Why land investors should understand Indigenous rights

Land development deals can involve territory owned or shared by First Nations, so investors can minimize risk by understanding how developers work with Indigenous communities.

As the First Nations Major Project Coalition noted in a recent white paper, nearly every major development project “will involve Indigenous rights in some manner, particularly if it involves land or natural resources.”

Developers, lawyers, architects and others who work on deals involving shared or disputed land say the first and most important part of the process — which can safeguard investments in the long run — is discussion and consultation with First Nations.

“Build meaningful relationships, ask nations how they wish to be engaged, [and] create real opportunity for nations,” said Indigenous architect Ryan Gorrie of Brook McIlroy/Indigenous Design Studio in Toronto.

He stressed the importance of not shortchanging the engagement process or timeline because those “relationships take time.” Further, there’s always a potential for disputes to scupper deals even if it seems a developer has all its ducks in a row.

Ontario’s Foxgate Developments knows all too well how plans can fall apart over disputes with Indigenous groups. More than a year after a group of Haudenosaunee people began occupying the site of a planned subdivision near Caledonia, Ont. and Six Nations of the Grand River First Nation, the developer pulled the plug in July 2021 and returned all deposits to homebuyers. One of the issues with the 200-home McKenzie Meadows subdivision was disagreement over which Indigenous group could make decisions.

Natural resource companies have for years undertaken the duty to consult with Indigenous groups over land use, resulting in impact benefit agreements and other deals to ensure the economic interests of all parties are addressed. In March, for instance, TC Energy Corp, which is building a gas pipeline to a liquefied natural gas terminal in B.C., signed a deal with a number of First Nations to bring them into the pipeline’s ownership consortium. But even with that deal, protests continue.

Bill Taggart, a lawyer with Toronto-based Fogler Rubinoff LLP who advises First Nations, said mutual engagement is the underpinning for agreements between developers and First Nations “that say no matter what the outcome, we’re going to work together.”

Many First Nations can “provide novel solutions” that include preferential tax polices, economic growth opportunities and more, which can create very “beneficial arrangements” for both Indigenous and non-Indigenous parties. Gorrie said working with Indigenous professionals on projects brings great benefit to all parties, so investors should also be aware of who’s working on a given development.

Bands in urban areas often use professional consulting groups and civil engineers to help set up their bylaws and operating procedures so investors and developers know their policies align with neighbouring municipalities in areas such as taxation and sewage and waste collection, said Morgan Dyer, a senior vice-president with Colliers International in Vancouver.

“The other thing that’s unique is that both provincial and federal governments have recognized the requirement to deal with First Nations on a government-to-government basis,” Taggart said. That means if there’s an issue with your project, the chief could contact the minister or premier directly. “That can often be a significant advantage,” he said.

Dyer noted First Nations own a lot of desirable property in urban areas. In the Greater Vancouver Area, where there is huge pressure on land supply, developers are interested in land owned by First Nations such as the Musqueam, Squamish and Tsleil-Waututh.

“There’s all these lands that haven’t been developed yet and are now coming into play,” Dyer said.

Dyer frequently represents First Nations, which rather than selling land to developers will enter into 99-year leases. Any land use must be approved by the band, but those leases also provide “sufficient protection for the investor or the developer,” he said. “Once you have these approvals and you’re working with the band,” the process is often smooth, he said.

Before investing in development deals, investors should make sure all parties are represented and protected. But, as Gorrie said, they should also be educated on both the development company and the current issues in the area.