first be “designated” pursuant to section 39(1) of the Indian Act before they may be leased.[3]   Essentially, a designation is an authorization permitting the Minister to lease or otherwise deal with the Reserve Lands in accordance with the terms of the designation.

The procedure governing the designation process is set out in the Indian Referendum Regulations, C.R.C. 1978, c. 957, as amended.  A designation is approved in the first instance if a majority of First Nation members, 18 years of age or older, cast a vote and a majority of the votes cast are in favour of the designation.  If the required quorum is not achieved in the first instance but a majority of the votes cast were in favour of the designation, the Minister may order a second referendum.  At the second referendum, there is no quorum requirement and the designation is approved if it is approved by the majority of the votes cast.

3. Administration by AANDC

Generally, AANDC has the administrative authority over transactions affecting Indian Act Reserve Lands, whether they are band lands or locatee lands.  Accordingly, any consents required from Her Majesty in right of Canada (“Her Majesty”) as landlord, and registration of instruments are handled by AANDC.  The only two exceptions in British Columbia are the Reserve Lands of the Tk’emlups Indian Band (formerly, the Kamloops Indian Band) and the Musqueam Indian Band.  Both of those First Nations have delegated authority pursuant to the Indian Act to handle specified land management duties of their respective Reserve Lands.

4. Registration in the Indian Lands Registry

Most transactions affecting Indian Act Reserve Lands are accepted for registration only in the Indian Lands Registry.  However, exceptions apply in respect of two residential subdivisions developed on Musqueam Reserve Lands in the late 60’s and early 70’s: the Musqueam Park subdivision and the Salish subdivision.  In addition to the Indian Lands Registry, transactions affecting lands within these two subdivisions are also accepted for registration at the provincial land title office.

B. First Nations Land Management Act

The FNLMA, enacted by Parliament in 1999, represents the next most common legal regime governing administration of Reserve Lands in British Columbia.

The FNLMA ratified and brought into effect the Framework Agreement on First Nation Land Management dated February 12, 1996, as amended, between 14 First Nations and the Government of Canada.  The FNLMA provides First Nations with the statutory authority, not possible under the Indian Act, to manage and develop Reserve Lands and the recognition of rights and capacities with respect to the governance and management of their lands.  Section 18(1) of the FNLMA provides as follows:

Power to manage

18(1)    A First Nation has, after the coming in force of its land code and subject to the Framework Agreement and this Act, the power to manage First Nation land and, in particular, may

(a)    exercise the powers, rights and privileges of an owner in relation to that land;

(b)   grant interests or rights in and licences in relation to that land;

(c)    manage the natural resources of that land; and

(d)   receive and use all moneys acquired by or on behalf of the First Nation under its land code.

In order to transition from the Indian Act regime to the more autonomous FNLMA regime, the First Nation must satisfy a number of procedural requirements, with the final requirement being the adoption and ratification of a land code.  Once a First Nation ratifies its land code, the land code becomes the basic land law of the First Nation and replaces the land management provisions of the Indian Act.  On the effective date of the land code, the rights and obligations of Her Majesty pursuant to instruments granted under the Indian Act in respect of the Reserve Lands of the First Nation who has adopted a land code become those of the First Nation[4] and AANDC ceases to be involved in the management of lands and resources of the First Nation.  In essence, a FNLMA First Nation replaces Her Majesty as the landlord for all existing and future leases of that First Nation’s Reserve Lands, subject to the provisions of the First Nation’s land code.

Currently, there are 20 First Nations in British Columbia who have ratified their own land codes, with 11 First Nations in the process of developing their land codes.[5]

2. Land Code

Section 16(1) of the FNLMA provides that “[a]fter the coming into force of a land code, no interest or right in or licence in relation to first nation land may be acquired or granted except in accordance with the land code of the first nation.”  As mentioned above, a land code ratified under the FNLMA replaces the land management provisions of the Indian Act.  Thus, it is crucial for lawyers handling land transactions involving the Reserve Lands of a FNLMA First Nation to familiarize themselves with the requirements of that First Nation’s land code.

