Evaluation of First Nation Jurisdiction over Land and Fiscal Management

Funding structure

Through a delegation of authorities, both CIRNAC and ISC were using grants and contributions to provide multi-year funding support to First Nations-led institutions and organizations. CIRNAC provided long-term funding to fiscal institutions (5 years or more) for core operational support and short-term funding (1-2 years) for proposal based project and initiatives. This funding structure is not reflecting the ongoing and foundational nature of these institutions and organizations. As pillars of the Framework Agreement and the FNFMA, these institutions and organizations must operate in a stable and predictable funding environment that is conducive to the successful implementation of their activities and strategies. The current approach is creating challenges relating to organizational long-term planning, and to the ability to recruit and retain the highly specialized personnel that land and fiscal management require. Having the funding provided by both CIRNAC and ISC also adds a layer of complexity in attempting to create that stable funding environment, as each department operates with its own processes and procedures related to funding support.

Legislative drafting

Establishing and maintaining the proper legislative framework to support First Nations land and fiscal management has been an ongoing process in which the Branch and First Nations-led institutions and organizations have been involved throughout the period covered by the evaluation. To date, First Nations and First Nations-led institutions and organizations have been involved in policy co-development processes through consultation, collaboration, and co-drafting of policy proposals. Key milestones include co-development activities leading to amendments to the FNLMA and FNFMA, and work to establish the First Nations Infrastructure Institute (FNII). However, First Nation-led partners have had no direct involvement in the legislative drafting process, which is carried out by the Department of Justice on the instructions of Cabinet. As these legislative initiatives directly shape the economic self-determination of First Nations, CIRNAC should continue to work with the Department of Justice and Central Agencies with a view of ensuring that First Nations have ongoing participation in the development of legislation through CIRNA policy and Legal Services officials so that First Nations have the appropriate opportunity to review and indicate agreement with proposed legislation, in accordance with Cabinet decisions, before any such legislation is introduced in Parliament.

Tax-based initiatives

The vision that First Nations-led institutions and organizations pursue require the implementation of a range of taxation measures, which enable First Nations to broaden their revenue base and proceed with the necessary investments in their social and economic infrastructures. This requires the participation and support of the federal government, and more particularly that of the Department of Finance Canada. Over the period covered by the evaluation, First Nations-led institutions and organizations and the Department of Finance Canada have interacted to explore how to further their collaboration, and CIRNAC has facilitated this process. As the federal government continues to develop its action plan to support the implementation of UNDRIP, there is an expectation on the part of First Nations-led institutions and organizations that this work with the Department of Finance Canada will be pursued, including options to have an ongoing collaboration, rather than ad hoc discussions. CIRNAC is expected to facilitate this process.

Distribution of roles and responsibilities

Following the dissolution of the department of Indigenous and Northern Affairs Canada and the establishment of CIRNAC and ISC, a delegation of authorities was signed between the two departments, whereby the Minister of Crown-Indigenous Relations is responsible for nation-to-nation relationships with First Nations, including those set by treaties and other agreements, and the Minister of Indigenous Services is responsible for administrative and operational aspects related to the delivery of direct services to eligible Indigenous individuals, organizations and communities.

In the context of land and fiscal management, the delegation of authorities has proven challenging for CIRNAC and ISC representatives, and First Nations-led institutions and organizations. For instance, providing adequate support in relation to land and fiscal management has required activities to be undertaken by both departments, including processes such as Additions to Reserves (ATR) and First Nations Land Management, where the Minister of Crown-Indigenous Relations has delegated some operational and administrative responsibilities to the Minister of Indigenous Services while maintaining other responsibilities related to process milestones.^{Footnote 1}

Following the delegation of authorities, CIRNAC is leading the policy work related to improving the First Nations Land Management and ATR process, while ISC is responsible for implementing any such policy changes. During interviews, representatives from CIRNAC, ISC and First Nations-led institutions and organizations noted an improvement over time in clarifying the practical roles and responsibilities between the two departments, but this structural environment is expected to continue raising challenges that require ongoing monitoring efforts.

