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There is apparently much concern and confusion regarding the transfer of the KVR lands to the Penticton Indian Reserve.  My original blog posting on the topic attracted many hits and some comments. In addition, there have been a few exchanges (not always cordial) in the local newspapers.  What follows is a summary of my current understanding of the situation. As always, your questions and comments are welcome.

Update 17 Oct 2010: I have added a much shorter and cleaner summary here.

Update 28 May 2010: The PIB is hosting an information session on June 2nd at 7 PM in the West Bench Elementary School gymnasiium.  See here for additional information.

Update 07 Apr 2010: The RDOS is holding a "town hall meeting" on the KVR issue on Tuesday, April 13th, at 7 PM in the West Bench Elementary School gymnasium. This will be an RDOS view. Representatives from INAC and the Federal Government WILL NOT be in attendance.  However, if you have any questions that seem more appropriate for INAC, the Federal Government, the Provincial Government, or the PIB, please email ( or call (250-809-2563) me with a heads-up as soon as possible. I may be able to forward the question to the right people and get an answer for you prior to the meeting.

Update 23 Mar 2010: I have asked INAC to check this document for errors and omissions so that it can provide the basis for a newsletter to residents (no use sending out a newsletter full of incorrect information).  I am adding information as I get it.

Indian Reserve #1

Indian Reserves were created in British Columbia in the mid 1800s in order to achieve a compromise between First Nations, whose semi-nomadic way of life revolved around the concept of communal ownership of land and resources, and the influx of European settlers, whose ranching and farming way of life depended on well-defined property rights and enclosure. The boundaries of the Penticton Indian Reserve were a matter of considerable negotiation and indecision prior to Confederation.  For example, in the 1860s, Judge Haynes proposed that the Okanagan Indians be granted land between the lakes and west of the Okanagan River.  A much larger Penticton Indian Reserve #1 (IR#1) was established in 1889; however, the importance of Haynes's boundary of the (pre-channelized) Okanagan River remains evident (see David MacDonald, “Penticton Years to Remember,” 1983)

Update 17 Apr 2010: The Penticton Herald published a map from 1897 showing the boundaries of IR#1 prior to the turn of the century.  Click on the image to get a larger version.  The line along the western edge of Okanagan Lake is presumably a road or trail.


In Canada, an Indian Reserve is “a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band.”  Thus, although Indian Reserves in Canada are technically Crown Land, the property is held in trust for the band.  We generally use the simple term “band land” to describe this convoluted arrangement.  Also note that the Indian reserve system in British Columbia is undergoing modernization.  Some bands in BC have recently moved towards fee simple ownership of their lands (see this  MacLean’s article).

The KVR/CPR Right-of-Way

The Kettle Valley Railroad, which was completed in 1915, acquired land through IR#1 for its Summerland-Penticton leg and also for its branch line to Okanagan Falls, which was completed in 1931. The strips of land now in question are those remnants of rail bed through (what are now) Sage Mesa, the West Bench, along the Penticton River Channel, and along the west side of Skaha Lake (see map).  The KVR was subsequently bought by the Canadian Pacific Railroad (CPR), which operated the line until some point in the early 1980s.  The tracks were eventually ripped up and the rail bed land was transferred to CPR's real estate division, Marathon Realty, where it still remains.

Update 24 Mar 2010: The City of Penticton's response to INAC's letter has caused some confusion:

Penticton Council voted 4-2 Monday to write a letter to Indian and Northern Affairs Canada stating that it is the city’s position that the roughly 139 acres of land, six parcels in all, should be maintained in its current ownership by the citizens of Canada.

The land is not owned by the citizens (or government) of Canada.  It is owned by Marathon Realty—a situation that has been ruled "illegal" by the courts (see below).

As an aside, I recall trains running along this line when I was younger and I can think of nothing worse in a residential area.  Of course, these trains were tiny—one or two boxcars—and, in retrospect, it seems probable the CPR was only running them to satisfy some type of “continuous use” condition for ownership of the land (see below).

Non-native Settlement of the West Bench

The land which is now the West Bench was cut-off from IR#1 for potential veterans’ housing in 1918 but was not developed as such until 1952 (see MacDonald, p. 130).  It appears that the remnants of this cut-off not used under the terms of the Veteran’s Land Act (VLA) passed into private ownership and eventually became the Sage Mesa, Husula Highlands, and Westwood Properties subdivisions.  Thus, the two cut-offs from IR#1—the KVR and then the West Bench—were distinct in purpose and legal justification.

