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1998 September Report of the Auditor General of Canada

Main Points

14.1 Comprehensive land claim settlements are modern treaties that are significant not only to Aboriginal communities but also to all Canadians. Settlements involve the payment by the federal government to Aboriginal groups of almost two billion dollars and the clarification of various rights, including full ownership of over a half-million square kilometres of land. The first modern negotiated settlement of a comprehensive land claim was signed in 1975, and the most recent settlement was reached in July 1997. As of July 1997, 12 claims had been settled. Actual and potential claims involving over 200 First Nations are still to be settled.

14.2 The Government of Canada has chosen to settle these claims by negotiation rather than litigation or other means. Indian and Northern Affairs Canada is the lead federal representative in negotiations, with participation of other federal departments as appropriate. Other parties include the territorial governments, provincial governments, and the claimants. Although the Department bears significant accountability for results, it is not the only party that should be accountable; the good will and political resolve of all participants are needed in order to achieve appropriate settlements.

14.3 The government has reported that negotiated settlements establish certainty to land title and access to land and resources. However, removing uncertainty involves much more than signing an agreement. Among other things, successful implementation of settlements is critical to achieving the intent of these treaties. Implementation involves hundreds of projects with joint or separate participation of the parties. We found deficiencies in implementation, including inadequate or non-existent implementation plans, and the need to improve monitoring, reporting and evaluating.

14.4 Indian and Northern Affairs Canada has not demonstrated that it has always exercised adequate rigour in determining the nature and amount of assets that may ultimately be included in final settlements, including such considerations as the amounts of cash, land and other resources.

14.5 Settlements can take over 20 years to reach. Delays have had many causes. In our view, these long time frames do not contribute to cost effectiveness, and may result in less desirable outcomes for all concerned.

Introduction

Comprehensive land claims - What are they?
14.6 The Government of Canada describes comprehensive land claims as claims relating to ongoing Aboriginal title to land and rights that have not been dealt with by treaties or law. At issue are Aboriginal assertions that their rights have been disregarded, that such rights are guaranteed by the Constitution (1982), and that claim settlements are needlessly slow and do not provide sufficient compensation, land and recognition of rights. We note the importance of land in Aboriginal culture and its relevance to inherent rights of self-government. Another category of claims, specific claims, deals with alleged treaty violations and related matters; these are not the subject of this audit.

14.7 Settling comprehensive land claims involves negotiating and implementing complex, modern treaties. According to the Department, claim settlements act as a springboard for First Nations self-government and may include concurrent or subsequent development of self-government agreements.

14.8 The transfer of ownership of and rights to large tracts of land and resources and the payment of substantial amounts of money to Aboriginal communities are usually the major features of a claim settlement. Benefits to the claimants can include participation in resource management, including water, wildlife, and subsurface and offshore assets, and in resource and revenue sharing.

14.9 Among other things, the government believes that negotiated settlements avoid litigation against it, thus resolving the legal ambiguities associated with the common-law concepts of Aboriginal rights. According to the government, settlements exchange undefined rights for explicit rights under the agreements.

Significance of land claim settlements
14.10 The first modern comprehensive land claim settlement was reached in 1975 and, as of May 1998, the most recent settlement had been in July 1997. The geographic areas covered by settled and unsettled comprehensive land claims include most lands in the territories, most of British Columbia, a significant area of Quebec and smaller areas in other parts of Canada.

14.11 As of July 1997, 12 claims, including six under an umbrella claim by 14 First Nations, had been settled. These involved 48,000 Aboriginal people, full ownership of over a half-million square kilometres of land, a financial package totalling $1.8 billion and other considerations. Details are set out in Exhibit 14.1 . Implementation of the agreements continues and payments will continue until at least 2012. The Department plans to spend $262 million on comprehensive claims in 1998-99, although it does not clearly disclose in its Estimates to Parliament the amounts for negotiating them, for implementing them and for making payments under them.

14.12 As of June 1998, there were 70 claims in various stages of negotiation and pre-negotiation discussion, or with accepted statements of intent to negotiate, including 52 in British Columbia and 18 outside B.C. There are 123 bands who have registered their intention to proceed under the British Columbia Treaty Commission process.

14.13 During the summer of 1998, steps toward the completion of the Nisga'a Treaty in British Columbia were being finalized outside the British Columbia Treaty Commission process. Since the treaty was in final negotiation at the time of our audit, we did not review how it was reached or the results achieved.

Parties to a claim and the claims process
14.14 Under the best of circumstances, reaching comprehensive land claim settlements is a very difficult challenge. Parties to a claim generally include the federal government, territorial or provincial governments and the claimant Aboriginal groups. Each party to a settlement agreement accepts rights and responsibilities either jointly or separately under very complex and voluminous agreements.

14.15 Final settlements can take more than 20 years to reach. This is partly because of the number of parties involved and the complexity of the claims. In addition, the motivation and the negotiation strategies of the parties can directly affect the speed, cost and content of settlements.

