Indigenous and Northern Affairs Committee on April 29th, 2014

[The Chair, Conservative, Chris Warkentin]

I will call this meeting to order. This is the 21st meeting of the Standing Committee on Aboriginal Affairs and Northern Development. Today we continue our study on the subject matter of wills and estates for first nations people living on reserve.

We have the privilege today of having Mr. Gailus back. Thanks so much for joining us. You seem to be our go-to guy on all things complicated, so thank you very much for being here. We'll be hearing from you first.

We have, from the Indigenous Bar Association, Mr. Roe and Ms. Richer. Thank you so much for being here. We'll hear from you after we hear from Mr. Gailus.

We'll hear from both groups, and then we'll turn it over to committee members for questions. We're trying to understand the matter of wills and estates for people living on reserve, and some of the complexities that go into those. We appreciate your being involved in our review.

We'll open it up for your opening statements. Then, as I said, we'll have some questions for you.

Mr. Gailus will start.

[John Gailus, Partner, Devlin Gailus Barristers and Solicitors]

Thank you, Mr. Chair. It's good to be back.

I want to thank you for inviting me here to talk about this really important topic. It is complex, and I know it's kind of a vexing issue for a number of first nations and first nations individuals.

Just by way of background, I'm a member of the Haida Nation in British Columbia. I'm also a practising lawyer. I've been practising in the aboriginal law area for the last 15 years throughout western Canada. Prior to that I spent four and a half years working for what was then the Department of Indian Affairs and Northern Development. I spent all of six weeks doing estates and got out of there and moved to lands for another four and a half years. But even working on lands, estate issues always seemed to pop up when we were trying to do economic development on reserve, and it still does today. As part of my practice I do some estates work. I have probably half a dozen files, complex files, usually involving land, usually involving leases of first nation land, so developments on reserve. I don't do any off-reserve estates work, just the on-reserve stuff, so hopefully I can give you a little bit of my knowledge in terms of ways to maybe improve the system.

What I want to talk about, and I want to be really brief on this, is sort of at a very high level, and this is really a question for the committee: what is the issue that needs to be resolved here? Is there a better way to address the wills and estates of status Indians who reside on reserve? I think the answer is yes, but the solution is not simple.

I think it was in February or March my colleagues here on the panel and I were invited here to Ottawa to a think tank that the department had put on to look at potential solutions. A number of solutions came out of that, so when I'm speaking of these solutions, I didn't come up with them myself. These were some solutions that the group as a whole came up with. It was good because we actually had representatives from the province, from the public guardian and trustee, and I was there representing the Canadian Bar Association. My friends here from the IBA were there, as well as people from the department who actually work on a day-to-day basis with these matters.

I think there are four possible responses. The first one is the status quo. I always give this to my clients when I'm giving them advice: do nothing. It's always an option. I'll leave that to my friends from AANDC to talk about. The second is moving to provincial jurisdiction. The third is the first nations control, first nations optional legislation, so something like we just saw recently with the Family Homes on Reserves and Matrimonial Interests or Rights Act. The fourth is amendments to the Indian Act and the Indian estate regulations.

As I said, I'm not going to address the status quo. I just want to point out some issues, though, that came up in terms of moving to provincial jurisdiction. As you're aware, the law is different from province to province. There are significant costs to retaining lawyers and court applications. The question you might want to answer is whether the process is going to be more efficient by moving to a provincial system. My experience is that it isn't. There are questions in terms of how the provincial law will intersect with the Indian Act lands provisions. One of the things that I learned from our think tank was that the public trustee actually charges to manage estates, so there may be a cost either to the individual first nations people or to the department if you decide that you want to move to a provincial system.

There were some submissions that the CBA aboriginal law subsection did on Bill C-428 that identifies some of these issues. I'd recommend them to the committee.

The second option would be moving to first nations jurisdiction. The question that I have is, and my friends probably might answer this, is this something that first nations want? Is this something that first nations should be exercising jurisdiction over? Unlike lands, estates are fundamentally personal matters. Any process would have to be adequately funded if first nations decided to take on this responsibility.

