ARCHIVED — Vol. 147, No. 5 — February 27, 2013

Registration

SOR/2013-21 February 14, 2013

INDIAN ACT

Regulations Amending the Indian Referendum Regulations

P.C. 2013-143 February 14, 2013

His Excellency the Governor General in Council, on the recommendation of the Minister of Indian Affairs and Northern Development, pursuant to subparagraph 39(1)(b)(iii) (see footnote a), subsection 39(2) (see footnote b), section 39.1 (see footnote c) and subsection 73(3) of the Indian Act (see footnote d), makes the annexed Regulations Amending the Indian Referendum Regulations.

REGULATIONS AMENDING THE INDIAN REFERENDUM REGULATIONS

AMENDMENTS

1. Section 1.1 of the Indian Referendum Regulations (see footnote 1) is replaced by the following:

1.1 These Regulations apply to a referendum held under subparagraph 39(1)(b)(iii), subsection 39(2) or section 39.1 of the Act.

2. Subsection 3(1) of the Regulations is replaced by the following:

3. (1) The Minister may, at the request of the council of a band or whenever the Minister considers it advisable, order that a referendum be held under subparagraph 39(1)(b)(iii), subsection 39(2) or section 39.1 of the Act.

3. Section 23 of the Regulations is replaced by the following:

23. (1) If the material referred to in section 22 or any other information in the Minister’s possession is sufficient to call into question the validity of a referendum held under subparagraph 39(1)(b)(iii) or subsection 39(2) of the Act, the Minister shall advise the Governor in Council accordingly.

(2) The Minister shall take into account any material provided under section 22 in relation to a referendum held under section 39.1 of the Act when deciding whether to accept the designation.

COMING INTO FORCE

4. These Regulations come into force on March 1, 2013.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issue

First Nation designated lands are reserve lands that a First Nation has agreed to lease for commercial, agricultural, recreational or other purposes. Similar to how a municipality would zone land for a specific purpose off a reserve, First Nations who operate under the Indian Act identify lands on their reserve for specific purposes following a land designation process. Designated lands remain reserve lands. When a First Nation designates land, it allows a business partner to temporarily run a business on a specified portion of the reserve while the First Nation retains its interest in the land. This arrangement allows First Nations to economically benefit from their lands and to manage them according to their by-laws.

The current system to designate land perpetuates a slow and cumbersome process that impedes economic development on reserves. Land designation currently takes an average of one to two years to complete, which can deter investment and business activity instead of enabling economic development. It also undermines First Nations governance while incurring unnecessary costs to Canada and First Nations.

Bill C-45, the Jobs and Growth Act, 2012, which amended sections 37, 39 and 40 of the Indian Act modifying the voting and approval procedures in relation to land designations, received Royal Assent on December 14, 2012. These amendments made fundamental changes to cut red tape and speed up the process to land designations.

Amendments to the Indian Referendum Regulations are needed to align with these legislative changes and enable implementation of these process reforms.

Background

The Indian Act sets out the land management responsibilities of the Minister of Indian Affairs and Northern Development for much of the reserve lands in Canada. Land management generally includes activities related to the ownership, use and development of land for personal, community and economic purposes.

The establishment of enterprises such as factories, mines or condominiums increases employment and business opportunities for the community. Both on and off reserve, land management laws and regulations affect how these projects proceed.

Aboriginal Affairs and Northern Development Canada continues to work with First Nations to change land management laws and regulations. These efforts aim to make it easier for First Nations to carry out economic development projects and have more control over their lands and resources. Recent initiatives that work toward this goal include the First Nations Commercial and Industrial Act, the First Nations Land Management Act, and the First Nations Oil and Gas and Moneys Management Act. A First Nation may also wish to enter into other sectoral and comprehensive selfgovernment agreements. These options, including land designation, differ greatly from land surrender that results in the complete release of the First Nation’s interest in the parcel of reserve land.

