O’CHIESE INFORMATION DOCUMENT

 

O’Chiese Band

Designation

 

BACKGROUND

 

The Chief and Council of the O’Chiese (the “Nation”) propose to designate, by way of surrender that is not absolute, a portion of the O’Chiese Indian Reserve No. 203, comprising approximately 52.2 hectares (approximately 128.99 acres), as shown on the plans attached as Schedule ‘A’, in order to allow for the lands to be leased for purposes which might include commercial, recreational, residential, light industrial, institutional or educational purposes for a term of up to 49 years.

 

This Information Document provides an overview of a proposed designation of O’Chiese reserve lands for leasing purposes. An explanation of the designation process is provided as well as information regarding the project proposed as part of this project.

 

 

WHAT IS LAND DESIGNATION?

 

Land designation is a process available to First Nations to assist in the management of reserve land.  Section 38(2) of the Indian Act allows a First Nation to designate, by way of surrender that is NOT ABSOLUTE, all or part of their reserve land so that it can be leased or a right or interest in that land granted to some other person or party.

 

Lands which are designated DO NOT lose reserve status they remain part of the reserve and are only leased to a lessee for certain purposes for certain limited periods of time.

 

Income earned by Nation people on designated land is non-taxable.

 

First Nation by-laws passed by Chief and Council apply to designated land and any projects located on those lands.

 

 

WHY DESIGNATE LANDS?

 

As reserve land is developed for economic benefit, people (or companies) that operate commercial or industrial ventures (such as stores, banks, hotels or gas stations) are often required to make long term financial commitments to finance their businesses.  To make the required long term financial commitments they may seek to lease a parcel of reserve land on which to locate their business for a fixed period of time.  To lease the reserve land they will be required to pay rent to the Nation or a Nation entity in return for the rent paid, a person (or company) referred to as a lessee receives the right to use the land for a specific purpose and period of time if they comply with the specific terms and conditions detailed in the lease.

 

A lease is the document which conveys to the lessee the legal right to use and occupy the land and contains the terms and conditions which specify all aspects of land use.  It is drafted and negotiated by the Department of Indian Affairs and Northern Development (DIAND) at the request of the Nation. 

 

However, before any reserve land can be leased, it must first be "designated." 

 

If land is not designated it cannot be leased.

 

Reserve land is not subject to seizure and cannot be used as security for loans or mortgages to financial institutions.

 

Leasehold interests in designated reserve lands can be mortgaged for loans or other obligations and a designation and lease maybe required in order to obtaining financing against the lease to pay for infrastructure and buildings.

 

 

THE PROCESS

 

A designation is conducted in accordance with the rules set out in Sections 37 to 41 of the Indian Act and the Indian Referendum Regulations.   There are specific procedures and requirements which ensure that electors of the Nation have the opportunity to vote on the terms and conditions of the designation. 

 

Before any vote on a designation, the Nation electors must be provided with information regarding the designation process and of any contemplated projects or developments. 

 

A designation can only occur if the electors of the Nation approve through a formal vote as described below.

 

Electors have the right and opportunity to ask questions and get information about the proposed designation so that they can make an informed decision regarding the acceptance or rejection of the proposed designation.

 

To ensure there is community support for the designation, the referendum vote must be passed by a "simple majority" of the eligible voters.  This means that a majority of those voting must vote in favor of the designation for it to pass.  If the majority votes against the designation, it will fail. 

 

Nation Electors who live off-reserve are also entitled to vote in designation referendums.  Information packages regarding the designation are sent to each eligible off-reserve voter for whom an address is known.  These packages contain a mail-in ballot which the off-reserve voter can fill out and return in the self-addressed return envelope provided.

 

 

DETAILS OF THE PROPOSED DESIGNATION

 

SUBJECT LANDS

 

The lands proposed for the designation are shown on Schedule ‘A’ and are more specifically described as:

 

PARCEL No. 1:

 

Lot 29 within theoretical SE ¼ SEC.25, TP.43, R.10, W5M, in O’Chiese Indian Reserve No. 203 as shown on C.L.S.R. No. 104764, said lot containing 5.88 hectares, more or less.