Update 29 Mar 2010: The cut-off from IR#1 that enabled the development of the West Bench et al. actually occured in 1912-16 as a result of the federal/provincial McKenna-McBride Agreement.  This agreement was disputed by bands across the province and, in 1982, the Province of BC settled with the PIB for $14M and 12,000 acres of land (see news story in the Spokane paper—the only news story I could find; see the full terms of the 1982 Settlement Agreement).  Since the KVR cut-off is separate from the McKenna-McBride cut-off, it was not covered in the 1982 settlement.

The Proposed Addition to Reserve (ATR)

It is not clear to me how the KVR acquired band land for completion of its railroad.  That is, I do not know whether the arrangement was entirely voluntary, how much money changed hands, whether the price was fair, or whether the Penticton Indian Band saw a penny.  My reading of the short history of this period by Duane Thomson suggests that the deal may not have been in the best interests of the PIB.  But as it turns out, these questions have been rendered irrelevant by the 1985 court decision regarding ownership.  As this news story explains, the PIB and the Government of Canada sued the CPR to get the land back and won:

Judge Meredith interpreted the 1948 cabinet order and relevant sections of the Indian Act and the Railway Act to mean that the railway could not sell or transfer the land and could keep only what it needed and was using to run its railway. 'The purported alienation of the lands by CP to Marathon is illegal as contrary to the Railway Act,' he said. 'Because the lands are no longer necessary and are thus no longer used for purposes of the railway, they must be restored to the Crown.' (link to additional information on the court decision)

In other words, regardless of how the KVR acquired the right-of-way, the land must be returned to the Crown since the land is no longer being used as a railroad. The 1985 court decision against the CPR was upheld on appeal.

Critically, this decision does not mean that the former KVR lands must necessarily revert to IR#1. As I understand it, reserve status can only be granted through an Order in Council—more or less an executive decision by the federal cabinet.

Update 23 Mar 2010: Apparently (according to INAC), the court decision does mean that the land must revert to IR#1—it is stated explicitly in one of the CPR agreements.  Moreover, return to IR#1 appears to be the whole rationale behind the court's directive to the CPR to return the land.  This is a significant new piece of information.



The legal ambiguity regarding reserve status and the ultimate fate of disputed lands across Canada are clearly thorny problems for the federal government. In response, it developed an “Additions to Reserve” policy (click here for a copy) that outlines the arrangements that must be in place for an Order in Council to proceed. For example, the policy outlines the process for dealing with existing encumbrances such as road and utilities rights-of-way before the deal is finalized:

(6.5) Existing encumbrances must be specifically identified and mechanisms for dealing with them must be determined in conjunction with the Department of Justice prior to the proposed acquisition by INAC.

Update 24 Mar 2010: What this means is that the Indian Act has mechanisms (apparently Sections 28.2 and 35) that are similar to what the CPR used to run its railroad.  That is, the right to use the property is granted to (say) the water purveyor or electrical utility as long as the utilities are in the ground.  INAC has been pretty clear on this: They will not (and would never consider) moving forward with this unless access rights are established for core infrastructure, access to private property, and so on.

As for future easments, etc., Section 35 of the Indian Act already grants broad powers to the Governor in Council (federal government) regarding non-native used of reserve land:

35.  (1) Where by an Act of Parliament or a provincial legislature Her Majesty in right of a province, a municipal or local authority or a corporation is empowered to take or to use lands or any interest therein without the consent of the owner, the power may, with the consent of the Governor in Council and subject to any terms that may be prescribed by the Governor in Council, be exercised in relation to lands in a reserve or any interest therein.

Section 12 of the Annex A is most relevant to the RDOS:

(12.1) In recognition that First Nation communities and non-First Nation communities live side by side, the federal government promotes a “good neighbour” approach. This involves First Nations and municipalities sitting down together to discuss issues of mutual interest and/or concern. Where requested by a municipality or a First Nation, there is a requirement to negotiate arrangements in such areas as joint land use planning/by-law harmonization, tax considerations, service provision and future dispute resolution.

(12.2) The potential requirement to negotiate in these areas means that both parties must engage in discussions based on good will, good faith and reasonableness. Note that the need for discussion may be with respect to ATR proposals within the boundaries of a municipality (where consultation/negotiations leading to an agreement may be necessary) or with adjacent/abutting municipalities (where consultations alone may be necessary).

(12.3) While municipalities must be consulted in accordance with this policy, they have no general or unilateral veto with respect to reserve proposals.