14.16 Although the Parliament of Canada has jurisdiction in matters relating to Indians and lands reserved for Indians, co-operation in settling claims is needed from the territorial and provincial governments with respect to certain lands that fall under their jurisdiction. For example, most treaties in British Columbia are addressed through the British Columbia Treaty Commission, established by the governments of Canada and British Columbia and the First Nations Summit.

14.17 The claims process outside of British Columbia, as set out in Exhibit 14.2 , begins with research and submission of a claim by the claimant group(s), followed by its validation by government and then negotiations for settlement. The federal government is represented by Indian and Northern Affairs Canada as the lead department, with participation by the Department of Justice and other departments as appropriate.

14.18 Claims are negotiated by negotiating teams with various working groups and committees. Major events in the process include reaching a framework agreement to establish the scope of negotiations, reaching an agreement in principle that sets out, among other things, the financial amounts and land, and reaching the final settlement agreement and implementing it. The importance of claims settlements is further signalled by Cabinet's approval of negotiating mandates and by settlement legislation.

Comprehensive land claims policy and objectives
14.19 The evolution of claims policy and objectives has been greatly influenced by jurisprudence. In the Calder case in 1973, the Supreme Court of Canada acknowledged the existence of Aboriginal title in Canadian law. According to the Department, this decision and other jurisprudence, reviews and ongoing claims negotiations between 1973 and 1985 set the stage for rethinking the federal government's position on comprehensive land claims. The current claims policy and objectives were developed during this period and were published in 1986.

14.20 The policy objectives state:

The purpose of settlement agreements is to provide certainty and clarity to ownership and use of land and resources in those areas of Canada where Aboriginal title has not been dealt with by treaty or superseded by law. Final settlements must therefore result in certainty and predictability with respect to the use and disposition of lands affected by the settlements. When the agreement comes into effect, certainty will be established as to the ownership rights and the application of laws.
14.21 Settlement agreements contain surrender provisions pertaining to certain Aboriginal rights. For example, a 1993 final agreement states that the First Nation and the people eligible to be represented by it cede, release and surrender to her Majesty all their Aboriginal claims, rights, titles and interests in and to non-settlement land and all other land and water within Canada, with some exceptions. The government sees this as a means of removing uncertainty that is deemed to be a barrier to economic development.

14.22 Pressures on claims and claims policy persist. A notable example is the Delgamuukw case in which 58,000 square kilometres of northwestern British Columbia were claimed. The case commenced in 1984 and was ultimately decided by the Supreme Court of Canada in December 1997.

14.23 The Supreme Court did not render a decision on the claimed land. However, it further defined the scope of Aboriginal title and related rights and stated that oral evidence pertaining to the acceptability of the claim should have been more liberally accepted at trial. The Court also ordered that a new trial be held if a negotiated settlement could not be reached. Aboriginal groups have considered this decision as support for their interests, and the government has indicated that it will be exploring the implications of the decision with the parties.

Fairness of the claim settlement approach
14.24 Comprehensive land claims negotiations can be adversarial. For example, First Nations have attempted to advance their positions by using the courts and other approaches. The difference between the financial, technical and legal resources available to the federal government and those accessible to communities of a few hundred or a few thousand Aboriginal people can be substantial. Given that the Crown holds the claimed land, it is important that the approach used to resolve such claims is seen to be fair, objective and credible.

14.25 We found that for settled claims the approach was largely controlled by the federal government. It decided what criteria would be applied for accepting claims and how much funding would be provided to the claimants to research and negotiate their claims. In addition, the government's policy set out the framework for reaching and implementing settlements.

14.26 In pursuing its objectives, the government needs to fairly represent all Canadians, who are ultimately bound by the agreements reached. Concurrently, the government has certain responsibilities and obligations for First Nations that do not apply to other Canadians in general. Because the need to balance diverse interests in settling land claims poses a difficult challenge, it may be optimistic to expect all parties to conclude that the process and outcomes were fair.

Focus of the audit
14.27 This audit focussed on the role of Indian and Northern Affairs Canada in reaching and implementing comprehensive land claims settled up to July 1997. It took into account that achieving appropriate results requires the good will and resolve of all parties involved. Further details on the audit objective, scope, approach and criteria are found at the end of the chapter in the section About the Audit .

Observations and Recommendations

Achievements and Results

Establishment of certainty
14.28 Since 1975, the government has finalized 12 comprehensive land claim settlements. The Department's 1998-99 Plans and Priorities Report tabled in Parliament states that negotiated settlements establish certainty to land title and access to lands and resources, avoid time-consuming litigation and create a climate that fosters economic development. Reaching a treaty is viewed by the Department not as an end in itself, but rather as a beginning in which Aboriginal people start to regain control of their destiny.

14.29 We noted that settlement agreements address, among other things, ownership of land. The importance of claim settlements to Aboriginal peoples and government can be demonstrated by the scope of an existing mature settlement. The agreement provides for the implementation of challenging responsibilities, as shown in Exhibit 14.3 .