While the FNLMA stipulates the subject matters that must be contained in a land code[6], First Nations retain broad discretion in deciding how those matters are to be addressed in their respective land codes.  While there are similarities among the provisions of many land codes, no two land codes will be identical.

The FNLMA regime recognizes all existing rights and interests in Reserve Lands at the time a land code comes into effect, including the special rights and interests that locatees have in their lands.[7]

Under the Indian Act regime, Her Majesty is the landlord under all Reserve Lands leases, whether they are leases of band lands or locatee lands.  Under the FNLMA regime, a number of land codes provide locatees the authority to grant leases and generally assume the role of the landlord in respect of leases of their lands.  For this reason, in handling a conveyance of locatee lands of a FNLMA First Nation, it will be important for a lawyer to review the applicable land code to determine the extent of the authority that the locatee may have over his land and consider what impact, if any, such authority may have on the conveyancing process.

3. First Nations Land Register

Section 25 of the FNLMA provides for the establishment of a register, known as the First Nations Land Register (“FNLR”), by the Minister.  Except for the name, the online FNLR appears identical to the online Indian Lands Registry.  However, registration in the FNLR provides greater benefits than registration in the Indian Lands Registry. The First Nations Lands Registry Regulations, SOR/2007-231[8] accord priority to all interests based on time and date of registration and gives priority to a registered interest over an unregistered interest.  On the other hand, the Indian Act accords priority only to an assignment based on registration.[9]    Many land codes also stipulate that land instruments are not enforceable unless they are registered.

C. Self-Government Legislation

The Sechelt Indian Band and the Westbank First Nation are two First Nations in British Columbia who are each subject to a comprehensive scheme for self-government established by federal statute.

1. The Sechelt Indian Band

The Sechelt people led the initiative for self-government legislation in British Columbia.  Pursuant to the Sechelt Indian Band Self-Government Act, S.C. 1986, c. 27 (the “Sechelt SGA”), the Indian Act Sechelt Band was replaced by “The Sechelt Indian Band”.  As a result, all lands that were former reserves under the Indian Act held for the use and benefit of the Indian Act Sechelt Band were transferred to the Sechelt Indian Band in fee simple.  No other Reserve Lands in British Columbia are held in the name of the First Nation.

The Sechelt SGA authorizes the registration of title to Sechelt lands in the name of the Sechelt Indian Band in the provincial land title office.  Part 24 of the LTA was created to accommodate such registration.  While the Sechelt Indian Band has the option of registering title to their lands in the provincial land title office, it is not required to do so.  To the extent that the Sechelt Indian Band has registered title under its name to a parcel of Sechelt lands at the land title office, all subsequent interests affecting that parcel of land may be registered in the provincial land title office.  Where the Sechelt Indian Band has not registered title to a parcel of Sechelt lands in the provincial land title office, all interests pertaining to that parcel of land may only be submitted for registration by the Sechelt Indian Band in the Indian Lands Registry.  When handling a conveyance involving Sechelt lands, it is important to determine at the outset whether title has been registered in the provincial land title office as the protection of our Torrens system applies only if it is so registered.  On the other hand, while property transfer tax may be triggered by certain registrations at the land title office, it will not be triggered by registration at the Indian Lands Registry.

There were no locatee interests at the time that the Sechelt SGA came into force.  As a result, no Sechelt member is provided with special rights or authority over any parcel of Sechelt lands pursuant to Sechelt law.

2. Westbank First Nation

The Westbank First Nation Self-Government Act, S.C. 2004, c.17, brought into force and effect the Westbank First Nation Self-Government Agreement (the “Westbank SGA”) signed on behalf of the Westbank First Nation and Her Majesty on October 3, 2003.  Although title to Westbank lands remains in the name of Her Majesty, the Westbank SGA provides that the Westbank First Nation has the rights, powers, responsibilities and privileges of an owner in relations to Westbank lands and may grant interests and licenses in Westbank lands, subject to the terms of the Westbank SGA.

