Working at the Speed of Business: The First Nations Land Management Act

On February 12, 1996, a group of First Nations and the federal government of Canada entered into the Framework Agreement on First Nations Land Management. The Agreement recognized that First Nations have a unique connection to and constitutionally protected interests in their lands, including decision-making, governance, jurisdiction, legal traditions, and fiscal relations associated with those lands, and set out that First Nations should have the option of withdrawing their lands from the land management provisions of the Indian Act in order to exercise control over their lands and resources for the use and benefit of their members.

The Framework Agreement provided that the federal government would pass legislation codifying the terms of the Agreement. In 1999, the First Nations Land Management Act (SC 1999, c 24) (the “FNLMA”) was passed in order to ratify the Framework Agreement. It allows participating First Nations to opt out of 34 land-related sections of the Indian Act and create their own land codes to govern their lands and resources.

The governance of reserve lands under the Indian Act is time-consuming and cumbersome. Opting out of the land-related sections of the Indian Act, therefore, introduces new economic opportunities to First Nations and allows them to participate in development at the speed of business.

For example, under the Indian Act, the federal government has the final sign-off on many land-related decisions that take place on reserve, including the leasing of lands. In order for a First Nation to lease land to a third party, including a corporation, the land must first be designated to the federal Crown. In order for the land to be designated, the Indian Act requires that the First Nation hold a referendum where the majority of electors vote in favour of the designation. Because of these administrative hurdles, a designation of land under the Indian Act can take multiple years to complete.

In contrast, a First Nation that enacts its own land code under the FNLMA can set their own rules and procedures regarding land use and occupancy under licenses and leases, revenues from natural resources, expropriating rights or interests in reserve lands, and delegating management authority over reserve land. The FNLMA also makes clear that a First Nation has the legal capacity to acquire and hold property, enter into contracts, and borrow, expend and invest money.

Essentially, a First Nation operating under the FNLMA has the power to exercise rights over its land in the same manner as an owner would. Importantly, these powers can be exercised without the supervision or approval of the federal government.

The FNLMA, therefore, allows a First Nation to pursue economic development at the regular pace of business in a manner that reflects the Nation’s own values, practices and traditions. Processes for the leasing of land or entering into contracts are more efficient and significantly faster than under the Indian Act. Investors and businesses are able to deal with a First Nation directly, which allows First Nations to develop enhanced relationships with surrounding industries, investors and corporations.

The benefits of doing business under the FNLMA have been studied and quantified. Research on First Nations operating under the FNLMA done in 2010 and updated in 2014 has shown that thousands of jobs have been created on reserve, and over $270 million in internal and external investment has been attracted. Overall, First Nations operating under the FNLMA reported that they experienced increased efficiency and effectiveness in building their communities and pursuing economic development opportunities.

A First Nation that wishes to establish a land management regime under the FNLMA and businesses considering partnerships with First Nations operating under the FNLMA should consult legal counsel with experience dealing with the FNLMA. McKercher LLP’s Indigenous Practice Group is specifically focused on economic development, governance, and rights-based issues and has considerable experience assisting First Nations to develop, ratify and implement land codes under the FNLMA.

Nikita B. Rathwell
McKercher LLP
374 Third Avenue South
Saskatoon, SK
(306) 653-2000