14.30 We recognize that certainty can mean different things to different parties. And, without a consensus on interpretation, it becomes more difficult to determine what exactly is being achieved through negotiated settlements. The risk is that the parties may have agreed on the negotiated outcomes, but have different views on and expectations of the benefits and obligations set out in the signed agreements.

14.31 We believe that the parties must consider that a strict technical or legal interpretation of certainty may not be sufficient if they wish to reach and implement settlements in harmony.

14.32 After its 1981 review of its policy, the Department noted that Aboriginal groups continued to be dissatisfied with the policy. In particular, claimants objected to a policy that they believed attempted to extinguish Aboriginal rights in exchange for specific benefits provided under a settlement agreement.

14.33 Notwithstanding these concerns, settlement agreements have continued to contain extinguishment or surrender clauses pertaining to Aboriginal rights such as hunting, fishing and trapping. Aboriginal groups have continued to assert their rights, as they believe that surrender clauses extinguish their identity, beliefs and way of life. We do not judge the merits of such assertions but note that they can affect certainty from a practical standpoint, such as investor confidence in the areas in question.

14.34 Moreover, certainty and intended benefits are contingent not only upon unanimity of intent but also on post-settlement events. This is because settlement agreements typically comprise hundreds of pages of terms and conditions that may be interpreted differently by the numerous parties after the agreements are finalized.

14.35 In addition, even where there is a consensus on interpretation, the implementation of the agreements by all parties to their satisfaction is crucial to fostering the effective relationships necessary for success.

14.36 While implementation in good faith may be considered a normal expectation, we noted lawsuits against the Crown because of alleged implementation failures and disputes over interpretation of the agreements. The section on implementation disputes elaborates on these claims.

14.37 Litigation against the government can arise in a variety of circumstances, and is not unique to matters relating to comprehensive land claims. Nevertheless, litigation can compromise the establishment of certainty through negotiated settlements.

14.38 In 1994, the Minister of Indian Affairs and Northern Development ordered a major study on surrender and certainty issues affecting the negotiation of land claim agreements. The study report, by a senior jurist, was issued in 1995. Among the many discussions on certainty, it noted, "there is certainty when both sides are happy with the result." A number of observations raised in the study are set out in Exhibit 14.4 .

14.39 The report emphasizes that explicit recognition of Aboriginal rights needs to be included in any treaty, and concludes that certainty can be achieved without the surrender of rights provisions contained in recent settlement agreements.

14.40 The Department confirms that it is committed to the exploration of possible methods, other than the surrender or extinguishment of Aboriginal rights or Aboriginal title, that would provide clarity, stability and certainty through comprehensive claims settlements. Those methods would need to be supported by federal and provincial governments, First Nations and the public.

Economic development
14.41 We expected to find valid studies on economic benefits, suggested by the claims policy, that resulted from settlements reached many years ago. This information would be necessary to demonstrate the advantages of and accountability for achieving the objectives, consistent with the enormity and importance of such settlements.

14.42 The Department provided four study reports on land claims and economic interests reported in 1990 (two reports), 1995 and 1996. They relate to British Columbia, where no final settlements have been reached. One report attempts to place an economic value on uncertainty. It discusses the cost of not settling land claims in specific sectors of the B.C. economy. The other reports identify the perspectives of selected third parties and describe potential benefits of settling claims.

14.43 The Department has not carried out studies on the benefits of settlements reached in the mid-1970s and `80s in the far North and other parts of Canada. Accordingly, we believe that the Department has not done enough to demonstrate the deemed benefits relating to the economic impacts of negotiated settlements.

Other factors affecting results
14.44 Many factors can affect the achievement of certainty. For example, the preparedness of First Nations to discharge their responsibilities under settlement agreements is not uniform. We obtained from the Department a sample of management and accountability self-assessments by First Nations who were either considered ready to negotiate a claim settlement or had reached one. The assessments revealed deficiencies in the capacity of a number of First Nations to manage their affairs, including funding arrangements with the government. In our view, such deficiencies do not augur well for reaching and implementing claim settlements. In at least two claim settlements, the parties have recognized the need for implementation training.

14.45 Overall, we conclude that the establishment of certainty through these agreements may remain elusive in the practical sense.

14.46 To help enhance the achievement of certainty, Indian and Northern Affairs Canada should further address differing expectations of the parties relating to rights, capacity and implementation needs.

Reaching a Settlement

Accepting and validating a claim
14.47 According to the Department, the criteria applied to decide the acceptability of a claim for negotiation, as set out in Exhibit 14.5 , were derived from common- law tests that determine continuing Aboriginal rights. In this regard, the Department relies on the Department of Justice to provide appropriate legal advice. These interpretations and their applications were not included in the scope of this audit.

14.48 The Department is considering possible implications for the current claims policy and approach to settlements as a result of the December 1997 Supreme Court decision in the Delgamuukw case .

