FAQs : Questions about the First Nations Property Ownership Initiative

What is the Indigenous Land Title Initiative?

The Indigenous Land Title Initiative (ILTI) initiative is proposed federal legislation that will return ownership of current reserve lands to First Nations and confirm their jurisdiction over those lands. First Nation ownership will replace the existing Crown ownership and include First Nation reversionary rights and expropriation powers. It also will enable all types of land tenure including individual ownership. ILTI will allow First Nations to opt-in to the legislative framework as an alternative to the Indian Act.

What will Indigenous Land Title Initiative legislation include?

  • The First Nation, instead of Canada, will hold the legal title to its reserve lands, thus opening the door to more economic opportunities and facilitating all aspects of land management.
  • The First Nation will, at its own discretion, have the ability to maintain permanent community held land as well as to grant full ownership to individuals.
  • The First Nation will have full land management authority, as well as broader governmental powers over First Nation lands, which will apply regardless of what kinds of ownership rights the First Nation decides to grant.
  • Ownership of lands will provide substantially increased access to capital for both the members of ILTI First Nations for their individual purposes (such as for home ownership and construction) and for ILTI First Nation governments community purposes (such as the provision of roads and utility services and other infrastructure and the development and growth of community-owned enterprises).
  • Costs of doing business on First Nation lands will be lowered, the economic value of First Nation lands will be improved, and private initiative and entrepreneurship will be enhanced.
  • The First Nation will have new tools to help resolve estates and matrimonial real property issues.

How will First Nation lands remain First Nation lands?

ILTI will provide participating First Nations with title to their lands. This is the greatest property interest available in Canada. ILTI First Nations can retain title to all of their land, and can decide to transfer or grant interests to individuals. The ILTI First Nation will always have jurisdiction over land use, taxation and public services, expropriation powers, and reversionary rights over all lands within their boundaries. These are the same property rights that federal and provincial governments in Canada possess and, just as the transfer or grant of their land does not remove it from federal or provincial jurisdiction, ILTI lands will not be removed from the First Nation’s jurisdiction even if the First Nation decides to transfer an interest to an individual. ILTI lands will always be governed by the First Nation.

Just like other governments, ILTI First Nations will have specific powers reflecting their ownership and jurisdiction:

  1. First Nation jurisdiction will exist regardless of who has individual ownership;
  2. First Nations can establish permanent community lands;
  3. First Nations can choose to allow individual ownership, how much to allow, and over which land;
  4. First Nations will have expropriation powers comparable to other governments; and
  5. Any First Nation land in an estate left without heirs will return to the First Nation (escheatment rights).

How does ILTI differ from the 1887 Dawes Act which created “checkerboard” reservations in the United States?

ILTI differs in many ways, including:

  • ILTI is a First Nation led and controlled initiative, while the Dawes Act was government led and controlled.
  • ILTI expands and protects First Nation jurisdiction, while the Dawes Act transferred tribal jurisdiction to the state.
  • ILTI is optional and permissive, while the Dawes Act was coercive and imposed.
  • Under ILTI, the title and jurisdiction to all First Nation land will be retained by the First Nation, while under the Dawes Act over half the reservation lands were removed from the tribes and taken by the government for sale to settlers to be placed under state jurisdiction.
  • ILTI will consolidate both ownership and governance of reserve land in the hands of the First Nation with the objective of preserving First Nation communities and enhancing their jurisdiction over their land, while the Dawes Act deliberately broke up reservation lands with the ultimate objective of eliminating tribal communities.
  • ILTI is designed to avoid the problems and consequences of the Dawes Act.

How does ILTI improve leasehold systems for on-reserve development?

For some lands, a First Nation may decide to continue to use leasehold interests under ILTI because they believe leases will provide the greatest benefits to the First Nation and its members for such lands. ILTI will make those lease transactions easier by eliminating federal government involvement and establishing the Torrens title registry that will provide certainty to the First Nation and all interest holders. Additionally, unlike the Indian Act, ILTI will allow each First Nation to decide whether to permit different property interests to be held (including full ownership) based on what works best for them. In some cases, such as non-member commercial development, leasehold interests may be the best option. However, in some other cases, full ownership may be more advantageous to the First Nation’s members because it provides longer term security and greater potential to create and maintain family wealth. Regardless, ILTI recognizes that it should be up to the First Nation and its members and not the federal government to determine which ownership options will be permitted on its lands.

Will all the reserve land of a participating First Nation need to be placed under ILTI?

