Mr. A. W. NEILL (Comox-Albemi):

The terms of this bill seem to be reasonable and appropriate enough, though perhaps section 2 is rather difficult to understand. In the discussion of the resolution on which this bill is founded the minister made a statement in connection with band funds that I was pleased to hear, which apparently indicated the intention of the department to abandon a system about which I have often complained in the past in connection with the handling of band funds. But there is nothing about it in the act itself, and I have learned by experience that it is not what the minister says but what the act states that counts. Perhaps it would be more appropriate to take that up when the house is in committee.

There is one other point I should like to mention. I am not anxious at this time of year to see any delay in legislation, but possibly it is better to bring up this point now instead of later on, after we have taken

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more time on the matter. The resolution on which this bill is founded was considered by the committee of the whole, as all such resolutions must be considered, and was passed on Thursday, April 7. The minister moved that the house go into committee of the whole to consider the resolution, which concluded with these words:

-the outstanding advances at any time not to exceed $350,000.

Then in the discussion of the resolution itself, at page 3349, the minister said that the amount was not to exceed a total of $350,000. That phrase occurs again and again, but when the bill is brought down it indicates an expenditure of half a million dollars. I should like to ask the minister or the Minister of Finance (Mr. Dunning) whether that would not upset the legality of the bill and make it necessary to reintroduce it later on. I should think it would be better to have that changed now, because I understand it is not in order to increase by a large sum the amount authorized under the hand of his excellency when the measure is brought in.

Mr. CRERAR:

I might say in reply to my hon. friend that this is a misprint in the bill. The amount is $350,000. The error probably arose in this way: there was some discussion of the advisability of making it $500,000, but it was finally decided to make it $350,000, as a beginning at any rate. When we get into committee I propose to amend that section of the bill accordingly. I think that will be quite in order.

Mr. NEILL:

Will that make it legal? Can you amend a bill to make up for such an important discrepancy?

Mr. CRERAR:

I am not clear on the legality of it; I should think it is within the power of the committee to reduce, but not increase it.

Right Hon. R. B. BENNETT (Leader of the Opposition):

I think the point made by the hon. member for Comox-Alberni (Mr. Neill) is a very serious one, unless the house unanimously grants the minister authority to reduce the figure from $500,000 to $350,000. It is quite clear that under the joint operation of sections 53 and 54 of the British North America Act this bill can be considered only after a resolution has been adopted by the house; and inasmuch as the resolution provided for $350,000 we must take it that this is another bill entirely which is being introduced by the minister, a bill that has no reference at all to the resolution that was before the house the other day.

Under the circumstances it is quite clear that the bill would be out of order, but I should think that by unanimous consent, in view of the very persuasive explanation by the minister as to how the Minister of Finance saw fit to reduce the amount from $500,000 to $350,000, feeling that the exchequer of the country could hardly go that far, the error might be rectified. I appreciate the explanation that was given, because a few moments before I observed that the minister looked at the Minister of Finance, who returned his glance with that happy smile sometimes described in loose journals as that of the cat that had swallowed the canary. It is quite clear that the fine Italian hand-with no offence to Mussolini-of the Minister of Finance is to be seen in the reduction of the amount from $500,000 to $350,000, and I fancy that the minister had good reason for making the change.

Speaking for myself only, I am sure those associated with me would be glad to accord the minister, with the unanimous consent of the house, the opportunity to treat the $500,000 as a misprint, as a misunderstanding of the will of the Minister of Finance, and to accept the statement that it should be $350,000 instead.

Hon. T. A. CRERAR (Minister of Mines and Resources):

When the resolution was being considered a few days ago the hon. member for St. Lawrence-St. George asked for certain information as to the position of various Indian reserves with respect to the minerals which might be found in or under them, and suggested it might be desirable to obtain a statement in the matter from the law officers of the crown.

