Guide to the Federal Real Property Act and Federal Real Property Regulation

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Section 3 - Application

Subsection 1 - Expropriations and secured dispositions

Notes

Section 3 limits the scope of the FRPRegs. Subsection 3(1) describes two classes of real property transactions that are not authorized or regulated by the FRPRegs.

Paragraph 3(1)(a) clarifies that the FRPRegs do not apply to expropriations. The legal authority for federal expropriations and the process to be followed in expropriations are contained in the Expropriation Act, RSC 1985, chapter E-21 and in specific expropriation provisions in other federal statutes.

Paragraph 3(1)(b) excludes dispositions, other than leases, where the entire purchase price is not paid to the Crown by the time the property is transferred. An example would be where the Crown sells a piece of land to someone who, instead of paying the full purchase price at the closing of the transaction, gives the Crown a mortgage for at least part of the purchase price. In such a case, by operation of paragraph 3(1)(b) of the FRPRegs, the minister selling the property will not be able to use the FRPRegs as the legal authority for the sale. Instead, the minister would need an Order in Council to authorize the sale pursuant to paragraph 16(1)(a) and (k) of the FRPA.

Any disposals where the purchase price is not paid in full were excluded from the FRPRegs because:

• such transactions by the federal government have been rare in the past;
• the requirement for Governor in Council approval of such transactions had not created any problems in the past; and
• it was felt that the special circumstances required to make such transactions preferable to immediate cash or cash-equivalent sales warrant Treasury Board approval and Governor in Council authorization of the transaction.

Specific provisions were included in the FRPA for Governor in Council approval of mortgages and similar transactions (16(1)(k)) and for regulations to be made relating to such transactions (16(2)(h)). Departments were consulted during the drafting of the FRPRegs to see if such regulations were necessary at that time. No need for such regulations was identified and the Bureau of Real Property Management agreed to revisit the issue should circumstances change.

Related General Questions

None.

Section 3 - Application

Subsection 1 - Expropriations and secured dispositions

Authority

FRPA 16(2)(a) - regulations on dispositions

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 3 - Application

Subsection 2 - Leases

Application

3. (2) Sections 7 to 10 do not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases.

Notes

Subsection 3(2) states that the following sections of the FRPRegs do not apply to transactions involving leases:

• section 7 - terms of acquisitions;
• section 8 - payments on acquisitions;
• section 9 - referral of dispositions to Justice; and
• section 10 - option terms.

This preserved the status quo. Sections 7, 8, and 10 are based on previous sections in the Government Land Purchase Regulations, which only applied to purchases and did not apply to leasing-in situations. Section 9 extends the settlement and approval of Crown grants role of Justice to the new instruments for dispositions allowed under the FRPA. Prior to the FRPA and the FRPRegs, Justice was not required to settle and approve leases. There were no policy reasons for changing either of these practices.

Related General Questions

None.

Authority

For the references to sections 7, 8 and 10, the authority is the FRPA 16(2)(b) - regulations on acquisitions.

For the reference to section 9, the authority is the FRPA 15(2)(a) - referral of instruments to Justice.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPRegs

• terms of acquisitions;
• s. 8: payments on acquisitions;
• s. 9: referral of dispositions to Justice; and
• s. 10: option terms.

Section 4 - General Ministerial Authority

Subsection 1 - Acquisitions, dispositions and options

General Authority

4. (1) A Minister may enter into an acquisition, a disposition or an option for an acquisition or for a disposition.

Notes

Subsection 4(1) provides a general legal authority for a minister to enter into real property conveyances:

- acquisitions;

- dispositions; and

- options for acquisitions and dispositions.

This authority is only tempered by

- the provisions of the FRPA related to executing instruments used in dispositions;

- the other provisions of the FRPRegs; and

- any other legislative or legal restrictions on ministerial authority.

Words to confirm that the minister could insert any terms or conditions in the conveyance "as desired" were not included in the subsection because the Justice drafters indicated that this concept was inherent in giving a minister authority to enter into the conveyance and adding any such words was superfluous. This same reasoning was applied by the drafters to the other authorities contained in the FRPRegs.

Related General Questions

None.

Authority

For acquisitions and options for acquisitions, the authorities are the FRPA 16(2)(b) - regulations on acquisitions and 16(2)(d) - regulations on acceptances of lease surrenders.

For dispositions and options for dispositions, the authorities are the FRPA 16(2)(a) - regulations on dispositions and 16(2)(d) - regulations on surrenders of leases.

Source

Prior to the FRPA and the FRPRegs, the authority for making regulations relating to ministerial acquisitions of real property and the entering into options for acquisitions was contained in section 41 of the Financial Administration Act, which read:

Section 4 - General Ministerial Authority

Subsection 1 - Acquisitions, dispositions and options

The acquisition by purchase authority was previously contained in section 5 of the Government Land Purchase Regulations, which read:

The authority to enter into an option for an acquisition was previously contained in section 11 of the Government Land Purchase Regulations, which read:

Prior to the FRPA and the FRPRegs, authority for making regulations relating to ministerial dispositions of real property was contained in section 4 of the Public Lands Grants Act, which read:

Additional authority to make regulations relating to dispositions was contained in section 61 of the Financial Administration Act, which read:

Section 4 - General Ministerial Authority

Subsection 1 - Acquisitions, dispositions and options

This was done to ensure that the FRPA is the sole general authority for federal real property transactions.

No general regulations had been made under either the Public Lands Grants Act or the Financial Administration Act to grant ministers the authority to sell federal real property. Therefore, all sales were authorized by:

• the Governor in Council under paragraph 4(1)(a) of the Public Lands Grants Act; or
• the Governor in Council and/or the Minister of Public Works under the Surplus Crown Assets Act.

Regulations had been made under section 4 of the Public Lands Grants Act and section 61 of the Financial Administration Act to provide general ministerial authority for leasing-out and for granting licences. Section 3 of the Public Lands Leasing and Licensing Regulations, (which relied on the regulation-making authority of both Acts), read:

There was no previous ministerial authority for the entering into of options for dispositions. Therefore, this type of option would have required Governor in Council authorization.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPRegs

- s. 7: terms of acquisitions;

- s. 8: payments on acquisitions;

- s. 9: referral of dispositions to Justice;

- s. 10: option terms; and

- s. 11: document depository

Section 4 - General Ministerial Authority

Subsection 2 - Licences

4. (2) A Minister may, in respect of real property,

Notes

Subsection 4(2) contains a general legal authority for ministerial actions relating to licences:

• giving a licence to use federal property and accepting the relinquishment of such a licence; and

• acquiring a licence to use someone else's property and relinquishing such a licence.

Words to confirm that the minister could insert any terms or conditions in the licence "as desired" were not included in the subsection because the Justice drafters indicated that this concept was inherent in giving a minister authority to enter into the licence and adding any such words was superfluous. This same reasoning was applied by the drafters to the other authorities contained in the FRPRegs.

Related General Questions

3.3.2 What is the difference between a lease and a licence?

Authority

For giving and acquiring licences, the authority is the FRPA 16(2)(c) - regulations on giving and acquiring licences.

For relinquishing licences, the authority is the FRPA 16(2)(d) - regulations on relinquishing licences.

Source

Prior to the FRPA and the FRPRegs, the authority for making regulations relating to contracting (including acquiring licences) was contained in section 41 of the Financial Administration Act, which read:

Section 4 - General Ministerial Authority

Subsection 2 - Licences

Prior to the FRPA and the FRPRegs, authority for making regulations relating to ministerial dispositions of real property was contained in section 4 of the Public Lands Grants Act, which read:

Additional authority to make regulations relating to dispositions was contained in section 61 of the Financial Administration Act, which read:

This was done to ensure that the FRPA is the sole general authority for federal real property transactions.

