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In Canada, an Indian reserve (usually capitalized as Indian Reserve) is specified by the Indian Act as 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." The Act also specifies that land reserved for the use and benefit of a band which is not vested in the Crown (for example, Wikwemikong Unceded Reserve on Manitoulin Island) is also subject to the Indian Act provisions governing reserves. Superficially a reserve is similar to an American Indian reservation, although the histories of the development of reserves and reservations are markedly different. Although the American term reservation is occasionally used, reserve is normally the standard term in Canada.Native reserves in 1867 are not listed here.
The terms "Native reserve," "First Nations reserve" and "First Nation" are also widely used instead of Indian reserve. Strictly speaking, however First Nation more properly designates a band government and/or the group of people it represents, which may commonly occupy more than one reserve. For example, the Munsee-Delaware Nation in Ontario is only one of three reserves in Western Ontario occupied by members of the Munsee-Delaware First Nation. In all, there are over 600 occupied reserves in Canada, most of them quite small in area. Some reserves are shared by multiple bands, whether as fishing camps or educational facilities such as Peckquaylis.
The Indian Act gives the Minister of Aboriginal Affairs the right to "determine whether any purpose for which lands in a reserve are used is for the use and benefit of the band." Title to land within the reserve may only be transferred to the band or to individual band members. Reserve lands may not be seized legally, nor is the personal property of a band or a band member living on a reserve subject to "charge, pledge, mortgage, attachment, levy, seizure distress or execution in favour or at the instance of any person other than an Indian or a band" (section 89 (1) of the Indian Act). While the act was intended to protect the Indian holdings, the limitations make it difficult for the reserves and their residents to obtain financing for development and construction, or renovation. To answer this need, Canada Mortgage and Housing Corporation (CMHC) has created an on-reserve housing loan program. Members of bands may enter into a trust agreement with CMHC, and lenders can receive loans to build or repair houses. In other programs, loans to residents of reserves are guaranteed by the federal government.
Provinces and municipalities may expropriate reserve land only if specifically authorized by a provincial or federal law. Few reserves have any economic advantages, such as resource revenues. The revenues of those reserves which do, are held in trust by the Minister of Aboriginal Affairs. Reserve lands and the personal property of bands and resident band members are exempt from all forms of taxation except local taxation.
Corporations owned by members of First Nations are not exempt, however. This exemption has allowed band members operating in proprietorships or partnerships to sell heavily taxed goods, such as cigarettes, on their reserves at prices considerably lower than those at stores off the reserves. Most reserves are self-governed, within the limits already described, under guidelines established by the Indian Act.
Due to treaty settlements, some Indian Reserves are now incorporated as Villages, such as New Aiyansh, British Columbia, which like other Nisga'a reserves was relieved of that status by the Nisga'a Treaty. Similarly, the Indian Reserves of the Sechelt Indian Band are now Indian Government Districts.