Establishing financial amounts, land transfers and other considerations
14.49 Major components of settlement agreements include financial amounts, transfer of ownership of and rights to land, resources and other benefits. We sought to determine whether appropriate information and a reasonable approach were used by Indian and Northern Affairs Canada to arrive at the selected components in the agreements.

14.50 Land claim settlements are the product of negotiations that usually involve a redistribution of significant assets, including land, cash and income from resource exploitation, previously held by the Crown on behalf of all Canadians.

14.51 Indian and Northern Affairs Canada needs to use adequate information and a suitable approach in determining the nature and amount of assets that may ultimately be included in final settlements. For example, information on the existence and potential value of surface and subsurface resources would be important, in our view, for the Department to use. And, due consideration of alternative approaches would be expected. However, the Department has not demonstrated that it has always exercised adequate rigour when making such determinations.

14.52 We noted that questions or concerns were raised within the Department about how settlements were being reached. For example, with respect to a number of settlements, the Department did not have studies of the claimed lands that it believed were reliable, land allocations did not take into account the impact of transferring such land, and the determination of resource royalty sharing was done without the use of detailed data on resource potential.

Relations with the Department of Justice
14.53 We found that the Department of Justice often raises issues to be addressed by Indian and Northern Affairs Canada during the settlement of a claim. We expected the Department to follow the advice of Justice or, alternatively, provide valid reasons when such advice was not followed.

14.54 For example, we observed one case where Justice had noted a number of outstanding issues within six months of the agreement signing date. According to Justice, the issues could not be resolved at the legal review stage because of disagreement between the claimants and the government, disagreement between Justice and federal negotiators, apparent time pressure to initial the final agreement, and the desire to maintain comparability with previous land claim settlements.

14.55 The Department of Justice further observed that while these matters would not cause it to oppose ratification by government of the agreement, it believed that the imminent final agreement was not as clear as it should have been. We noted that approximately two years after the agreement was signed, the claimant party filed a lawsuit against the government on one of the significant outstanding issues. The case was still in litigation at the time of our audit.

14.56 We were unable to determine if the above-noted case was an isolated one or if other concerns raised by Justice on claims are routinely and appropriately addressed before settlement agreements are signed. However, we were advised by Indian and Northern Affairs Canada that it would not support a settlement proposal if the Department of Justice had any significant, unresolved concerns.

14.57 We also noted that Indian and Northern Affairs Canada does not request an overall assessment from the Department of Justice on the final settlement before it is signed. We believe that such assessments are necessary to enhance the accountability of the federal parties and to reduce the risk that unintended interpretations of the terms of the agreements could be made.

Time cycle to finalize an agreement
14.58 Reaching a final settlement agreement is generally a lengthy affair that can take over 20 years. However, there is no proven guideline that suggests an optimum time frame in which a settlement can best be reached. This leaves only the perception of reasonableness by the parties and non-parties to a settlement as a possible indicator of whether the time taken is acceptable.

14.59 As a result of a court action by First Nations and related events in 1972, negotiations commenced in 1973 to settle two claims that were finalized in 1975. These were the first negotiated modern comprehensive land claim settlements and took the least time to reach a final agreement. Examples of other settlement time frames are set out in Exhibit 14.6 .

14.60 As indicated in the exhibit, the time taken to reach 10 of 12 settlements ranged from 6 to 24 years (with most over 14 years) after a claim had been accepted for negotiation. Moreover, settlements with eight First Nations will take more than 24 years to settle. Three additional claims that had been accepted for negotiation in the 1970s are still unresolved.

14.61 In 1986 the Department acknowledged concerns in its claims policy about the lack of progress in negotiations. Further, in 1998 a major Aboriginal organization indicated that settlements take much too long to reach.

14.62 We acknowledge that the reasons for protracted settlements are complex and can be attributed to all parties to a claim, although we do not attribute them to any individual party. Reasons may include the lack of willingness by some jurisdictions to recognize a claim, the nature of the parties' negotiating strategies, the need to meet political objectives, the concurrent connection to self-government negotiations, and the possible impact of non-party interests.

14.63 However, the way in which the claims process is managed can also contribute to protracted settlements. In some settlements, we noted the following deficiencies:

  • There was no overall plan at the beginning of the process that identified the responsibilities of the parties, including other federal departments, and specified target dates for key events, against which progress could be measured.
  • Final settlement deadlines were either not set or not met.
  • Established procedures for federal and territorial parties were not always followed and negotiations deviated from established mandates, according to departmental information.
14.64 In our view, protracted settlements do not contribute to cost effectiveness and may result in less desirable outcomes for all concerned. In addition, the benefits of expected economic development in the disputed areas may be delayed.

14.65 Indian and Northern Affairs Canada should:

  • ensure that adequate rigour is always applied in determining the nature and amount of assets that are included in final settlements;
  • obtain an overall assessment of the intended agreement from the Department of Justice before the government signs it; and
  • together with the other parties to a claim, expedite the claims settlement process, in a cost-effective way.