1. Management Response

The evaluation provides guidance to better support First Nations as they exercise their jurisdiction over land, including Additions to Reserve (ATR), and fiscal management. Recommendations were provided as a result of the review of activities undertaken by Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC)'s Indigenous Institutions and Governance Modernization Branch (IIGM) in support of First Nations-led institutions and organizations that engage individual First Nations participating in land or fiscal management regimes structured outside of the Indian Act.

Many of the findings of the evaluation are related to organizational challenges between CIRNAC and other Departments. These challenges will need to be addressed through a coordinated and coherent government approach.

Over the period covered by the evaluation, several initiatives were implemented and have strengthened the legislative framework related to land management. For example, the First Nations Land Management Act was repealed and replaced in December 2022 by the Framework Agreement on First Nation Land Management Act (FAFNLMA), therefore recognizing the Framework Agreement as the foundational document when it comes to First Nation land management. As well, strengthening of the legislative framework related to First Nations fiscal management continued via the introduction of Bill C-45, an Act to amend the First Nations Fiscal Management Act (FNFMA), to make consequential amendments to other Acts, and to make a clarification relating to another Act. This Bill received Royal Assent on June 19, 2023.

From January 2022 to March 31, 2023, IIGM undertook engagement with First Nations and Indigenous organizations to seek direction on ATR policy redesign. The redesign process included a Call for Proposals, held from March 20, 2023 to May 19, 2023. This Call is to provide funding to support First Nation-led engagement on ATR policy redesign. Indigenous partners whose proposals are selected, will have until Spring 2024 to engage with their community (ies) and provide insight and recommendations for policy redesign. Reports from these processes will help inform ATR policy redesign options in Spring 2025.

In addressing the recommendations, the action plan below provides further information on upcoming IIGM's initiatives where engagement with Central Agencies is critical.

Although IIGM benefits from a positive working relationship with First Nation-led institutions and organizations, co-development of certain legislative and regulatory processes is challenging due to the need for Cabinet confidence. In addressing the Report's recommendation of "ensuring the co-development, at all stages of the process, of any legislation or regulations that have a direct impact on the land and fiscal authority exercised by First Nations", IIGM will continue to collaborate closely with First Nations through their First Nations-led institutions and organizations to improve transparency related to future legislative and regulatory initiatives while respecting Cabinet confidence.

2. Action Plan

Approach and methodology

An Evaluation Working Group, composed of representatives from First Nations institutions and organizations involved in land and fiscal management, and from CIRNAC, was established to guide and support the evaluation process. Working Group participants included representatives from the First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority, First Nations Land Management Resource Centre, Assembly of First Nations, and CIRNAC. Working Group members provided feedback on the evaluation framework, the preliminary findings, and the evaluation report.

The evaluation used a mixed-method approach to address the set of evaluation issues and questions, which are included in annex to this report. The conclusions and recommendations have been developed on the basis of findings from all lines of evidence. The following table provides a brief description of these lines of evidence:

Limitations

The following table describes the key limitation encountered as part of this evaluation, along with the mitigation strategy.

UNDRIP

For First Nations, exercising their authority over land and fiscal management is at the core of achieving self-determination and self-governance. This vision rests on a new relationship between Canada (including all levels of government, the economic sector, as well as civil society) and First Nations, which is captured in the letter and spirit of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). Many articles of the UNDRIP find application when it comes to land and fiscal management, including, but not limited to:

• Article 3, which recognizes that Indigenous peoples have the right to self-determination, including their right to freely determine their economic development;
• Article 18, which recognizes their right to participate in decision-making in matters that affect their rights, through representatives chosen by themselves, and to maintain their own indigenous decision-making institutions;
• Article 20, which recognizes their right to develop their own economic systems and institutions;
• Article 26, which recognizes their right to own, use, develop and control the lands, territories and resources that they possess; and
• Article 32, which recognizes the role of states in supporting the right of Indigenous peoples in determining and developing priorities for land use and development.