Regulations had been made under section 4 of the Public Lands Grants Act and section 61 of the Financial Administration Act to provide general ministerial authority for leasing out and for granting licences. Section 3 of the Public Lands Leasing and Licensing Regulations, which relied on the regulation making authority of both Acts, read:

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 4 - General Ministerial Authority

Subsection 3 - Utility and other services

4. (3) A Minister may provide utilities and other services on or from federal real property that is under the Minister's administration and may impose fees, charges and rates for those services.

Notes

Subsection 4(3) provides a minister with the authority to provide and charge for utility and other services. Although providing and charging for such services had been common practice in the government prior to the FRPRegs, the absence of a specific provision led to some legal opinions questioning ministerial authority for the practice. Subsection 4(3) clarifies the existence of this authority.

Words to confirm that the minister could insert any terms or conditions in the agreement "as desired" were not included in the subsection because the drafters indicated that this concept was inherent in giving a minister authority to enter into the agreement and adding any such words was superfluous. This same reasoning was applied by the drafters to the other authorities contained in the FRPRegs.

Related General Questions

None.

Authority

FRPA 16(2)(i) - regulations on provision of services.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 5 - Administration and Control

Administration and Control

5. (1) A Minister may transfer to Her Majesty in right of a province, by instrument satisfactory to the Minister of Justice, the administration and control of the entire or any lesser interest of Her Majesty in any federal real property, either in perpetuity or for any lesser term.

(2) A Minister may accept on behalf of Her Majesty a transfer of the administration and control satisfactory to the Minister of Justice of the entire or any lesser interest of Her Majesty in right of a province in any real property, including such transfers made by grant, vesting order or other conveyancing instrument, either in perpetuity or for any lesser term.

Notes

Subsection 5(1) states that a minister may transfer administration and control of federal real property to a provincial Crown. This subsection states that the transfer must be satisfactory to the Minister of Justice. Under subsection 11(1) of the FRPA such transfers must be signed by the minister administering the property and countersigned by the Minister of Justice.

Subsection 5(2) states that a minister may accept a transfer of administration and control of real property from a provincial Crown. The transfer must be satisfactory to the Minister of Justice. Under subsection 11(2) of the FRPA a grant, transfer, or vesting order from a province, once accepted, results in a transfer of administration and control from the provincial to the federal Crown.

The wording of subsection 5(2), by parallelling the wording of subsection 11(2) of the FRPA allows the federal Crown to accept a transfer of provincial Crown property regardless of the instrument by which the province desires to transfer the real property. If the transfer is accepted by the federal Crown, it amounts to a transfer of administration and control of real property. The paragraph removes any question of whether the federal Crown's right to accept a transfer of provincial Crown property is limited to certain types of instruments used for the transfer.

Although paragraphs 16(2)(e) and (f) allow regulations to be made relating to transfers of administration and control to and from Her Majesty in any right other than Canada, subsections 5(1) and (2) of the FRPRegs only authorize transfers to and from provinces. Therefore, a transfer of administration and control to or from another British Commonwealth jurisdiction where Her Majesty holds title to Crown lands must be done through an Order in Council under subsection 16(1) of the FRPA. The status quo was retained because such transfers have occurred rarely, if at all.

Section 5 - Administration and Control

Related General Questions

3.4.3 What is the difference between "administration" and "administration and control?"

3.5.1 How does the FRPA affect transfers of administration and control between the federal and provincial Crowns?

3.5.2 Why must transfers of administration and control be countersigned by and/or be satisfactory to the Minister of Justice?

3.5.4 What is a vesting order?

3.5.5 What would be a transfer of a "lesser interest?"

Authority

For transfers to other governments, the authority is the FRPA 16(2)(e) - regulations on transfers of administration and control to other governments.

For accepting transfers, the authority is the FRPA 16(2)(f) - regulations on accepting transfers of administration and control from other governments.

Source

Prior to the FRPA and the FRPRegulations, transfers of administration and control from the federal government to provinces were authorized under subsection 4(2) of the Public Lands Grants Act, which read:

Prior to the FRPA and the FRPRegulations, transfers of administration and control were accepted by Orders in Council issued under the Royal prerogative because there was no specific statutory authorization.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPA

• s. 11(1): signing of transfers of administration and control
• s. 11(2): effect of transfers from other governments
• s. 16(1)(e): GIC authorization of transfers of administration and control to other governments
• s. 16(1)(f): GIC acceptance of transfers of administration and control from other governments
• s. 16(2)(e): regulations on transfers of administration and control from the federal government
• s. 16(2)(f): regulations on for accepting transfers of administration and control to the federal government

FRPRegs

- s. 11: document depository

Section 6 - Administration or Administrative Responsibility

Subsection 1 - Authorities

Administration or Administrative Responsibility

Notes

Subsection 6(1) contains a general legal authority for ministerial actions relating to transfers of administration (real property interests) and administrative responsibility (licences):

• transferring administration of federal real property to another minister or an agent Crown corporation and accepting such a transfer; and

• transferring administrative responsibility for a licence relating to non-federal property to another minister and accepting such a transfer.

Two points should be noted about this subsection as it relates to transfers to and from agent Crown corporations. The first is that the subsection does not authorize agent corporations to transfer administration to ministers. Although the wide wording of paragraph 16(2)(g) would permit regulations to do this, it was decided that this issue would be dealt with in the anticipated future discussions with agent Crown corporations over the applicability of all or part of the FRPA and the FRPRegs to them.

The second point is that the provision only applies to transfers to and from agent Crown corporations that have authority through other legislation to acquire or dispose of real property. The problem is that not all agent corporations have been authorized by Parliament to conduct real property transactions. The specific real property powers of each agent Crown corporation must be examined case by case.

Section 6 - Administration or Administrative Responsibility

Subsection 1 - Authorities

In drafting the FRPRegs, there was some concern that simply allowing ministers to transfer to and accept transfers from agent corporations would be an implied legal authorization

for the corporations to make such transfers. This was unsatisfactory because, as stated above, the intention was that the 1992 FRPRegs would not provide new legal authority for Crown corporations to conduct real property transactions or transfers. The FRPRegs, at least initially, were intended to authorize ministerial transactions and transfers.

For this reason, subsection 6(1) had to be worded in a way that would not provide new authority to agent corporations but still provide new authority to ministers to transfer administration to agent corporations and accept transfers from them. This was accomplished by referring specifically to the powers of agent corporations under legislation other than the FRPA.

Related General Questions

3.4.1 What is "administration" of federal real property?

3.4.2 Why was the change made to "administration?"

3.4.7 In the FRPA and Regulations, why was the wording "administrative responsibility" applied to licences rather than "administration?"

3.4.4 What are the main responsibilities of a minister in relation to the real property he or she administers?

3.4.5 Did the coming into force of the FRPA affect administration held by a minister?

3.4.6 Why are transfers of administration made?

3.4.3 What is the difference between "administration" and "administration and control?"

Authority

For transfers of administrative responsibility for licences, the authority is the FRPA 16(2)(c) - regulations on transfers of administrative responsibility between ministers.

For transfers of administration, the authority is the FRPA 16(2)(g) - regulations on transfers of administration.

Section 6 - Administration or Administrative Responsibility

Subsection 1 - Authorities

Source

Prior to the FRPA and the FRPRegs, transfers of administration were normally done in two ways:

- By Order in Council under section 36 of the Public Works Act, which read:

This section was repealed by the FRPA;

- by the Minister of Public Works under the Surplus Crown Assets Act, again no longer applicable after the FRPA.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPA

FRPRegs

Section 6 - Administration or Administrative Responsibility

Subsection 1.1 - Consents by agent corporations

unless the transfer is consented to in writing by the agent corporation. SOR/93-305, June 8, 1993.

Notes

Subsection 6(1.1) clarifies that an agent Crown corporation must consent in writing to any transfer of administration to or from it.