The fourth option would be amending the act and regulations. I think this should be seriously considered.

Much of the current process is policy driven rather than legislation and regulations. It's a fairly lean set of laws that you're dealing with, and there are a number of administrative gaps, as I would call them. One example is whether or not an administrator has to pass their accounts at the end of the administration of the estate. This is something that's required provincially under the Trustee Act, but it seems to depend, when you're talking to the folks at AANDC.

In British Columbia, where I reside and do most of my work, there's been a new act put in place just recently, as of March 31, called the Will, Estates and Succession Act. There are opportunities to look at other pieces of provincial legislation, and to, I'll use the word “cherry-pick”, from these various provincial legislative regimes to develop a comprehensive code.

Finally, I think any recommendations to make changes to the current system must consider: first of all, the constitutional responsibility of Canada under section 91, item 24; the costs that may be associated with individuals moving to a different system from the current system; the cost to the Government of Canada of change, for example, the need to enter into some sort of memorandum of understanding with the provinces for fee for services to manage these small-value estates that the public trustee is now going to be responsible for; whether making changes will lead to efficiencies in the management of these estates; and finally, the long-term cost to families and first nations of lands being tied up in estates.

Thank you.

[The Chair, Conservative, Chris Warkentin]

Thank you, Mr. Gailus.

We'll turn to Mr. Roe next.

[Brock A. F. Roe, Member, Board of Directors, Indigenous Bar Association in Canada]

Thank you, Mr. Chair.

I'm going to go first, and then my colleague, Ms. Richer, is going to speak, and then I'm going to finish off, if that's okay.

Tansi, everyone.

My name is Brock Roe. I'm an associate lawyer at the law firm of MacPherson Leslie and Tyerman, or MLT for short. I work out of the Edmonton, Alberta office, although I live in Saanich, B.C., just outside of Victoria, and I commute as required.

At MLT I work in a number of different practice areas. I mainly work with our partners in our aboriginal practice to support our clients in issues relating to band governance, corporate commercial economic development matters, business transactions, resource and regulatory matters, and consultation matters between first nations, resource sectors, and governments. I also support our partners with our non-aboriginal group of clients.

It's basically a general commercial practice that deals with everything: corporate law, corporate governance, commercial financing, business acquisitions and sales, and acting for non-profit societies. In other words, I'm a generalist, if you want to put it that way.

I have also had some experience working on a few estate matters on reserve for first nations ordinarily resident on reserve. I also have a little bit of experience working with regular estate matters off reserve for Albertans.

I'm also a member of the Bigstone Cree Nation, located in central northwestern Alberta. I grew up in Fort St. John, in northeastern B.C., so I have come to a unique off-reserve experience growing up, but being in close ties to my family on reserve.

I'm also a director and treasurer with the Indigenous Bar Association in Canada, also known as the IBA.

I want to be clear with the committee that my views expressed today are not reflective of the views of MLT or Treaty 8 or Bigstone, but these are the views of the IBA.

[Valerie Richer, Member, Board of Directors, Indigenous Bar Association in Canada]

Good afternoon. My name is Valerie Richer. I am an employee of the Canadian Human Rights Commission. However, I'm on a two-year interchange with the Assembly of First Nations and I serve as associate counsel there. However, I am here as a member of the Indigenous Bar Association, and I sit on the board. The comments that I'll be sharing today are on behalf of the IBA and are in no way connected to the commission or the AFN.

My background is in aboriginal law, human rights, and administrative law. In addition, I'm Anishinabe. I'm from a small community, Atikameksheng Anishnawbek, in northern Ontario, and I currently live in Ottawa.

The IBA is a non-profit professional association of first nation, Métis, and Inuit lawyers, legal academics, and law students in Canada. The objects, or purposes, of the IBA are as follows:

One, to recognize and respect the spiritual basis of our indigenous laws, customs, and traditions;

Two, to promote the advancement of legal and social justice for indigenous peoples in Canada;

Three, to promote the reform of policies and laws affecting indigenous peoples in Canada;

Four, to foster public awareness within the legal community, the indigenous community, and the general public in respect of legal and social issues of concern to indigenous peoples in Canada; and

Five, in pursuance of the foregoing, to provide a forum and network amongst indigenous lawyers: (a) to provide for their continuing education in respect of developments in indigenous law; (b) to exchange information and experiences with respect to the application of indigenous law; and (c) to discuss indigenous legal issues.