Indian and Northern Affairs Canada (INAC) is currently working through its ATR checklist in order to prepare a recommendation to the federal Cabinet (e.g., notifications have been sent to local governments, utilities, and so on—copies of the letters to the RDOS and West Bench Irrigation District have been posted here).  It is understood that, barring any unforeseen complications, INAC will recommend that the KVR lands be reattached to IR#1.  As a member of Cabinet, Mr. Day will likely have some input into this decision.

Update 24 Mar 2010: Apparently, there is not as much discretion for Cabinet in this process as I thought. See Mr. Day's comments in the Penticton Western News

“This is between CPR and the band,” said Day. “Where the federal government will get involved is, once a deal is finalized between CPR and the band, then the federal government will act basically as the transfer agent ... and make sure everything is done according to law.”

The Role of the RDOS

The role of the RDOS in all this is tricky.  Although local governments have no standing in the federal matters of land ownership or reserve status, the RDOS does have a parks mandate.   And most of the people I have talked to want the land set aside as a linear park and formally incorporated into the Trans Canada Trail. However, I find it very hard to argue against the spirit of the 1985 court ruling.  The land was legally part of IR#1, it was removed for “the public convenience” to support the development of the railroad, and now, according to courts, it must be restored to the Crown (with the understanding that the federal government then has the option of restoring the land to IR#1).

Update 23 Mar 2010: Again, according to INAC, the court decision gives the Government of Canada no discretion in this regard—the lands must be reattached to IR#1 and cannot simply be held by the Crown.

The only question is whether the RDOS has anything to gain by attempting to block the granting of reserve status to the KVR lands.  Specifically:

  1. Will an RDOS objection have any impact on the final decision of the federal cabinet to reattach the KVR lands to IR#1?
  2. Will an RDOS objection harm our working relationship with the PIB and thus undermine any efforts to create a park if the lands are ultimately reattached to IR#1

This is a tough one and clearly requires some careful thought. If the granting of reserve status is successfully blocked, then the KVR lands remain in the hand of the Crown and (we may assume) will be available for development as part of the Trans Canada Trail for the use and enjoyment of all. If, on the other hand, the RDOS attempts to block the granting of reserve status and fails, then it may become difficult for the RDOS to negotiate on this and other issues with the PIB.  After all, the PIB has expressed clear interest in reacquiring this land.

A couple of thoughts on (1):

  • Property rights are a matter of law in this country, not a matter of public opinion.  Imagine if I put together a petition of a few thousand signatures that your property should be dedicated a park (for the public good, of course).  You might be outraged and would inevitably rely on the rule of law to protect your property rights.  The issues are much the same in this case, except that band lands in Canada lack clear property rights.  Instead, it is up to the Government of Canada, through reserve status and other measures, to simulate something like property rights for its native citizens.  My guess is that the Government of Canada will not be persuaded that reserve status should be withheld in order to facilitate a linear park—the principles at stake are too important for that.
  • On the other hand, the federal government may conclude that the shape of this particular land and its location (partially within non-native residential areas) makes it of little practical use to the PIB.  The symbolic benefits to the PIB of returning the land to IR#1 would be more than offset by many practical and jurisdictional problems created by the reattachment.  Perhaps comparable symbolic benefits could be achieved in other ways.
Update 24 Mar 2010: It is now clear that any RDOS objection will have no impact whatsoever on the narrow issue of transfer of the KVR lands to the PIB.  This has been decided by the courts.  We are currently investigating the possiblity of some kind of land swap.  This almost certainly would require significant participation by the Province.

I am a bit more certain about (2):

  • In my view, the RDOS should be taking every possible opportunity to work with the PIB to develop a better relationship. I believe that any efforts by the RDOS to obstruct the ATR process by going through INAC would be detrimental to our relationship with the band.
  • Reattachment of the KVR lands to IR#1 does not preclude development of the land as part of the Trans Canada Trail. Indeed, as noted above, the land is of little practical use to the PIB as anything other than a park. If the RDOS can work with the PIB to turn the KVR into part of the Trans Canada Trail, then everyone wins.
  • Section 12.1 in the ATR (quoted above) opens the door for a wide range of negotiations regarding use of the land, bylaw harmonization, and even the funding mechanisms for development of the linear park (anyone who has spent time on these trails recognizes that some investments in maintenance are long overdue).

My assessment of the issue at this point is that is that the best way to move forward (that is, the way with the greatest chance of success) is to enter negotiations with the PIB within terms of the ATR policy—especially the bits about good will, good faith and reasonableness. Confrontation and paternalism have not worked in the past; why would they work now?


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