This subsection was inserted in the FRPRegs through a June 1993 amendment. It was put in on the specific request of Canada Post Corporation. The corporation did not feel that the provisions of subsection 6(2) relating to executing transfers of administration adequately protected its client's interests.

Related General Questions

None.

Authority

FRPA 16(2)(g) - regulations on transfers of administration.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPA

Section 6 - Administration or Administrative Responsibility

Subsection 2 - Execution of transfers

Administration or Administrative Responsibility

6. (2) Every transfer and acceptance referred to in subsection (1) shall be in writing and shall be effective when it is signed by both parties and countersigned by the Minister of Justice.

Notes

This subsection requires that all transfers of administration and acceptances of such transfers must be in writing. This is to ensure that there is a record of these transfers.

The subsection further states that transfers of administration are only valid when they are signed by both parties, i.e., both ministers in cases of transfers between ministers or a minister and an agent Crown corporation in cases of transfers between a minister and a corporation.

There is a further requirement for the Minister of Justice to countersign each transfer of administration.

Related General Questions

None.

Authority

For transfers of administrative responsibility for licences, the authority is the FRPA 16(2)(c) - regulations on transfers of administrative responsibility between ministers.

For transfers of administration, the authority is the FRPA 16(2)(g) - regulations on transfers of administration.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPA

- s. 2(1): definition of "administration"

- s. 16(1)(c): GIC transfers of administrative responsibility

- s. 16(1)(j): GIC transfers of administration

- s. 16(2)(c): regulations on transfers of administrative responsibility

- s. 16(2)(g): regulations on transfers of administration

- s. 18: administration

Section 7 - Acquisition Terms

Notes

This section provides a minister with the authority to make certain types of payments in connection with the purchase of real property. It is intended to provide the minister with the flexibility to make such payments if the minister considers it advisable in the circumstances of the particular purchase.

Subsection 3(2) of the FRPRegs makes it clear that this section does not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases. It also does not apply to licences because "acquisition" is defined to not include a licence.

Related General Questions

None.

Authority

FRPA 16(2)(b) - regulations on acquisitions.

Source

With the exception of a few minor changes it is essentially identical to section 8 of the repealed Government Land Purchase Regulations.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 8 - Payment

Subsection 1 - General rule

Payment

8. (1) Subject to subsections (2) to (5), no payment shall be made in respect of an acquisition until good title satisfactory to the Minister of Justice is obtained through that Minister.

Notes

This subsection requires that the Minister of Justice certify the title to land being purchased prior to paying the purchase price. The payment of the purchase price, and not the authority to enter into the conveyance, is conditional upon compliance with the subsection.

Exceptions to this requirement are contained in subsections 2 to 5:

- partial payments within Canada - 8(2)

- options to buy - 8(3)(a)

- confidential acquisitions - 8(3)(b)

- foreign acquisitions - 8(4), 8(5)

Subsection 3(2) of the FRPRegs makes it clear that this subsection does not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases. It also does not apply to licences because "acquisition" is not defined to include a licence.

Related General Questions

None.

Authority

FRPA 16(2)(b) - regulations on acquisitions.

Source

Subsection 8(1) is based on paragraph 10(a) of the Government Land Purchase Regulations, which relates to purchases and read:

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 8 - Payment

Subsection 2 - Partial payments within Canada

Payment

8. (2) A Minister may make a partial payment in respect of an acquisition of real property that is within Canada, before the completion of the acquisition, under an arrangement satisfactory to the Minister of Justice that ensures its repayment to Her Majesty if the Minister of Justice is not satisfied as to good title.

Notes

This subsection allows deposits, down payments and other partial payments to be made prior to the closing of an acquisition within Canada. Such a payment must be made under an arrangement satisfactory to Justice ensuring return of the payment if the vendor's title is not satisfactory.

This type of arrangement has been common in private sector agreements of purchase and sale of real property for some time, but the federal government had not previously been able to use it because of the Government Land Purchase Regulations prohibition against payment before closing. Eliminating this prohibition promoted the policy objective in the FRPA and the FRPRegs of having consistency between private and federal real property practices wherever practical.

Subsection 3(2) of the FRPRegs states that this subsection does not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases. It also does not apply to licences because "acquisition" is not defined to include a licence.

Related General Questions

None.

Authority

FRPA 16(2)(b) - regulations on acquisitions.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 8 - Payment

Subsection 3 - Exceptions

Notes

Paragraph 8(3)(a) makes it clear that the certifying title requirement does not apply to payments for options to buy property. Typically, only a preliminary title search is done before entering into an option to determine whether the option is being obtained from the owner of the property. Requiring a full title search prior to receiving an option would be inconsistent with the purpose of an option, i.e., an expedient manner of keeping alternatives open while analyzing what property should be acquired.

Paragraph 8(3)(b) makes an exception to the certification of title requirement in two cases where expediency and confidentiality of the transaction are necessary, namely in acquisitions made by the Minister responsible for CSIS for the purpose of pursuing security investigations, and acquisitions made by the Minister responsible for the RCMP for the purpose of pursuing RCMP investigations. The instruments relating to these transactions also do not have to be

- settled and approved by Justice under section 9 of the FRPRegs; or

- deposited in Justice's document depository under section 11 of the FRPRegs.

Related General Questions

None.

Authority

FRPA 16(2)(b) - regulations on acquisitions.

Source

The exception for the Minister responsible for CSIS was based on section 10.1 of the Government Land Purchase Regulations, which read:

The exception for the Minister responsible for the RCMP is new.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPRegs

• 11(1): Document depository

Section 8 - Payment

Subsection 4 - Payments outside Canada

Notes

This subsection creates another exception to the certification of title requirement. This exception relates to purchases of property in foreign countries by the Secretary of State for External Affairs (now the Minister of Foreign Affairs). For the exception to apply, three conditions must be met:

- the payment must be consistent with local commercial practices;

- the payment must be made under an arrangement allowing for the return of the payment if title cannot be certified; and

- the Crown must have possession of the property when full payment is made.

The first condition simply reflects that such payments should only be made where local commercial practices permit. This is consistent with the "good corporate citizen" policy of the federal government.

The second condition reflects the practice that legal advice on many foreign real property transactions is provided by lawyers practising in the jurisdiction where the property is located rather than lawyers employed by the Department of Justice. These local lawyers are hired by the Minister of Foreign Affairs under the provisions of section 4 of the Government Contracts Regulations, which reads:

The third condition was inserted because in some foreign jurisdictions, such as Hong Kong, it is common to pay most or all of the purchase price to the vendor prior to closing the transaction. The immediate possession upon full payment protects the Crown and is consistent with the practices of these jurisdictions.

Subsection 3(2) of the Regulations clarifies that this subsection does not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases. It also does not apply to licences because "acquisition" is not defined to include a licence.

Section 8 - Payment

Subsection 4 - Payments outside Canada

Related General Questions

3.2.15 Why are there different rules for foreign transactions?

Authority

FRPA 16(2)(b) - regulations on acquisitions.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 8 - Payment

Subsection 5 - Exception for payments outside Canada

Payment

8. (5) Notwithstanding subsection (4), the Secretary of State for External Affairs may, in respect of the acquisition of real property that is situated in a jurisdiction in which the title to or ownership of real property within that jurisdiction cannot be determined or certified by and to the satisfaction of the Minister of Justice, make a payment if the payment

Notes

Subsection 8(5) creates a further exception for foreign acquisitions where the land-tenure system in the foreign jurisdiction precludes title certification. This has occurred in the past in countries such as the Republic of China where a system of land registration did not exist. The subsection would also except those cases where title certification is impossible because of war or disaster.

For this exception to apply, the first and third conditions in the subsection 8(4) exception must apply. In addition, Justice must be satisfied that title cannot be determined or certified.