Implementation of Settlement Agreements

Responsibilities of the parties
14.66 We believe that a settlement agreement alone should not be considered a successful resolution of a claim unless it is implemented in a cost-effective way. To help achieve this as well as accountability for results, the responsibilities of the parties need to be clearly detailed in the agreements. Furthermore, clear, comprehensive and agreed-upon implementation plans must be developed and used appropriately.

14.67 Settlement agreements are complex, lengthy documents involving several parties and long time spans. Responsibilities of the parties may be joint or separate and Indian and Northern Affairs Canada, as the lead department, is the project manager for hundreds of obligations.

14.68 Although the Department is actively involved in the implementation of settlement agreements, we observed the need for improvement. In some cases, the provisions in recent settlement agreements can lead to implementation disputes. For example, a standard definition in several agreements states that government means the Government of Canada, the territorial government, or both, depending upon which government or governments have responsibility from time to time for the matter in question. This wording, coupled with the ongoing devolution of departmental responsibilities to the territories, increases the risk of ambiguity in implementation responsibilities.

Implementation plans
14.69 We noted that settlements reached prior to 1986 and still being implemented have only partial implementation plans or none at all. For example, an implementation plan for a settlement reached in 1975 was not completed until 1990, and it covers only one of two claimants to the settlement. In another case, settled in 1984, no implementation plan has been developed. The lack of comprehensive implementation plans makes it more difficult to determine progress and to identify problem areas as well as achievements.

14.70 Agreements reached after 1986 require implementation plans. The plans identify hundreds of implementation projects and activities in varying degrees of detail. In many cases, these projects are contingent upon other events that do not have designated time frames.

14.71 Implementation plans are attached to the agreements but are not part of them. With some exceptions, they are not intended to be contractual obligations. Consequently, although the plans are signed by the parties, their contribution to accountability and results is limited. According to the Department, the plans are only a guide because flexibility is needed. Given the significance of the land claim settlements and the difficult challenges to their successful implementation, we believe that implementation plans can and need to be more than a guide, while still providing the necessary flexibility.

Monitoring, reporting and evaluating
14.72 The Department uses various methods to monitor and report on implementation. One important method is the Land Claim Obligation System (LCOS) used by the Department to report the status of federal obligations. We found that LCOS is too general to be useful in assessing the status of certain obligations. In addition, LCOS tracks only activities and processes, not results produced and costs incurred.

14.73 As well, the matching of the obligations contained in settlement agreements to the implementation status reports is fragmented. This is because not all settlements are included in LCOS. For example, the status of obligations and activities pursuant to a settlement reached in 1984 is not routinely reported in LCOS. And, for those settlements that are included in LCOS, the system focusses only on the status of federal government obligations. Where LCOS identifies necessary action, time frames are not generally indicated. Thus, the conditions that led to the required action may be perpetuated.

14.74 In addition, when completion dates are identified, there is little evidence that progress has been tracked against these dates. As well, we could find no departmental criteria on how the adequacy of implementation would be assessed.

14.75 The status of obligations belonging to the other parties is reported separately by them or through implementation committees on which the Department is represented. Accordingly, the Department obtains information on the status of the other parties' obligations that can help it to discharge federal government obligations. However, consolidated reporting of all obligations at regular intervals in a standard format is not done on a timely basis. For example, for a 1993 settlement agreement, the only available consolidated internal status report, as of June 1998, covered the period ended March 1996. And, like LCOS, time frames for completion of necessary actions are not indicated.

14.76 In addition, a general review of a 1992 implementation plan, for five years ending in 1997, recommended that Canada and the territorial government organize a working group by June 1998 to review, implement and monitor the economic measures provided for in the related 1992 settlement agreement. Further, with respect to a 1975 agreement, the most recent implementation review published by the Department was in 1982.

14.77 In addition to LCOS monitoring reports, the Department co-ordinates the preparation of annual reports on the reviews of settlement agreements. These reports describe the implementation activities undertaken and this information is provided by the parties to the agreements and others who are involved in implementation. We believe these reports are a useful method of communicating the implementation of claim settlements. However, their usefulness could be enhanced by including information on the results and impacts of claim settlements on the affected communities.

14.78 With respect to evaluations, none of the four settlement agreements in the audit sample calls for an evaluation of all key implementation impacts, and none has been performed. One agreement, reached in 1984, requires a full and public review in the year 2000 of the efficacy of the provisions for economic measures, a delay of 16 years.

14.79 In another agreement, reached in 1993, there is a requirement to review the effectiveness of the provisions relating to economic development by 2010, a delay of 17 years.

14.80 Evaluating the implementation of settlement agreements could:

  • assist the Department in discharging its broader responsibilities of its overall mandate;
  • assist other parties in the implementation of the agreements;
  • assist Aboriginal and non-Aboriginal communities in adjusting to or benefiting from the impacts of settlements; and
  • enhance accountability for the implementation of settlement agreements.
14.81 We recognize that evaluating the impacts of claim settlements can be very complex and difficult. However, we believe that waiting for a period of 15 years or more to commence such evaluations increases the difficulties. The nature and potential magnitude of the effects of settlements suggest that such evaluations would best be carried out on a timely, periodic basis. This would allow information on results to be built up over time and, among other things, would provide the necessary information to guide future settlements.

