ISC overlooked modern techniques for Indigenous landholders to derive value from their lands
The Federal Court has ordered Indigenous Services Canada (ISC) to reassess the value of an estate's on-reserve land and provide an accounting to the applicants.
In Mitchell v. Canada (Indigenous Services), 2024 FC 1248, the court ruled that the ISC's practice of attributing negligible value to reserve land without registered leases was unreasonable and outdated. The case involved the estate of Susan Joe, who passed away in 2005 and left land interests on the Okanagan Indian Reserve.
The applicants, children of the deceased, sought an accounting of the estate's value, which includes several parcels of land on the reserve. ISC had refused to provide an accounting, relying on a practice that assumes reserve land without registered leases holds negligible value. The Federal Court found this practice unreasonable and ordered ISC to reconsider the valuation of the estate and provide an accounting to the applicants.
The decision stemmed from ISC's handling of the estate, which included certificates of possession for on-reserve land and partial interests in other parcels. The applicants challenged a will produced after Susan Joe’s death on the grounds of lack of testamentary capacity. In 2021, the British Columbia Supreme Court ruled the will void, and ISC subsequently declared the deceased had died intestate. As a result, ISC determined that the deceased’s spouse was the sole heir under the Indian Act, despite the applicants' claims as potential heirs.
The court criticized ISC’s reliance on a longstanding policy of assigning minimal value to on-reserve lands without registered leases, finding it did not account for modern techniques allowing Indigenous landholders to derive value from their lands, such as through long-term leases. The court emphasized that this outdated practice could unfairly impact potential heirs, particularly when determining whether an estate exceeds the $75,000 threshold under s. 48 of the Indian Act, which affects how estates are distributed.
Additionally, the court ruled that ISC’s refusal to provide an accounting to the applicants was unreasonable. The court noted that ISC’s manual did not prohibit disclosing estate information to potential heirs and emphasized the administrator’s duty to account for the estate's administration, even to those who may not ultimately inherit.
Ultimately, the court directed ISC to reassess the estate’s value and provide the applicants with an accounting.