Yes, ILTI will apply to all of a First Nations current reserve lands (except shared reserves) and First Nations can assert their ownership and jurisdiction of these lands in any of the ways described above.

Can First Nation lands be sold to anyone?

If a First Nation decides to grant ownership to First Nation individuals, they will be able to sell this interest to anyone. First Nations can choose to restrict sales of full ownership interests but this would reduce property values and restrict access to capital for members. However, even if the land is sold to a non-First Nation person it will remain First Nation land because the First Nation will retain the jurisdiction and escheatment interests.

What can be done to protect against the loss of First Nation ownership through mortgage default?

The First Nation will not lose underlying title and jurisdiction over its land through mortgage default by an individual. The First Nation will still have jurisdiction and the reversionary interests. If however a First Nation wants to restrict the rights of lenders, the First Nation could consider requiring that in the event of a mortgage default, the First Nation has the first option to “cure the default’ and buy the land in question within a specified time period. However, this would raise the cost of borrowing because it would create uncertainty for lenders and liabilities for First Nations if they purchased the property.

How will ILTI help with the on-reserve housing situation?

There is a significant demand for on-reserve housing. ILTI will help First Nations respond to that demand and provide members with sole ownership and responsibility for their homes. First Nation persons owning their land will be able to obtain mortgages without the need of a Ministerial or First Nation guarantee. They will be able to use their ownership to provide for mortgage security. Mortgage moneys can be used to either build new homes on their lands or improve existing ones.

How will ILTI support additions to reserves (ATRs)?

Once land has been approved for ATR, whether as a result of Treaty Land Entitlement, the settlement of a specific land claim, or some other way, ILTI will enable a First Nation to put this new land directly into the ILTI land base. The land would then become immediately available for full economic use under the First Nation’s land use and development laws. ILTI will speed up ATRs in two ways. First, it will provide a legal framework that is more harmonized with provincial systems so that service agreements and other jurisdictional matters associated with ATRs are easier to address. Second, it is possible that third parties holding interests on ATR lands would maintain those interests as the ATR lands are moved into the ILTI land system – something that is not possible when moving into an Indian Act reserve land system. This will make resolution of third party interests much quicker.

How does ILTI affect the ability to pass land on to heirs?

Under ILTI, First Nation persons who individually own their land will be able to pass it on as an inheritance to their children and other heirs regardless of whether these heirs have “Indian status” under the Indian Act.

Will the Indian Act tax exemption apply to ILTI lands?

Yes. The section 87 Indian Act tax exemption will continue to apply on ILTI lands.

How will ILTI impact s. 89 of the Indian Act?

Three specific instances where s. 89 would not apply are proposed:

  1. S. 89 would not apply to real property mortgaged by First Nations or members under the proposed ILTI to secure borrowing or guarantees. This will increase access to internal entrepreneurial capital, conventional mortgage borrowing for housing, and lead to economic growth. Personal property in ILTI also would be able to be pledged when used as security for loans.
  2. S. 89 would not apply to a First Nation’s real or personal property mortgaged by a First Nation to secure borrowing or guarantees for community infrastructure. This would improve infrastructure borrowing terms, enhance community infrastructure, and reduce the costs of doing business for potential external investors.
  3. S. 89 would not apply to the remedies associated with builders’ liens. Builders’ liens could be registered on title to ILTI lands and enforced in accordance with applicable laws. This will attract more builders to First Nation projects, reduce the cost of construction on First Nation lands, and improve financing for builders.

Why a Torrens land registry?

A First Nation Torrens registry will provide legally guaranteed title to ILTI lands and priority of registration. This will provide legal certainty to First Nation land ownership and greatly facilitate all land-related transactions. By contrast, the Indian Lands Registry does not provide any of these assurances.

Would customary land holdings be affected?

A First Nation’s approach to customary holdings will be a community decision. First Nations could choose to grant a registered property right, such as leasehold or full ownership to those First Nation persons who have customary holdings. This step would increase the economic value of customary holdings to those who possess them.

Will ILTI impact the Crown’s fiduciary relationship?

The fiduciary relationship for reserve lands is the relationship between the federal government as “trustee” holding and controlling reserve land, and the First Nation and its members as “beneficiaries”. Once a First Nation takes over the ownership and management of its lands under ILTI, the federal government will no longer be a trustee of those lands. However, the Crown’s fiduciary duties to First Nations will continue in other respects that are not related to holding reserve lands, and First Nations will continue to receive funding for the delivery of services and programs to members.