Implementation disputes
14.82 The nature and scope of settlements suggest that occasional disagreements on implementation can occur. Indeed, settlement agreements usually provide for dispute resolution mechanisms. And, except as may be provided under the terms of the agreements, no party can prevent another from resorting to litigation. Although we do not take a position on any litigation, disputes that go to litigation raise questions about the effectiveness of the settlement agreements and their implementation.

14.83 Several lawsuits against the Crown came to our attention during the audit. Examples include one filed by a third party and three filed by First Nations. One case involving the first modern settlement is a 1996 claim for $5.4 billion against Canada and other parties. First Nations are seeking relief for alleged breaches of obligations under the agreement. The allegations relate to:

  • Aboriginal and treaty rights;
  • social and environmental protection; and
  • funding under the agreement for land use, tourism, health, education, training, employment, fishing, housing, capital items and other matters.
14.84 In another case, filed in 1997, a First Nation is seeking damages in connection with the alleged failure of Canada to establish the Land and Water Board to regulate land and water use throughout the settlement area. The Board was required under the settlement agreement signed in 1992. The lawsuit asks for $2 million and an order requiring Canada to perform its obligations under the agreement.

14.85 In another case, filed in 1995, a First Nation alleges that the Crown is not allocating a proper share of resource royalties to the First Nation as required under the 1993 agreement. The matter stems from differing interpretations of the intent of the applicable clauses.

14.86 In a case filed in 1996 by a third party, compensation is being sought for alleged damages relating to the allocation of land under settlement agreements. The issue surrounds the disagreement between Canada and another jurisdiction involved in the land claim settlement over who is responsible for paying compensation that may be provided under the claim settlement. Although the two governments later reached an agreement on responsibility, the third party's claim is still outstanding.

14.87 Indian and Northern Affairs Canada, together with the other settlement parties, as applicable, should:

  • ensure that agreed-upon implementation plans contain adequate details regarding time frames, project costs, and cost sharing;
  • address issues relating to fragmentation, completeness and timeliness of reporting; and
  • perform periodic evaluations of settlement implementation on a timely basis.

Costs to Reach and Implement Settlements

14.88 Determining and reporting accurate and complete cost information is important to help ensure the cost effectiveness of the claims process, the results produced, and accountability to Parliament. Costs are also needed to determine implementation budgets and sources of financing.

14.89 The Department does not report the complete costs of reaching and implementing settlement agreements. Although the costs of the financial compensation components of settlements are generally known, other costs associated with settlements have been identified only on a piecemeal basis, or not at all. Other costs include those involved in reaching a settlement, the potential value of transferred land ownership and access rights, consolidated costs of other federal departments involved in the claims process, costs of various projects under implementation plans and responsibilities under the agreements, and costs of resource and revenue sharing. For some things, only estimated costs may be identifiable. However, we believe that where actual costs cannot be determined, this fact should be disclosed so that the extent of accountability for reaching and implementing settlements can be clarified.

14.90 Indian and Northern Affairs Canada should report the complete costs of reaching and implementing settlements and compare them with relevant budgets.

The British Columbia Treaty Commission

14.91 The B.C. Region is unique in its approach to treaty settlements. The approach in this region is framed by the British Columbia Treaty Commission (BCTC) initiated by the federal government, the government of British Columbia, and the First Nations Summit in 1992.

14.92 In 1993, the BCTC began to receive statements of intent from First Nations wanting to enter the treaty process. The purpose of the BCTC is to facilitate the negotiation of treaties and related agreements. The duties of the Commission include:

  • receiving statements of intent and assessing the readiness of the parties to commence a treaty negotiation according to predetermined criteria;
  • encouraging timely negotiations and monitoring progress;
  • allocating funding to First Nations;
  • assisting the parties to obtain dispute resolution services;
  • maintaining a public record of negotiations; and
  • preparing annual reports for tabling in Parliament, the British Columbia Legislature and the First Nations Summit and for public distribution.
14.93 The Commission does not make binding orders, determine territorial boundaries, arbitrate disputes or negotiate on behalf of any party.

14.94 As the federal government's representative in land claims in B.C., the Federal Treaty Negotiation Office of Indian and Northern Affairs Canada will not negotiate modern treaties with a First Nation who has not entered the BCTC process. In these instances, the only recourse available to the band is litigation. As of July 1998, 74 bands of a total of 197 bands in B.C. had not entered the process.

14.95 The BCTC treaty process involves six stages, as set out in Exhibit 14.7 . Indian and Northern Affairs Canada relies on the BCTC for accepting First Nations into the treaty process. As of July 1998, 36 out of 51 negotiations were progressing toward a stage 4 agreement in principle; 15 were at earlier stages of the process.

