Through a well-designed community trust, First Nations can turn multimillion-dollar settlements with the Crown into powerful tools for self-determination, economic independence, and cultural resurgence.
When the Crown breaches its lawful obligations, whether through broken treaty promises, expropriations, or wrongful surrenders, the impacts are not just historical. They are felt across generations, touching on everything from land access and culture to economic opportunity and community well-being.
So, when a First Nation receives compensation, it isn't just financial restitution—it's recognition of that deep loss. Critically, it's also an opportunity for long-term, if not perpetual, revitalization and growth. Enter the community trust.
This article outlines 10 considerations when designing a community trust. It draws on best practices seen across Canada while affording flexibility for each Nation's unique values, laws, and governance traditions.
Ten considerations for First Nation trusts
1. Understanding the nature of the claim
Every settlement tells a story. Whether the issue was a treaty land entitlement shortfall, an unlawful land surrender, or a mismanagement of trust funds, the origin of the settlement should inform the trust's purpose. For example:
- A claim involving lost agricultural benefits may support a land revitalization or food sovereignty initiative.
- A loss of reserve lands might justify an acquisition fund for lands to be returned and added to reserve.
Aligning the trust's objectives with the original harm can help restore not just the land or money—but what that land or opportunity meant to the Nation.
2. Who are the beneficiaries?
One of the most foundational questions in creating a trust is: Who is it for?
Is the First Nation, as a single entity, a beneficiary? Are its individual members beneficiaries?
For First Nations that have assumed control of its membership under s. 10 of the Indian Act, this brings up a critical governance issue — should the list of beneficiaries include only those members registered under s. 6 under the Indian Act, or should the list of beneficiaries include all members?
While the Federal Band list may be convenient from an administrative standpoint, it reflects a colonial definition of community. In contrast, many Nations maintain their own citizenship codes or membership rules that are rooted in kinship, community ties, and cultural belonging. These may include individuals who aren't registered under s. 6 of the Indian Act but are still part of the community.
Conversely, First Nations whose membership is controlled by Canada under s. 11 of the Indian Act must decide whether the band list should determine the beneficiaries, or different criteria should determine the beneficiaries. Keep in mind that the nature of the claim, as outlined above, may well impact this decision.
Regardless of whether a First Nation controls its membership lists, this is a nation-building decision as much as a legal one. Defining beneficiaries based on the Nation's own criteria reinforces sovereignty and ensures that the trust serves those with a genuine connection to the community — now and into the future.
3. Purpose of the trust: From healing to building
Trusts can fund:
- Nation-building and governance capacity
- Cultural revitalization, language, and ceremony
- Education and trades training
- Health and wellness, including land-based healing
- Housing and infrastructure
- Youth leadership development
- Economic development projects
Clarity here is essential. Consider which areas are best addressed by annual distributions versus major one-time initiatives. A well-structured trust can help balance both.
Also consider whether land acquisition, additions to reserve, or environmental restoration are among the long-term strategic goals of the community. Trusts can be powerful vehicles for rebuilding territorial presence.
4. Authentic community engagement
Before the trust is finalized, leadership should invest in robust consultation. This isn't just about checking a box—it's about collective ownership of the trust's direction. Engagement methods might include:
- Community visioning sessions
- Youth and elder circles
- Surveys (digital and in-person)
- Drafting workshops to review trust language
Trusts created with true grassroots involvement are more resilient, trusted, and sustainable over time.
Leaders should also consider capacity building as part of engagement—training youth and future leaders in trust management, financial literacy, and governance, so they're ready to take on roles as trustees or administrators when the time comes.
Robust consultation is also critical for community buy-in. Settlement ratification votes often include ballot questions to use compensation money to settle a trust. Having early participation by membership on the design and purpose of the trust promotes a successful ratification when the time comes.
5. Choosing trustees: Values first, then finance
Yes, trustees need financial competence. But more than that, they need to understand the Nation's history, values, and vision. Some Nations appoint both community and corporate trustees to balance technical expertise with cultural grounding. What matters most is building a team of trustees that the community can trust to walk in both worlds: the legal and the cultural.
It is also worth considering how trustee performance will be evaluated, how disputes will be resolved, and whether internal oversight bodies (e.g., Elders' Council, finance committee) can be empowered to support accountability.
6. Smart, values-aligned investment strategy
Most trusts will be invested to generate returns for long-term use. That doesn't mean chasing the highest yield. Many Nations are choosing Indigenous or ESG-aligned investment managers who respect cultural values and land ethics. The key is this: investing should support the Nation's goals, not just the markets.
Some Nations also use trusts funded by revenue sources—like leases, royalties, or own-source revenues. These economic development trusts can be managed alongside settlement trusts or merged into a blended fund.
7. Fair and sustainable distribution models
Trusts can adopt fixed annual percentages, income-only models, or hybrid approaches. Whichever you choose, define when (if ever) the principal can be accessed. For example:
- For land repurchase or capital projects with Nation-wide benefit
- To respond to natural disasters or health emergencies
Your trust agreement should have flexibility—but only with clear rules and thresholds that protect the fund over generations.
8. Review and amendment: Build in renewal
The community will evolve—and so should the trust. Set up an amendment process that includes a community vote, but avoid impossibly high participation thresholds that could block necessary change. A 25–35% threshold with other safeguards often strikes the right balance.
9. Lifespan: Know when it ends
Community trusts can't last forever under current Canadian law. Design your trust with a long runway—often 80–100 years—but also a clear plan for what happens at the end. For some Nations, the end goal may be repurchasing traditional lands. For others, it could be resettling the trust for new generations with fresh priorities.
10. Transparency builds trust
Trustees should report regularly not only to Chief and Council, but to the entire community. Tools include:
- Quarterly or annual reports
- Document availability at Band office
- Community meetings
- Newsletters (print and digital)
- Secure online portals
Consider an "open book" policy where any member can request information about trust spending, investments, or decision-making processes. Communities may also wish to adopt secure digital platforms that support access to reports while reinforcing data sovereignty.
Leveraging settlements to provide generational income
Trusts are not just financial tools. They are extensions of sovereignty and self-governance. When designed with care, culture, and community vision, they can transform a moment of restitution into a foundation for Nationhood.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