Part XI of the Westbank First Nation Constitution contains a detailed set of land rules governing the use and development of Westbank lands.  These land rules recognize locatee interests and provides for different processes for land transactions involving community lands and lands subject to “allotments”.

Transactions affecting Westbank lands are registered in a registry known as the Westbank First Nation Land Registry established pursuant to the Westbank First Nation Land Registry Regulations, SOR/2007-232 (the “WFN Regulations”).  Pursuant to the WFN Regulations, a registered interest has priority over an unregistered interest,[10] and registered interests affecting the same parcel of Westbank land are accorded priority based on the time and date of their registration.[11]

D. Modern Day Treaties

Currently, there are three modern day treaties in effect in British Columbia.  The Nisga’a Final Agreement, British Columbia’s first modern day land claims agreement, came into effect on May 11, 2000.  The Tsawwassen First Nation Final Agreement came into effect nine years later, on April 3, 2009.  Most recently, the Maa-Nulth First Nations Final Agreement came into effect on April 1, 2011.

1. Nisga’a Final Agreement (the “Nisga’a Agreement”)

Under the Nisga’a Agreement, the Nisga’a Nation acquired fee simple ownership to two categories of land, defined in the Nisga’a Agreement as “Nisga’a Lands” and “Nisga’a Fee Simple Lands”.

“Nisga’a Lands” are the core lands held in fee simple by the Nisga’a Nation with no reservations or exceptions in favour of the Crown.[12]  They comprise approximately 2,000 square kilometers of land in the lower Nass Valley, and include the four villages of New Aiyansh, Gitwinksihlkw, Laxgalt’sap and Gingolx, all of which ceased to be Indian reserves.[13]  The Nisga’a Lisims Government has jurisdiction over Nisga’a Lands.[14]  Pursuant to the Nisga’a Agreement, the Nisga’a Nation may dispose of all or any part of its estate in fee simple in any parcel of Nisga’a Lands in accordance with the Nisga’a Agreement, the Nisga’a Constitution and Nisga’a law.[15]  It is important to note that a change in ownership in a parcel of Nisga’a Lands does not change its status as “Nisga’a Lands”.[16]

“Nisga’a Fee Simple Lands” is the second category of land acquired by the Nisga’a Nation under the Nisga’a Agreement.  The jurisdiction of the Nisga’a Lisims Government does not extend to Nisga’a Fee Simple Lands.

Former Nisga’a locatees were granted replacement certificates of possession by the Nisga’a Nation on the effective date.[17]  The Nisga’a Agreement provides that a holder of a replacement certificate of possession has substantially the same right to possess the parcel of land in question as they had as a CP holder under the Indian Act.[18]  Nisga’a laws have further elaborated on the rights that its citizens may acquire in Nisga’a Lands.[19]

As is the case with the Sechelt Indian Band, the Nisga’a Nation has the option of raising title to a parcel of Nisga’ Lands in the provincial land title office.[20]  However, the Nisga’a Nation has chosen to establish its own land title system pursuant to the Nisga’a Land Title Act.

2. Tsawwassen First Nation Final Agreement (the “TFN Agreement”)

Pursuant to the TFN Final Agreement, the Tsawwassen First Nation (“TFN”) acquired fee simple ownership to two categories of land, described as “Tsawwassen Lands” and “Other Tsawwassen Lands”.  The TFN Final Agreement further provides that as of the effective date, former TFN locatees acquired a type of fee simple interest, described as “Tsawwassen Fee Simple Interest” (“TFSI”), in their former locatee lands.  The rights of a holder of a TFSI are those defined by TFN laws.[21] The Land Act of the TFN establishes the legal framework of TFSI’s.

