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1Respectively, MA – Economics (2016), Simon Fraser University; and Surveyor General Branch, NRCan. This does not necessarily
reflect the views of NRCan. Erin helped with Figure 2 and footnote 16.
2For lands that vest in First Nations, as for the Sechelt First Nation and 11 Yukon First Nations, parcels are created pursuant to sections
24, 25, 27 and 29 of the CLS Act, because the lands are no longer administered by Canada.
3For a condemnation of informal rights in the face of First Nation (Chief and Council) opposition, see: Johnstone v Mistawasis First
Nation, 2003 SKQB 240.
4Because “landowners are people;” as summarized by de Rijcke, Intention and rights in land: Implications for title registration and
parcel boundaries. Presentation to CCLTO & CCOG-Cadastral. Toronto. September 2014.
5Knight. Statutory recognition of customary land rights in Africa. Food & Agriculture Organization. Rome. 2010.
6Brown v Town of Edmonton, 1894 CarswellNWT 26.
7R v Patrick, 2009 SCC 17 at para 43. The issue was whether police trespassed onto the parcel to take garbage bags. The court ruled
that no trespass had occurred because property rights near the boundary were weak.
Vol. 70, No. 3, 2016 dx.doi.org/10.5623/cig20165-312 GEOMATICA 233
Introduction
Informal property rights exist on
First Nations Reserves. Estimating
socio-economic development (commu-
nity well-being) on 91 Reserves in
British Columbia vis-à-vis informality
reveals a negative effect (i.e., informal-
ity hinders development). However, the
significance of the effect is ambiguous.
Formal v Informal
The parcel is that to which the legal
right applies; and boundaries define the
location and spatial extent of the parcel.
Boundary principles—mostly from court
judgments, sometimes from legisla-
tion—are predicated on such parcels and
such formal rights. Think of fee simple,
leases, easements and so on. For First
Nation Reserves there is an identical
symmetry between parcels and formal
rights. The parcels are surveyed and cre-
ated pursuant to section 29 or 312of the
Canada Lands Surveys Act; and rights to
those parcels are granted pursuant to the
Indian Act. Such rights include posses-
sion (evidence of which is a Certificate of
Possession—(s20); permits (s28); leases
of designated lands (s53); assignments of
designated lands (s54); leases of unculti-
vated/unused lands (s58(1)); leases of
possessed lands (s58(3)). Indeed, formal
rights are not granted or sanctioned in the
absence of a formal parcel.
Of course, this list of formal rights
pertains only to First Nations operating
under the Indian Act. For those First
Nations that have regained autonomy
(e.g., Tsawwassen FN); have sectoral
self-government (e.g., Westbank FN),
or are operating under the First Nations
Land Management Act (e.g., Muskoday
FN since 1998 or Dokis FN since 2013)
different formal rights exist. This analy-
sis is not about the diversity of such formal
rights across a range of First Nation
parcels; nor even about formal rights and
parcels. Rather, it is about the informal
rights and parcels that exist across First
Nation Reserves. Although such rights
are not sanctioned by the Indian Act (or,
indeed, by any other legislation),3the
intention here is not to question their
existence or to denigrate their acceptance
within Indigenous communities.
The cause/source/lineage of infor-
mality is not that relevant, because
informal rights pervade all land tenure
systems, including non-Indigenous
lands across Canada4and elsewhere.5
For instance, think of the possessive-
ness of house-owners about the sections
of road in front of their houses.
