The Economic Characteristics of Indigenous Property Rights: a Canadian Case Study

• Publication year: 2021
• Citation: Vol. 95

95 Nebraska L. Rev. 432. The Economic Characteristics of Indigenous Property Rights: A Canadian Case Study

The Economic Characteristics of Indigenous Property Rights: A Canadian Case Study

Dwight Newman(fn*)

TABLE OF CONTENTS

I. Introduction .......................................... 433

II. The Nature of Aboriginal Title Within the Canadian Judicial Interpretation ................................ 439
A. Background ....................................... 439

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B. The Aboriginal Title Test .......................... 442
C. The Contents of Aboriginal Title ................... 449
D. Inherent Limits on Scope of Aboriginal Title ....... 450
E. The Security and Insecurity of Aboriginal Title . . . . 454
F. The Implications of Unsettled Aboriginal Title Claims ............................................ 457

III. The Property Rights Characteristics of Aboriginal Title .................................................. 459
A. Theoretical Characteristics of Title ................ 459
B. The Real Costs of Uncertain Economic Characteristics of Aboriginal Title: Examples of Practical Consequences for Mining Development . . . 464

IV. Why Common Law Judicial Development May Not Work with Aboriginal Property Rights ................. 468

V. Potential Policy Approaches to Further More Economically Functional Indigenous Property Rights. . . 471

I. INTRODUCTION

Legal and economic scholars have increasingly drawn attention to the impact of property rights issues on economic prosperity for Indigenous communities around the world.(fn1) Topics addressed by such scholarship have included inadequate formalization of Indigenous property rights with resulting disincentivization of land improvements and inability to fully utilize land for credit purposes,(fn2) impacts of unpredict-

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able governance regimes on property rights,(fn3) and the complex variety of economically inefficient land-holding systems imposed on Indigenous lands in various countries.(fn4) Property rights have impacts on Indigenous communities through effects on the possibilities for investment within the community,(fn5) and they have impacts on possibilities for Indigenous communities or individuals to contract with business entities outside the community on matters like resource development.(fn6) When things are not set up right, uncertain systems of property rights make it difficult to use land and invite opportunities for increased governmental control.(fn7)

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These impacts are in the context of compelling, urgent needs to grow Indigenous economies, with forward-thinking Indigenous scholars like Robert J. Miller having recently highlighted, once again, the ongoing poverty on the reservation and the ways this poverty fundamentally constrains Indigenous options.(fn8) These limitations often come from constraints on Indigenous institutions that have undermined their prior economic standing and success.(fn9) They also often come from the sort of problem Jessica Shoemaker is exploring in her important and innovative work detailing the deep-seated complexities in the nature of land ownership on American Indian reservations.(fn10)

The focus of this Article will be on Aboriginal title rights held by Canadian Indigenous communities, but the impacts reflect more general economic theory that has implications for communities elsewhere. They also have direct practical relevance to Canadian, American, and other international resource companies hoping to invest in Canada, which is almost uniquely positioned as a Western democratic state with truly enormous future resource potential.(fn11) At the same time, there is a significant current scholarly interest in Indigenous rights at an international level(fn12) such that ongoing developments may well not

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be confined to any one locale.(fn13) As a result, there is additional reason for attention to significant developments in a jurisdiction like Canada.

In the particular context that will be the focus of this Article, Canadian courts-and, ultimately, the Supreme Court of Canada-have been making decisions about the shape of various Indigenous property rights in recent years. Perhaps most prominently, after a lengthy series of issues in the lower courts,(fn14) the Supreme Court of Canada rendered a major Aboriginal title judgment in June 2014 in favor of the Tsilhqot'in Nation in central British Columbia,(fn15) thus making the first-ever judicial declaration of Aboriginal title to specific demarcated lands in a Canadian court.(fn16) Like some other recent Aboriginal rights decisions from Canada,(fn17) this decision has already received some international attention(fn18)-although it deserves more for reasons including those articulated in this Article.