Subsection 3(2) of the FRPRegs makes it clear that this section does not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases. It also does not apply to licences because "acquisition" is defined to not include a licence.

Related General Questions

None.

Authority

FRPA 16(2)(b) - regulations on acquisitions.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 9 - Referral of Dispositions to the Minister of Justice

Subsections 1 and 2 - General rule and exceptions

9. (1) Subject to subsection (2), a Minister shall refer every disposition to the Minister of Justice for settlement and approval of the form and legal content of the Crown grant.

Notes

Subsection 9(1) requires Justice to settle and approve the form and legal content of Crown grants used for dispositions under the FRPRegs. This clarifies that Justice's role of settling and approving Crown grants did not change with the enactment of the FRPA and the FRPRegs.

The Department of Justice Act, paragraph 5(c), states that the Minster of Justice shall settle and approve all instruments issued under the Great Seal, such as letters patent. As the new types of disposal instruments allowed under the FRPA, i.e., the instruments of grant, provincial instruments and plans, are not issued under the Great Seal, the Department of Justice Act provision does not apply to them. Therefore, settlement and approval of the new Crown grant was necessary to make sure that Her Majesty's legal interests would be protected in the same way for letters patent and the new classes of Crown grants.

Subsection 9(2) provides two exceptions to the Justice settlement and approval requirement:

• Foreign Affairs disposals where a foreign lawyer is providing legal advice to the department; and
• disposals of property acquired by CSIS and the RCMP for confidential investigations.

In addition, subsection 3(2) of the FRPRegs states that this section does not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases. It also does not apply to licences because "disposition" is not defined to include a licence.

Related General Questions

3.2.9 Why must the instruments of grant and the provincial instruments be signed by both the minister administering the real property and the Minister of Justice?

3.2.8 Why isn't the approval of the Minister of Justice required for Crown grants using foreign instruments?

3.2.15 Why are there different rules for foreign transactions?

Section 9 - Referral of Dispositions to the Minister of Justice

Subsections 1 and 2 - General rule and exceptions

Authority

FRPA 15(2)(a) - referral of instruments to Justice.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

FRPRegs

- s. 9(3): proof of settlement and approval by Justice

Section 9 - Referral of Dispositions to the Minister of Justice

Subsection 3 - Proof

Referral of a Disposition to the Minister of Justice

9. (3) Where, pursuant to subsections 5(6) and 7(2) of the Act, a Crown grant is to be countersigned by the Minister of Justice, the countersignature is conclusive evidence that the Minister of Justice has settled and approved the form and legal content of the Crown grant.

Notes

Subsection 9(3) clarifies that Justice's countersignature on Crown grants acts as proof of compliance with this section. This is intended to ensure that no questions on the title to the property are ever raised relating to whether Justice had settled and approved the grant. Future title searches may occur many years after the grant takes place when other evidence of Justice settlement and approval may not be readily available.

Reference to subsections of the FRPA relates to Justice's countersignature on:

- instruments of grant and provincial instruments, other than leases - subsection 5(6); and

- plans used as disposal instruments - subsection 7(2).

Justice need not countersign foreign instruments used to grant property abroad under subsection 5(3) of the FRPA. Where Justice is providing the legal advice and a foreign instrument is used for the Crown grant, Justice still has to settle and approve the instrument under subsection 9(1).

Related General Questions

None.

Authority

FRPA 15(2)(a) - referral of instruments to Justice;

FRPA 16(2)(a) - regulations on dispositions.

Source

New.

Related Sections in the FRPA, the Regulations and TB Real Property Policy

FRPRegs

- ss. 9(1) and (2): general rule on referral to Justice and exceptions

Section 10 - Option Terms

Option Terms

10. Where a Minister, in an option for an acquisition, is granted the right to enter and conduct tests in respect of the real property that is subject to the option, the Minister may agree with the person granting the option

Notes

This section provides a minister with the authority to make certain covenants in connection with soil and other testing of lands which the minister has an option to acquire. Under these covenants, a minister may agree to repair any damages to the lands caused by the testing or to pay compensation to the owner of the lands for any such damages. The section is intended to provide the minister with the flexibility to make such covenants in the option agreement if warranted in the circumstances of the particular situation.

This section is essentially identical to a previous section contained in the Government Land Purchase Regulations.

Subsection (2) of the FRPRegs makes it clear that this section does not apply in respect of leases, surrenders of leases and acceptances of surrenders of leases. It also does not apply to licences because "acquisition" is not defined to include a licence.

Related General Questions

None.

Authority

FRPA 16(2)(b) - regulations on acquisitions.

Source

With the exception of a few minor changes it is essentially identical to subsection 13(1) of the repealed Government Land Purchase Regulations.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 11 - Document Depository

Subsection 1 - Instruments to be deposited

Document Depository

11. (1) The Minister of Justice shall establish and operate a document depository at the Department of Justice that shall contain copies of the following instruments:

Notes

This subsection sets out what types of instruments shall be deposited in the Department of Justice document depository. The four general types are:

- Crown grants (disposals) with certain exceptions noted below;

- transfers and acceptances of transfers of administration and control;

- transfers and acceptances of transfers of administration; and

- transfers and acceptances of transfers of administrative responsibility for licences.

The subsection is based on the policy intention that the document depository was only to contain Crown grants and administrative transfers. For that reason, the various following instruments affecting federal real property were excluded from the depository:

- acquisition instruments;

- leases (both leasing-in and -out);

- licences; and

- Crown grants, i.e., letters patent and notifications, that are kept in other government depositories.

Paragraph 11(1)(a) describes four types of Crown grants that may be deposited, as follows:

- instruments of grant;

- provincial disposal instruments;

- foreign disposal instruments; and

- plans used as disposal instruments.

The FRPA either created or for the first time authorized these four types of instruments to be used as Crown grants by the federal government. And the FRPRegs allowed ministers, for the first time, to issue Crown grants (outside the territories) without requiring Orders in Council or instruments under the Great Seal. Therefore, without paragraph 11(1)(a), there would have been no government depository for these types of Crown grants when issued by ministers under the authority of subsection 4(1) of the FRPRegs.

Section 11 - Document Depository

Subsection 1 - Instruments to be deposited

Paragraph 11(1)(a) excludes from the document depository leases and notifications (as noted above) and also excludes instruments used for disposals of property acquired by CSIS and the RCMP for confidential investigations.

Related General Questions

3.2.1 What kinds of documents can be used to issue Crown grants of federal lands under the FRPA?

3.2.2 What is a notification?

Authority

FRPA 15(2)(b) - regulations on the document depository.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Section 11 - Document Depository

Subsection 2 - Ministers responsible for depositing instruments

Document Depository

11. (2) Except in the case of a disposition of real property that was the subject of an acquisition described in paragraph 8(3)(b), a copy of the instrument shall immediately be sent to the document depository by the Minister who

Notes

Subsection 11(2) describes who is responsible for depositing copies of instruments in the depository. The last minister to have contact with the instruments before the transaction was completed is the minister who:

- issues a Crown grant for property under his or her administration;

- transfers administration and control of property under his or her administration;

- transfers to an agent Crown corporation the administration of property under his or her administration;

- accepts a transfer of administration and control;

- accepts a transfer of administration; and

- accepts a transfer of administrative responsibility for a licence.

Again, the subsection does not apply to instruments used for disposing of property acquired by CSIS and the RCMP for confidential investigations.

The document depository is managed by the Property Law Section of the Department of Justice.

Related General Questions

None.

Section 11 - Document Depository

Subsection 2 - Ministers responsible for depositing instruments

Authority

FRPA 15(2)(b) - regulations on the document depository.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

Document Depository

11. (3) Instruments and information may be recorded or stored in the document depository by any means.