Following the Calls to Action 43 and 44 included in the Truth and Reconciliation Commission of Canada and the Call for Justice 1.2 from the National Inquiry into Missing and Murdered Indigenous Women and Girls, Parliament adopted in 2021 the United Nations Declaration on the Rights of Indigenous Peoples Act, which commits the federal government to ensuring that all laws of Canada are consistent with UNDRIP, and to develop an action plan to achieve the objectives of UNDRIP. Other governments in Canada have also initiated the implementation of UNDRIP, notably the provincial government of British Columbia that adopted in 2019 the Declaration on the Rights of Indigenous Peoples Act, along with an action plan released in 2022 that lays out collectively identified goals and outcomes that form the long-term vision for implementing UNDRIP through 89 priority actions in key areas over the next five years.

The engagement of the whole-of-government

As stated in its constituting act, CIRNAC was established in 2019 to help advance reconciliation with First Nations, Inuit and Métis through renewed nation-to-nation, government-to-government and Inuit-Crown relationships based on affirmation and implementation of rights, respect, cooperation and partnership.

In the specific context of land and fiscal management, CIRNAC acts as the primary federal interlocutor engaging with First Nations, but the direct participation of other federal departments and agencies, notably Indigenous Services Canada (ISC), the Departments of Finance, the Department of Justice and central agencies, is also required for First Nations to achieve their vision of self-determination.

Current land and fiscal management frameworks

Eco-system of institutions and organisations

The process of supporting First Nations to reclaim their authority over land and fiscal management involves an ecosystem of First Nations-led institutions and organizations that work with individual First Nations as they establish their own processes and systems related to land and fiscal management, including the required engagement with CIRNAC and ISC, as framed by the Framework Agreement and the FNFMA.

As illustrated in Figure 1, individual First Nations interact with both the First Nations-led institutions and organizations, and Canada as they opt in to the alternate land and fiscal management regimes, and the First Nations-led institutions and organizations also interact with Canada on broader issues that create the overall legislative and policy environment in which land and fiscal management are undertaken.

Text alternative for Figure 1: Interactions among partners

Figure 1 is a series of three circle representing the groups of partners in the program and illustrates that the partners are connected by a fourth circle. The three key partners are: individual First Nations, First Nations-led institutions and organizations, and Canada.

As illustrated in Figure 2, at the time of the evaluation, there were five First Nations-led institutions and organizations in place, along with one other institution in the process of being fully established.

Text alternative for Figure 2: First Nations-led institutions and organizations

Figure 2 is a diagram that illustrates the two groups of organizations responsible for First Nations land and fiscal management. The names of these organizations are identified below.

• The First Nations Lands Advisory Board and Resource Center are the organizations responsible for land management.
• The First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority, and First Nations Infrastructure Institute (in development) are the institutions responsible for fiscal management.

Land Advisory Board (LAB)

Created in accordance with the Framework Agreement, LAB is a First Nation established and led organization that supports First Nation signatories to resume control over their reserve lands, natural resources and environment. It represents the interests of First Nations signatories to the Framework Agreement, and works with the federal government to enhance the legislative framework for First Nations land management, negotiate funding and provide strategic direction to the RC.

First Nations Land Management Resource Centre (RC)

The RC is a service-delivery organization that provides technical and professional support to First Nation signatories as they develop and implement their own land codes. The RC provides training, resources and support to Operational First Nations. It works with ISC and CIRNAC to support the Framework’s ongoing implementation, and it also provides training, resources, support and information to interested First Nations.

First Nations Tax Commission (FNTC)

The FNTC is an institution responsible for the approval of property tax and new local revenue laws of participating First Nations, and reconciling the interests of First Nations and taxpayers. It also supports the First Nations Gazette and the Tulo Center of Indigenous Economics.

First Nations Financial Management Board (FNFMB)

The FNFMB is an institution that assists First Nations governments in strengthening their financial management regimes. It also provides independent certification of their financial management systems.

First Nations Finance Authority (FNFA)

The FNFA is a not-for-profit corporation that provides financing through bonds issuances on capital markets, investment and advisory services to First Nation governments.