Objectives

Land designations have become the preferred alternative to land surrenders, yet the administrative process remains incompatible with the fast pace of modern business. For common band land, designation is a prerequisite to attracting investment in the community, such as developing land for small- and medium-sized businesses, parks and public spaces, and any activity that may be beneficial to the community but that will be undertaken by a non-member of the First Nation. When a First Nation sets out to develop a parcel of reserve land, the land must be designated in accordance with the Indian Referendum Regulations.

The changes to the Indian Referendum Regulations are consequential to the legislative amendments to the land designation provisions of the Indian Act. The legislative changes reduce the voting threshold to a simple majority from a majority of majority and replace Governor in Council authority with ministerial authority.

The changes to the Indian Referendum Regulations work together with the legislative amendments to speed up the process to designate lands and, as a result, provide greater flexibility for First Nations to act on time-sensitive economic development opportunities.

Reducing excessive red tape supports the Government of Canada’s Red Tape Reduction Action Plan, announced October 1, 2012, that will “further free up business to invest in jobs and growth and cement Canada’s reputation as one of the best places in the world to do business.” The amendments are in line with reducing the administrative burden on business, making it easier to do business with regulators, and improving service and predictability.

In the Speech from the Throne, June 3, 2011, the Government of Canada committed to facilitating greater First Nations economic development by streamlining government processes. Similarly, in the Economic Action Plan 2012, the Government reaffirmed its commitments to continue to work with First Nations to address barriers to economic development on reserve.

Reducing the timeframe for processing designations also aligns with the objectives of the 2009 Federal Framework for Aboriginal Economic Development to enhance the value of Aboriginal assets and remove impediments to developing the land and natural resource base on reserve. In addition, amendments to the process to designate land under the Indian Act are practical and incremental changes, consistent with the approach outlined by the Government at the Crown-First Nations Gathering in January 2012.

Combined, the legislative and regulatory changes are expected to reduce the time it takes to administer the land designation process by several months and create new economic opportunities on reserve. By reducing red tape in the land designation process, unnecessary costs to Canada and First Nations will also be eliminated.

Description

The legislative amendments to the Indian Act and regulatory changes to the Indian Referendum Regulations will speed up the designation process by (1) reducing the voting threshold for a land designation from a double majority to a simple majority vote; and (2) allowing the Minister of Indian Affairs and Northern Development, rather than the Governor in Council, to accept land designations.

The amendments to the Indian Act shorten the designation process by months and allow First Nations to respond to economic development opportunities in a timeframe closer to off-reserve practices.

The changes to the Indian Referendum Regulations modify references to Indian Act section numbers to accord with the recent amendments to the Indian Act, provide for the referendum requirements to apply the new simple majority voting threshold, and provide for the new requirement for a Band Council Resolution either accepting or declining the results of the community vote. If community leaders have doubts as to whether the vote represents the informed consent of their community, the band council will now have the option to recommend that the Minister of Indian Affairs and Northern Development rejects and therefore stops the process. More specifically, the Regulations Amending the Indian Referendum Regulations

  • replace section 1.1 to modify the references to the Indian Act to apply the new section 39.1 of the Indian Act that establishes the conditions for land designation that must be satisfied in order for a designation to be valid;
  • replace subsection 3(1) to include the new section 39.1 of the Indian Act, which sets out the conditions for land designations to apply to the procedure for holding a referendum; and
  • replace section 23 by separating the review procedure for land surrender from the new rules for land designation into subsections (1) and (2).

Both the legislative and regulatory amendments apply only to land designations and not to land surrenders. Provisions for an absolute surrender will be maintained, including advising the Governor in Council when the validity of the referenda is called into question. The changes do not affect the Crown-First Nations relationship, as designated land remains reserve land.

“One-for-One” Rule

The amendments to the Indian Referendum Regulations are revenue-neutral. They impose no costs or administrative burden on business.

Small business lens

The small business lens does not apply to this proposal, as there are no costs to small business.

