1 Welcome to the International Right of Way Association’s Course 408 The Valuation of Native Lands in Canada 408-PT – Revision 2 – CAN

2 Introductions Who we are… What we do… Where we do it… How long we’ve been doing it… Our goals for the course...

3 Objectives (1) At the end of the two days, you will... Know more about the nature of Native lands and the reserve land regimes structure Understand better the main features of First Nation land management

4 Objectives (2) At the end of the two days, you will... Learn more about information sources relating to First Nation land management Appreciate better reserve lands procedural requirements

5 Housekeeping

6 Schedule (1) Day One 8:00 - 8:30Introductions, Etc. 8: :30The Nature of Native Lands 12: :30Reserve Land Regimes Structure 2:45 - 4:15First Nation Real Estate Perspectives 4:15 - 4:30 Recap Day One

7 Schedule (1) Day Two 8:00 - 8:15Recap Day One/Introduce Day Two 8: :00Valuation of First Nation Lands 1: :45Specific Claim Valuation 3:45 - 4:00Summary and Review 4:00 - 5:00 Exam

8 Native Lands Aboriginal title lands Comprehensive claim settlement lands Reserve lands

9 Native Peoples Native peoples (eligible under a comprehensive claim settlement) Status Indians Non-status Indians Metis Inuits

10 Native Land Categories Aboriginal Title Lands Treaty Lands Reserve Lands Lands set aside by the Crown Lands acquired by Native Peoples Metis and Non-status Lands Comprehensive Claim Settlement Lands

11 Definitions A reserve is land with title vested in Her Majesty and set apart for the use and benefit of a band and … includes designated lands. A special reserve is land, the title is not vested in Her Majesty and set apart for the use and benefit of a band. A band is “a body of Indians for whose use and benefit in common, lands the title to which is vested in Her Majesty, have been set apart … or for whose use and benefit in common, moneys are held by Her Majesty, or have been declared by the Governor in Council to be a band for the purposes of the Indian Act.”

12 Judicial Guidance on Valuing Native Lands Guerin, 1984 Musqueam Indian Band v. Glass, 2000 Wewayakum Indian Band v. Canada, 2002 Ross River Dana Council Band v. Canada, 2002 Osoyoos Indian Band v. Town of Oliver, 2003

13 Guerin “… Indians have a legal right to occupy and possess certain lands, the ultimate title of which is in the Crown.” “… Indian title as a beneficial interest...”

14 Musqueam Current land value is interpreted to mean the fair market value of fee simple title. There are different legal constraints and different market conditions on reserve lands.

15 Wewayakum “… in conflicts, government must consider the interests of non-Aboriginal groups.”

16 Osoyoos (1)... regular expropriation rules might not apply including the adequacy of compensation. … it is inappropriate to apply common law real property rules to Indian lands … the transfer cannot be treated as a regular, commercial transaction.

17 Osoyoos (2)... reserve land does not fit neatly within the traditional rationale that underlies the process of compulsory takings in exchange for compensation in the amount of the market value of the land plus expenses. The Aboriginal interest in land will generally have an important cultural component.

18 Evolution Aboriginal title and Indian land interests has evolved from a vague concept to an approximation of a fee simple estate. Reserve and Aboriginal interests have special characteristics and utility, which are not fully valued by determining current market value. Any taking of reserve land must be for the minimum interest required for the project.

19 Indian Act … provides a separate and complete reserve land administration system.

20 Interests in Land and Assets (1) Aboriginal title is a root title subsumed in part by the Crown and based in a group’s communal use and interest. It must be surrendered and compensated when granted or used for non- traditional uses.

21 Interests in Land and Assets (2) Reserve land is a communal interest, with the general attributes of Aboriginal title. It may be unallotted to members as locatees by certificates of possession or allotted by custom, surrendered for sale or for a specified use, taken for public purposes or committed for specific periods for uses through permits, leases and easements.

