Debunking Myths and Misconceptions about Indian Trust Moneys
What are Indian Trust Moneys?
Trust moneys are all moneys collected, received, or held in trust by INDIGENOUS SERVICES CANADA for the use and benefit of First Nations and their members. Trust moneys are held in the Consolidated Revenue Fund, where public moneys are deposited, as defined under the Financial Administration Act.
There are 2 types of trust moneys:
· individual moneys
· band moneys
Individual Moneys
Individual moneys are managed by INDIGENOUS SERVICES CANADA on behalf of Status Indian minors, dependent adults (based on a provincial designation as such), and estates of certain deceased individuals. These moneys are administered and accessed through the Estates Program according to sections 42 to 52 of the Indian Act.
Status Indian minors
An individual trust account holds certain moneys belonging to a minor until that minor reaches the age of majority in the province where they live, at which time the account balance is paid to them and then the account is closed. Individual trust accounts are usually established in one of 2 situations:
when the Minister exercises jurisdiction over property of a minor
when a First Nation asks INDIGENOUS SERVICES CANADA to retain a minor's share of per capita distributions.
Trust accounts administered by INDIGENOUS SERVICES CANADA on behalf of minors accrue interest until the account is paid out. To learn more, visit Who is a minor?
The Minors Account Payout Initiative was established to pay individuals who have a trust account with INDIGENOUS SERVICES CANADA and have now reached the age of majority in their province of residence. To learn more, visit Minors Account Payout Initiative.
Dependent adults
Where a First Nation member, who ordinarily lives on reserve, is found to be incapable of handling their own financial affairs, INDIGENOUS SERVICES CANADA may establish an account for the individual and manage their day-to-day income and expenditures. These accounts accrue interest.
Estates
Where a First Nation member, who ordinarily lives on reserve, dies, the Minister has exclusive jurisdiction over the estate. INDIGENOUS SERVICES CANADA may appoint an outside administrator (provincial officer, family member, etc.) or, as a last resort, appoint an INDIGENOUS SERVICES CANADA employee to administer the estate. Estate trust accounts are established by INDIGENOUS SERVICES CANADA as required in order to administer the estate. Estate trust accounts are entitled to interest, with the exception of accounts established for missing heirs.
For more information, visit Estate services for First Nations.
Band Moneys
Band moneys are managed by INDIGENOUS SERVICES CANADA on behalf of First Nations according to sections 61 to 69 of the Indian Act, which outline INDIGENOUS SERVICES CANADA's responsibilities for the collection, maintenance, disbursement and accounting of these moneys.
There are 2 types of band moneys:
capital moneys
revenue moneys
Capital moneys
Capital moneys are trust moneys that come from the sale of the First Nation's surrendered lands, from an interest in the land, or from the sale of the First Nation's non-renewable resources. Examples of capital moneys include proceeds from:
oil and gas revenues
sale of a First Nation's reserve lands
sale of timber without a reforestation program
sale of gravel
Revenue moneys
Revenue moneys include all other band moneys other than capital moneys.
Examples of revenue moneys include proceeds from:
the sale of renewable resources
reserve land activities such as leases, permits and rights-of-way
fines
interest earned on capital and revenue moneys held by INDIGENOUS SERVICES CANADA
How First Nations can access and manage their band moneys
There are various methods for First Nations to access band moneys, including exercising more access than the Indian Actalone currently provides:
Policy on the Transfer of Capital Moneys Through Paragraph 64(1)(k) of the Indian Act
Band Council Resolution requesting access to capital and revenue moneys per sections 64, 66 and 69 of the Indian Act(all band moneys)
To learn more about how First Nations under self-government agreements control their band moneys consult: Self-government
Visit the various acts or the Manual for the administration of band moneys to learn more.
Related links
THE BASICS about Indian Trust Moneys from Yellowhead Institute
There is significant confusion, mythology and a lack of clarity around this fund. Until the 1860s, trust funds and the lands and resources that made them grow were managed by a large set of institutions, both in the colonies and imperial Britain, guaranteeing confusion and inefficiency as well as encouraging fraud.
