Evidence of meeting #20 for Indigenous and Northern Affairs in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was indian.
A recording is available from Parliament.
3:35 p.m.
Conservative
The Chair Conservative Chris Warkentin
Colleagues, I will call this meeting to order.
This is the 20th meeting of the Standing Committee on Aboriginal Affairs and Northern Development.
Today we begin the study with respect to wills and estates.
Colleagues, today is an opportunity for us to quiz the Department of Justice and the Department of Aboriginal Affairs with regard to the subject material.
We're going to turn it over to Mr. Saranchuk to begin.
I believe you have an opening submission.
3:35 p.m.
Andrew Saranchuk Assistant Deputy Minister, Resolution and Individual Affairs Sector, Department of Indian Affairs and Northern Development
Correct.
3:35 p.m.
Conservative
The Chair Conservative Chris Warkentin
Then we'll have some questions for you. We're going to keep the first round of questions rather structured, according to what is our usual practice.
There may be a more organic way to continue after that. If people have questions on a subject as it comes up, we may do that, but we'll give it a shot after the first rounds of questions.
We'll turn it over to you, Mr. Saranchuk, for your opening submission and then we'll have some questions.
3:35 p.m.
Assistant Deputy Minister, Resolution and Individual Affairs Sector, Department of Indian Affairs and Northern Development
Great. Thank you.
I'd like to thank the committee at the outset for providing this opportunity to speak to the administration of wills and estates on reserve.
My name is Andrew Saranchuk. I'm the assistant deputy minister responsible for the resolution and individual affairs sector in the Department of Aboriginal Affairs and Northern Development. That sector of the department includes the residential school settlement agreement, the secure certificate of Indian status card, the office of the Indian registrar, and Indian moneys, estates, and treaty annuities.
I have with me today, Roy Gray, who is the director who leads the Indian moneys, estates, and treaty annuities team, and two of my colleagues from the Department of Justice, Mr. Martin Reiher, acting general counsel, and Mr. Tom Vincent, legal counsel, since this is, of course, an inherently legal issue.
We're pleased to be here today to brief you on the administration of wills and estates on reserve land. I thought it would be helpful to begin by describing the existing system under the Indian Act and the process for the administration of estates. We will then identify some considerations that would likely be relevant to any review in this area that might be undertaken.
As you know, in Canada, wills and estates are a provincial responsibility. Therefore, for most Canadians, the laws of the province or territory where they lived at the time of their death apply to the administration of their estate, whether they died testate, with a will, or intestate, without a will. However, for first nations individuals who are registered or entitled to be registered under the Indian Act and who have died ordinarily resident on a reserve, the administration of wills and estates is the responsibility of the Minister of Aboriginal Affairs and Northern Development. To be clear, the minister does not administer the estates of first nation individuals who live off reserve.
There are some key differences between the Indian Act estates system administered by the minister and the provincial and territorial systems. I will identify five main areas related to the administration of estates on reserve and highlight the main commonalities and differences with the provincial and territorial systems. In doing so, I hope to provide the committee with an understanding of what both the minister and the department do in this area.
I would like to begin by examining the process related to wills.
As I mentioned, when a person dies, they will have either left a will or died without one. In most provinces, before a will is recognized as having legal force, it needs to be probated, which is the process of proving that a document is the valid final will of the deceased. Probate is usually granted by a court. In Quebec, individuals may also register a will with a notary. A notarial will in Quebec has legal force when the testator dies, and it does not need to be probated after their death.
On reserve, the Indian Act and the Indian Estates Regulations provide the legislative framework and administrative guidance for estates and will administration. Under the act, all registered Indians are entitled to write wills. However, after a death, rather than go to a court to have the will probated, the will is sent to a regional office of Aboriginal Affairs and Northern Development Canada, where an official will approve the document on behalf of the minister, based on the conditions set out in the act.
The conditions that need to be met for a will to be approved under the Indian Act are similar to those in the provinces and territories, but not as strict, in certain respects. For example, most provinces require that a will be witnessed, but that is not the case under the Indian Act. The will must also be written and signed by the deceased, and indicate the deceased individual's wishes with respect to the disposition of his or her property upon death.
Once the will has been approved as meeting the basic requirements, family members may challenge it, if they believe there are problems. It is at this stage that the minister, similarly to the provincial system, has the authority to declare a will, or part of a will, void in certain circumstances.
Those circumstances include the following: if the will was written under duress or undue influence; if the testator lacked capacity—for example, owing to illness or infirmity at the time it was made; if the terms of the will would impose hardship on the testator's dependants; if the will disposes of land in a reserve in a manner contrary to the interests of the band or to the Indian Act; or, if the terms of the will are too vague or uncertain and would render the administration and equitable distribution of the estate difficult or impossible to carry out.