We would also like to make it very clear that the IBA has no mandate from any first nation in Canada to consult with the crown on their behalf on these issues. We simply appear before this committee as a type II Canada Corporations Act entity, i.e. a non-profit, governed by a board of directors who are elected by the members of our society, with the above objects or purposes in mind.

[Brock A. F. Roe]

Similar to my colleague, I'm going to make some remarks on a broader level on issues that we see and some things that should be addressed.

Because this committee is discussing how to deal with the administration of the estates of first nations, i.e., the stuff that indigenous people possess and own, meaningful consultation obviously needs to take place with first nations on any changes that are desired, keeping in mind those objects that Ms. Richer just reiterated. It's important to remember that first nations in Canada have their own indigenous legal orders as well.

It's also important to remember that those first nations have been dealing with property of their own for a very long time. If we want to consider making changes to how a deceased first nations person's possessions are to be dealt with in Canada, then we need to consider how indigenous peoples in Canada already have been dealing with their property in the past, according to their own legal orders, how they can deal and are dealing with it now, and how that work can be supported by Parliament with sufficient resources.

Also, let us remember that the relationships between the crown and a large number of first nations in Canada are based on treaty. Do not be surprised when engaging on these issues if first nations come to it from a treaty perspective. For those first nations who have no treaty with the crown, be prepared to engage in a process from an aboriginal rights perspective, right? Those are two very different frames of mind.

We also understand that previously, under MP Rob Clarke's private member's bill, Bill C-428, a number of antiquated sections were removed, more or less, from the Indian Act. Subsequently, certain sections within the bill relating to wills and estates were then removed from the bill, so here we are today discussing these same sections, the wills and estates sections.

Before we get into a dialogue, I also want to highlight some important concepts and issues or items that ought to be considered in any type of amendments going forward. These are sporadic, by the way. I tried to organize them into some meaningful sense, but wills and estates are complicated and encapsulate a large area of law jurisdiction. I tried to filter it into some type of organizational paradigm.

One is the concept of “ordinarily resident on reserve”. It's not just on reserve. Even the “Decedent Estates Procedures Manual” acknowledges this, but this is the guide that the bureaucrats in AANDC use to help themselves when they administer these estates. It also refers to first nations who are on crown land, National Defence land, provincial parkland, national parks, and lands bought by the federal crown for first nations that don't have reserve status. Keep in mind that there are other people who are captured in this, not just people on reserve. In Alberta, there's a group of people living on crown land in the mountains, on the eastern slopes, in the Smallboy camp. That's an example.

Two is dispute resolution. This was discussed on April 8 before this committee as well, in a cursory context. The minister, or AANDC, doesn't have the administrative tool to deal with contentious estates. If some change is desired, consider talking with first nations to see what sorts of ideas they might come up with to deal with dispute resolution. They know their community best, so they would have a good idea of how to deal with contentious matters. Also, you can't just dump another administrative process onto first nations who are already dealing with estates matters. I think those processes need to be supported adequately with resources.

In regard to intestate thresholds, under the intestate provisions of various provincial regimes, there is a threshold dollar amount. The first dollar value would go to the spouse. Afterwards, any remaining value would be split up between the children and the spouse, or however the formula is set out. Currently under the Indian Act that threshold is $75,000. In Alberta it was $40,000 until it was recently amended up to $150,000 in new legislation. I'm not sure about B.C. In Ontario I understand it's $200,000. There's a disparity there that we need to consider. I've just been told that it's $300,000 in B.C.

There's a significant difference. We need to consider why there's a difference. Again, it's pretty obvious. Provinces can't deal with possessory interests in reserve lands, right? That's in sections 91 and 92, ultra vires, intra vires, and we have to keep that in mind.