Notes

Subsection 11(3) clarifies that instruments and information may be deposited or stored in the depository by any means. This is intended to ensure the flexibility to use current electronic and non-electronic data storage and information management practices.

Related General Questions

None.

Authority

FRPA 15(2)(b) - regulations on the document depository.

Source

New.

Related Sections in the FRPA, the FRPRegulations and TB Real Property Policy

None.

3. General Questions on the Federal Real Property Act and Regulations

3.1 Scope of the Act and Regulations

3.1.1 Why should there be authority for interdepartmental delegation of authority?

This type of delegation allows the government's real property dealings to be managed efficiently. There may be occasions where a minister wishes to delegate the requisite power or authority in relation to a real property transaction to someone outside his or her department. For example, an official in a regional office of the Department of Public Works and Government Services could be delegated the authority to act on behalf of another minister's department; or a head of mission could act in foreign transactions.

There may be occasions where a minister wishes to delegate the requisite power or authority in relation to a real property transaction to another minister. For example, the Minister of Public Works and Government Services could be delegated the authority to act on behalf of another minister's department; or External Affairs could act in foreign transactions.

3.1.2 Does the FRPA affect the federal Crown rights of acquiring and disposing
under other Acts of Parliament, such as the National Parks Act, etc.?

No. The rights of acquiring and disposing of real property as defined under other Acts of Parliament are unaffected by the FRPA. The FRPA was designed not to affect the application of existing legislation to federal Crown lands such as national parks, Indian lands, or territorial lands. The rights of Crown corporations as defined under their own Acts or the FAA to acquire and dispose of real property are also not affected by the FRPA.

3.1.3 How does the FRPA affect Indian lands?

The FRPA was intended to be neutral vis-à-vis Indian lands. The FRPA was designed not to affect the application of pre-existing legislation to federal Crown lands such as Indian lands. The authority of the Minister of Indian Affairs and Northern Development to deal with and dispose of reserve lands continues to be governed by the Indian Act.

3.1.4 Why did the FRPA change the requirement that federal real property has to be either "surplus" or "not required for public purposes" before it can be sold or transferred?

The FRPA removed the restriction from the Public Lands Grants Act, thePublic Works Act, and the Surplus Crown Assets Act which limited disposal to real property which was either "surplus" or "not required for public purposes."

The words "not required for public purposes" were first used in connection with disposing of federal real property in the late 1800s. This restriction created difficulties for the Crown to complete real property transactions.

For example, the preceding condition that real property be "not required for public purposes" was an obstacle in making grants of federal real property to agent Crown corporations, whose purposes are federal public. It would not have been possible to use the disposal authority in the previous legislation to authorize a disposition of real property owned by the federal Crown to the National Museums of Canada, given that the previous legislation required the property be "not required for public purposes" and that the National Museums of Canada would use the property for public purposes.

Another example would be a situation in which the Crown owns a 20-storey office building, but over time only needs one floor for government program purposes. Good real property management practices would suggest that the building be sold and the needed floor space rented from the new owners, thereby eliminating the overhead involved in managing the entire building. In addition, Treasury Board policy requires that real property not required for program purposes be sold. However, it could be argued under previous law that this could not be done because a portion of the building would still have been required for public purposes.

3.1.5 What protection is there to ensure that real property required for public purposes is not disposed of?

The federal real property regime is based on the premise that real property is to be held for the purposes of the government's programs. Therefore, under Treasury Board policy, a minister's disposal of real property is limited to those cases where:

- the property is no longer needed for the purposes of the minister's department; or

- the disposition itself furthers the programs of the minister's department.

Likewise, the policy provides that a minister may only acquire real property when it is required for the purposes of the minister's department.

3.1.6 Did the FRPA change the procedures for disposing of surplus lands?

Under section 42 of the FRPA, the Surplus Crown Assets Act and the procedures for disposing of surplus property under that Act no longer apply to real property. The procedures for disposing of lands no longer required by a department for its programs, like all other procedures relating to acquiring and disposing of public lands, were examined in developing the FRPRegs and Treasury Board policy in connection with the FRPA. In the interests of consistency the Minister of Public Works and Government Services, whose department has much expertise in disposing of surplus property, continues to have the major role in these disposals.

3.1.7 How did the requirement limiting disposal of federal real property to that "not required for public purposes" create difficulties in lease-leaseback agreements?

The requirement that federal real property be "not required for public purposes" led to a serious problem a few years ago in relation to the government's desire to enter into a variety of leasing transactions. Crown lease-leaseback transactions normally entail the Crown providing developers with a long-term ground lease (e.g., 35 years) whereby the tenant would covenant that it would construct a building to the Crown's specifications and upon completion would sublease the building to the Crown for almost the same period of time as the ground lease (minus a few days). The lease normally would also contain an option to purchase in favour of the Crown. An example of such a lease-leaseback transaction is the 240 Sparks Street complex in Ottawa.

The concern was raised that given that the Crown was obtaining a long-term sublease of the very property it had leased by way of the ground lease, this was indicative that the property was in fact still required for public purposes. It was therefore argued that there was no authority to enter into such a lease-leaseback agreement.

Consequently in 1985, the Public Lands Grants Act and the Public Works Act were amended to provide clear legislative authority for the Crown to enter into these transactions. Given the broad wording of paragraph 16(1)(a) of the FRPA, there is no longer a requirement for the 1985 amendments and these sections were repealed in the FRPA.

3.1.8 Why was the authorization to acquire and dispose of property placed in the FRPA?

This brought the authority to acquire real property under the same Act as the authority to dispose and promoted consistency in real property management. It made sense to include in one statute the federal authorities pertaining to both acquiring and disposing of real property by the federal Crown, including the power to make orders and regulations for these purposes.

Prior to the FRPA, the primary general disposing authority was under thePublic Lands Grants Act and the leasing of real property was governed by the Government Contracts Regulations under the FAA, while acquisitions were governed by the Government Land Purchase Regulations made under the FAA. When it was enacted, the FRPA became the primary general authority for both disposing of and acquiring federal real property.

3.1.9 Why would the Crown want to finance a purchase of real property?

To help sell the property. For example, financing the purchase could help maintain a satisfactory sale price or even make it easy to sell the real property in a slow market.

3.1.10 Why would the Crown want to take a security to guarantee a part of the payment for real property?

A security is necessary to protect the interests of the Crown in the money owed to it.

3.1.11 Did the FRPA cause the rent or utility charges to tenants on public lands to increase?

No. The Act clarified the authority for what had been the existing practice for many years. The FRPA makes it clear that, where appropriate, market rates can be charged for government services relating to federal real property.

Charging rent to tenants of federal real property is based on the market rate approach, with any exceptions based on policy considerations. This approach ensures that the government acts consistently, fairly, and equitably in the best interest of all taxpayers within the context of good financial management practices. It should also be noted that the FRPA provision does not affect property for which specific provisions for setting rental rates are already provided under specific program legislation, such as the National Parks Act or the Fishing and Recreational Harbours Act. In relation to utility charges, these are primarily being made on a cost basis, and this has not changed.

3.1.12 Does this contradict section 19 of the Financial Administration Act?

No. Section 19 is intended to regulate charges for services provided by the Crown to the public. The Federal Real Property Act provisions are intended to regulate charging for rent and services provided as a matter of contract between the Crown and third parties.