“Tsawwassen Lands” comprise approximately 290 hectares of former TFN reserve lands and approximately 372 hectares of former provincial Crown land.  The TFN government has jurisdiction over Tsawwassen Lands.[22]  Similar to the Nisga’a Lands owned by the Nisga’a Nation, the estate of the TFN in Tsawwassen Lands is not subject to any reservations or exceptions in favour of the Crown.[23]  The TFN Final Agreement expressly permits the TFN to dispose of all or part of its estate in Tsawwassen Lands, to any person, without the consent of Canada or British Columbia.[24]  Notwithstanding this permissive provision in the TFN Final Agreement, the Land Act enacted by the TFN (“TFN Land Act”) provides for a complete prohibition on the transfer by the TFN of its fee simple interests in Tsawwassen Lands.[25]   The fee simple interest acquired by the TFN in Tsawwassen Lands is subject to pre existing rights and interests. Moreover, it is subject to the TFSI’s conveyed by the TFN to their former locatees, as of the effective date.[26]

“Other Tsawwassen Lands” is the second category of land acquired by the TFN pursuant to the TFN Final Agreement.  They comprise, what are described in the TFN Final Agreement as, the “Boundary Bay Parcels” and the “Fraser River Parcels”.[27]  The TFN’s ownership of these lands is subject to all of the reservations and exceptions provided for in the Land Act normally associated with a disposition of land by the provincial Crown and all pre existing interests.[28]  With limited exceptions, TFN laws do not apply to Other Tsawwassen Lands.[29]

In contrast to the Nisga’a Final Agreement, the TFN Final Agreement requires that the fee simple interests of the TFN acquired in the Tsawwassen Lands and Other Tsawwassen Lands, including all subordinate interests such as the TFSI’s, be registered in the provincial land title on the effective date of the treaty.[30]

3. Maa-Nulth First Nations Final Agreement (the “Maa-Nulth Agreement”)

The Maa-Nulth First Nations (collectively, the “MFN’s” and individually, a “MFN”) consist of the Yuułuʔiłʔatḥ First Nation[31], Huu-ay-aht First Nations, Toquaht Nation, Ka:’yu:’k’t’h’/Che:k’tles7et’h’ First Nations, and Uchucklesaht Tribe (collectively, the “MFN’s”), all located on the west coast of Vancouver Island.  Under the Maa-Nulth Agreement, each MFN acquired fee simple ownership to, and jurisdiction over, certain lands defined as “Maa-Nulth First Nation Lands” of that MFN in the Maa-Nulth Agreement.  Maa-Nulth First Nation Lands consist of approximately 24,400 hectares of former reserve lands of the MFNs and former provincial Crown land.  As with the Nisga’a Lands and Tsawwassen Lands, the Maa-Nulth First Nation Lands of a MFN are held in fee simple by that MFN with no reservations or exceptions in favour of the Crown.[32]

The Yuułuʔiłʔatḥ First Nation is the only MFN which acquired fee simple ownership to another category of land known as “Other Maa-Nulth First Nation Lands” under the Maa-Nulth Agreement.  These Other Maa-Nulth First Nation Lands consist of 92 hectares of land in the District of Ucluelet.   The Yuułuʔiłʔatḥ First Nation has no jurisdiction over these 92 hectares of land.

On the effective date of the Maa-Nulth Agreement, the indefeasible titles to certain parcels of Maa-Nulth First Nation Lands were required to be registered in our provincial land title office.[33]  Except for those parcels, registration of indefeasible title in a parcel of Maa-Nulth First Nation Lands is at the option of each MFN. Since the effective date of the Maa-Nulth Agreement, none of the MFN’s has yet exercised this option.  Each of the MFN’s has enacted its own Land Act which provides for the establishment of its own land registry and its own rules pertaining to registration.

IV. Closing Remarks

The legal landscape governing land regimes of First Nations has changed over the last decade.  While the Indian Act continues to be the most common legal regime in British Columbia, more and more First Nations are opting to manage their own lands, especially under the FNLMA.  With this increased autonomy of First Nations comes increased complexity for lawyers practicing in this area.  Every land code of a FNLMA First Nation will provide for its own unique approval requirements, just as every self-governing and treaty First Nations will have their own land laws.  More than ever, a lawyer needs to carefully assess his or her knowledge in the First Nation land regime in question before undertaking a transaction involving First Nation lands, even if the transaction appears to be a “simple conveyance”.

Seeking legal assistance with First Nations leasehold interests? Contact Jean Yuen for comprehensive guidance and support in navigating Indigenous land laws.