There's also clarity. You can't simply enact a regime where the federal law applies in one context of the administration of estates and then provincial law comes in for another.

I'm trying to think, if a client came to me with a complex matter that considered both of those jurisdictions and the advice I needed to give, I'd have to research both areas of law and put together advice. I can tell you that would cost a lot of money, more than if it was under one regime or the other, simply where there is already an existing body of case law for both.

Regarding family administrators, you will recall previous evidence from Mr. Gray on April 8, that approximately 20% of estates are handled by AANDC administrators, the balance being handled by appointment of family administrators.

We're concerned that AANDC would look at these family administrators with potential liability for any decisions these family administrators make, and AANDC might distance themselves from these family administrators in order to protect themselves from liability.

The family administrators are then kind of left to their own devices to deal with decision-making, and they undergo a steep learning curve just as lawyers do. We need to consider that, and we need to support them in their decision-making, and make sure they have clear guidelines. Otherwise estates matters aren't going to be helped or dealt with.

Next are the provincial government administrators. This was new, and I never knew this before, but on April 8 it was either Mr. Gray or Mr. Saranchuk who said that there are contracts with two provincial governments regarding their administration of estates files.

This was kind of interesting. I thought maybe individuals who are administering those contracts should be brought before committee to discuss how they think it's going, if there's anything they can improve, the same as first nations who are being dealt with under that contract.

There was a comment about regional disparities at the last meeting here as well. AANDC has about a 20% departmental administration take-up. When you break that up across the country, there was serious regional disparity between B.C. and Alberta, for instance. From what I understand, nobody really understood why when I looked at the transcript from the last meeting. So here are my thoughts on that, and this is based on our discussions from the think tank discussion group we had previously.

One, you have to look at how legally recognized possessory interests in reserve land are spread out across the country. In B.C., there are a lot more certificates of possession or certificates of occupancy that are issued, which we can otherwise call lawful possessory interests. In Alberta there are significantly less, so upon someone's death, you're going to be dealing with a lot less than if you were in B.C.

B.C. also has a treaty process that a number of first nations are engaged in. This triggers a lot of people needing to consider all of the outstanding estates because there are outstanding interests in reserve land that need to be taken care of.

Some nations are also considering whether to adopt the First Nations Land Management Act. Again, there are a number of outstanding interests in reserve land that need to be dealt with.

You can think about, if you're going to sell your house on regular titled land, you have a mortgage on title, maybe there's a certificate of lis pendens or some type of writ on your title. Before you sell that to the next person, you need to deal with those outstanding interests on title.

There's the same kind of idea or concept with reserve lands. Before that transfer of land occurs under a treaty or self-government agreement or under FNLMA, you need to deal with all of these outstanding interests in reserve land. So in B.C. you're going to have a pile of certificates of possession that are issued. There are a lot of old estates files that are taking a long time to deal with. I think in B.C. you're going to see more of that than in, say, Alberta just because of those processes.

I think that can explain why there's some regional disparity between the provinces.

In regard to holograph wills, these are rather easy to prepare. The concept is that you take a pen and write down your intentions on what you want to do with your stuff upon your death. As long as it's clear, and you clearly write out your property and your intentions with that, and it's your own signature in your own writing, it's usually non-contentious.

Under the Indian Act provisions under their will making, that's roughly the criteria. There is a set criteria that Mr. Gray and Mr. Saranchuk discussed at the last committee meeting.

If you have this provision of providing a means for a holograph will to be prepared by first nation individuals on reserve, and you replace it with a requirement for a formal will, we're concerned in that what you're saying is that instead of writing something in your own hand that you can do on the reserve with some limited guidance, you're going to need to seek legal counsel on how to prepare a will.

A will is a very different document from a holograph will, and there are certain formalities that need to be addressed. You can't have a beneficiary in your will as a witness to your will. That's going to be tough, because you have to educate everybody. For instance, you trust your sister a lot perhaps because she takes care of a lot of your family's business, but if you also want her to have something, then she can't witness your will, but you want her to help you prepare it.