Formally, the road vests in the munici-
pality; informally, the house-owner
considers anybody who parks there to
be trespassing. Or, consider the transfer
of high-value commercial parcels (and
buildings) in Canadian cities through
the unregistered transfers of beneficial
interests, so as to avoid land transfer
taxes. The Supreme Court of Canada
has accepted informal rights at least
twice. In 1894, the SCC acknowledged
the informal rights that had existed in
Edmonton during the fur trade era and
that were only formalized when patents
were issued in 1887.6More recently, the
SCC ruled that property rights are not
uniform across the entire parcel. In the
middle of a parcel (distant from the
boundaries), rights are formal and
sacrosanct. At the periphery of the par-
cel (close to the boundary), rights are
more informal: “I also do not think con-
stitutional protection should turn on
whether the [garbage] bags were placed
a few inches inside the property line or
a few inches outside it.”7
GEOMATICS AND THE LAW
Ceilidh Ballantyne, MA, and Dr. Brian Ballantyne1
The Effect of Informal Property Rights on
First Nations’ Community Well-Being
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234 GEOMATICA Vol. 70, No. 3, 2016
This is not a paean in praise of
informality; because some informality
is inequitable.8Nor is it a rant against
informality, because some informality
is a choice by Indigenous peoples to
keep the State at bay.9So, let’s move
beyond emotive value judgments and
vapid generalities to empirical
analysis.
10 Such analysis is rare because
informality on First Nation Reserves
has not been systemically studied: “This
absence of documentation and central
recording makes it impossible at the
present time to construct a customary
rights variable for statistical analysis.”11
Or does it? This analysis assesses the
effect of informality on socio-economic
development.12
Methodology
In British Columbia there are 198
First Nations across some 1 584
Reserves with a population of 70 000.
Population is not spread out evenly
across all Reserves for a First Nation;
there is usually a population centre in
one Reserve. As such, this analysis
focuses on the main Reserve for each
First Nation. However, the sample size is
reduced to 143 Reserves, given that First
Nations under the First Nations Land
Management Act do not register rights in
the Indian Lands Registry (ILR).
The dependent variable reflects
economic development: the Community
Well-Being Index (CWB). The CWB is
a metric used by Indigenous and
Northern Affairs Canada (INAC) and is
created using data from the Statistics
Canada 2011 Census of Population and
the National Household Survey (NHS).
The CWB is a value between 0 and 100
and is an aggregate metric of a
Reserve’s level of income, education,
housing and labour force activity.
“Income” captures total income per
capita; “education” captures how many
members have at least a high school
education and how many a university
degree; “housing” reflects whether
homes are overcrowded or in need of
repair; “labour force activ ity” is a stan-
dard employment metric. Although
each of the four indicators is equally
weighted (which may seem arbi trary),
the disaggregated indicators are
pre sented as well. This allows an exam-
ination of the impact of informality on
edu cation, housing, income and labour
force activity.
An Aboriginal Population Profile
is not available for every First Nation
on the National Household Survey
website.13 As such, a CWB indicator is
only available for 91 Reserves, thus
reducing the sample size from 143.
Furthermore, only 33 Reserves have
data for the metrics of education,
labour force activity, income and
housing. So, two samples are
exam ined—91 Reserves using the
aggregated CWB (Table 1); and 33
Reserves using the constituent parts of
CWB (Table 3).
The independent variable of interest
is the extent of informal rights. There
is no dataset of informality; conversely,
rights registered in the ILR (CPs, leases,
permits, …) are formal, pur suant to
the Indian Act. For this analysis,
8For an excellent review of informality on First Nations Reserves, see: Alcantara, Customary land rights on Canadian Indian Reserves,
Chapter 5 in Beyond the Indian Act. pp 73–90. 2010.
9Scott. The art of being governed. 2009.
10 For a discussion of the inappropriateness of registering informal rights in the ILR, see: Ballantyne & Ballantyne. Socio-economic
value of the Indian Lands Registry. Geomatica. 69(3): 341–346. 2015.
11 Flanagan & Beauregard. The wealth of First Nations: An exploratory study. Fraser Institute. p9. 2013.
12 The economic analysis is based on: Ballantyne. The nuance of informality: Land tenure and economic development on Indian
Reserves. Research paper for MA – Economics. Simon Fraser University. August 2016.
13 Statistics Canada outlines three reasons: The census area does not meet the threshold of 250 people; the data has been suppressed for
confidentiality reasons; some Reserves opt out of the census.