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Perhaps less obviously, Canadian courts have also been making decisions about other matters such as the form of water rights held by Indigenous communities,(fn19) traditional harvesting rights and other property rights held as Aboriginal rights or as modern treaty rights,(fn20) and the duty-to-consult doctrine and associated claims to accommodations such as resource revenue sharing.(fn21) Thus, there are a range of Indigenous property rights issues at stake; this Article focuses on the key title determination from the Tsilhqot'in decision.

The Canadian courts render these decisions in the context of a particular constitutional provision adopted as part of Canada's major 1982 constitutional amendments.(fn22) The 1982 amendments include various new constitutional provisions, including an amending formula,(fn23) clarifications regarding provincial (as opposed to federal) ownership and jurisdiction over natural resources,(fn24) and the Canadian Charter of Rights and Freedoms (Charter), which is a written bill of rights contained in sections 1 through 34 of the new Constitution

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Act, 1982.(fn25) Immediately following the Charter, section 35(1) of the Constitution Act, 1982 contains a further rights provision, with the statement that "[t]he existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed."(fn26)

Section 35, the Aboriginal rights provision, is not detailed and therefore leaves a great deal of room for judicial interpretation.(fn27) In the context of determinations on Indigenous property rights, the Canadian courts have increasingly used constitutional reasoning about the purposes of section 35 in articulating the scope and limits of these property rights.(fn28)

The main claims of this Article are threefold: First, that the Indigenous property rights created by Canadian courts in recent years have a variety of economic characteristics that may undermine their value compared to rights that might have simply been differently articulated. Second, that the way in which these particular property rights are developed in the courts differs from traditional common law methodologies in particular ways that lead the courts to attain these outcomes rather than an economically efficient design of property rights. And, third, that there are a variety of policy routes forward that could help to promote the development of more economically functional property rights for Canadian Indigenous communities.

Although the particular claims are developed in terms of the Canadian jurisprudence of Indigenous rights, the concluding section will also try to show that this study has wider implications on several different issues-notably, questions related to appropriate engagement

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with Indigenous property rights in other contexts and questions related to when there are exceptions to the general proposition that common law judicial interpretation of property rights leads to economically well-structured rights.

II. THE NATURE OF ABORIGINAL TITLE WITHIN THE CANADIAN JUDICIAL INTERPRETATION

A. Background

As noted, the 1982 constitutional provision "recognizes and affirms" specifically "existing aboriginal and treaty rights."(fn29) Whether or not the drafters realized it at the time, this provision would come to encompass a right to Aboriginal title in areas where Indigenous communities had not surrendered land through treaties, in the way that the doctrine of Aboriginal title has grown in common law jurisdictions around the world.(fn30)

In a 1973 case brought by the Nisga's community, Calder v. British Columbia, the Supreme Court of Canada recognized, in principle, the idea of Aboriginal title being part of the common law.(fn31) Although six of the seven justices sitting in the case recognized Aboriginal title in principle, the Nisga'a lost on the facts of the case from a combination of three of the seven justices holding their title to have been extinguished by past government action and one further justice holding the case to have procedural defects such that it was unnecessary to rule on the substantive issues.(fn32)

The case did not result in any declaration of Aboriginal title for the Nisga'a, but it set the stage for negotiations with them and other Aboriginal communities on the basis of recognized rights: the Nisga'a ultimately concluded a treaty under which they have self-governmental powers and forms of land ownership, including the ability to create individualized property rights and even to establish a Torrens land-registry system.(fn33)

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More broadly, the Calder case concerning the title claim of the Nisga'a showed that Aboriginal title continued to exist, in principle, in areas where land had not been surrendered through historic treaties-which included most of British Columbia as well as most of the three Northern territories, much of Quebec, and the Maritime provinces.(fn34) The result was that Aboriginal title became a constitutionalized property right across significant parts of Canada in 1982,(fn35) with Aboriginal title claims having been settled in only some of these regions...