You're also probably going to want to seek advice on whether or not your bequests or the testamentary dispositions in your will would be valid under your will. For transferring reserve land, if you have a valid lawful possessor interest, like a certificate of possession, you'll want to account for that in your will and transfer it.

There is a concept of something called a buckshee lease, which is what we'll call an unrecognized interest in reserve land, which isn't formally recognized. A lot of first nations live in a trailer in which the family has lived for a long time and everyone knows that they live on a certain piece of land. We can call that an interest, but in terms of the Indian Act, it's not recognized and it's an unrecognized lawful interest. When the individual living in the mobile home on that spot drafts a will, can they actually transfer that spot to someone else? This is something that needs to be addressed in the Indian Act, because there are a lot of interests like this out there.

I would say you need a lot of input from first nations on how that needs to be dealt with, because it's not simply inserting a title regime. There are lots of questions about that because of the collective nature of reserve lands.

Concerning probate, if you want to draft a will, you have to take it to probate and you have to have it approved by a court. If you live on a reserve three hours away, you may have to drive to a courthouse or somewhere to get the information, or maybe you're lucky and you have Internet and you can print it off and deal with it then. You're going to have to pay probate fees. You're probably going to have to seek legal help or legal information of some sort.

I don't know if somebody living on reserve can seek legal aid and whether they're going to meet the threshold requirements for legal aid in the provinces, and as we all know, across the country their budgets have been cut.

As well, what do we do with the 8% of people who have wills already? That was discussed as well. If 8% of first nations people living on reserve are drafting wills and we do something new, is there going to be something provided in any act or wherever that would account for those existing wills? Will those old holograph wills be grandfathered or are we going to require them to get legal advice and draft something new? Those people are going to be hard to find. You have to talk to them and say, “You need to reconsider all this. You can't give that away in that manner. We have to deal with it in a different way.”

Regarding public guardians and trustees, my understanding, based on a think tank discussion group at which we had three public guardians and trustees from Saskatchewan, Ontario, and British Columbia, is that they don't have the current administrative knowledge or expertise with respect to first nations issues on reserve. Some have an idea. There is a body of some case law on it, but not a lot, that they can learn from. They don't have that knowledge, nor do they have the budget to deal with this.

If you want to think about transferring any authority to the provinces to deal with these estates, think about those 3,600 open case files right now and just transferring them over to the provinces. Think of the administrative bureaucratic exercise that goes into saying that one group is in, or that somebody has to deal with the B.C. group because there are a lot more and they will have to have more staff on that. In Alberta, Saskatchewan, the territories, and across the country, it would be the same thing.

Those are just some things to keep in mind, because it seems to be a relatively easy process, but it's actually quite complicated and it's going to take a lot.

Those are my comments.

[The Vice-Chair, NDP, Jean Crowder]

I want to thank the witnesses very much.

We'll now go to our rounds of questioning.

We'll start with Mr. Genest-Jourdain, for seven minutes, and that includes responses as well.

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

Good afternoon, Mr. Gailus.

I believe I understood that you work in private practice in British Columbia and that you also deal with estate files on a regular basis at your firm. Is that correct?

[John Gailus]

Yes.

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

According to your expertise and the particular situation in British Columbia, Mr. Gailus, what are the usual costs for a third party to administer an ab intestat estate, whether we are talking about aboriginal persons, or citizens of British Columbia in general?

Since you handle that type of case, would you have a figure in mind that would correspond to the usual amount that could be charged to settle or administer an estate?

[John Gailus]

Would that be on reserve?

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

Generally, yes. What would be the cost to settle an estate on a reserve, from A to Z? If a third party does the distribution, what would the normal cost be for that? I heard $300,000 mentioned earlier. You mentioned amounts.

[John Gailus]

The $300,000 reference was to the amount that a spouse would be entitled to under the new B.C. act. The surviving spouse would get the first $300,000 of the estate, and then it would go down from there, to the children and next of kin.

It's hard to ballpark, frankly, what it might cost to do. I think the translation was “liquidation”, but I think you're talking about a distribution of the estates. The ones that I'm involved in usually involve real property as well as assets.

