Policy & Positions Manual
Provincial Issues - Aboriginal Relations and Reconciliation
More Secure Property Rights On Reserve Lands (2010)
Background and Problem
The First Nation Tax Commission (FNTC) is leading an initiative to create more secure property rights on reserve lands. The existing land tenure and registry system on reserves is a significant source of socio-economic disadvantage because it contributes to high transaction costs related to investment, limits the potential property market, and in many cases prevents the securitization of land as a source of credit.
Property rights are the bedrock of the market economy. Property rights are absent or poor on many reserves. The results are lower property values, less commercial development and higher incidences of poverty. Poor property rights contribute to high costs of doing business. One study recently quoted by the Auditor General of Canada suggests that it costs four to six times more to complete an investment project on reserve lands than off. The principle reason for these higher costs is that investors have to establish secure tradable property rights on reserve lands which they don’t have to do off reserve lands.
Proposed Solution
The FNTC is proposing to resolve this problem by working on First Nation Property Ownership legislation (FNPOL). This legislation would create a similar property rights structure to the rest of Canada. The Chamber understands that land registration under the FNPOL would use a modified Torrens land title system.
The Chamber understands that FNPOL would be optional for First Nations, that the legislation would ensure that the underlying title or reversionary right remains with the First Nation, and the First Nation would retain land management and property tax jurisdiction regardless of who reside there. The Chamber understands that this would effectively allow participating First Nations to issue fee simple title and provide guaranteed title through the Torrens system.
The Chamber expects that the economic benefits from such an initiative would be large. As an example, an economic analysis conducted by Fiscal Realities Inc. for the FNTC estimates that if 68 First Nations, mostly rural, in BC converted their lands using this legislation, the benefits from increased property values, employment opportunities and increased revenue potential would be over $4 billion.
THE CHAMBER RECOMMENDS
That the Federal and Provincial governments work with the First Nations Tax Commission, and other interested parties, to develop legislation that would provide more secure and marketable property rights on reserve lands.