3.1.13 What are the specific powers and authorities of the Treasury Board under the FRPA?

The Federal Real Property Act underscores the central role of the Treasury Board in managing federal real property. The Act provides the Treasury Board with the powers and authorities to ensure the efficient and effective management of federal public lands. Some of the specific powers and authorities of the Treasury Board under the FRPA are:

- the authorities given to the Governor in Council under subsection 16(1) of the Act may only be exercised on the recommendation of the Treasury Board;

- through the operation of subsections 15(2) and 16(2), any regulations made under the FRPA must be on the recommendation of the Treasury Board, either on its own (in the case of regulations under subsection 16(2)) or jointly with the Department of Justice (in the case of regulations under subsection 15(2)). (The provisions in 16(1) and 16(2) are a change from the Public Lands Grants Act, under which a minister such as the Minister of Public Works and Government Services and the Minister of Indian Affairs and Northern Development could seek Governor in Council authority for a specific disposition or could propose regulations regarding dispositions. Under the FRPA, the Treasury Board's recommendation must be sought to gain access to the Governor in Council authorities under subsections 16(1) and (2).); and

- subsection 16(4) of the Act permits the Treasury Board to make financial or other managerial limitations to authorities granted to ministers in relation to real property transactions. These policy limits allow the Treasury Board to tailor its policy directives to ministers in a manner that recognizes the managerial expertise of their departments.

3.1.14 What did the FRPA change in regard to real property in the Yukon and Northwest Territories?

The Federal Real Property Act does not provide authority for the granting of federal lands in the Yukon and Northwest Territories that are governed by the Territorial Lands Act.

The Territorial Lands Act applies to lands in the Yukon and Northwest Territories under the administration of the Minister of Indian Affairs and Northern Development and, in certain circumstances, the Territorial Commissioners. Under the Territorial Lands Act, certain mineral and other rights are reserved to the Crown when a grant of territorial lands is made under the Act.

However, other federal ministers administer federal lands in the territories, the lands having been acquired by purchase from private parties or by transfer of administration from Indian Affairs and Northern Development. These federal lands are not governed by the Territorial Lands Act. Instead, dispositions of these lands had been governed by the Public Lands Grants Act or the Surplus Crown Assets Act, which did not require the reservation of the Crown rights set out in the Territorial Lands Act. ( The dispositions of these lands are now governed by the FRPA.)

Because of this it is possible for two neighbours, each having purchased a parcel of land from the federal Crown, to have acquired significantly different rights in their land. This inequity was eliminated by section 17 of the FRPA. This section requires all grants of federal real property in the Yukon and Northwest Territories made under the FRPA to be subject to the same reservations to the Crown of mineral and other rights as set out in the Territorial Lands Act. Thus, all grantees of federal lands in the two territories are treated in the same fashion.

Subsections 17(2) and (3) of the FRPA also clarify which federal minister has the administration of the reserved rights.

3.2 Crown Grants

3.2.1 What kinds of documents can be used to issue Crown grants of federal lands under the FRPA?

There are six classes of documents that can be used to grant federal Crown lands under the Federal Real Property Act:

- a grant by letters patent referred to in paragraph 5(1)(a) of the Act;

- an instrument of grant as described in paragraph 5(1)(b);

- a provincial conveyancing instrument under paragraph 5(2);

- a conveyancing instrument used in a foreign jurisdiction under subsection 5(3);

- a lease within Canada under subsection 5(4); and

- a plan used to grant real property under section 7.

Prior to the coming into force of the FRPA, most federal real property grants were made by letters patent. The FRPA did not alter the legal effect or the procedures concerning letters patent.

What the Act did was provide for alternative documents that could be used instead of letters patent. These alternative documents, the instruments of grant, provincial and foreign instruments, and plans may be used to grant federal real property, but do not have the complex processes and the time delay involved in issuing letters patent. This also provides the federal government with the ability to convey real property using the same means as are used in the private sector, thus supporting the public policy objective of the government dealing with the public in customary terms.

3.2.2 What is a notification?

A notification is a document issued pursuant to the Territorial Lands Act by the Minister of Indian Affairs and Northern Development or a Territorial Commissioner directing that a certificate of title be issued by the Registrar of Land Titles in respect of lands in the Yukon and Northwest Territories. The person named in the certificate of title is the registered owner of the lands.

A notification has the same force and effect as a grant of territorial land made by letters patent. Under the FRPA, a Crown grant is defined to include a notification.

3.2.3 What are letters patent under the Great Seal?

Letters patent have been defined as "writing of the sovereign, sealed with the Great Seal, whereby a person or company is entitled to do acts or enjoy privileges which could not be done or enjoyed without such authority."

There is a common law rule dating back several centuries that land owned by the Crown can only be conveyed by way of letters patent unless there is statutory authority to do otherwise. There does exist some federal legislation authorizing the disposition of Crown lands by way of instruments other than letters patent. For example, under subsection 96(1) of the National Housing Act, C.M.H.C. is authorized to execute deeds or grants of easements, etc., in relation to certain Crown lands. Other examples are notifications under the Territorial Lands Act and leases.

However, prior to the FRPA, letters patent were the main legal instrument by which Crown lands or interests therein are granted to individuals or corporations, although there were complex processes and time delays involved in issuing letters patent.

3.2.4 How are letters patent issued?

The Seals Act and the Format Document Regulations regulate the procedures for issuing and sealing letters patent (after the requisite authority for selling or disposing is obtained). These procedures are quite complex and normally involve at least three departments. The process usually takes from four to six weeks from the date of the initial request. This period is in addition to the time required to negotiate the transaction, prepare its documentation and obtain the necessary Order in Council or other required authority.

3.2.5 Were letters patent eliminated under the Act? If not, why not eliminate letters patent altogether? Why is an alternative instrument needed for letters patent? Is there a difference in legal effect between "instruments of grant" and grants made by letters patent?

No, the option to issue letters patent remains open. Letters patent are the traditional instruments by which the federal or provincial Crown have granted title to land or any estate or interest in land. The government decided to retain the ability to use letters patent in appropriate cases, such as where a purchaser of public lands specifically requests the use of letters patent.

In addition, letters patents are still required for a more esoteric legal reason. The new category of grants under the FRPA, the instruments of grant, is given under the Act the same legal force and effect as letters patent. Over the years court cases have dealt with the legal force and effect of letters patent. Therefore, we need to keep letters patent at least to have this jurisprudence continue to apply to the instruments of grant.

An alternative instrument to letters patent is needed because:

- Letters patent are not used in conveyancing practice in the private sector. As a matter of public policy the government should deal with the public in terms that the public is accustomed to use.

- Letters patent, by their nature, involve complex processes and time delays. The procedures for issuing letters patent are regulated by the Seals Act and the Formal Document Regulations.

Under the FRPA, both the "instruments of grant" and letters patent are of equal effect (refer to subsection 5(7)).

3.2.6. Does using provincial instruments result in adopting provincial law?

This subsection may entail adopting the laws in force in a province which governs such instruments and their effects. However, the legal interests of the federal government are protected by requiring the Minister of Justice to approve any instrument used.

3.2.7 What are some examples of provincial conveyancing documents that could be used for Crown grants under the Act?

Examples of such documents include:

- a deed;

- a transfer form;

- a deed of sale in Quebec; and

- a lease drawn in accordance with a provincial Short Form of Leases Act.

3.2.8 Why isn't the approval of the Minister of Justice required for Crown grants using foreign instruments?

In a transaction outside Canada the advice of a lawyer in the jurisdiction in question would be obtained in preparing the conveyancing documents, and therefore it is not necessary for the Minister of Justice to approve the Crown grant. Requiring that the Minister of Justice approve the foreign instruments to be used in a Crown grant for lands outside Canada could create a considerable delay in closing the transaction.

3.2.9 Why must the instruments of grant and the provincial instruments be signed by both the Minister administering the real property and the Minister of Justice?

Regulations under the Seals Act require the Minister of Justice to sign all grants of federal land issued under the Great Seal, i.e., letters patent. This ensures that the legal interests of Her Majesty are protected in dispositions of federal real property. The instruments of grant and the provincial instruments are not issued under the Great Seal and it is intended that they would not be governed by the regulations under the Seals Act. Therefore, the Minister of Justice's signature is required to make sure that Her Majesty's legal interests would be protected in the same way for letters patent and the new classes of Crown grants.

