In 2008, the federal government introduced a significant shift in its First Nations policies by repealing the section of the Canadian Human Rights Act that excluded decisions under the Indian Act from scrutiny by the Canadian human rights system.
The first decision of the Canadian Human Rights Tribunal considering Indian and Northern Affairs Canada’s (INAC) leasing policies (Louie and Beattie v. INAC) was released in early 2011.
This decision marks the beginning of the Canadian Human Rights Tribunal’s investigations into First Nations peoples’ complaints of discrimination on the part of INAC. Although the Canadian Human Rights Act has been around since 1977, INAC is only now for the first time having its policies reviewed by this body.
In this case, a locatee (land holder) and a developer entered into a joint venture agreement where the locatee would contribute land, in the form of a 49 year prepaid lease with rent of $1.00, and the developer would contribute the building of a house and marketing of that house for sale.
Proceeds were to be divided, with two-thirds going to the locatee and one-third to the developer.
The locatee applied to INAC for a lease and advised that the nominal rent was non-negotiable and an appraisal unnecessary. He agreed to provide INAC a release of liability in respect to the rent.
INAC declined this proposal on the grounds that INAC’s leasing policies required an appraisal of the land to be leased and a justification for a departure from fair market rent. Correspondence went back and forth over the next 18 months involving various INAC officials, including the Minister. The locatee filed a complaint resulting in a hearing in front of the Canadian Human Rights Tribunal more than three years after the initial application to lease.
The Tribunal found INAC’s policies on this issue were discriminatory. It stated the process for approving locatee leases “must become an enabling administrative function that recognizes and accepts status Indians as personally responsible Canadians capable of making their own determinations of anticipated benefits to be derived from leasing their lands, and that ministerial discretion must not be exercised unilaterally.” In other words, locatees are adults who can make their own decisions on leases and how much is enough.
The Tribunal ordered INAC to reconsider the locatee’s application to lease. Further, INAC was ordered to amend its land management policies so that individual locatees can determine for themselves if a transaction is to their individual benefit, and when they do so, INAC will accept that determination and process the requested lease. The Tribunal also ordered INAC to work with the Canadian Human Rights Commission to prevent similar discriminatory practices from occurring
INAC has filed an application for judicial review.
If the Tribunal’s decision is upheld by the courts, a locatee could decline INAC’s oversight of business terms in a leasing transaction. This would shift INAC’s role from providing advice on the business terms of a transaction to having, as the Tribunal described it, an “enabling administrative function” of processing leases on the business terms established by the locatee. This would also establish a precedent for the Tribunal’s review of other INAC policies and practices on human rights grounds.
This article was first published in Native Business Development Magazine in April 2011.
Andrea East is a business lawyer at Pushor Mitchell LLP practicing in the area of First Nations Law and commercial transactions. You can reach Andrea at 250-869-1245 or e-mail her at [email protected]. This article is intended for general informational purposes only and should not be construed or relied upon as legal advice. Always seek legal advice concerning any specific issues affecting you or your business.