14.96 The Commission has identified several aspects of the treaty negotiation process that require attention, including:

  • overlapping claims (by more than one First Nation);
  • the differences among First Nations in their capacity to settle claims;
  • the need for greater third-party consultations and education;
  • appropriateness of when to suspend negotiations in the event of litigation;
  • the capacity and resources of the governments of B.C. and Canada to enter into multiple, concurrent negotiations; and
  • the adequacy of funding to First Nations for negotiations.
14.97 First Nations that have entered the process may be funded for their negotiations by repayable loans (80 percent) and contributions (20 percent). Canada provides all the loan funding and 60 percent of the contributions. The government of British Columbia provides 40 percent of the contributions. The Commission makes funding decisions subject to available resources.

14.98 As of early 1998, Canada's cumulative share of funding for treaty negotiations since 1994-95 was $90 million. No settlements have been reached under this process. The BCTC indicated that it does not have the mandate to set deadlines. This raises questions about the time and cost implications for settling the demands of the 123 bands that have expressed interest in reaching treaties.

Non-Parties to a Claim

14.99 Settled claims can affect non-parties to the settlement. Examples include small but important businesses such as outfitting, larger enterprises such as mining, and First Nations that are not parties to a specific settlement but that have land or other interests that overlap settlement areas.

14.100 With respect to certain types of enterprise in some settlement areas, we found indications that little opportunity had been provided for their input to decisions on the allocation of land and other provisions in settlement agreements.

14.101 In one case, an association representing over 20 tourist businesses alleged, among other things, that the settled land had blocked their normal operating areas, preventing efficient access to big game and thus impeding their business. As well, they believe that settlement negotiations have omitted consideration of non-native historical land use and that the general population has not been adequately represented.

14.102 Another association reported its concerns about the lack of opportunity for input to the claims process and the lack of information on how land is selected for settlement.

14.103 We do not take a position on these perspectives and acknowledge that other types of enterprise may have other perspectives.

Perspectives of Selected First Nations Involved in Comprehensive Land Claims

14.104 Given the role of First Nations in the resolution of claims, we sought their perspectives on the claims process and results. These are set out in Exhibit 14.8 . Again, we do not take a position on these perspectives.

Conclusion

14.105 Resolving comprehensive land claims is a difficult challenge for all those involved. The political will, expectations and good faith of all parties in negotiations can directly affect the content of settlement agreements, the time taken to reach and implement settlements, the cost effectiveness of the entire process and the overall results produced.

14.106 In considering the government's objectives for negotiating claim settlements and how these could be achieved, we concluded that reaching an agreement is a significant milestone. However, it does not by itself constitute a complete achievement. There are some opportunities to resolve some fundamental issues.

14.107 We believe that the ultimate success of existing and future modern treaties will depend largely on how the parties define and act on their expectations for the removal of uncertainty and for the clarification of the rights of all parties. In addition, the parties' satisfaction with implementation progress and results will be a significant factor that helps determine the long-term benefits of negotiating settlement agreements.

14.108 Since a significant number of claims have yet to be resolved, Indian and Northern Affairs Canada needs to address the matters and concerns identified in this chapter that fall within its responsibilities.

Department's response: The Department is committed to resolving by negotiation, rather than litigation, issues of claims to Aboriginal rights and title in Canada. This approach was endorsed in the 1997 Supreme Court of Canada decision in Delgamuukw, which summed up the situation with the statement "Let us face it, we are all here to stay." The first modern land claims agreement or treaty, the James Bay and Northern Quebec Agreement, was concluded in 1975. Since then, 12 final land claims agreements, one agreement in principle and 41 framework agreements were completed in areas of Canada not previously covered by treaty.

The Auditor General's report reviews treaties negotiated over a period of more than 20 years, largely negotiated in the 1970s and 1980s, and highlights shortcomings of previous policies and practices, which have evolved considerably during this period. For example, as noted by the Auditor General, multi-party implementation plans have been negotiated to accompany all settlement agreements reached since 1986. For claims settled earlier, we had made efforts to negotiate implementation agreements after the fact, with success in most cases.

We agree with the Auditor General that there is always room for improvement in implementation monitoring and reporting practices. The Department is continually striving to improve these practices in concert with the other parties and stakeholders. In the early 1990s, the Department initiated a rigorous, multi-faceted regime of implementation monitoring and reporting against implementation plans. A consolidated annual report is prepared on the implementation of each settlement agreement for public distribution and tabling in Parliament. As well, many agreements call for comprehensive five-year reviews, the first of which is now being completed for the 1992 Gwich'in agreement.

Government's approach to achieving certainty in respect to lands and resources has also evolved since the 1970s, when the Crown had the power to extinguish Aboriginal title. The Constitution Act, 1982 protects existing Aboriginal rights from such unilateral action. New land claims agreements reflect evolution in this area as all parties struggle to find legal text to achieve certainty in regard to lands and resources. The lack of litigation to date over Aboriginal title in areas covered by these modern treaties is cause for optimism that the goal of legal certainty is being achieved. As the Auditor General has pointed out, however, the satisfaction of all of the parties with what has been negotiated, and the successful implementation of treaties, will contribute to the certainty of results far beyond the legal protection that governments and Aboriginal groups seek to obtain.

