Reserve Land – Tenures Available to Local Governments

Every so often, a local government may require an interest in a First Nation’s reserve lands, be it for highway/road access purposes, or to construct and operate a sewer or water line or outfall. This article identifies the interests that are available to local governments under the Indian Act on reserve lands of a First Nation that has not adopted a Land Code under the First Nations Land Management Act (“FNLMA”). This article does not address interests on reserve lands that are subject to a Land Code. The nuances under the Land Code regime will be the subject of a future article. The main difference between the two regimes is that under the FNLMA the local government deals with the First Nation directly whereas Indian and Northern Affairs Canada (“INAC”) acts on behalf of the First Nation in respect of interests granted on a reserve that is not subject to a Land Code. In addition, this article does not deal with interests granted by First Nation members that hold a certificate of possession on a reserve.

Designations and Surrenders (Sections 37-41 and 53(1))

In rare cases, a local government may be entitled to obtain a fee simple interest in reserve land through an absolute surrender under sections 37 to 41 and 53(1) of the Indian Act. Under this process, the lands are “surrendered” to the Crown prior to being transferred to the local government. As this process removes the lands from reserve status, it is an option that a First Nation is very reluctant to consider, except where land is being exchanged for the loss of reserve land under the surrender.

As an alternative, a local government may obtain a lease. Under this option, INAC acts on behalf of the First Nation to issue the lease. Although INAC issues the lease under the Indian Act, it is typically up to the First Nation and the local government to negotiate all the substantive business terms. A negotiator of lease terms on the local government’s behalf requires intimate knowledge of the case law relating to leases of First Nation land.

Once the parties have reached agreement on the essential business terms of the transaction, INAC provides a draft lease for the parties to review. Furthermore, an environmental assessment under the Canadian Environmental Assessment Act would be required prior to the granting of any lease.

Permits Under Section 28(2)

Land use permits granted under Section 28(2), albeit designed for short-term purposes, may be issued for longer periods provided they are not granted in perpetuity: the expiration of the permit must be specified by a date or in accordance with the happening of an event that has an ascertainable end date. Specific language drafted in accordance with the relevant case law should be used in all cases. As permits granted under this section create a lesser interest in land than a lease, they are often more attractive to a First Nation. However, they are generally not appropriate for ostensibly permanent structures, such as roads. A permit may in some cases be obtained (with INAC’s and the First Nation’s consent) for such purposes as a sewer or water main or sewer outfall, or as a drainage ditch.

Easement/ Right of Way (Section 35)

The final primary interest that may be obtained on reserve lands not subject to a Land Code, is a right of way or easement granted under Section 35. This is a common method for local governments to obtain the right to construct, maintain and operate a water and/or sewer line or sewer outfall, and it may also be used for roads or highways. The relevant portions of Section 35 are as follows:

35(1) Where by an Act of Parliament or a provincial legislature Her Majesty in right of a province, a municipal or local authority or a corporation is empowered to take or to use lands or any interests therein without the consent of the owner, the power may, with the consent of the Governor in Council and subject to any terms that may be prescribed by the Governor in Council be exercised in relation to lands in a reserve or any interest therein.

35(3) Whenever the Governor in Council has consented to the exercise by a province, a municipal or local authority or a corporation of the powers referred to in subsection (1), the Governor in Council may, in lieu of the province, authority or corporation taking or using the lands without the consent of the owner, authorize the transfer or grant of the lands to the province, authority or corporation, subject to any terms that may be prescribed by the Governor in Council.

In other words, a local government may, with the consent of the Crown and on terms satisfactory to the Governor in Council, obtain a right of way or easement over the reserve lands if the local government has authority to take or use the lands for the purposes it requires. The general authority of a municipality to take and use land is found under Division 4 (Expropriation and Compensation) of Part 3 of the Community Charter. A regional district’s expropriation powers are found in Division 3, Part 8 of the Local Government Act.

Full takings are also available under Section 35. However, since the decision in Osoyoos Indian Band v. Oliver (Town) [2001], land required for public purposes will generally be by way of easement. As a matter of policy, an exception may exist if the full taking (with a reversionary interest) is required for health or safety reasons.

Process for Approval

The process for obtaining an easement or right of way or a lease or absolute surrender can be a difficult and long one. Going through the process does not necessarily guarantee that an interest will be granted at the end of the day. For instance, any of these interests must be approved by a majority of the eligible electors of the First Nation following negotiation of the instrument. A section 28(2) permit, on the other hand, only requires assent of the band council.

Regardless of the interest that is taken, there are numerous requirements and issues that must be overcome before the interest will be granted, including Environmental Assessment(s) under the Canada Environmental Assessment Act (and where necessary, remediation) and a land appraisal.

In the next issue, I will review the interests available on lands subject to a Land Code under the FNLMA and interests on lands held by First Nation members holding a certificate of possession.