 

Excepting thereout all mines and minerals, whether precious or base, solid, liquid or gaseous;

 

Subject to all third party encumbrances on the lot at the date of this Designation, which include, but are not limited to:

 

  1. Permit to Fortis Alberta Inc. dated May 5, 2011 for Utility (Power) Distribution, Reg. 6056543;

 

  1. Permit to Telus Communications Inc. dated May 6, 1971 for Telephone Distribution and related activities, Reg. 7363-240, 270394, 270395;

 

  1. Permit to Rocky Gas Co-op Ltd. dated November 10, 1993 for Natural Gas Distribution, Reg. 217405;

 

  1. Permit to Her Majesty the Queen in Right of Alberta dated May 17, 2004 for the SuperNet Network, Reg. 318683;

 

  1. Permit to O’Chiese Utilities (GP) Limited dated September 11, 2015, for the Distribution of Natural Gas, Reg. 6088391;

 

  1. Lease toBellatrix Exploration Ltd.. dated December 17, 2004 for Wellsite & Access Road, Reg. 323798, 342603, 345210, 369827.

 

 

 

PARCEL No. 2:

 

Lot 27 and Lot 28 (Road) within theoretical SEC.19 TP.43 R.9, W5M, in O’Chiese Indian Reserve No. 203 as shown on C.L.S.R. No.104765, said lots together containing 1.42 hectares, more or less.

 

Excepting thereout all mines and minerals, whether precious or base, solid, liquid or gaseous;

 

Subject to all third party encumbrances on the lots at the date of this Designation, which include, but are not limited to:

 

  1. Permit to Fortis Alberta Inc. dated May 5, 2011 for Utility (Power) Distribution, Reg. 6056543;

 

  1. Permit to Telus Communications Inc. dated May 6, 1971 for Telephone Distribution and related activities, Reg. 7363-240, 270394, 270395;

 

  1. Permit to Rocky Gas Co-op Ltd. dated November 10, 1993 for Natural Gas Distribution, Reg. 217405;

 

  1. Permit to Her Majesty the Queen in Right of Alberta dated May 17, 2004 for the SuperNet Network, Reg. 318683;

 

  1. Permit to O’Chiese Utilities (GP) Limited dated September 11, 2015, for the Distribution of Natural Gas, Reg. 6088391;

 

  1. Lease to Bellatrix Exploration Ltd. dated December 20, 2004 for Wellsite & Access Road, Reg. 330120, 342603, 345210, 369827.

 

 

PARCEL No. 3:

 

Lot 26 within theoretical W ½  SEC.30, TP.43, R.9, W5M, and E ½ SEC.25, TP.43, R.10, W5M, in O’Chiese Indian Reserve No. 203 as shown on C.L.S.R. No. 104764, said lot containing 44.9 hectares, more or less.

 

Excepting thereout all mines and minerals, whether precious or base, solid, liquid or gaseous;

 

Subject to all third party encumbrances on the lot at the date of this Designation, which include, but are not limited to:

 

  1. Permit to Fortis Alberta Inc. dated May 5, 2011 for Utility (Power) Distribution, Reg. 6056543;

 

  1. Permit to Telus Communications Inc. dated May 6, 1971 for Telephone Distribution and related activities, Reg. 7363-240, 270394, 270395;

 

  1. Permit to Rocky Gas Co-op Ltd. dated November 10, 1993 for Natural Gas Distribution, Reg. 217405;

 

  1. Permit to Her Majesty the Queen in Right of Alberta dated May 17, 2004 for the SuperNet Network, Reg. 318683;

 

  1. Permit to O’Chiese Utilities (GP) Limited dated September 11, 2015, for the Distribution of Natural Gas, Reg. 6088391;

 

  1. Pipeline Right of Way agreement to Bellatrix Exploration Ltd. dated April 2, 2012 for Pipeline Right of Way, Agreement RW-4629.

 

 

TERM

 

The term of the designation is 49 years that commences on the date the designation is accepted by the Minister.

 

The designation term is different than the lease term and while the designation term is 49 years, the lease term for O'Chiese lands may be for a shorter term such as 5 years.

 

Some of the lands to be designated may never be leased, but designating them now gives the Nation the option in the future should it decide to do so.