Consultation

The recent changes to the land designation provisions of the Indian Act respond to several criticisms raised by First Nations, the Auditor General of Canada and industry, who have noted that the process is cumbersome and obstructive to economic development. The amended Indian Referendum Regulations are consequential to the amendments to the land designation provisions of the Indian Act.

Several First Nations who have designated land have communicated to Aboriginal Affairs and Northern Development Canada that the majority participation required for designation votes is difficult to attain, creating an impediment to the community’s economic development plans. In addition, they have made it clear that the lengthy approval process for land designations, particularly the requirement to obtain approval from the Governor in Council, can take several months, during which time economic development opportunities may be lost.

The National Aboriginal Economic Development Board, created in 1990 to provide strategic policy and program advice to the federal government on Aboriginal economic development, has made it clear that the land designation process is currently too lengthy and complex, thereby putting on-reserve economic development projects at a comparative disadvantage to those off reserve.

A recent study of the experiences of 25 more successful First Nation communities reveals that barriers related to the requirements of the Indian Act and the cumbersome bureaucratic processes related to Aboriginal Affairs and Northern Development Canada’s procedures have impeded the ability of communities to achieve their economic development pursuits.

Based on testimonies by several First Nations, the Standing Senate Committee on Aboriginal Peoples has concluded that “the Department’s delays in providing approvals for leasing reserve lands for commercial development costs them money and lost business opportunities.”

For many First Nations, the rationale for joining the First Nations Land Management Act is based on the challenges they have faced with the Indian Act designation process, particularly the excessive red tape and the time, cost and resources needed to complete a land designation.

Aboriginal Affairs and Northern Development Canada has corresponded with several First Nations, who have expressed frustration with the length of the current designation process and indicated that their economic development plans have been jeopardized as a result, that their First Nation citizens have been placed at an economic disadvantage, and that the process conflicts with their economic development strategy and sustainability plan. Industry is also generally supportive of the amended Regulations as it would further enable economic development on reserve lands.

Findings presented by the Auditor General have also identified designation and leasing processes as the cause of unnecessarily lengthy approval times for projects on reserve, stifling economic development.

The Government has responded to these concerns by finding ways of streamlining internal processes for granting land designations that are administrative in nature, without impacting the quality of service provided to First Nations, or the ability of First Nations to provide their informed consent to a land designation. The designation process will still require that all members of the community receive detailed information packages about the proposed use of the land and that an information session be held prior to a vote.

Rationale

Combined, the changes made by the regulatory proposal are expected to reduce the time it takes to administer the land designations process by several months, making it possible for First Nations to respond to economic development opportunities in a timeframe closer to that of off-reserve practices. Furthermore, with a more streamlined land designation process, investment in reserve land will be more appealing and increased partnerships between First Nations and industry will be facilitated.

Ultimately, First Nations will be able to exercise greater control over the economic development of their reserves, and spend less time dealing with the designation process that can deter investment opportunities from their communities. Removing the unnecessary constraints to designating lands will also allow First Nations to focus on pursuing businesses that align with their community’s goals and approach economic development with greater independence and flexibility. This increased potential for business opportunities on reserve is expected to result in greater economic benefits for all Canadians, and in particular Aboriginal peoples.

There are no potential gross costs expected as a result of the regulatory proposal to amend the Indian Referendum Regulations. Rather, there is an expected cost and time savings to First Nations, as well as to the Government of Canada.

Implementation, enforcement and service standards

As a result of the amendments to the Indian Referendum Regulations, it is expected that First Nations who wish to designate land will experience improved service in that the process will be up to several months shorter while the Crown’s fiduciary obligations to First Nations will continue to be fulfilled.

The amendments to the Indian Referendum Regulations do not impact compliance of the Regulations.

Contact

Kris Johnson
Senior Director
Lands Modernization
Lands and Economic Development
Aboriginal Affairs and Northern Development Canada
Telephone: 819-994-7311
Fax: 819-994-5697
Email: Kris.Johnson@aadnc-aandc.gc.ca