5.1 Inconsistent securities provisions in the two lands acts

Issue

The Northwest Territories Lands Act and Commissioner’s Land Act contain different provisions relating to:

• the authority to require security
• security and liability
• security exemptions
• security calculations

The differences between the two acts create challenges for land administration and a lack of clarity for land users.

Background

Security is an important tool for reducing GNWT exposure to financial risk associated with the use of public land and resources. The Northwest Territories Lands Act and Commissioner’s Land Act should provide the ability to ensure that security may be required of a land user for different types of land tenure instruments and that security is adequate. The two acts contain several differences relating to security. These differences are summarized below.

• The Northwest Territories Lands Act does not provide explicit authority to require securities for leases or other land tenure instruments issued under it. The Commissioner’s Land Act was amended in 2011 to add such authority and other provisions for the amount, form, and use of security but only for commercial and industrial leases.
• The Commissioner’s Land Act sets out criteria to be used in calculating a security amount. The Northwest Territories Lands Act does not.^[1] The specific calculation criteria set out in the Commissioner’s Land Act limits Executive Council and Ministerial decision-making authority.
• The Commissioner’s Land Act requires security to be taken in every commercial or industrial land lease if the amount of security would exceed $1000.^[2] The inclusion of the exemption amount of security in the Commissioner’s Land Act does not allow flexibility for the Executive Council to determine an appropriate exemption amount of security. The Northwest Territories Lands Act does not contain such a provision.
• The Commissioner’s Land Act includes a provision that the posting of security does not affect the liability of a lessee for damages in excess of the amount of the posted security required for restoration of the land.^[3] The Northwest Territories Lands Act does not contain such a provision.
• The Commissioner’s Land Act and associated regulations prohibit the taking of cash for securities.

Recommended Actions

• Propose that the Northwest Territories Lands Act and the Commissioner’s Land Act provide the authority to require securities in leases and land tenure instruments issued under it for various uses, not only commercial and industrial.
• Propose removal of section 3.1(2) of the Commissioner’s Land Act and advance policy work on securities to support a land administration approach that is based on similar criteria but has the flexibility needed to determine security requirements for different land uses. Propose development of calculation criteria in regulations and standardize the form of security accepted. Providing for discretion to adapt or waive security amounts might help to avoid security duplication between the Northwest Territories Lands Act, Commissioner’s Land Act and other legislation.
• Propose removal of the mandatory $1000 threshold for exemptions and use regulations to set the amount below which security is not required, unless the Minister determines otherwise based specific circumstance of particular proposed uses.
• Propose that the Northwest Territories Lands Act include a provision to indicate that the posting of security does not affect the liability of a lessee for costs incurred by the GNWT in excess of the amount of the posted security for restoration of the land and other activities.

Rationale

Policy and guidelines related to securities are being developed by the Department and other GNWT departments. The recommended actions will support and enable the GNWT to manage securities consistently and effectively.

The recommended actions have the potential to reduce costs to the GNWT and proponents relating to security. Broad authorities will allow a full range of actions to guide the GNWT in implementing a modern approach to managing securities for land use activities.

The recommended actions will help to achieve the following goals:

• align provisions in the Northwest Territories Lands Act and Commissioner’s Land Act
• improve clarity relating to legislative authority
• provide clarity and transparency to land users
• ensure legislation reflects current risks, practices, and standards
• minimize operational challenges in land administration