Most first nations estates usually don't have very much value and, to be honest, they really can't afford to retain a lawyer to deal with it. It seems that the ones I'm involved in often also have a mix of members and non-members, so we have that section 50 rearing its ugly head. We have individuals who can't inherit the estate. In those circumstances, there's a lot of discussion that goes on with the department to see whether it's going to be necessary to do a section 50 sale or not.

Recently, the fees associated with just getting a new administrator appointed, and this was an estate that had been transferred, the jurisdiction had been transferred from the minister to the court, under section 44, I believe it is. The minister said, "Well, this is too complicated. I'm going to transfer my jurisdiction to the court". The fees associated with that were in the area of $25,000, but there was some dispute involved in terms of who wanted to be the administrator there.

I think with the costs, whether you're dealing with on reserve or off reserve, if there's some value in the estate, you're going to need to retain lawyers. Oftentimes, you have beneficiaries who also have their own lawyers, so the costs can escalate quite quickly.

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

I understood that you have also worked with Aboriginal Affairs and Northern Development Canada on estates-related matters. To your knowledge, has the department ever provided figures on the cost to the department of administering estates? Internally, what are the amounts for that?

You spoke about $25,000 in the civil area. If the department did this, to your knowledge, have these figures ever been drawn to public attention before?

[John Gailus]

Would this be a circumstance where the department is administering the estate?

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

Yes.

[John Gailus]

My understanding is that there's no fee charged for doing that. That might be a better question for somebody from the department, whether or not they've actually quantified what that cost might be for departmental administration.

I know that some of the complex or older estates, where there is no one who is willing to step forward, if you priced it out, it would be my guess that it would be a significant sum of money in terms of the amount of time that the estates officers are dealing with these estates.

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

You also referred to the responsibility of the state. To my mind you were talking about the concept of fiduciary relationships.

According to you, Mr. Gailus, the administration of wills and estates by Aboriginal Affairs and Northern Development Canada is covered by this notion of the fiduciary responsibility of the Crown for first nations. Could wills and estates really be included in that, in the final analysis?

[John Gailus]

In terms of the trustee's duties, yes. If a departmental representative is managing the estate, they're in the same position as Canada Trust, for instance, or a family member, in terms of their fiduciary duties to manage the estate.

Certainly there are potential liabilities if the administrator is negligent or breaches their fiduciary duty in handling the estate.

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

Thank you.

Mr. Chair, I'm going to share my speaking time with my colleague.

[The Chair, Conservative, Chris Warkentin]

Ms. Crowder.

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

I have only a minute and a half so I'll follow up with the rest of my questions on my second round, but I want to come back to a point.

Mr. Gailus, in your opening remarks you indicated the issue that needs to be resolved. I think that's a challenge for the committee because it's a complex matter.

If the committee could recommend one simple thing, what would it be?

[John Gailus]

One simple thing....

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

I looked at the program evaluation that was done, the internal evaluation, which identified a couple of key areas where the department was not fulfilling its responsibilities. For example, they weren't adequately monitoring third party administrators. There was insufficient information. There were lengthy periods of time between when a person passed away and the department was notified. There were a number of departmental inefficiencies.

Would that be one thing that we could at least do?

[John Gailus]

Absolutely. As I said, both the legislation and the regulations are pretty lean and there are some huge holes in there. Oftentimes, you're left with policy to try to fill those gaps and even the policy often doesn't address all of those issues.

My guess is that the policy may not be applied in the same way across the board. I suggest that an option was to take a really hard look at the act and the regulations and determine whether it would be worthwhile to do a comprehensive code. That is what you would have if we were under a provincial system where you go to the act, the act says what it is you have to do, these are your responsibilities, and you can get on with it, rather than it seems oftentimes to be very ad hoc when you have an issue.

We had an issue recently. We tried to remove an administrator who had been appointed by the department. No one in my office could actually find the form or the process by which that person could be removed. I said to just write a letter to whoever the regional manager of estates is, and say that we want the guy removed and give the reasons why.

In some cases, there is a lack of formality when we as lawyers are trying to figure out how to manoeuvre through it.

The simple answer is to throw more resources at it, but I don't think that is the solution.