This brings me to the second area of estates administration, and that is dispute resolution.
One of the main differences between the Indian Act system and that of the provinces and territories involves the way a will may be challenged.
Since Aboriginal Affairs and Northern Development Canada is not set up to hear and resolve disputes in estates in the same way as courts in the provinces, the general practice has been to transfer jurisdiction of such disputes to a provincial or territorial court. Under the Indian Act, on behalf of the minister, the department has the authority to refer a particular question, or an entire estate, to the court. In either case, the Indian Act continues to apply, but the family can plead their case before a provincial judge, rather than before the department's officials.
The third area of estates administration that I would like to mention is intestacy and the process of appointing estate administrators.
Generally in the provinces and territories, if there is no will, then family members need to apply to a court for letters of administration according to the laws of the province or territory.
Under the Indian Act, if there is no will for a first nation individual living on reserve, family members apply to the department to be appointed as the administrator of the estate. The department will make all efforts to appoint a family member of the deceased to administer the estate. Family members are invited to apply to be an administrator. Once an administrator is selected, the others with an interest in the estate will be given an opportunity to object to the appointment, if they wish. Departmental officials will only be appointed if no family member is willing or able to administer the estate.
In the majority of cases, for first nations individuals who die ordinarily resident on reserve, there is no will in the estate. This means that the intestacy provisions in the Indian Act, found at section 48, apply to determine how and to whom the estate is to be distributed. These provisions are similar to those of the provinces and territories.
Under the act, section 48 specifies clearly how the estate is to be divided in the event there is no will. For example, if there is a survivor, the first $75,000 goes to the surviving spouse. If there is one child, the surviving spouse and the child split the estate after payment of the spousal preference share, and so on. You'll see there's quite a series of rules there. Intestacy can also include the division of any possession of interest in reserve lands that was held by the deceased.
This brings me to the fourth aspect of the Indian Act estates administration that I would like to mention briefly. That is the treatment of reserve land when it is part of an estate, and in particular, the rules of the Indian Act designed to maintain the integrity of on-reserve land.
The Constitution Act, 1867 grants the federal government exclusive jurisdiction over lands reserved for the Indians. This means that provincial and territorial laws cannot deal with the possession of interests in reserve land, and this includes provincial wills and estates legislation. It is for this reason that the Indian Act has rules regarding reserve lands and estates. In particular, the Indian Act clearly states that reserve land interests can only be transferred to people who are members of the first nation that holds that reserve, and this applies in the context of wills and estates as well.
The existing estate process provides that if an heir or beneficiary of the reserve land interest is not a band member, and is therefore not entitled to possess reserve land, under the Indian Act, the minister is obliged to try to sell that land to another band member and give the proceeds of the sale to the heirs or beneficiaries involved. If there is no buyer after six months, the land will revert to the first nation. Clearly, this is a significant difference from the provincial system.
The fifth and final aspect I'd like to note is that various services relating to wills and estates under the current system are provided by the department at no cost to first nations individuals. For example, the approval of wills and the appointment of administrators are both done at no cost to the estates or to the heirs. This is not the case under provincial systems, and there is normally a cost associated with those steps.
That's not to say all costs associated with the wills and estates of first nations individuals living on reserve are covered. In particular, there are costs such as legal costs and the court fees that are not covered for first nations individuals.
The five aspects I just presented relate to the existing system, and hopefully give this committee a sense of what the minister and the department do in this area. But as part of its general responsibility in the area of estates administration, the Department of Aboriginal Affairs has begun exploring how its services in this area could be improved. Since the introduction of Bill C-428 in June 2012, we have spoken with several experts to gain a better understanding of how estates work in the provinces and territories, and where there may be potential intersections and opportunities to improve the current system if changes are desired.
From that perspective, I would like to offer very brief comments to the committee on some of the considerations that would likely be relevant to any possible review or reform of the estates system for first nations individuals on reserve.
At the broadest level, a review could explore whether improvements could be made to the current Indian Act estates system. For example, in addition to its administrative function, as mentioned, the department currently has a role in the resolution of disputes arising from estates. Consideration could be given as to whether or not the department could maintain its administrative role and devolve the judicial function to another body. A review could also explore whether options exist for first nations, or aggregates of first nations such as tribal councils, to have a role in estates administration, particularly with respect to these judicial functions. This would be consistent, of course, with first nations' aspirations for more control over their own affairs and with the objective of reducing departmental and ministerial involvement in their day-to-day lives.