First Nations Infrastructure Institute (FNII)

FNII is the latest First Nations-led institution, which is still in the developmental stage.^{Footnote 2} Since 2017, it has been operating with a Developmental Board, and the official establishment of FNII is expected to be accomplished through an amendment of the FNFMA, which has been introduced in Parliament. Once fully operational, it will support First Nations and Indigenous organizations as they plan, procure, own and manage their infrastructure assets on their lands.

In addition to these institutions and organizations, the Assembly of First Nations (AFN) has been leading efforts to enhance the policy and legislative framework related to the addition to reserve and reserve creation process.

Participation of First Nations in the alternative land and fiscal regimes

As illustrated in Figure 3, the number of First Nations that have engaged with the alternative land and fiscal management regimes provided by the Framework Agreement and the FNFMA has steadily increased during the period covered by the evaluation.^{Footnote 3} This is important contextual information, as this growth results in greater demands for support and services from the land and fiscal institutions and organizations, and from the federal government.

Text alternative for Figure 3: Number of First Nations involved in alternative regimes

Figure 3 is a chart that illustrates the number of First Nations involved with the Framework Agreement and the number of First Nations scheduled to the FNFMA in fiscal years 2017-18 to 2021-22.

In 2017-18, 209 First Nations were involved with the Framework Agreement and 229 First Nations were scheduled to the FNFMA.
In 2018-19, 217 First Nations were involved with the Framework Agreement and 269 First Nations were scheduled to the FNFMA.
In 2019-20, 224 First Nations were involved with the Framework Agreement and 294 First Nations were scheduled to the FNFMA.
In 2020-21, 232 First Nations were involved with the Framework Agreement and 312 First Nations were scheduled to the FNFMA.
In 2021-22, 238 First Nations were involved with the Framework Agreement and 321 First Nations were scheduled to the FNFMA.

With 634 First Nation communities in Canada, it also means that 51% of them are scheduled to the FNFMA, and 38% are signatory to, or interested in joining the Framework Agreement.

Alignment with needs and priorities of CIRNAC and First Nations-led institutions and organizations

The Indigenous Institutions and Governance Modernization Branch is part of CIRNAC's Resolution and Partnerships Sector, which also covers settlement agreements and childhood claims, specific claims, and cross sector initiatives. At a fundamental level, the work undertaken by the Branch is driven by the department's commitment to the nation-to-nation relationships and partnerships with First Nations to move forward with reconciliation, including economic reconciliation.

On that basis, the relevance of the activities carried out by the Branch is determined by the extent to which they are adequately aligned with the vision and priorities of the First Nations-led institutions and organizations involved in land and fiscal management. Throughout the evaluation period, these partners have pursued a wide range of initiatives. Far from being an exhaustive list, the following initiatives serve to illustrate some of their priorities:

• Amending the legislative framework relating to land and fiscal management, to ensure that it continues to align with the priorities of First Nations;
• Proceeding with the establishment of the First Nations' National Land Registry;
• Exploring options to enhance processes related to law enforcement, environmental and waste management systems, and internal boundary;
• Expanding the First Nations tax jurisdiction through a number of capacity-building initiatives, and the work of the Tulo Centre of Indigenous Economics;
• Supporting the full establishment and operations of First Nations Infrastructure Institute (FNII);
• Implementing the First Nations Financial Management Board (FNFMB) Roadmap Project, which provides a comprehensive list of actions to be undertaken to support economic reconciliation, in accordance with the principles and commitments found in United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP);
• Increasing the access for First Nations and other First Nations-led organizations to affordable financing in the capital markets; and
• Reforming the addition-to-reserve framework in collaboration with First Nations, and Indigenous partners such as Lands Advisory Board (LAB), First Nations Land Management Resource Centre (RC) and Assembly of First Nations (AFN), among others.

These examples serve as a reminder that, while significant progress has been achieved in establishing alternative land and fiscal management regimes to support the self-determination of First Nations, this ongoing process still requires significant milestones to be achieved.