Figure 1: A coherent First Nation subdivision—many informal rights (houses) in the
absence of parcels (purple).
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Vol. 70, No. 3, 2016 GEOMATICA 235
everything else on Reserve is considered
informal.14 The Electronic Registry
Index Plan (eRIP) available through the
ILR provides electronic maps using
Geographic Information System (GIS)
technology. These maps are dependent on
the Parcel Identification Number shared
between the ILR and NRCan’s Canada
Land Survey System (CLSS). The eRIP
shows how land is held on each Reserve
(e.g., CPs are shown in orange on the
eRIP; leases are striped). Using the
eRIP’s tools, these areas are calculated,
and—given the total area of Reserve—a
proportion of Reserve land held formally
is calculated.
Subtracting formal area from total
area results in informal area, for each
Reserve. Such informality is defined
two ways:
・The ratio of informality (as a
pro portion of the Reserve area).
・Total informality (ha), which does
not account for the size of the
Reserve.
The analysis includes four control
variables: Reserve population, Reserve
area, location, and Global Non
Response Rate. Population density can
be calculated from population and area.
There is precedence for inferring that
communities with high levels of density
have high levels of development,
because density (effect) is often a result
of development (cause).
Location is crucial to development
for a variety of reasons, including
access to markets and cost of living. A
remote Reserve might have poor
eco nomic out comes (i.e., a low CWB)
owing to location and not to the extent
of informality. As such, there are two
location variables: “Closeness to serv-
ice centre,” and “Closeness to urban
centre.” A service centre refers to the
nearest town with the most basic serv-
ices. An urban centre has a population
of over 50 000. These include
Nanaimo, Victoria, Greater Vancouver,
Kamloops, Kelowna, Prince George,
Lethbridge, Calgary, and Grande
Prairie.15 Both metrics are included in
the INAC reserve profile in increments
of 0–50 km, 50–300 km, and more
than 300 km. Given that these incre-
ments are vague and non-descript, road
distances were calculated using
Google Maps.
The final control variable is the
Global Non Response (GNR) rate: the
percentage of a community who opt not
to participate in the census. GNR rates,
normalized, range from zero to one (zero
being “total response” in which the cen-
sus captures the entire population).
GNR rates greater than 0.50 are deemed
to be of little use and are suppressed by
StatsCan. The GNR variable, available
with the CWB data, is useful as it
reflects a community’s engagement
with the wider state. GNR can function
as a proxy for civic engagement, which
is an important engine for economic
growth in a democracy. Furthermore,
on a deeper level, those who feel the
incentive to respond to the census see
value in the institutions that support
governance, both on Reserve and
nationally.16 Functioning First Nation
governance, with thriving institutions,
increases democratic capital which
drives growth. The working hypothesis
here is that lower GNR rates reflect
bet ter civic engagement and more
robust institutions and will be correlated
with higher levels of CWB.17
14 Land against which no rights are registered in the ILR is not necessarily informal. For Reserves in B.C., much of this land is held by
the First Nation/Band collectively (i.e., not possessed by any individual or family). This has the potential to overestimate informality—see
Conclusion for the antidote.
15 The latter three are in Alberta but remain the nearest urban centre for some Reserves.
16 Or perhaps they simply enjoy completing forms and responding to letters.
17 It would also be beneficial to include Aboriginal Governance Indicators developed by the Frontier Centre for Public Policy. Sadly,
these indicators are only available for First Nations in Manitoba, Saskatchewan and Alberta.
Figure 2: First Nation Reserve with possession (orange), leases (striped) and
informal (beige).
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236 GEOMATICA Vol. 70, No. 3, 2016
For the 91 Reserves, the influence
of informality on CWB is analyzed
using Ordinary Least Squares
regres sion:
CWBi=α+βinformalityi+Xi
⎖θ+ui
(1)
where Xiis a vector of control variables,
and uiis an error term uncorrelated with
the covariates.
