Indigenous and Northern Affairs Committee on April 23rd, 2013

[The Chair, Conservative, Chris Warkentin]

Colleagues, we'll call this meeting to order. This is the 68th meeting of the Standing Committee on Aboriginal Affairs and Northern Development. We are continuing our study of Bill C-428.

Today we have the privilege of having representation from the Canadian Bar Association. We have Christopher Devlin with us today, who is back to our committee. We appreciate your willingness to return. We know that you're from Western Canada and it's five in the morning there, so we appreciate your willingness to come this morning and be prepared to answer questions.

We also have Tamra Thomson. Thanks so much for being with us. We appreciate your willingness to come and answer questions as well.

We'll turn it over to you folks and we'll hear your opening statement. Then we'll have some questions for you.

[Tamra Thomson, Director, Legislation and Law Reform, Canadian Bar Association]

Thank you, Mr. Chair and honourable members. We are very pleased to appear before this committee today on behalf of the Canadian Bar Association. We represent over 37,000 members across Canada. The statement that you have received from us was prepared by the aboriginal law section, which includes lawyers from across Canada with expertise in all areas of aboriginal law.

On the areas of the bill relating to sections 42 to 47, we have also received input from our wills and estates law section.

One of the objectives of the Canadian Bar Association is improvement in the law and improvement in the administration of justice. It's through that lens that we have examined Bill C-428.

With that, I'm going to ask Mr. Devlin to go into the specifics of the points that you have in front of you in the submission.

[Christopher Devlin, Executive Member, National Aboriginal Law Section, Canadian Bar Association]

Thank you.

I understand that all of the members have a copy of our paper in front of them, which will be very helpful. We have three comment sections in the brief.

The bill proposes to repeal several sections of the Indian Act. The first section of our paper just reviews the sections where we have no concerns about the repeal of those provisions. They are archaic provisions for the most part, or they are provisions that enough workarounds have been developed that they are no longer in effect as a practical matter. We suggest that the committee should not be concerned about the repeal of those provisions, so I'm not going to spend any time on those.

What I do want to spend time on are the effects of section 7 of the act, which would be the repeal of certain provisions of the Indian Act relating to wills and estates. Section 7 would remove the minister—of I guess it's still legally Indian and Northern Affairs Canada—from the administration of estates and wills. We have considerable concerns about this section. It's a very small section with huge implications, as we see it. I want to talk first with respect to wills, then estates, and then some transition issues that we've identified in the paper.

With respect to the repeal of sections 42 to 47 of the Indian Act that would follow from clause 7 of Bill C-428, the provincial laws with respect to wills wouldn't then apply to the wills of Indians by virtue of section 88 of the Indian Act. It's all very complicated, but section 88 of the Indian Act brings into force provincial laws that apply to wills with respect to Indians. It's referential incorporation of provincial law. Without federal regulation over Indian wills, then the provincial laws would apply. We see a few challenges with this.

First of all, provincial laws are different throughout all provinces and all territories. You would no longer have a uniform law that would apply to Indian wills across the country.

The second thing is that it would be a very complicated and expensive process that would then fall to individual Indian families rather than be administered from the Department of Indian Affairs. We also have to remember that these provisions only touch on wills for Indians who are ordinarily resident on reserve. The wills of Indians who do not live on reserves or whose main residence is not on a reserve are already subject to provincial legislation with one exception. That is, if they hold any land on a reserve, then they still have to go through and are still subject to the Indian Act with respect to transfer of land. The normal conveyancing of land in a provincial system wouldn't apply. They would then still have to go under the Indian Act to be able to transfer and devise land held on a reserve to the beneficiaries. I'll explain that in a moment.

Without that backstop of having Indian Affairs be the default institution, these private citizens—who are now Indians, ordinarily resident on a reserve, or their families—will be forced to start in the provincial system, and potentially move back to Indian Affairs to get a variety of opinions on the value of the estate, perhaps section 50 sales of their certificates of possession. Then, once all that is taken care of, they have to go back to the provincial system to get it probated. The current system allows the minister, who effectively acts as a probate court, to have all of this happen in a very efficient manner. Those efficiencies will be lost.

Families who have to deal with probate of Indian wills will be flipping back and forth between whatever their regulations are in their province, and then back to the Indian Act if there are land issues on reserve, and then back to the province. We expect that this will increase costs.

The other thing that we have identified in the paper is that many Indian estates, frankly, aren't worth that much. Usually, the typical Indian estate, for someone who's ordinarily resident on reserve, is some sort of landholding on the reserve, like a certificate of possession. There will be a family home. But the value of those land holdings tend to be much less, particularly in rural communities, than you might expect off reserve. The value of a certificate of possession doesn't attract a high market price.