3.2.10 What are "words of limitation?"

"Words of limitation" is a legal expression for the words used in a deed or otherwise to grant a particular estate or interest in real property. It is the right of a person conveying real property to limit the interest being conveyed in the real property as he or she sees fit.

Words of limitation simply define the interest transferred in the deed. Ironically, the presence of words of limitation in a deed may result in conveying a greater interest in the real property than that which would have been conveyed otherwise.

For example, at common law if a deed conveying real property contained only the name of the person receiving the land and did not contain "words of limitation" defining the interest conveyed, the deed was considered to only transfer a life estate. In other words, the person only received the right to use the lands during his or her lifetime and at his or her death the lands would go back to the former landowner. However, if the deed contained the name of the person and the words of limitation "and his/her heirs," the deed was considered to have transferred the property absolutely and without any conditions.

The common law has been altered by statute in most Canadian provinces. The modern presumption is for all deeds to be absolute transfers unless clearly stated otherwise.

3.2.11 Why would the federal government want the right to grant real property to itself?

The primary reason is to resolve some technical problems with certain land registration systems that preclude the registration of some federal public lands.

Prior to the FRPA, the federal Crown was unable to grant land to itself. This technically barred ungranted federal lands from being included in provincial land registries which require a Crown grant for a first registration. Some provinces that operate under a Torrens system have this requirement, e.g., British Columbia.

Section 10 of the FRPA removed that barrier and allowed registration in those provinces. This section also provides a useful tool in structuring land transactions. For example, the Crown may want to have an easement over federal lands that it wishes to sell. Section 10 will allow the federal Crown to grant the easement to itself prior to the sale of the lands. This transaction would be more complicated if the Crown did not have the right to grant the easement to itself.

3.2.12 Why are there different rules for foreign transactions?

The disposition of federal real property outside of Canada is complicated by certain legal principles and the interaction between them. The local (foreign) law generally governs the acquisition and disposal of land but the local (foreign) laws vary as to the extent to which the Canadian federal Crown is subject to these laws.

There are problems surrounding the use of letters patent in disposing of federal real property outside of Canada. A complicating factor is that the local (foreign) law affects the form and content of the letters patent.

Subsection 5(3) of the FRPA recognizes that there are different practices used in foreign real property transactions. The subsection allows the disposal documents to be tailor-made in light of the circumstances of the particular case, including the local foreign law. It should be noted that a head of mission may be delegated authority for transactions abroad.

3.3 Real Property Conveyances

3.3.1 What are servitudes and easements?

Servitudes relate to real property in the Province of Quebec. They are derived from Roman civil law and closely correspond to easements in common law. A servitude is a charge against a property for the benefit of another property (a real servitude) or a person (a personal servitude).

Both real and personal servitudes are interests in real property. A personal servitude could be a person's right of access over another's property. An example of a real servitude would be a right of view for a building over another property.

An easement is a right of the owner of one parcel of land to use the land of another for a specified purpose. At common law, the easement must be for the benefit of another property (note property, not person). Easements are used in the common law provinces.

3.3.2 What is the difference between a lease and a licence?

At common law, a lease is an agreement whereby a landlord transfers part of his or her interest in real property to another person. Unlike a lease, a licence at common law does not create any right or interest in the land itself and does not imply or confer a right to exclusive possession of the lands.

In civil law, the lease of an immovable is a contract by which the lessor agrees to grant the lessee the enjoyment of the immovable during a certain time period for a consideration (the rent). It usually creates a "personal" right rather than a "real" right (an interest in land), except in the case of an emphyteutic lease or a lease with surface rights.

A licence relating to land is, at common law, a personal privilege or permission with respect to some use of lands. In civil law, an occupation licence [permis d'occupation] is defined as an authorization given to a person to occupy land temporarily. It may be cancelled by the licensor at any time without notice, formality or compensation unless otherwise stipulated in the contract between the parties.

Under the FRPA a lease is included in the definition of an "interest." A licence is defined in the Act as including all the rights of use or occupation of real property that are not caught in the definition of "interest."

3.3.3 What is a surrender of a lease?

A surrender of a lease is an agreement terminating the lease. A surrender of lease could be advantageous to a tenant where the tenant's requirements have changed and result in the leased premises becoming unsuitable. In such a case, the tenant may well wish to pay the landlord a sum of money to release him or her from the balance of the term of the lease. Alternatively, it may be to the landlord's benefit to pay the tenant to vacate the building to enable the landlord to renovate or sell the building or enter into a lease with another tenant.

3.3.4 What is a relinquishment of a licence?

A relinquishment of a licence is the termination of the right to use real property given by the licence. Such a right may be relinquished in several ways, including:

- agreement between the licensor and the licensee; or

- unilateral action by the licensor (in certain licences).

3.3.5 What did the FRPA change in the governmental processes relating to surrenders of leases and relinquishments of licences?

In addition to the Order in Council route under paragraphs 16(1)(f), paragraph 16(2)(d) provides for making regulations authorizing the granting or acceptance of surrenders.

Previous regulations that authorized a minister to enter into a lease as a landlord or tenant did not provide for the giving or accepting of surrenders by the Crown. Under previous law, an Order in Council was required for the federal Crown, as tenant, to surrender a lease or for the federal Crown, as landlord, to accept a surrender of lease. The Order in Council was required because in either case a federal proprietary interest is given up or relinquished (the leasehold interest in the case of the Crown as tenant; the rent in the case of the Crown as landlord). The result is that while ministers were given fairly broad authority to enter into leases, they were precluded from terminating those same leases unless they obtained the authorization of the Governor in Council.

Ministers were also prevented from making certain amendments to leases which in the eyes of the law amount to an implied surrender. For example, additional land could not be added to a lease nor could the term of the lease be extended.

A surrender of a lease or a relinquishment of a licence had been treated like forgiving a debt, which under the FAA requires an Order in Council. However, this disregards the differences between the two.

There are many instances in which it is in Her Majesty's interest to surrender a lease or relinquish a licence or to accept a surrender of a lease or a relinquishment of a licence. In summary, the FRPA did away with the need in all cases for Order in Council authority by providing for both Order in Council authority and authority under regulations.

3.3.6 What is fee simple?

At common law, an estate in fee simple in a parcel of land is one transferred absolutely to a person and his or her heirs, forever, without any conditions. This is the highest estate in land that can be held by a person in a common law province.

The civil law equivalent of a fee simple estate is the concept of "ownership," which is the right of enjoying and disposing of an immovable in the most absolute manner. The only restriction is that no use be made of the immovable that is prohibited by law or regulation.

An estate in fee simple is freely transferable by deed, will or otherwise.

3.4 Administration

3.4.1 What is "administration" of federal real property?

The word "administration" refers to the administrative responsibility of a minister over a particular piece of federal real property.

"Administration" is not an ownership right, and does not in itself give the minister the right to sell, lease, or otherwise dispose of the property or the right to the proceeds from a disposition of the property. The administrating minister has the right to use the property for the purposes of the programs of the minister's department.

The right of a minister to sell, lease or otherwise dispose of real property is governed by subsections 16(1) and (2) of the FRPA or by any specific provision contained in another Act.

3.4.2 Why was the change made to "administration?"

Prior to the FRPA, federal statutes used various words or phrases, such as "management, charge and direction" to describe what the FRPA calls "administration." The change in the FRPA to the use of the word "administration" was primarily motivated by two concerns:

- a desire for a uniformity of language throughout the law; and

- the elimination of the possibility of having different words used for the same concept interpreted differently.

Subsection 18(2) of the FRPA was drafted to provide a general equivalence between the various former wordings and "administration." In addition, some of the consequential amendments in the FRPA specifically changed previous phrases. It should be noted that a conscious effort was made to specifically change only those provisions in other Acts that referred only to real property. Some provisions, such as were contained then in the Public Works Act and other statutes, were not amended because they covered both real property and personal property, such as boats.