22 Interests in Land and Assets (3) A certificate of possession establishes a member’s right to possess and use a specific parcel of reserve land. A certificate holder may lease the parcel unconditionally, sell, transfer or will the interest to other band members or lose the interest through reversion or resumption, with compensation for improvements by the Band Council.

23 Interests in Land and Assets (4) Absolute surrender Conditional surrender Permitted interest Internal allotment/taking

24 Real Estate (1)  land is a fundamental element of life not a medium of exchange  the reserve land base and resources are limited and need to be expanded not diminished  the anticipated community impacts must influence any response to a real estate transaction  cemeteries, religious, social and cultural sites have special status and usually there are no equivalent substitutes

25 Real Estate (2)  there are potential negative tax, rent, employment consequences if businesses relocate from the reserve  member opportunities can be part of any real estate transaction  negotiations is an important part of any real estate transaction

26 Real Estate (3)  hospitality is an important part of any interaction  fairness and respect are essential in any transaction  there may be ideological changes with electoral changes

27 Appraisal Contrasts (1) Value in use and some apparent non-economic uses must be considered. Restoration is important and covers disturbance, injurious affection and special difficulties. There may be no or only a limited number of comparable reserve sales and other transactions.

28 Appraisal Contrasts (2) There is a need to consider Aboriginal interest and cultural attachments to land when valuing interests. There is a need to consider the unique and inherent value of reserve land to the community. There is a need to understand and appreciate the traditional attachment to plants, trees, animals and fish and natural features that add value.

29 Appraisal Contrasts (3) The valuation impact of reducing reserve privileges/benefits and revenues (e.g., taxes, rent, wages, employment) must be considered. The complex and costly process to maintain and expand reserves, as a consequence of real estate transactions/takings is a valuation concern. Consideration needs to be given to different interpretations of planning activities and understanding environmental issues.

30 Recap Day One

31 Day Two

32 Valuation Process Appraisal Problem Definition Scope of Work Data Collection and Analysis Land Value Opinion Three Approaches to Value Reconciliation and Final Value Opinion Defined Value Opinion Report

33 Valuation Process Highest and Best Use The reasonably probable and legal use that is physically possible, appropriately supported, and financially feasible, and that results in the highest value. Physically possible? Legally permissible? Financially feasible? Maximally productive?

34 Valuation Process Additional Highest and Best Use Considerations (1) Current or traditional or non-traditional uses Special features Cultural components Future reserve status

35 Valuation Process Additional Highest and Best Use Considerations (2) other political or market factors Supply and demand differences Community, social and cultural factors

36 Valuation Process Land Valuation Methods Allocation Direct comparison Extraction Ground rent capitalization Land residual technique Subdivision development analysis

37 Valuation Process Appraisal Problem Definition Scope of Work Data Collection and Analysis Land Value Opinion Three Approaches to Value Reconciliation and Final Value Opinion Defined Value Opinion Report

38 Valuation Process Cost Approach Develop a value opinion for the land Estimate the cost new of the improvement Deduct depreciation Add land value opinion to the depreciated improvement value

39 Valuation Process Direct Comparison Approach Research the market for comparable data Develop relevant units of comparison Compare the sales to the subject and adjust for dissimilarities Reconcile the value indications into a final value opinion

40 Valuation Process Income Approach The conversion of income into value through a rate or a ratio. Direct capitalization Yield capitalization

41 Reconciliation and Final Value Opinion Valuation Process

42 Valuation Process Defined Value Opinion Report Narrative Short narrative Form

43 Valuation Process Appraisal Problem Definition Scope of Work Data Collection and Analysis Land Value Opinion Three Approaches to Value Reconciliation and Final Value Opinion Defined Value Opinion Report

44 Objectives (1) Now, you... Know more about the nature of Native lands and the reserve land regimes structure Understand better the main features of First Nation land management

45 Objectives (2) Now, you... Know more about information sources relating to First Nation land management Can appreciate better reserve lands procedural requirements

46 Thank you! 408-PT – Revision 2 – CAN