 

 

PURPOSE               

 

The designation allows for the lands to be leased for commercial, recreational, residential, light industrial, institutional or educational purposes, examples of which include, but are not limited to, the following:

 

• Truck stop, gas station and convenience store;

• Playgrounds, parks and recreational areas;

• Recreational vehicle sites, campground;

• Automotive service centers;

• Restaurant and food sales facilities including kiosks, convenience stores;

• Signs;

• Facilities related to bingos and casino games;

• Single or multi-residential premises;

• Athletic and recreational facilities;

• Clubs and organizations;

• Retail or wholesale establishments or shopping centers;

• Office, business or commercial establishments;

• Parking areas;

• Light manufacturing, fabricating, processing and packaging goods or products;

• Movement or storage of goods;

• Utilities and essential public services;

• Public buildings;

• Educational institutions for both children and adults;

• Financial institutions, medical or health facilities;

                                         

or such other specific commercial, recreational, residential, light industrial, institutional or educational purposes as set forth in each lease.

(the “Permitted Purposes”).

 

The designation will also allow for assignments, mortgages and subleases of the leasehold interests in accordance with the terms of the designation. It will also allow for the granting of easements, permits, right-of-way, licences of occupation, other interests and amendments of all such interests as may be necessary or ancillary to the primary purposes of any lease. 

 

 

PROPOSED PROJECTS

 

The Nation is considering developing a number of possible projects on the designated lands, the details of which are as follows:

 

A light industrial commercial park for use by the Nation in light manufacturing, equipment & vehicle maintenance or repair, indoor and outdoor storage/shop/warehouse areas for businesses.

 

A light industrial commercial park for use by Nation member or private industry operating on the O’Chiese First Nation or in the O’Chiese traditional territories in light manufacturing, equipment & vehicle maintenance or repair, indoor and outdoor storage/shop/warehouse areas for businesses.

 

The lands will be re-subdivided in to smaller parcels suitable for a single user and then leased to individual purpose users.

 

These locations have convenient access to Sunchild Road with access to Highway 620 and Highway 11 which are heavily travelled with petrochemical and logging industry traffic.  The nearest areas that can offer competitive options to industry are Drayton Valley approximately 80 km to the north and Rocky Mountain House approximately 65 km south and east.

 

These locations will assist in keep commercial traffic outside of the community core. 

 

This location also provides convenient access support of the O’Chiese Truck Stop.

 

The Nation will construct a new state of the art Business Centre offices which will be used to support the Nation’s growing businesses.

 

Businesses located in this area have the potential to employ Nation members both Nation owned businesses and private industry who may lease space.

                       

 

AUTHORITY OF CHIEF AND COUNCIL

 

The Chief and Council may, by way of Band Council Resolution, request a Ministerial Order to revoke the designation, in respect of the whole of or any part of the designated lands, without another band vote being required, provided that there are no existing third party rights or interests issued under the designation on the affected designated lands.  For example, if it is determined that not all of the 52.2 hectares (approximately 128.99 acres) are required, then the designation may be revoked from the portion of the lands that is no longer required for development. 

 

Chief and Council will have the authority to negotiate, review and approve the terms and conditions of all leases. The Chief and Council will evidence, by Band Council Resolution to Canada that the Nation, at a further general meeting of the Nation’s members, has approved of the rental structure of a lease, the term of a lease, the area to be leased and the specific purpose that the lands will be leased for.

 

Any amendments of leases granted pursuant to the designation will require the approval of the Chief and Council by way of a Band Council Resolution, without the requirement of a further meeting of the Nation’s members. However, no such amendment shall extend the term of a lease beyond the term of the designation, and where an amendment to a lease reduces, or has the effect of reducing, the rent per acre payable under the lease, substantially changes the term of the lease, substantially changes the area to be leased or substantially changes the purpose for which the lands are leased, the Chief and Council will evidence by Band Council Resolution to Canada that the Nation, at a further meeting of the Nation’s members, has approved of such amendments.

 

 

ENVIRONMENTAL ASSESSMENTS

 

Any lease and any subsequent sublease entered into on the designated lands will be subject to all necessary environmental assessments as required by DIAND’s policy and any relevant legislation.  The designation appoints the Chief and Council to act as the representative of the Nation in relation to such environmental assessments.

 

A current environmental assessment of the designated lands has been completed and did not identify any concerns with the proposed designation and leasing of the lands.

 

 

 

GENERAL INFORMATION

 

The rent for all leases shall be fair market rent subject to periodic rent reviews as set out in each lease.  However the Chief and Council may approve of Canada leasing the designated lands, or any portion of them, for nominal rent of $1.00 per year for up to the first five years of the term of a lease to a Nation Entity to promote the economic development of the lands.  After this nominal rent period, rent reviews shall be conducted and the designated lands shall be leased for fair market rent.