For 33 of the 91 Reserves, data is
available not only for CWB, but also for
its components: income, education,
housing and labour force activity. For
these 33 reserves, the Seemingly
Unrelated Regression method is used,
given that the sample size is small and
that the error terms are assumed to be
highly correlated:
Incomei=α+βinformalityi+Xi
⎖θ+ui
(2)
Educationi=α+βinformalityi+Xi
⎖θ+ui
(3)
Housingi=α+βinformalityi+Xi
⎖θ+ui
(4)
LFAi= α+βinformalityi+Xi
⎖θ+ui
(5)
Crucially, for equations 1 to 5, the
term “informality” encapsulates all meas-
urements of the extent of formal (and, by
definition, informal) rights: ratio of
infor mality and total informality.18
Results
Of the 91 Reserves: 65 have
Certificates of Possession; 19 have leas-
es; and 17 have both. Total area is
117 489 ha; total CP area is 12 968 ha;
total lease area is 655 ha.
Thus, it is clear that all the results
are insignificant. However, there are
certain trends worth noting:
18 There is no feasible instrument capturing the extent of informality to warrant an IV regression. Too little is understood about the
mag nitude of such informality.
19 At the 95% confidence level, the correlation is significant if the absolute value of the test statistic exceeds 1.96. See the statistics
annotated with * in Tables 2, 4 and 5.
Average Max Min
CWB 61 82 45
Population 337 2604 70
GNR 0.20 0.50 0.02
Area (ha) 1291 13283 10
S. Centre (km) 148 691 1
City (km) 273 886 1
CP (ha) 143 3318 0
Lease (ha) 7 400 0
Total informality 1141 11883 9.8
Ratio informality 0.86 1 0.1
Table 1: Summary statistics of 91 Reserves.
Table 2: Estimating CWB.19
Ratio of informality Total informality
Ratio of inf. -1.14
Total inf. -0.36
Population 1.04 1.03
GNR 1.27 1.22
Size (ha) 1.66 -1.75
S. Centre (km) -0.07 0.16
City (km) -1.52 -1.75
Popdens. 0.12 0.16
Cons 14.98* 29.64*
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Vol. 70, No. 3, 2015 GEOMATICA 237
・As the ratio of informality increases,
the CWB is predicted to decrease.
・Distance from both a service centre
and city reduces CWB (distance
from a city substantially more so).
This suggests that remoteness
hin ders development.
・As Reserve population and area
increase, the impact on CWB is
positive.
・Population density also has a
pos i tive coefficient.
・The real shock is the positive value
of GNR, which suggests that if a
Reserve has a poorer response rate
to the cen sus, the CWB is generally
higher.
The same trends are mostly evident
when total informality is used as the
measure. However, total informality
seems to have a far less powerful effect
on CWB.
Of the 33 Reserves: 27 have CPs,
of which 11 had leases. Total Reserve
area is 60 623 ha; total CP area is
6 584 ha; total lease area is 534 ha.
When parsing the results, remember
that these 33 Reserves are included in
the initial 91 (Table 4 is a sub-set of
Table 2, so comparison between the two
groups is not warranted). It is clear that:
・An increase in the ratio of infor-
mality lowers CWB, Income,
Education, Housing and Labour
Force Activity.
・The impact is greatest on Income
(which is significant), followed by
Housing, Education and LFA (all of
which are not significant). This
sug gests that increasing formal
rights (e.g., CPs and leases) increases
the income of First Nation members.
・The coefficient on Housing is
almost significant, which suggests
that housing quality is poorer when
property rights are ill-defined.
The last two findings are consistent
with conventional economic theory,
whereby secure property rights facili-
tate income growth through a number
of avenues (such as the ability to attract
investors). The analysis here is limited
to highlighting the trends. There is no
empirical explanation for why infor-
mality hinders income or housing; it is
simply that—across 33 Reserves—it
appears to hinder.