Other provisions in the Indian Act require that certificates of possession can only be bought and sold by other members of the band, and of course, mortgage money can't be raised to pay for these, so they tend to be cash transactions. Because you have a small market for certificates of possession—other band members—and because you can't raise financing, the price for these holdings on reserve gets much less.

Why is this a problem? It's a problem because the public trustees in the various provinces and territories simply won't touch small estates. If they can't get their fees out of the estates, then they won't deal with these kinds of issues. So if a will is declared void for whatever reason, or part of it is declared void, or if the will says you can have all the personal property but the real property on the reserve has to be transferred according to the Indian Act, the value of that could be so small that there won't be any backstop. The public trustees in the provinces simply won't deal with it.

As a result, one of our big concerns is that landholdings on reserve may no longer come out of the names of deceased Indians, because there may be no financial incentive for people to actually go through a probate process, or in the case of intestacies, an administration process. You may have certificates of possession that could remain in the names of deceased Indians for years. There's simply nobody who will have an interest in resolving those estate matters. Indian Affairs will no longer be administering that. The minister's jurisdiction will be taken away. The public trustees won't be able to get their fees, so they're not going to be interested. Quite frankly, some of the families in some of these small rural communities, access to justice for them—accessing legal counsel who will understand this, their ability to fund the probate process—probably won't be there in many cases.

There are some other concerns we have, which I only want to touch on, that are unique to first nations. We mention concurrent spouses as an issue. The Indian Act has significant flexibility to deal with situations in which a person may be married to one person, say early on in their life, then by the time they die are living with someone else. The Indian Act allows for the minister to ensure that a will provides for all dependents of a deceased Indian, and that can include concurrent spouses. That flexibility is lost in most of the provincial jurisdictions that we're aware of.

Also, Indian customary adoptions is another big concern. Under the Indian Act the definition of a “child” includes children who are adopted through indigenous legal traditions. The definition of “child” in most of the provinces and territories does not refer to that. So when you have child beneficiaries under Indian wills, currently they can include children who have been adopted according to the custom of that first nation. That may become lost and those beneficiaries may become disentitled under Indian wills.

I've already talked about the problem of dividing land on reserve, so I won't go into that again.

The form of a will is another big concern. Under the Indian Act and the Indian Estates Regulations, the form of a will is that it has to be in writing, signed by the testator, and expressing the testator's wishes. That's it. It's a much more generous definition than what exists in most provinces and territories.

We have—and we note these statistics in our paper—only 5% to 10% of Indians ordinarily resident on reserve making wills now. The fact that this bill would see them fall under provincial jurisdiction and therefore have to comply with the forms of wills that are required under provincial laws may reduce the incidence of Indians, ordinarily on reserve, making wills. It may increase the level of intestacies of Indians ordinarily resident on reserve as a result of having to comply with provincial jurisdiction. Some provinces, it's true, allow for holographic wills, so just a piece of paper signed by the testator, but many don't. We have to be alive to that as the bill is being considered.

I have touched briefly on the ability of the minister currently to void wills in unjust circumstances. Provincial legislation will allow wills to be voided in circumstances of duress or lack of testamentary capacity. The Indian Act provides greater flexibility to the minister currently, particularly when a will disposes of land contrary to the Indian Act or against the public interest. There is a huge flexibility currently in the Indian Act for the minister and the department to make provision for all those who need to be provided for in a will, and to vary it accordingly. That flexibility doesn't exist to the same degree in a variety of provincial regimes, nor uniformly across the country, the way it does now.

Although it removes the minister's exclusive jurisdiction over wills in estates, the bill still keeps the intestacy provisions in place in the Indian Act. As I mentioned earlier, over 90% of Indians who are ordinarily a resident on reserve do die intestate. However, this removal of the jurisdiction under section 43 of the Indian Act means that the minister has certain obligations, but no longer the jurisdiction to trigger them under the intestacy provisions.

In our paper, we talk about what we identify as potentially harsh, unintended consequences. For example, under section 48 of the Indian Act, the minister still needs to be involved in the valuation of estates assets and intestacies, and also has to provide an opinion as to whether adequate provision has been made for children and dependents. Currently, the minister and Indian Affairs act as the administrative backdrop to Indian intestacies. If that's not the case, if they become more passive players in the process, although the minister has the obligation to come to these opinions, that won't be triggered until a private administrator would come forward from an Indian family on behalf of a deceased Indian to ask for those opinions. That means the minister's obligations would be somewhat reliant, then, on the diligence of these private administrators, or reliant on the fact that the private administrators are indeed appointed.