 

In leases entered into pursuant to the designation, Canada will only be collecting the rent payable under the leases, and not any rent revenues payable under any subleases. 

 

A certified appraiser Ken Waters, of Waters Mackie Valuations Inc., has appraised the fair market annual rental of the lands proposed to be designated. The appraisal reports, dated November 23 & 24, 2015 set out the appraised fair market annual rental of the lands as approximately:

 

  • Parcel No 1.  $36,625.00 per year, or $2,500.00 per acre per year;
  • Parcel No 2.  $17,650.00 per year, or $5,000.00 per acre per year;
  • Parcel No 3.  $38,766.00 per year, or $350.00 per acre per year;

 

Total:              $93,041.00 per year.

 

            In hectares, this approximately converts as follows:

 

  • Parcel No 1.  $6,177.63 per hectare per year;
  • Parcel No 2.  $12,355.25 per hectare per year;
  • Parcel No 3.  $864.87 per hectare per year.

 

Differences in the per acre value of the lands are mainly a result of differences in parcel sizes.  Smaller parcels allow more intensive use of the land for commercial purposes and are more valuable.  The lease rate for Parcel 3 in its current state is most comparable with larger sized agriculture arable land.

 

Copies of the appraisals are available at the O’Chiese Band Office.

 

In the event the lease from Canada shall only be for nominal rent during the initial 5 years of the lease, the fair market annual rent is the amount that the Nation would forgo as annual lease rent per acre for the designated lands (or any portion of the designated lands that has been leased).

 

No rent is payable to Canada on lands that are designated but not yet leased.

 

All payments made to Canada for any lease, permit, easement, license, or other interests issued under the designation will be credited to the funds of the First Nation as Indian moneys, except for any additional rent, reimbursements or similar payments payable to Canada as may be provided for in such instrument.

 

Full details of the designation are set out in the designation document attached to this Information Document as Schedule ‘B’.

 

 

NOMINAL RENT

 

All or some of the designated lands may be leased for nominal rent to a Nation Entity for up to five years. If nominal rent is payable under a lease, the Nation Entity will have a rent-free "start-up" period which may assist the Nation Entity in becoming a viable operation, and/or lessen the Nation Entity's financial outflow while it is pursuing fair market rental sublease opportunities. In addition, although nominal rent may be payable by a Nation Entity under a lease, any profits of the Nation Entity, or increases in value of the Nation Entity's assets, may indirectly benefit members of the Nation as beneficial owners of the Nation Entity.

 

However, as only nominal rent would be paid by the Nation Entity instead of fair market rent for up to five years, there is a risk that the Nation may not financially benefit as much from the designated lands during the nominal rent period as compared to a lease for fair market rent. As such, Canada requires certain acknowledgements from the Nation in respect of this risk, and nominal rent leases to Nation Entities generally. These acknowledgments are specifically set out in Schedule ‘B’.

 

 

INFORMATION MEETINGS

 

An information meeting for the Nation members will be held on January 6, 2016 at the O’Chiese Community Center from 1:00 pm to 4:00 pm as set out in the Notice of Referendum. The purpose of the information meeting(s) is to provide the Nation members with information to assist in their decision making with respect to the proposed designation.

 

 

DATE OF REFERENDUM VOTE

 

A referendum vote to seek the assent of the electors of the Nation to the proposed designation will be held on on January 27, 2016 at the O’Chiese Community Center from 9:00 am to 8:00 pm.

 

 

 

 

 

 

FURTHER INFORMATION

 

For further information on the proposed designation contact:

 

Victor Rumbolt, at the O’Chiese First Nation Band Administration office, P.O. Box 1570, Rocky Mountain House, Alberta, T4T 1B2. Phone: 403 989-2047 or 403 989 2297. 

 

Mitchell Reynaud, Land Management Officer, Indigenous & Northern Affairs Canada, #630 Canada Place, 9700 Jasper Avenue, Edmonton, Alberta, T5J 4G2, Phone (780) 495- 2779.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE ‘A’

PLAN LANDS PROPOSED FOR DESIGNATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE ‘B’

O’Chiese Indian Reserve No. 203 Designation Document