How does ILTI affect treaty rights?

ILTI only affects the way in which reserve lands are held; it does not affect or detract in any way from treaty rights. In fact, a number of leaders of First Nations under historical treaties have commented that when treaties were signed nobody imagined that the reserves would be owned by the government. In this sense, putting title to the reserves in the hands of First Nations is more in keeping with the spirit of the treaties than having reserves held by the Crown.

How does ILTI relate to First Nations culture and history?

Some have said that permitting private ownership of land is contrary to First Nations culture and history. For this reason, some First Nations might not opt-in to ILTI. However, there are many First Nations whose history involves economic activities of all kinds including extensive trade relations as well as a variety of forms of communal and private ownership of property. First Nations today are expanding their involvement in the economy in many ways as a means of preserving and enriching their culture and creating a new future for their children. For these First Nations, ILTI may be a useful tool.

How does ILTI differ from the Indian Act and the First Nations Land Management Act (FNLMA)?

The Indian Act land system is primarily about setting aside Crown lands as reserves for the use and benefit of Indian bands under the control of the federal government.
FNLMA is primarily about expanding First Nation control over the management and leasing of reserve lands for First Nations and their members. Leasing serves the business needs of the First Nation and the needs of non-First Nation parties to occupy reserve land – the FNLMA expedites this. Leasing of FNLMA reserve land to individual First Nation members is very limited.
ILTI is primarily about ownership and total control over First Nations lands. Ownership serves the needs of the First Nation over collectively held lands. Ownership also serves the needs of individual First Nation members by providing full rights over their privately held land, rather than limited rights of “possession” which they currently have for lands in the reserve system. Many First Nation members want to own their land on reserves, not lease it or have possessory rights to use it.

The Indian Act empowers the Crown to control reserve lands on behalf of bands and mandates cumbersome rules and processes. The FNLMA empowers First Nation Councils by providing them significant land management law making powers; however these laws may take considerable time to develop and implement. ILTI empowers both individual First Nation members as well as First Nation Councils by granting both full ownership rights over the land they own and by providing a turn-key legal framework that allows them to implement their jurisdictions efficiently and quickly. Some of the key differences between the Indian Act, FNLMA, and ILTI are summarized in the table below:

19th Century Reserve Land.21st Century Reserve Land.21st Century First Nation Land.
Legal title is held by the Crown.Legal title is held by the Crown.Legal title is held by the First Nation.
Not optionalOptionalOptional
First Nations or First Nation members cannot have full ownership rights.First Nations or First Nation members cannot have full ownership rights.First Nations hold title to land and can choose to grant full ownership to individuals.
Land cannot be used as security for mortgages, loans or bonding but some Indian Act lessees can secure mortgages.Land cannot be used as security for mortgages, loans, and bonding, but FNLMA lessees can secure mortgages.Land can be used as security by anyone, including First Nations and members.
Land records are deposited in the Indian Lands Registry, without legal title guarantee.Land records are deposited in the First Nation Land Management Registry, without legal title guarantee. Priorities and land title insurance is possible.Land is registered in a “Torrens” land title system with legal guarantee of registered title.
19th century legal framework.Modern legal framework. Implemented requires development of a land code and extensive law development.Modern turn-key legal framework. Implemented efficiently and quickly.

How can a First Nation implement ILTI?

There are four steps to implement ILTI:

  1. An interested First Nation must opt-in to the legislation. They should send a BCR expressing an interest in using the legislation to the First Nations Tax Commission. Once the legislation is passed, it won’t apply to a First Nation until there is a positive vote by the community.
  2. The community vote will be supported by an allocation of ownership plan and a summary of the current interests in a participating First Nation’s land (certificates of possession, leases, rights of way, etc.). The Commission will provide First Nations with support for carrying out this work.
  3. Once a positive vote is obtained, the First Nation will then undertake preparation work (i.e. further surveying, transition of existing interests etc.). Once the preparatory work is complete, the First Nation will then be added to the ILTI Schedule by Ministerial Order and title/interests to its lands will be registered in the Torrens land title registry.
  4. The legal framework for a participating First Nation will have to be updated so they are able to exercise their ILTI jurisdictions. A turn-key legal framework will be available and can be adapted by participating First Nations.

Throughout implementation, the administrative capacity of participating First Nations will be enhanced through model systems and supported by accredited training from the Tulo Centre of Indigenous Economics.