The negotiation process itself has also been greatly streamlined over the years. Since 1986, the negotiation of framework agreements as a first stage has allowed the parties to develop a relationship and clarify expectations by reaching agreement on subject matters, working procedures and target dates. Over two-thirds of those First Nations that have entered the British Columbia Treaty Commission process since its inception in 1993 have concluded framework agreements and embarked on agreement-in-principle negotiations.

All agree that further improvement is necessary in the length of time required to negotiate treaties. In partnership with Aboriginal groups, provincial governments and other stakeholders, we are exploring ways to accelerate the process, while respecting roles and relationships so that trust in the process and outcomes is maintained and enhanced. However, since treaty negotiations seek to resolve complex issues of long-term significance, governments as well as claimant groups must take the time required to satisfy themselves that the agreement will adequately address their interests for the future.

Another area that is being addressed is the capacity of Aboriginal groups with valid claims to conduct negotiations while at the same time undertaking other increased responsibilities, such as providing advice to governments on proposed development in their traditional territories. This issue is one that has been identified in the review of the British Columbia treaty process, and that the federal government has addressed by the establishment of a special capacity-building fund in that province. This is consistent with the Gathering Strength initiative (government's response to the report of the Royal Commission on Aboriginal Peoples), which sets out an approach for renewing the partnerships with Aboriginal people, supporting strong people, communities and economies, strengthening Aboriginal governance and developing a new fiscal relationship.

Internal practices have also seen improvements; for example, analyses of potential mineral values of possible settlement lands are now being used to support negotiations. Horizontal linkages between departments have been developed. In the treaty-making process, close collaboration with other departments is routine. In particular, the Department of Justice assigns counsel full time to negotiating teams to provide advice on chapters as they are being negotiated. As well, a full review is conducted throughout government departments prior to conclusion of framework agreements, agreements in principle and final agreements.

Costs of reaching and implementing settlements are contained in each department's Main Estimates and annual Performance Reports, as well as in Public Accounts. In addition, annual reports on the implementation of each settlement agreement provide useful summaries of most settlement and implementation expenditures. This department meets all required reporting and disclosure standards and has played a lead role among departments in improving reporting to Parliament, in particular by its horizontal display of Aboriginal expenditures by all departments. However, the publication of financial information on settlements in a manner that is comprehensive and accurate, yet easily understood, is a continual and complex challenge.

Canadians support the negotiation of land claims agreements to settle issues of long-standing concern and to allow Aboriginal citizens to participate fully in society by regaining control of their communities through self-government arrangements. Many lessons have been learned, and the process continues to evolve as new models are tried and all parties adapt to changing circumstances. While the stakes are high and the negotiations complex, we will continue to accept the challenge, since we believe that the negotiation of treaties will benefit all Canadians and contribute to Canada's international reputation as a country that can demonstrate peaceful ways of resolving our differences.


About the Audit

Objective

The main objective of the audit was to identify opportunities for improvements in the way claim settlements are being reached, implemented and reported, in the context of the government's objectives for settling claims.

Scope and Approach

The work was performed in selected regions of Indian and Northern Affairs Canada that continue to be significantly involved in comprehensive land claims. They included parts of British Columbia, the Northwest Territories, and Yukon. The audit also included a review of selected matters in the Department's headquarters in Ottawa. In addition, we inquired into the status of a 1975 claim settlement in Quebec.

We examined, in varying degrees, four settlements that had been finalized between 1984 and 1993 (at the start of the audit, 1993 was the year of the most recent settlement). These agreements provided an opportunity for reviewing all phases of a settlement while they continue to be implemented. The total value of the known, direct compensation of the four settlements is approximately $350 million and the amount of land with full Aboriginal ownership covered by the agreements in the sample totals approximately 160,000 square kilometres in the North. In addition, we reviewed selected matters relating to other settlement agreements.

We also met with the British Columbia Treaty Commission to obtain an overview of its mandate and status of claims in the region and to explore certain issues. As well, we obtained the perspectives of selected First Nations involved in comprehensive land claims as well as some of those affected by them.

Criteria

We expected that:

  • comprehensive land claim settlements would result in the removal of uncertainty, increased socio-economic development in the claimed areas, fairness to all parties and non-parties to the settlement and a reasonable determination and transfer of financial and other resources and rights;
  • comprehensive land claim policies and procedures would be applied to every claim as intended by the government and in accordance with principles of cost effectiveness and accountability;
  • settlement agreements would be reached in a timely manner and be properly implemented; and
  • comprehensive land claim activities and results would be reported appropriately.

Audit Team

Assistant Auditor General: Don Young
Principal: Grant Wilson
Director: Ted Bonder

Bruce Carroll
Julie Erb
Kathleen Hobbs
Suzanne Moorhead
Marjorie Pound
Anne-Marie Smith

For information, please contact Grant Wilson.