Average Max Min
CWB 61 82 45
Income 70 94 45
Education 40 60 22
Housing 76 96 53
Labour Force Activity 67 81 47
Population 660 2604 259
GNR 0.24 0.50 0.05
Area (h) 1837 13283 13
S. Centre (km) 167 691 1
City (km) 281 818 1
CP (h) 200 3318 0
Lease (h) 16 400 0
Total informality 1621 11883 12
Ratio informality 0.86 1 0.10
Table 3: Summary Statistics of 33 Reserves.
CWB Income Education Housing LFA
Ratio of inf. -1.99* -2.31* -1.22 -1.78 -0.52
Pop. 1.32 1.24 1.62 0.57 0.65
GNR -0.26 -0.34 0.15 -0.06 -0.76
Size (ha) 1.02 2.05* -0.02 0.73 0.42
S. Centre (km) -0.12, 0.41 -0.89 -0.89 1.01
City (km) -1.20 -0.87 -0.88 -0.75 -1.04
Popdens. -0.51 0.82 -1.76 0.23 -0.90
Cons. 12.57* 10.05* 6.75* 10.20* 10.20*
Table 4: Estimating CWB (using Income, Education, Housing, LFA) for ratio of informality.
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238 GEOMATICA Vol. 70, No. 3, 2016
Increasing total informal rights
appears to increase CWB, Income,
Education and LFA, while reducing
Housing. However, this result is largely
superficial—the coefficients are all
nearly zero. This observation suggests
that as a metric, total informality is not
informative. The only significant results
concern Population, which is positively
associated with CWB, Income and
Education. The trend for GNR to the
census is negatively associated with all
indicators, which is intuitive.
Conclusion
When comparing the two measures
of informality, the ratio of informality
outweighs the total area of informality.
Table 4 is far more informative than
Table 5. Given the unique geography of
each Reserve, it makes more sense to
base a measurement on the proportion
of informal rights. Of course, if all
Reserves were homogenous in size, the
two metrics would be equally useful.
One must be wary of extrapolating
the findings from British Columbia to
First Nation Reserves across Canada.
B.C. was largely ignored by historic
treaties. There are 111 First Nations,
comprising 70% of the Aboriginal pop-
ulation, currently participating in the
modern treaty–comprehensive land
claim process.20 Furthermore, the
rugged topography means that there are
many First Nations and a fragmented
mosaic of Reserves.
The measure of informality
devel oped here is imperfect—it over-
estimates the extent of informality
because land against which no rights
are registered is not necessarily
infor mal. On the other hand, there is
much evidence from the developing
world that experts significantly under-
estimate tenure informality, and have
low precision for all proxies of infor-
mality.21 So, perhaps one tendency (to
underestimate) offsets the other (to over-
estimate). In any case, the methodology
is the best tool available and provides a
consistent measure across Reserves on
a national scale. q
20 Aragon. Do better property rights improve local income? Evidence from First Nations’ treaties. Journal of Development Economics.
v116, pp43–56. 2015.
21 Smolka & Niderman. Measuring informality in housing settlements: Why bother? Land Lines. April 2009.
Table 5: Estimating CWB (using Income, Education, Housing, LFA) for total area of informality.
CWB Income Education Housing LFA
Total inf. 0.87 1.31 0.11 -0.06 1.28
Pop. 2.40* 2.66* 2.03* 1.16 1.50
GNR -0.57 -0.71 -0.05 -0.33 -0.90
Size (ha) -0.80 -1.05 -0.21 0.07 -1.20
S. Centre (km) -0.66 -0.24 -1.23 -1.34 0.88
City (km) -1.49 -1.28 -1.02 -0.90 -1.30
Popdens. -0.42 0.85 -1.67 0.32 -0.94
Cons. 18.50* 13.61* 10.01* 14.90* 17.60*
Figure 3: “Now, choosing the right tenure regime is just a mere
for mality.”
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