That goes back to my earlier point. On some Indian estates, there simply won't be enough value in the estate to warrant someone being appointed administrator. Their fees and costs won't be covered.

[The Chair, Conservative, Chris Warkentin]

We'll just have you wrap up here shortly and then we'll begin the questions.

[Christopher Devlin]

The last part of our paper, the third section, deals with the proposed repeal of bylaw provisions. We talk there about section 85.1 and about how some first nations do have bylaws that govern intoxication on reserve to the extent that those nations may be affected. As well, the department may not see the other bylaw powers as being similar to those in section 85.1, so the existing bylaws could be continued. We see that being problematic for those nations that have chosen to have anti-intoxicant bylaws.

We make a series of recommendations on the final page of our paper. Our first recommendation is that clause 7 of the bill be tabled until further study can be done by the department to determine the best way to reform the wills and estates provisions so that some of these unintended consequences we've identified wouldn't occur or could be dealt with in a more holisitic fashion.

We also note there are no transition clauses in the bill so there's no way to have the bill come into effect in a measured way. If it's passed, it will suddenly be law, and those other provisions of the Indian Act will be repealed without any consideration regarding the effects.

If those two recommendations aren't acceptable, then we have a list of a few recommendations. They are admittedly piecemeal recommendations, the second alternative recommendations, on things like grandfathering existing wills so they are not immediately void upon the bill coming into force, and stuff like that.

[The Chair, Conservative, Chris Warkentin]

Thank you, Mr. Devlin.

Thanks, Ms. Thomson.

We're going to turn to Ms. Crowder for the first seven minutes.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Thank you, Mr. Chair.

Thank you, Ms. Thomson and Mr. Devlin, for a very thorough presentation. I appreciated getting the briefing document.

It seems clause 7 of Bill C-428 is the most problematic. There are other issues as well, but it's the most problematic. I have a couple of points of clarification on your specific recommendations.

Regarding your recommended amendment about “common-law partner" for the purposes of Indians ordinarily resident on reserve, under subsection 2(1) of the act, common-law partner is already defined. The assumption is that subsection 2(1) of the act would prevail even if clause 7 were left in Bill C-428. Is there something I'm missing? Because there already is a definition.

Section 2(1) of the Indian Act states that:

“common-law partner”, in relation to an individual, means a person who is cohabiting with the individual in a conjugal relationship, having so cohabited for a period of at least one year....

[Christopher Devlin]

Thank you for the question.

The short answer is that once the wills provision in the Indian Act is repealed, then the provincial definitions of common-law partner would prevail vis-à-vis wills and estates regimes in their respective provinces or territories.

So you're correct in that the Indian Act definition of common-law spouse would remain for the rest of the Indian Act, but the regimes that would apply to wills and estates would be the provincial regimes. Therefore you have to look to whatever the definition of common-law spouses is in a particular provincial regime for wills. That would be operative.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

If we inserted a definition specifically to deal with wills and estates, referencing section 2(1), would that override the provincial?

[Christopher Devlin]

Yes. Again it's the doctrine of interjurisdictional immunity. Whenever you have specific.... Sorry to get technical this early in the morning, but—

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

I'm not a lawyer.

[Christopher Devlin]

—whenever you have specific federal legislation that occupies the field, as it were, then that will push out the provincial.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

So if we specify that, then it overrides the provincial.

[Christopher Devlin]

But this kind of goes to our first recommendation. I would caution the committee about taking a piecemeal approach to this area of reform. There are many things that need to be thought out, intricacies about how the provincial wills regimes would work vis-à-vis Indian estates. Those need to be thought out carefully. It may not be as simple as just adding that section 2 of the Indian Act, regarding common-law partner, continues to apply. That may not get us all the way there.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

I would completely agree with you. I don't think the solution to this is to actually do a piecemeal amendment.

How our process works is that the committee would have to vote no to clause 7. We can't actually put a motion forward to delete clause 7 at the committee stage. We can only do that in the House. The committee would have to agree to vote no to clause 7.

If the committee wouldn't agree to vote no to clause 7, is there a way that we can then amend this egregious piece of the act, which will have unforeseen consequences? You've done a very thorough job of presenting what some of those are. What I'm trying to get to is if we can't get agreement on deleting clause 7 by voting no, then I'm looking for places where there's a potential to amend, even though we disagree with clause 7.

[Christopher Devlin]

Right.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

That's where I'm going on this. It's not that I think this is a great way to do it, because I don't.

With regard to part (c) of your recommendation 3, “A provision that reserves residual authority and jurisdiction to the Minister under s.43 with respect to intestacies still governed by the Indian Act”, the legal opinion that we've had said this would involve an amendment to clause 7 so that paragraphs 43(c) and (d) would not be included in the repealed sections 42 to 47 to allow for the continuing operation of these sections, given that the minister's power contained in section 43 relates to intestacy. Is that what you're suggesting?