In any review, consideration will have to be given to the jurisdictional challenges that are inherent in any potential changes to the administration of estates on reserve land. The Constitution Act, 1867 grants the federal government exclusive jurisdiction over "lands reserved for the Indians”. The case law has interpreted the constitutional doctrines of distribution of powers to mean that provincial and territorial laws cannot deal with the possession and transfer of interests in reserve land, and this includes provincial wills and estates legislation.
Therefore, some federal rules will presumably always be required at least in respect to reserve lands. However, there might be options for greater application of provincial laws in other areas, although this would obviously necessitate engaging on these issues with provinces and territories to a certain extent.
As part of this, consideration would also have to be given to the fact that if the estates provisions in the Indian Act are removed, an alternative regime would be required to replace them. If no alternative were explicitly identified, provincial or territorial laws might apply to the administration of estates on reserve to the extent that they were not inconsistent with the Indian Act and did not deal with the possession of reserve land. However, it seems clear that provincial and territorial laws would presumably not apply of their own force to the possession or transfer of reserve lands. So, simply removing the provisions of the Indian Act would, at a minimum, create a partial legislative gap meaning that the courts would need to get involved to provide guidance in this area. The result is that meaningful and orderly change in this area is not as simple as simply repealing the estates provisions in the Indian Act. Our advice would be to be clear and explicit about any replacement regime and not leave it to the courts.
Finally, it would likely be relevant to consider the potential implications of modifying the services that are currently provided by the department to first nations individuals, some at no cost, and consider how they would be paid for in the future.
I hope we have made this complex area a little bit clearer. We would be pleased to answer any questions that you might have.
3:45 p.m.
Conservative
The Chair Conservative Chris Warkentin
Thank you very much. I appreciate your opening submission.
We'll turn to Mr. Genest-Jourdain for the first questions.
Colleagues, if you do have members who want to be on the questioning list, we'll make sure that happens before we go to a less formal way of engaging with the questions.
We'll begin with Mr. Genest-Jourdain.
3:45 p.m.
NDP
Jonathan Genest-Jourdain NDP Manicouagan, QC
Good afternoon, gentlemen.
I looked at the information and figures provided in the document titled “Evaluation of Indian Moneys, Estates and Treaty Annuities”, dated April 2013. That document is about the number of estate files related to registered Indians on reserve in 2010-2011.
How do you explain that almost 23% of estate files for registered Indians were handled completely by representatives of the Department of Aboriginal Affairs and Northern Development in 2010 and 2011? Having failed to find an administrator or someone interested in administering the estate, the department had to take care of everything. How do you explain that lack of interest?
3:45 p.m.
Roy Gray Director, Indian Moneys, Estates and Treaty Annuities, Department of Indian Affairs and Northern Development
Mr. Chair, I think what is being referred to is the ratio of non-departmental administrators of estates versus departmental administrators. The department's policy is, and has been for some time, to try to encourage family members of deceased individuals to take over the administration of their estates. However, there are circumstances that arise where there may not be somebody available, or there are family members who are just not prepared to come forward and take over the responsibilities.
On average, about 20% of the estate administration files are handled by departmental employees. The majority are handled by family members, and that is the thrust: to try to encourage family members to take over.
3:50 p.m.
NDP
Jonathan Genest-Jourdain NDP Manicouagan, QC
If the Department of Aboriginal Affairs and Northern Development were to offload its responsibility with regard to administration, and Indian estates and gifts, how much would it cost to have the 577 files from 2010 and 2011 handled by an external administrator? I am not sure whether you have already looked into that, but I am asking you to answer based on your knowledge of these issues. How much would it cost to hire a professional to administer those estates, which have so far been administered by the Department of Aboriginal Affairs and Northern Development? Have you ever tried to quantify that?
3:50 p.m.
Director, Indian Moneys, Estates and Treaty Annuities, Department of Indian Affairs and Northern Development
We do have some experience with that. In two of the regions in Canada, contracts have been entered into with the provincial governments to take over the administration of estates files. I don't have the costs at hand, but that is done in two jurisdictions.
3:50 p.m.
NDP
Jonathan Genest-Jourdain NDP Manicouagan, QC
I will now talk about holograph wills prepared by individuals without the help of a notary.
You know that, in Quebec, holographs have to be probated by a court. You also mentioned that in your opening remarks this morning. I do want to clarify something. In Quebec, if those types of documents are typewritten, they are not recognized as valid. The will has to be written in the hand of the testator and signed by them. However, that is not what is set out in section 15 of the Indian Estates Regulations. The following is stated: “Any written instrument signed by an Indian may be accepted as a will by the minister [...]”. No further clarifications are provided.