Later on, the establishment of the Fund to its eventual absorption into the Consolidated Revenue Fund (CRF), the recording and transactions of the funds were haphazard. Much like many fiscal policies relating to First Nations, depending on the time and the bureaucrats in charge, record-keeping could be minimal and subject to miscalculations and theft. Here, we shed light on some of the key questions related to Indian Trust Fund.
Where does the money come from and how is it spent?
The federal government holds Band, Individual, and other First Nations money that comes from the sale or lease of lands and from royalties and revenues from natural resources.
The Indian Trust funds are managed in accordance with the “Indian Moneys” sections of the Indian Act, which lay out the legal framework for how these funds may be collected, maintained, and accessed. The Fund is also managed pursuant to the Financial Administration Act and related regulations. Historically, the government controlled the Trust and used it to pay for treaty annuities, agricultural implements, salaries for teachers, capital projects, and many other things, including infrastructure for settlers — like canals and universities.
How much money is in the Indian Trust Fund today?
At present, the Indian Trust balance sits at over $634 million. This money is mostly divided into two types of Indian Moneys held in trust:
$400 million in Capital Moneys: All money that comes from the sale of surrendered lands or capital assets. Capital assets can be stuff like property, investment properties, royalties, stocks, bonds, or revenues from sale of timber, oil, gas, gravel or other non-renewable resources. $179 million in the Revenue Moneys: Basically, anything else that is not Capital Moneys, like interest earned on Band capital and proceeds from sale of renewable resources (e.g. hydroelectric power). Approximately $50 million is also held in Indian Estate Accounts and Indian Savings Accounts. Indian Moneys are also held in trust on behalf of individuals, such as on-reserve minors, adoptees, “dependent” adults, and missing heirs’ estates.
When was the Indian Trust Fund created?
The Indian Land Management Fund (ILMF) came into existence on 1 April 1858.2 The Superintendent General deducted $95,420 from trust funds held for individual trust funds and consolidated them — 67 percent of which came from Six Nations alone.3 This money was transferred into a single general trust account. First Nations opposed this transfer and demanded control over the fund itself but were denied. The Colonial Office transferred authority over Indian Affairs to Canada a couple of years later in 1860, but the colony had no money to pay for the new administration.5 So, it was decided that the Trust would finance the Department through a quasi-tax that peeled off interest from the fund.
However, as the Superintendent knew, to generate enough interest to pay for Indian Affairs’ day-to-day operations, the ILMF would need close to $200,000 more than it received. Therefore, the fund was mismanaged and drained by Indian Affairs from the start.
Who controls the Trust Fund?
Most of the ongoing and daily management of Indian Moneys has been delegated to regional Indigenous Services offices.10 First Nations can access money they invested in the Fund, following the procedures laid out in Sections 61–64of the Indian Act.
Historically, the Department of Indian Affairs, under its many names, has managed the Indian Trust Fund. Through amendments to the Indian Act from 1880–1906, the authority and power of the Governor in Council increased in power to control the Fund.
For example, in 1895, the Department could spend Band money on capital works for First Nations through proceeds from their sold lands. The Indian Act amendment in 1905 raised from 10 to 50 percent the distribution of funds to First Nations from their sold lands as an incentive to surrender them to the Crown. When funds were accepted, agents then forced Bands to use them to supply their own agricultural implements, saving the Department money.
So why talk about Indian Trust Moneys?
So, settlers Canadians can put their racist, discriminatory, and hateful or at the very least mis guided thoughts about their ‘tax’ dollars going towards “Indians and Lands reserved for Indians”. Because not one penny of your tax dollars is used to support the approximately 14-1500 full time of Indigenous Services Canada employees and its departmental budget of just under $200 million to manage us ‘Indians’. In actuality, there is no way the government of Canada could pay us thus amount of money, so I guess this is why there is always extreme funding caps on everything related to servicing wards of the Crown in this country known as Canada. Which leads us to my stories about Land Back and Cash Back Red Papers by the Yellowhead Institute.