[Christopher Devlin]

That's entirely what we're suggesting. Because of how the Indian Act is written and because the minister has exclusive jurisdiction under section 42 of the Indian Act, the following sections, both the wills and the estates stuff, is all combined together. If you get rid of sections 42 and 43 vis-à-vis wills, you're also getting rid of that exclusive jurisdiction vis-à-vis intestacies.

Because of the fact that we don't see the public trustees stepping in as sort of that final backstop to assist in the intestacies of Indians ordinarily resident on reserve, we see that there's a real need to keep this jurisdiction and retain it for the minister. So, yes, paragraphs 43(c) and (d) of the Indian Act should remain in the Indian Act. Even if wills are removed, the jurisdiction over estates should remain.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Then the final one, in your recommendation 3(d) and (e), where it's dealing with the minister no longer receiving notices of Indians dying on reserve, there is a notification requirement set out in subsection 3(1) of the Indian Act, which says, “As soon as feasible after the death of an Indian, the superintendent shall forward a notice of the death, in the form prescribed, to the Minister”.

Because there is already another section of the act that deals with the notification to the minister, is that going to be good enough, or are we going run into the same case that we had with the common law?

[Christopher Devlin]

Can you just give me the reference again?

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Sure. It's subsection 3(1) of the Indian Estate Regulations, which are not repealed.

[Christopher Devlin]

I see. Right.

The problem is that the superintendent won't necessarily know about these intestacies anymore. Because there's no exclusive jurisdiction, no one will be required to tell Indian Affairs that someone has died who is ordinarily a resident on reserve. There won't be estates officers who are making those enquiries and making sure that the family is doing all it needs to do.

In many of these intestacies someone from the family will come forward as the administrator. I'm not suggesting that the department acts as the administrator in every intestacy. That's not true. Many times people come forward and act—you know, next of kin and that kind of thing. But because Indian Affairs has the kind of administrative presence that it does now and the jurisdiction to make these enquiries, people are much more proactive when someone dies.

There can be changes in band lists where people will send in a new membership list a year later and say, “Oh, yes, so and so has died”. That may be the first time that the department ever finds out that someone died on a reserve if clause 7 goes through, whereas those things do happen much more quickly given the department's existing administrative infrastructure right now when dealing with membership changes and Indian estates.

[The Chair, Conservative, Chris Warkentin]

Thank you.

We'll turn now to Mr. Rickford for seven minutes.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Chair.

Thank you, Tamra and Christopher. Christopher, it's nice to see you back again and thank you for your analysis.

I'm going to deal with clause 7 of the private member's bill with my questions, but I would like to make a couple of quick opening remarks and observations, if you will, as to where we are at this point and how that might be helpful from some perspective.

There has been some back and forth between words like “incremental” and “piecemeal”. What I find most interesting in terms of where we are at this time is that obviously we would be using the word “incremental” and some other colleagues might be saying “piecemeal”, but what has happened, no matter what label you apply, is that a very serious conversation has developed, which is what was intended by this member of first nations descent, I might add, around a number of issues, particularly with respect to section 42 to section 47, and then I would say, based on your report, section 48, and then subsection 2(1) becomes impacted.

In other words, this may be more than incremental. I think in your recommendations you give us an algorithmic kind of way of, perhaps, approaching it, so that's what my questions will be focused on. But any time you deal with the descent of property, wills, and appeals mechanisms, obviously it raises issues about the distribution of property on intestacy, and I appreciate that additional source of information.

Similarly, with respect to the Indian custom piece of subsection 2(1), Christopher, I think it raises some serious issues. My question is specifically on Indian custom. I would like to know for what specific reasons there would be a lack of a definition in some jurisdictions, if you know any. That may be a very short answer.

Then my questions will deal specifically with your recommendations. You have the removal versus the coming into force. There is an option in between recommendation 1 and 2 to a legislative way to find the best way to reform wills and estates without creating unintended consequences or legal gaps. Do you have a time period, if we went the route of a coming into force, where that would be implicated?

Then further, do you have any recommendations for a new way of administering wills and estates, some early stuff to give us some ideas about where we would do this?

I put the questions out first because I thought you would have no trouble going through that list and expounding on it.

[Christopher Devlin]

Thank you.

On the customary adoptions, only the Indian Act, so far as I know, recognizes customary adoptions in its definition of a child, pursuant to indigenous legal traditions. The only other body of law that I'm aware of that recognizes that is the common law, so judge-made law, where the common law will also recognize these customary adoptions. To the best of my knowledge, none of the provincial or territorial—