Indigenous and Northern Affairs Committee on April 3rd, 2012

[The Chair, Conservative, Chris Warkentin]

And four seconds.

[Kyle Seeback, Conservative, Brampton West, ON]

All right.

What other factors that are going on with the reserve, other than the lack of fee simple, are causing or hindering economic development? I know that's a broad question in 40 seconds.

[Clarence T. Jules]

Well, it's one of the major factors in the underdevelopment of our lands. When you compare the lands in most of the proponent communities and the neighbouring jurisdiction, it's night and day. In Kamloops, they used to call the reserve the dark side. It's because we didn't have as many city lights as the city of Kamloops, so it is underdeveloped. Why is it underdeveloped? It's because of the Indian Act. When you don't own or have title to the land and somebody else owns it, they are always in the position of making the decision for you.

The processes that you have to be involved in are long and convoluted. One aspect was about 32 different steps that we had to take before a lease could be granted. My dad said in 1968, by the time Indian Affairs came back and said we could lease, the developer was gone. That's one aspect.

The other one is the deed system. Looking at the deed system, it's historical research. That's another aspect.

Then, when you have the banking institutions, say in a particular jurisdiction, they have one set of criteria if it's a Torrens system. It's easy to determine how much of an interest you have and how much they would be willing to give a mortgage on. On a reserve there's a whole bunch of different factors.

One of the stories the banker told was that they had the 99-year lease, but they didn't have the water. They didn't have access to the water, or the other services that could go in and make that land valuable. They had an appraisal that the land was worth $2 million because of the lease. They went back and told the gentleman they would give him $900,000. The banker said, do you know how much we paid ultimately? Zero, because they had no seizable interest.

[The Chair, Conservative, Chris Warkentin]

Thank you Mr. Seeback, Mr. Jules.

We're going to turn to Mr. Genest-Jourdain and then over to Ms. Hughes after.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Jules, I want to go back to the First Nations Property Ownership Act. You provided some information on modulation in terms of individual ownership. Given the fact that my community is, to this day, still nomadic—meaning that people go from one home to another, have no permanent address and move around throughout the year—how will a title of ownership be modulated when an individual wants to obtain one, for instance, if the band wants to allocate lots to individuals? I would like to know what you think about that.

[Clarence T. Jules]

I think it would be much the same way as they do it in your community now. When I visited Sept-Îles there were two different communities. When I toured, there were individual property lots on which individuals had built homes. It wouldn't be any different from that.

In order to come up with a community plan, the community comes together and says, “This is the subdivision plan we're going to create so individuals will be able to have title to these lands”. That would be put to a community vote, and then it would be ratified by the community and implemented.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Currently, in my community—be it in Maliotenam or Uashat—people are not owners. They were simply allowed to live on that land. They do not even own homes. I wanted to make that point clear.

[Clarence T. Jules]

But they do reside in the homes.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thank you very much.

In Ontario as a whole, how many first nations are part of your organization or interested in your organization, where a claim has been completed for a first nations land management community? Have any of them been completed?

[Clarence T. Jules]

Some of them are starting to move into what's called FNLMA. I haven't personally approached communities in northern Ontario to be part of or a proponent of this particular initiative.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Are there any in Ontario?

[Clarence T. Jules]

Yes.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

How many are there?

[Clarence T. Jules]

There's one community. Another community is nearing a settlement and wants to set up lands under FNPO.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

I'm going to pass it over to my colleague for a minute, and if there's time left I'll take it.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I just want some clarification, Mr. Jules. Is this proposal coming from the tax commission or is it yours personally? I would also welcome some information from you, in your role as the head of the tax commission. I'm interested in knowing your experience.

My understanding is that the role of your commission is to provide information to people about leaseholds and opportunities for taxation of leasehold properties. I'm just wondering if you could also take the time here as the chair of the tax commission to share some of that experience with us about how first nation communities are benefiting from those mechanisms.

[Clarence T. Jules]

Sure. I'll give you a little bit of a history lesson.

My dad started to deal with the tax issue in 1965. It was to snowplow some of the lands on our Mt. Paul industrial park, which you created in 1961. You went to the provincial government. The province said, “Well, you're an Indian reserve, so talk to the Department of Indian Affairs”. We ended up having discussions for over 20 years.

When I was a claim chief in 1984, I wrote a letter to all of the communities in Canada asking them to support Kamloops to amend the Indian Act. During the time previous to that, we worked with a lot of communities to try to have tax jurisdiction under the Indian Act. Then it was announced in the 1986 federal budget that there would be an amendment so we could tax on reserve lands, and by 1988 the legislation was passed.

I had to get the provincial government to vacate the tax field. There were three communities that came forward—Kamloops, Westbank, and Musqueam. They were the first communities after the provincial government had an orderly vacating of the lands. Now there are about 140 communities involved in real property tax. They collect about $100 million on an annual basis, and we're nearing $1 billion in revenue since I started to do this work.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

What's the breakdown between houses and businesses?

[Clarence T. Jules]

It's a mix. There are residential developments, some railway rights-of-way with CPR, industrial developments, and commercial developments. Those are the taxable interests that first nations go after, and because of that they're able to lever that to have interests that they can—

[Linda Duncan, NDP, Edmonton Strathcona, AB]

That's on leased lands.

[Clarence T. Jules]

That's right.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

So there's a fair bit of revenue from leased lands.

[Clarence T. Jules]

That's right. Remember that leased lands are one-tenth of the value of fee simple lands. So obviously that's going to increase.

[The Chair, Conservative, Chris Warkentin]

Thank you.

Mr. Rickford, we'll turn to you for the next five minutes.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Chair, and thank you, Manny, for being here today.

First, I have to declare something here, Mr. Chair. On two previous occasions, I spoke at length with the witness and I've had difficulty sleeping afterwards because he's given me lots of food for thought. I'm not prepared to declare him hostile, but I'm tired again today because I've been thinking about these things. I should say to you, Manny, intellectually and practically, I'm not quite there yet, but I do appreciate that the trajectory of this discussion has been looking at what options are out there in an overarching way and what they would look like. There's obviously a context in which this arises.

Second is, in terms of implementation, to appreciate and understand that what is there now is not working. I think of the great Kenora riding. I think of Lake of the Woods. My colleagues get mushy here when I start talking about my own riding. We see tremendous value in one of Canada's most beautiful areas. We see some of the first nations communities developing land through federal programs for residential development. Magnificent places get built on these, and the real value of them ultimately isn't realized. So that doesn't work either. What does work?

We've seen 99-year leases, and as you say, the value plummets. Owners in a leasing context have nothing at the end of that, and the value of that land isn't benefiting anybody in the first nations community either. I've been involved with that legally. So I'm fixated on this issue and I'm so glad to be participating in this study and looking at those options. Yours specifically gives me concern along these lines.

I want to capture a little about the Nisga'a experience that you're well familiar with because in my mind, where I've struggled with this the most, is the fact that, particularly in the interior of B.C., these communities come forward, they've got choice land on Okanagan Lake, and everything is more perfect than it could ever be in Washagamis First Nation—although there is some potential there—or in some of the isolated first nations communities, for example, one of the 25 in my region, and we say, “That's kind of a perfect-world scenario. What's going to happen there?”

Can you tell us a little about that experience and how that process converted real value to a fairly remote section of British Columbia?