Evaluation findings confirm that the vision and actions undertaken by the Branch are aligned with the needs of First Nations-led institutions and organizations. Two factors stand out in that regard:

• First, the Branch and First Nations-led institutions and organizations have successfully built and cultivated an open and constructive dialogue, supporting ongoing conversations and collaborations based on respect and a shared vision of the expected outcomes to be achieved. This has proven particularly helpful when considering the complexity and the far-reaching scope of initiatives that have been pursued to date, and those that are expected to progress moving forward; and
• Second, the Branch has demonstrated significant flexibility in its approach and in the range of tools and means it can use to respond to the nature and scope of the various initiatives it has undertaken in support of First Nations-led institutions and organizations.

There are, however, other factors that may have an impact on the Branch's activities moving forward. In particular, the Branch has been facing limitations in terms of internal resources and capacity to ensure timely support on some of the demands placed on its teams. Representatives from both First Nations-led institutions and organizations, and CIRNAC have pointed to the fact that, while well-intentioned, the teams within the Branch are at times struggling to keep pace with the demands and expectations they face.

In addition, the engagement of other federal departments and agencies is critical to the success of files in which the Branch is involved. This includes the engagement of central agencies, such as the Department of Finance, in implementing fiscal measures addressing the needs of First Nations, and the Department of Justice Canada on drafting new legislation and enforcement issues related to First Nations laws. As such, CIRNAC is in a unique position that requires ongoing coordination efforts and engagement and the Branch must have the capacity to achieve that level within the federal government.

Alignment with federal roles and responsibilities and UNDRIP

As already noted (see subsection 2.1), Parliament has adopted the United Nations Declaration on the Rights of Indigenous Peoples Act, in which Canada commits to promoting the self-determination and self-governance of Indigenous peoples, based on their inherent rights, which derive from their political, economic and social structures and from their cultures, spiritual traditions, histories, philosophies and legal systems, especially their rights to their lands, territories and resources.

At the time of the evaluation, the Department of Justice Canada, on behalf of the federal government, had tabled the draft action plan (PDF) for the implementation of UNDRIP, which was co-developed by Canada and Indigenous peoples. Proposed actions related directly to First Nations land and fiscal management include:

• Paragraph 31 addressing the need to develop "guidance on engaging with Indigenous peoples on natural resources projects";
• Paragraph 48 addressing the need to "develop frameworks, mechanisms, and/or processes for a coordinated, whole-of-government approach to the implementation of the right to participate in decision-making related to legislative, policy and program initiatives"; and
• Paragraphs 81 to 83 addressing the need to improve the specific claim process, the Additions to Reserves (ATR) process, and the legislative framework provided by the First Nations Fiscal Management Act (FNFMA).

The support provided by the Branch is directly aligned with the collaborative work that Canada and Indigenous peoples are conducting to achieve a comprehensive implementation of UNDRIP.

Range of activities undertaken

As previously noted, CIRNAC's Indigenous Institutions and Governance Modernization Branch (IIGM) has successfully adapted the range of activities it undertakes to respond to the needs and priorities of First Nations-led institutions and organizations involved in land and fiscal management. Through a variety of legislative and policy options, it has contributed to enhancing the organizational capacity of these partners. This flexibility is an important feature that must be maintained and supported through adequate internal resources.

Evaluation findings also provided the opportunity to identify areas for improving the support currently provided, which are described in the following paragraphs.

Distribution of roles and responsibilities

In the context of land and fiscal management, the delegation of authorities has proven challenging for CIRNAC and ISC representatives, and First Nations-led institutions and organizations. For instance, providing adequate support in relation to land and fiscal management has required activities to be undertaken by both departments, including processes such as Additions to Reserves (ATR) and First Nations Land Management, where the Minister of Crown-Indigenous Relations has delegated some operational and administrative responsibilities to the Minister of ISC while maintaining other responsibilities related to process milestones.^{Footnote 5}

Following the delegation of authorities, CIRNAC is leading the policy work related to improving the First Nations Land Management and ATR process, while ISC is responsible for implementing any such policy changes. During interviews, representatives from CIRNAC, ISC and First Nations-led institutions and organizations noted an improvement over time in clarifying the practical roles and responsibilities between the two departments, but this structural environment is expected to continue raising challenges that require ongoing monitoring efforts.

