The First Nations Land Management Act (“FNLMA”), allows First Nations to enact and administer their own land codes. Until they enact a land code under the FNLMA, First Nations have to govern their reserve lands according to the Indian Act, which can be cumbersome, time consuming, and difficult. Under the Indian Act, Aboriginal Affairs and Northern Development Canada (“AANDC”) has the final say on many First Nations’ decisions about land. AANDC also carries out certain functions—such as leasing lands—on First Nations’ behalf, subject to AANDC policies and resource constraints. The Indian Act system inhibits economic development by imposing administrative hurdles on First Nations land management. It also prevents First Nations from managing their lands on their own according to their own values and legal traditions.
When First Nations choose to enact a land code under the FNLMA, roughly one third of the Indian Act ceases to apply. Land codes include rules and procedures on, among other things:
- land use and occupancy under licences, leases, certificates of possession or First Nation custom;
- transferring rights in reserve land through wills or other succession documents;
- revenues from natural resources;
- how land and money generated from reserve land are managed;
- a community consultation process to develop rules and procedures about how interests in land are divided when a marriage breakdown occurs;
- enacting and publishing laws;
- conflicts of interest in reserve land management;
- dispute resolution;
- expropriating rights or interests in reserve land;
- delegating management authority over reserve land; and
- exchanging reserve land.
A First Nation has the power to manage its reserve land pursuant to its land code. It may exercise the powers, rights and privileges of an owner in relation to the land, grant interests, rights or licences in relation to the land, manage the land’s natural resources, and receive and use all moneys acquired under its land code. A land code makes it clear that a First Nation has the legal capacity to enter into contracts, borrow money, expend and invest money, and be a party to legal proceedings with regard to the land.
A land code enables a First Nation to enact laws regarding interests, rights or licences in relation to reserve land, as well as the development, conservation, protection, management, use and possession of reserve land. These include laws respecting:
- the regulation, control or prohibition of land use and development, including zoning and subdivision control;
- the creation, acquisition and granting of interests, rights or licences and prohibitions in relation thereto;
- environmental assessment and environmental protection;
- the provision of local services and the imposition of user charges for those services; and
- the provision of services for the resolution of disputes in relation to First Nation land.
First Nations under the FNLMA may exercise their powers without the supervision and approval of AANDC. First Nations hold and manage any revenues from their lands, meaning AANDC will no longer hold them in trust. Despite a First Nation’s expanded authority, under the FLNMA, Canada continues to hold title to the reserve land for the First Nation’s use and benefit and First Nations cannot sell or transfer title to reserve lands. That said, as a First Nation assumes powers under the FNLMA, the Crown ceases to owe it a fiduciary duty with regard to those powers.
What are the Pros and Cons of the First Nations Land Management Regime?
More economic development. Under FNLMA, First Nations can create more favourable conditions for business. Research on First Nations currently operating under the FNLMA shows they have experienced a significant increase in new business and a greater variety of business types, many of which are owned by community members. One study found that these 32 First Nations had created approximately 4,000 jobs and attracted approximately $270 million in investment.
FNLMA regimes promote economic development because their processes are faster and more efficient, First Nations have direct control, it is easier to capitalize the land value and investment is more accessible. Businesses and investors may deal with First Nations directly through simplified procedures and have a greater sense of certainty and security. First Nations are better suited to take advantage of market opportunities due to better relationships with industry and municipalities, improved communication and more effective and timely management of reserve lands.
More control. Nations under the FLNMA can govern their reserve lands better through their own land codes. They are better able to use their reserve lands effectively and to collect and control any revenue from them. Land codes also allow First Nations to fill in gaps in existing legislation, such as in environmental protection. First Nations can also design processes to enforce their laws and resolve disputes through processes consistent with their legal traditions and cultures.
More effective management. Decision making under FNLMA regimes is more efficient and is more effectively implemented. Research on existing FNLMA regimes found that processing land transactions is significantly faster and cheaper. In one group of First Nations, after adopting a land code the average time to issue a permit or lease dropped from an average of 584 days to 17.
More community involvement. The FNLMA enables First Nations to replace roughly one third of the Indian Act with land laws that reflect their own values, practices and traditions. Developing a land code involves an intensive process for obtaining community approval, in which off-reserve members are invited to participate. FNLMA processes are more transparent and accountable, and allow for more community participation in land management.
Expense. Designing and implementing a FNLMA regime requires significant funding, dedicated resources, technical knowledge and training. These requirements are easily underestimated. As a result, the transition to a FNLMA regime can be slow and expensive. Canada does not fully fund FNLMA First Nations’ land management expenses. Currently, federal funding covers one third to one half of the costs of managing a fully implemented land code regime. If a First Nation is unable to provide the remainder, its land management system may suffer.
Liability. When First Nations take responsibility for land management they assume liability for land management issues. The Crown no longer owes a fiduciary duty to First Nations regarding the powers that they exercise under the FNLMA. First Nations must ensure that they have the funds to cover legal costs and the financial losses which may result from lawsuits arising from the administration of a land code.
JFK has experience assisting First Nations develop, ratify and implement land codes. We have developed specialized resource tools that enable us to provide our services at an affordable fixed rate. The benefits to our clients include cost predictability, a streamlined process, and the advantage of experience. For more information, please contact Krista Robertson.
 For more information, see KPMG, “Cost/Benefit Analysis of Future Investment in the Framework Agreement on First Nations Land Management: Final Report—January 27, 2010”, online: First Nations Land Management Resource Centre Inc. <https://labrc.com/wp-content/uploads/2014/03/FNLM-Benefits-Report_FINAL_Jan-27_2010.pdf> at 51-64; KPMG, “Framework Agreement on First Nation Land Management: Update Assessment of Socio/Economic Development Benefits: Final Report—February 27, 2014,” online: First Nations Land Management Resource Centre Inc. <https://labrc.com/wp-content/uploads/2014/03/FNLM-Benefits-Review-Final-Report_Feb-27-2014.pdf> at 18-22.
 KPMG, “Framework Agreement on First Nation Land Management: Update Assessment of Socio/Economic Development Benefits: Final Report—February 27, 2014,” online: First Nations Land Management Resource Centre Inc. <https://labrc.com/wp-content/uploads/2014/03/FNLM-Benefits-Review-Final-Report_Feb-27-2014.pdf> at 9.
 KPMG, “Cost/Benefit Analysis of Future Investment in the Framework Agreement on First Nations Land Management: Final Report—January 27, 2010”, online: First Nations Land Management Resource Centre Inc. <https://labrc.com/wp-content/uploads/2014/03/FNLM-Benefits-Report_FINAL_Jan-27_2010.pdf> at 31-32.