I am not in a position to submit such a statement to-day. The matter has been before the Department of Justice for an opinion for some time, but the question is greatly involved and that opinion has not yet been received. With the permission of the committee however I believe I can outline the situation in the various provinces from a statement prepared by the officials of the department. With the permission of hon. members I shall read the statement, which is as follows:

The ownership of minerals underlying Indian reserves does not appear to have been determined with any finality, except as mentioned hereafter. Some months ago however the Department of Justice was asked for a statement

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as to just what the position of the crown in the right of the dominion is. Although this reference has been studied, when it is realized that there are 2,200 reserves scattered throughout the nine provinces, that these reserves were set aside or acquired at different times under varying conditions, and that the privy council and supreme court decisions on the subject of Indian reserve under-rights were given in connection with definite sets of circumstances that do not apply generally, and further that there seem to be some differences in the judgments, it will be appreciated that the task is by no means a simple one. Consequently it is not possible at this time to make a clear-cut statement as to the ownership of these minerals in all the provinces. In Ontario, the prairie provinces, and the railway belt and Peace river block, British Columbia, the situation is fairly clear, and it is desirable that proper mining regulations be established.

It might be well to make clear at the outset that part (1) of the bill does not involve any change in practice in the administration of Indian mineral lands. Mining regulations have been standing for years and it was only when the government revised the oil and gas regulations for Indian reserves with a view to bringing them up to date and providing for better revenue for the Indians, that the legal foundation for the regulations was questioned.

The justice department expressed doubt as to whether section 54 of the Indian Act was sufficiently wide to authorize the governor in council to pass general regulations of this kind. In other words while a particular lease or sale might be provided for by order in council, general regulations could not properly be set up under which the department might issue leases or otherwise dispose of such rights. The department has prepared new quartz mining regulations for Indian reserves but submission of these regulations to the governor general in council has been withheld pending approval being given by parliament to this bill.

Generally speaking the situation with respect to ownership of Indian reserve underrights appears to be about as follows:

Ontario

An agreement between the dominion and the province of Ontario was entered into on July 19, 1924, for the settlement of certain questions respecting Indian reserve lands. The agreement is set out in full in chapter 48 of the Dominion Statutes, 1924. It provided that Indian reserves should be administered by the dominion for the benefit of the Indians and-

"6. Except as provided in the next following paragraph, one-half of the consideration payable. whether by way of purchase money, rent, royalty or otherwise, in respect of any sale, lease or other disposition of a mining claim staked as aforesaid, and, if in any other sale, lease or other disposition hereafter made of Indian reserve lands in the province of Ontario, any minerals are included, and the consideration for such sale, lease or other disposition was to the knowledge of the Department of Indian Affairs affected by the existence or supposed existence in the said lands of such minerals, one-half of the consideration payable in respect of any such other sale, lease or other disposition, shall forthwith upon its receipt from time to time, be paid to the province of

Ontario; the other half only shall be dealt with by the Dominion of Canada as provided in the paragraph of this agreement numbered 1.

7. The last preceding paragraph shall not apply to the sale, lease or other disposition of any mining claim or minerals on or in any of the lands set apart as Indian reserves pursuant to the hereinbefore recited treaty made in 1873. and nothing in this agreement shall be deemed to detract from the rights of the Dominion of Canada touching any lands or minerals granted or conveyed by His Majesty for the use and benefit of Indians by letters patent under the great seal of the province of Upper Canada, of the province of Canada or of the province of Ontario, or in any minerals vested for such use and benefit by the operation upon any such letters patent of any statute of the province of Ontario."

In effect this means that the dominion deals with the disposal of mining rights in Indian reserves, that the province receives one-half the revenue therefrom and the Indian band concerned the other half, with the exception that in the case of certain reserves in the vicinity of the north-west angle of the Laki of the Woods covered by the Indian Treat) of 1873, the Indians receive all the revenue.

irame Provinces

When the natural resources transfer agreements were entered into with the three prairie provinces and the crown lands transferred from the dominion to the provinces, provision was made in the agreements to avoid the difficulties Which had existed in Ontario prior to the agreement of 1924. Two sections of these agreements read-

U- lands _ included in Indian reserves within the province, including those selected and surveyed but not yet confirmed, as well as those confirmed, shall continue to be vested in the crown and administered by the government of Canada for the purposes of Canada, and the province will from time to time upon the request of the Superintendent General of Indian Affairs, set aside, out of the unoccupied crown lands hereby transferred to its administration such further areas as the said Superintendent General may, in agreement with the Minister oi Mines and Natural Resources of the province, select as necessary to enable Canada to fulfil its obligations under the treaties with the Indians of the province, and such areas shall thereafter be administered bv Canada in the same way in all respects as if they had never passed to the province under the provisions hereof.