In Quebec, there could be some problems caused by a shift in provincial regulations, especially if we consider that the department already has to fully administer 23% of estates across the country. If any additional elements were to create obstacles for first nations, would Indians almost systematically have to use a notary to ensure that their wills are compliant?
3:50 p.m.
Director, Indian Moneys, Estates and Treaty Annuities, Department of Indian Affairs and Northern Development
We have to bear in mind that we are talking here about wills and the administration of estates on reserve, which are governed by the rules in the Indian Act. The Indian Act, in section 45, sets out rules as to what the requirements are for first nations individuals ordinarily resident on reserve to make a will.
Basically, it boils down to the fact that the will has to be in writing and it has to be signed by the individual and deal with their property on death. If an individual makes a will in accordance with that section, there shouldn't be any problem disposing of land or any other assets on reserve.
I don't know if my colleagues at Justice have anything to add on that.
3:50 p.m.
Martin Reiher Acting General Counsel, Director, Operations and Programs, Legal Services, Department of Justice
Yes, I would like to add something. I am not sure I fully understand your question.
You are entirely correct in saying that a holograph will cannot be typed and must be handwritten. However, a typewritten will in Quebec can be valid if, of course, a witness is present at the signing.
3:50 p.m.
NDP
3:50 p.m.
Acting General Counsel, Director, Operations and Programs, Legal Services, Department of Justice
This is true.
That said, you correctly pointed out that the current rules under the Indian Act are unclear. So a typewritten document could be valid under the Indian Act. The current rules are not more rigid than what is set out in provincial legislation.
So, I fail to see how it is currently more difficult for a will made by an Indian to be valid than for a will made off reserve. That's why I am not sure I fully understand your question.
However, I think clarifying the rules would definitely help.
3:50 p.m.
NDP
Jonathan Genest-Jourdain NDP Manicouagan, QC
As you pointed out, so far, there has been a convivial aspect to accepting and probating the wills of registered Indians on reserve. If the department offloaded that responsibility, and provincial rules—if possible—applied to this situation, additional barriers would be created, since people have gradually gotten used to whatever approach was in effect. Ultimately, a will written on a napkin could be considered valid.
We already see that 23% of those files have to be processed fully, taking into account complications, understanding of fees and cultural distinctions.
I think that applying those rules, which are fairly strict in Quebec—we can agree on that—could be a factor that would surely slow down the process or, at least, make registered Indians less likely to become administrators and ultimately get involved in the administration and liquidation of the estate.
3:55 p.m.
Acting General Counsel, Director, Operations and Programs, Legal Services, Department of Justice
Thank you for the clarification.
I actually think that, if the rules of the Indian Act were simply eliminated, a number of problems would arise. The provincial rules would in all likelihood fill the void partially, but not completely. If they were to fill the void, the current provincial rules, being slightly more strict than the rules under the Indian Act, could cause issues for existing wills and current practices. It would be important to provide for a regime that would apply in such cases.
3:55 p.m.
Conservative
3:55 p.m.
Conservative
Rob Clarke Conservative Desnethé—Missinippi—Churchill River, SK
I'd like to thank the witnesses for coming in today.
I'm very interested in this study and appreciate the committee actually addressing this issue, because it was part of my private member's bill.
I want to clarify a couple of things.
First of all, I have a very straightforward question. Do first nations have the same rights as every other Canadian in Canada in regard to wills and estates?
3:55 p.m.
Assistant Deputy Minister, Resolution and Individual Affairs Sector, Department of Indian Affairs and Northern Development
I believe they do, but I'll let my colleague fill you in more.
3:55 p.m.
Director, Indian Moneys, Estates and Treaty Annuities, Department of Indian Affairs and Northern Development
Yes, I would say so. For example, a first nations individual has the right to make a will, and there are rules analogous to the rules that apply off reserve to non-first nations individuals and first nations off reserve regarding the administration of their estates.
3:55 p.m.
Conservative
Rob Clarke Conservative Desnethé—Missinippi—Churchill River, SK
But on reserve, do we have the same rights?
3:55 p.m.
Director, Indian Moneys, Estates and Treaty Annuities, Department of Indian Affairs and Northern Development
Well, as I say—
3:55 p.m.
Conservative
3:55 p.m.
Assistant Deputy Minister, Resolution and Individual Affairs Sector, Department of Indian Affairs and Northern Development
I think there are similarities and differences that we've tried to outline.