3.4.3 What is the difference between "administration" and "administration and control?"

While the word "administration" refers to the administrative responsibility of a minister over a particular piece of federal real property, the words "administration and control" refer solely to the administrative responsibility for a particular piece of Crown land by either the federal government or a provincial government.

Transfers of administration are internal transfers within the federal government of the administrative responsibility for real property. Such transfers may be between two ministers or a minister and an agent corporation.

"Administration" is not an ownership right, and does not in itself give the minister the right to sell, lease, or otherwise dispose of the property or the right to the proceeds from a disposition of the property. There is no change in title to the lands when there is a transfer of administration.

As indicated, the words "administration and control" are used to denote the relationship between Crown lands and the Crown, either federal or provincial, which controls the lands. Strictly speaking, there is only one Crown, and therefore there should be no difference in the ownership of Crown lands between lands held by the federal Crown and lands held by a provincial Crown.

However, there are differences in management, uses, and purposes between federal and provincial Crown lands. To differentiate between the two, whichever Crown is holding and controlling the lands is said to have the "administration and control" of the lands. However, unlike "administration," "administration and control" is in essence a right of ownership. Legislative jurisdiction follows "administration and control," and therefore the government, federal or provincial, administering and controlling a piece of real property would have the right to make laws about the property. This would normally carry with it the right to dispose of the lands and to keep the proceeds.

3.4.4 What are the main responsibilities of a minister in relation to real property the minister administers?

A minister administering federal real property has two main responsibilities to the government and to the taxpayers with respect to those lands:

- a responsibility to use the property to deliver government programs during the temporary possession of the property; and

- a responsibility to manage and maintain the property in a proper fashion.

3.4.5 Did the coming into force the FRPA affect administration held by a minister?

No. Subsection 18(3) of the FRPA confirms that administration continues to be held by the minister until

- the administration is transferred under the Act, or

- the Governor in Council authorizes or directs that the administration be transferred.

3.4.6 Why are transfers of administration made?

Transfers of administration are made to ensure the maximum use of the real property the government holds in support of its programs. If a minister no longer requires certain federal real property for the programs of the minister's department, administration of those lands can be transferred to a minister who needs the property to support the programs of another department.

3.4.7 In the FRPA and the FRPRegs why was the wording "administrative responsibility" applied to licences rather than "administration?"

The different wording was used, at the request of Justice, to keep clear the legal distinction between a lease and a licence, the latter of which is not an interest in land.

3.5 Administration and Control

3.5.1 How did the FRPA affect transfers of administration and control between the federal and provincial Crowns?

The Act provides the means by which such transfers can be accomplished.

Subsection 11(2) provides that a grant, transfer, or vesting order from a province, once accepted, results in a transfer of administration and control from the provincial to the federal Crown. This also applies to transfers from other Commonwealth countries for which Her Majesty holds the title to real property.

Paragraph 16(1)(e) provides that the Governor in Council may transfer the administration and control of any interest in lands to a province either forever or for a lesser term and subject to any conditions, restrictions or limitations.

Paragraph 16(1)(f) provides statutory authority for accepting transfers of administration and control. Prior to the FRPA, the authority to accept such transfers was under the Royal prerogative. Paragraphs 16(2)(e) and (f) respectively provide for regulations regarding the transfers of administration and control (by means other than Orders in Council) and acceptances of transfers of administration and control, see section 5 of the FRPRegs.

3.5.2 Why must transfers of administration and control be satisfactory to and be countersigned by the Minister of Justice?

Transfers of administration and control, unlike other acquisitions, always involve constitutional issues as legislative jurisdiction follows a transfer of administration and control. This factor, and the complicated nature of most of these transfers, warrant the involvement of the Department of Justice.

3.5.3 How and under what authority did the federal government accept transfers of administration and control prior to the FRPA?

Transfers of administration and control were accepted by Orders in Council issued under the Royal prerogative.

3.5.4 What is a vesting order?

A vesting order is a Court order or order from another authority which vests, i.e., grants, title of real property to an individual or corporation.

3.5.5 What would be a transfer of a "lesser interest?"

The words "lesser interest" when used in the FRPA and the FRPRegs relate to an interest less than the entire interest of the federal or provincial Crown in the property. An example of a transfer of a lesser interest in Crown property would be the granting of an easement over the lands.

3.6 Department of Justice

3.6.1 What kind of transactions are referred to the Minister of Justice?

The Federal Real Property Regulations refer disposal transactions other than certain excepted transactions to the Minister of Justice for settlement and approval of the form and legal content of the Crown grants. This clarifies that Justice's role of settling and approving Crown grants did not change with the enactment of the FRPA and the FRPRegs.

The Department of Justice Act, paragraph 5(c), states that the Minster of Justice, as the Attorney General of Canada, shall settle and approve all instruments issued under the Great Seal, such as letters patent. As the new types of disposal instruments allowed under the FRPA, i.e., the instrument of grant, provincial instruments and plans, are not issued under the Great Seal, the Justice Act provision does not apply to them. Therefore, settlement and approval of the new Crown grants was necessary to make sure that Her Majesty's legal interests would be protected in the same way for letters patent and the new classes of Crown grants.

3.6.2 Why is the document depository necessary?

The Registrar General of Canada, under Industry Canada, is required to register all Crown grants of real property under the Great Seal, i.e., letters patent. As the FRPA allowed the government to issue Crown grants that are not under the Great Seal, such as instruments of grant, provincial instruments, foreign instruments and plans, a depository was needed to maintain records of these other Crown grants. Such a depository allows lawyers to ascertain the existence, date and nature of these Crown grants and the legal authority for the transaction.

3.7 Crown and other Government Corporations

3.7.1 What is the difference between Crown corporations, agent corporations, and departmental corporations?

A Crown corporation is a corporation which is wholly owned by the federal Crown, or which is a wholly owned subsidiary of such a corporation ("wholly owned" being as defined in subsection 83(2) of the FAA).

An agent corporation, under the FRPA, means a Crown corporation that is expressly declared by or pursuant to an Act of Parliament to be an agent of the Crown. Some examples of agent corporations are:

- Canada Post Corporation;

- Canada Mortgage and Housing Corporation;

- Canada Ports Corporation;

- National Capital Commission; and

- Farm Credit Corporation.

A departmental corporation means a corporation named in Schedule II of theFAA. That Schedule is limited to corporations that are established by federal statutes and perform administrative, research, supervisory, advisory or regulatory functions of a governmental nature. For the purposes of the FRPA, a departmental corporation is treated the same as a government department. Some examples of departmental corporations are:

- Atomic Energy Control Board;

- Canada Employment and Immigration Commission;

- Economic Council of Canada; and

- National Research Council of Canada.

A Crown corporation may be neither an agent nor a departmental corporation. Some examples are Canadian National Railways and the National Arts Centre Corporation.

3.7.2 Did the coming into force of the FRPA affect administration held by a Crown corporation?

No. The Federal Real Property Act only enables

- the granting of federal real property under the administration of a corporation to that corporation or a person designated in writing by that corporation;

- the transfer of administration of federal real property from a minister to an agent corporation; and

- the transfer of administration of federal real property from an agent corporation to a minister.

3.7.3 Did this mean that a Crown corporation that managed, charged and directed real property would suddenly lose its power to dispose of the property and retain the proceeds from the disposal because it would only have "administration" of the property?

No. A Crown corporation retains the same powers it had under the Act establishing the corporation or the Financial Administration Act. Subsection (6) of the FRPA only treats a corporation for certain specific purposes as if it had administration of federal real property. The Federal Real Property Act purposely does not affect in any way the rights Crown corporations have in relation to the federal real property they administer.

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