12. The provisions of paragraphs 1 to 6 inclusive and of paragraph 8 of the agreement made between the government of the Dominion ot Canada and the government of the province of Ontario on the 24th day of March, 1924, which said agreement was confirmed by Statute fol!rteei1 and fifteen George the fifth, chapter forty-eight, shall (except so far as they relate to the Bed of Navigable Waters Act) apply to the lands included in such Indian reserves as may hereafter be set aside under the last preceding clause as if the said agreement had been made between the parties hereto, and the provisions of the said paragraphs shall likewise apply to the lands included in the reserves heretofore selected and surveyed, except that neither the said lands

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nor the proceeds of the disposition thereof shall in any circumstances become administrable by or be paid to the province."

British Columbia

Section 13 of the agreement respecting the union of British Columbia with the dominion reads:

"13. The charge of the Indians, and the trusteeship and management of the lands reserved for their use and benefit, shall be assumed by the dominion government, and a policy as liberal as that hitherto pursued by the British Columbia government shall be continued by the dominion government after the union.

To carry out such policy, tracts of land of such extent as it has hitherto been the practice of the British Columbia government to appropriate for that purpose, shall from time to time be conveyed by the local government to the dominion government in trust for the use and benefit of the Indians on application of the dominion government; and in case of disagreement between the two governments respecting the quantity of such tracts of land to be so granted, the matter shall be referred for the decision of the secretary of state for the colonies."

The dominion and the province entered into an agreement on the 24th September, 1912 (McKenna-McBride), which provided for the setting up of a commission to adjust the acreage of Indian reserves in British Columbia. The agreement contemplated the conveyance by the province to the dominion of additional areas for Indian reserves with full power to deal with the lands in such manner as it deemed best suited for the purposes of the Indians, including the right to sell the lands for the benefit of the Indians. This agreement was approved by the governments of the dominion and the province. The commission's report was received on 30th June, 1916, and in 1920 a dominion act was passed (Chapter 51) enabling the governor in council to give effect to the report in whole or in part. A similar act was passed by the province in 1919 (Chapter 32). The report was approved by provincial order in council on 26th July, 1923, and by dominion order in council on 19tli July, 1924, excepting suggested "cut-offs" in railway belt.

On 22nd March, 1929, a supplementary agreement was entered into in connection with the reconveyance to the province of the railway belt anil Peace river block and with respect to the form of conveyance to be used in transferring the additional reserves to the dominion. This agreement provided in part for the exclusion from the general transfer of the railway belt and Peace river block of reserves previously set aside by the province or the dominion and for the administration of such reserves in accordance with the conditions of the McKenna-McBride agreement. The lands were excluded from the general transfer by section 13 of the natural resources transfer agreement which forms a schedule to the Railway Belt and Peace River Block Act. chapter 37, statutes of Canada 1930. Clause 3 of the agreement of 22nd March, 1929, reads:

"3. We have considered clause 4 of the document known as the McKenna-McBride agreement, which reads as follows:

'4. The lands which the commissioners shall determine are not necessary for the use of the Indians, shall be subdivided and sold by the

province at public auction/ It is considered that this provision might beneficially be varied so that it be provided that on agreement between the two governments, through their respective departments, the lands may be either subdivided for sale, or disposed of en bloc, as may appear most advantageous in the circumstances of each particular case, but that such sale and disposal shall be by public auction; and as to disposal of timber, mineral and similar rights, the same should be dealt with by agreement between the respective governments through their proper departments, and we shall recommend accordingly to our respective governments."