Relationship

Evaluation findings indicate that CIRNAC's Indigenous Institutions and Governance Modernization Branch and the First Nations-led institutions and organizations have established a strong and productive relationship that led to a number of results, some of which are documented in this subsection for illustrative purposes. This relationship is seen as having been pivotal in building the trust and confidence required for nation-to-nation relationships, and the full implementation of UNDRIP.

Fiscal management

Land management

Addition to Reserves (ATR) process

For decades, ATR have proven to be a challenging process that Canada and First Nations have struggled to improve. Shortcomings in fully engaging First Nations in a comprehensive co-development process has further complicated the establishment of the policy and legislative framework related to the ATR process. The most recent Addition to Reserve Policy, jointly drafted with the AFN in 2016, was subsequently criticized by the AFN for lacking a proper engagement of First Nations. Following the adoption of the Addition of Lands to Reserves and Reserve Creation Act in 2018, the AFN passed a resolution rejecting the approach adopted by Canada in enacting this legislation without, again, the proper engagement that a co-development approach would have required.

A number of factors have contributed to the complexity of ATRs. In particular, findings from interviews and the document review point to a lack of adequate data on ATRs, including the fact that there is no published data on the volume of current ATR requests. However, the AFN estimates that there are currently more than 1,300 active ATR files under review. Also, as previously noted, the processing of ATR requests is largely undertaken by ISC, under delegated authority, while the approval of each request rests with the Minister of Crown-Indigenous Relations.

New efforts to improve the ATR process reached a milestone when Canada and the AFN agreed in 2019 to establish a joint technical AFN-federal Lands Table involving the AFN, the Resource Centre, the National Aboriginal Lands Managers Association, CIRNAC and ISC. To further support these efforts, the federal government announced, as part of its Budget 2021, an allocation of $43 million over 4 years (starting in 2021-2022) to ISC and CIRNAC to work with Indigenous partners and other interested parties to redesign the ATR process with the goal, once again, to enhance its efficiency. The objective is to have new policy developed by March 2025, with implementation taking place afterwards.

In the meantime, the number of ATR submissions approved per year has steadily declined during the period covered by the evaluation, from 116 in 2017 to 36 in 2021 (see Figure 4). While a number of factors may have contributed to this trend, interview findings indicate that the COVID-19 pandemic may have slowed down the various steps required to complete an ATR application even further.

Text alternative for Figure 4: Number of ATR Submissions approved per year

Figure 4 shows the number of ATRs approved for years 2017 to 2021.

In 2017, the number of approved ATRs was 116.
In 2018, the number of approved ATRs was 66.
In 2019, the number of approved ATRs was 60.
In 2020, the number of approved ATRs was 51.
In 2021, the number of approved ATRs was 36.

As a result of this slowdown, the total number of acres per year that have been returned to First Nations has also declined sharply during the evaluation period (see Figure 5).

Text alternative for Figure 5: Total acres returned to First Nations per year

Figure 5 shows the total number of acres returned to First Nations for years 2017 to 2021.

In 2017, the number of acres returned to First Nations was 64,701.
In 2018, the number of acres returned to First Nations was 85,200.
In 2019, the number of acres returned to First Nations was 37,851.
In 2020, the number of acres returned to First Nations was 20,900.
In 2021, the number of acres returned to First Nations was 9,722.

As evaluation evidence indicates, the ATR process is far reaching, and involves a wide range of organizations, such as CIRNAC, ISC, Natural Resources Canada, Department of Justice, First Nations, and municipal governments. The process is perceived, almost unanimously by all key informants, to be challenging and ineffective. For instance, First Nations bear the burden of consulting and negotiating with municipalities, while there is little to no incentive for municipalities to support ATRs. In this context, CIRNAC's Indigenous Institutions and Governance Modernization Branch has provided support to this process through policy re-design and Indigenous-led engagement activities to reform the ATR policy.

Efficiencies

With the combination of a restructuring leading to the establishment of two new departments (CIRNAC and ISC) and the COVID-19 pandemic, much of the period covered by the evaluation has been marked by transition and adaptations. The analysis of the extent to which the support provided by the Branch is delivered efficiently has therefore focused on four aspects that have emerged from the evaluation findings, and that are presented in the following paragraphs.