The forms of conveyance agreed upon in 1929 reads in part:

". . . the lands set out in schedule attached hereto be conveyed to His Majesty the King in the right of the Dominion of Canada in trust for the use and benefit of the Indians of the province of British Columbia, subject however to the right of the dominion government to deal with the said lands in such manner as they may deem best suited for the purpose of the Indians including a right to sell the said lands and fund or use the proceeds for the benefit of the Indians subject to the condition that in the event of any Indian tribe or band in British Columbia at some future time becoming extinct that any lands hereby conveyed for such tribe or band, and not sold or disposed of as heretofore provided, or any unexpended fund being the proceeds of any such sale, shall be conveyed or repaid to the grantor. ..."

For years the department has been endeavouring to secure a conveyance of title to the reserves agreed upon by the McKenna-McBride commission but without much success. The matter has been discussed more than once within recent months with Premier Pattullo and he has given his assurance that it would be adjusted without further undue delay.

Mr. BENNETT:

Probably the congress of the United States is dealing with it.

Mr. CRERAR:

Possibly.

A draft form of conveyance was submitted by the province some weeks ago but it was not in accord with the form agreed upon in 1929 and is not acceptable to the department. This has necessitated further negotiations which it is hoped will shortly produce satisfactory results.

Quebec

There are no outstanding mining leases or mining permits covering Indian reserve lands in Quebec. The situation with respect to Indian reserves in that province is slightly different to that in Ontario.

Mr. BENNETT:

None of them are in the mineralized area.

Mr. CRERAR:

So far. To continue:

The decision of the privy council in the St. Catharines Milling case established that in Ontario the rights of the Indians in the lands was a "personal and usufructuary right" depending entirely upon the bounty of the crown. In Quebec the Indian interest in some cases amounts to beneficial ownership and in these cases the province has no claim to any reversionary interest.

Mr. BENNETT:

In many cases they

asserted their right to a reversionary interest, and it has been granted.

Mr. CRERAR:

The statement continues:

In others, the rights of the Indians in reserves are personal and usufructuary and their position may be similar to the Indians of Ontario.

It is realized that the situation is not at all satisfactory particularly in view of the fact that the development of the mining areas in Quebec is being extended rapidly and the time will soon come when we will be faced with the problem of dealing with the mineral rights. As soon as a definite opinion is received from justice department further steps can be taken as may be considered advisable.

Maritime Provinces

It has not been necessary to give a great deal of thought to the dominion crown's title to minerals underlying Indian reserves in the maritime provinces. However the situation with respect to those reserves set aside prior to confederation is probably comparable to the case of Ontario. Certain reserves were purchased outright by the dominion and the dominion's title in these cases is absolute.

This is a lengthy statement, but I think it sets out the conditions as briefly and concisely as they can be set out at the present time. It is quite evident that there are varying conditions surrounding the titles to these reserves in respect to all that they may contain in the way of mineral wealth. The conditions governing vary in British Columbia, Ontario and Quebec and between different reserves in these provinces. However, when I approach the Department of Justice to see if they could give me a statement that would meet the wishes of the hon. member for St. Lawrence-St. George, they said it was quite impossible to do so at the present time. Consequently I have fallen back on this statement that was prepared by the officers of the department and which I think outlines the situation fairly well.

Mr. BENNETT:

The statement just read by the minister is an interdepartmental statement for use in the department?

Mr. CRERAR:

Quite.

Mr. BENNETT:

I would think that in the main it is a very clear and correct statement of the situation. The St. Catharines Milling Company case is the leading case dealing with the rights of provinces to the reversionary interests in lands in which it was held the Indians had other than a beneficial interest. When their interest in the reserve terminated, the dominion thought that the interest in the land reverted to the crown in the right of the dominion, but the courts decided that it belonged to the crown in the right of the province. That is the decision so far as

Ontario is concerned, and under the circumstances of that particular case. The late government had to deal with a situation ir Quebec in which the same principle was applied, the conditions and circumstances being similar, but there are some reserves in Quebec which were created under different conditions than those applicable to the reserve in the St. Catharines case. The only practical difficulty is whether or not the mines and minerals under the soil in an Indian reserve belong to the crown in the right of the dominion or in the right of the province.