If a person passes away intestate and there is no heir to inherit their estate, the deceased’s property will typically revert to the Crown under provincial escheat legislation. Escheat, a concept first developed within the feudal system in England, is premised on the Crown having an underlying interest in all property. When private ownership ends without a successor, the property simply reverts to the Crown.
In recent years, a few Canadian provinces have taken steps to modernize the legislation governing escheat and ownerless property. In keeping with this trend, the British Columbia Law Institute (the “BCLI”) recently proposed a complete overhaul of that province’s Escheat Act: see the Consultation Paper on Modernizing BC’s Escheat Act.Something that distinguishes the BCLI project from escheat modernization in other Canadian provinces is the BCLI’s focus on bringing the law in British Columbia into alignment with Indigenous rights and title, as per the United Nations Declaration on the Rights of Indigenous Peoples (the “UN Declaration”).
If the changes recommended by the BCLI are adopted, they would have ramifications for estates in BC that have no heirs, where estate property would otherwise escheat to the Crown.
Why Overhaul the Law of Escheat?
As noted in the BCLI’s Consultation Paper, BC’s existing law of escheat was introduced as part of colonization and fails to take Indigenous rights and title into consideration. The Consultation Paper points out that when private ownership of property ends, the property may nevertheless be subject to Indigenous rights and title. This issue is particularly salient in BC in light of the enactment of the Declaration on the Rights of Indigenous Peoples Act in 2019. This legislation sets out measures for aligning provincial laws with the UN Declaration, which affirms Indigenous peoples’ inherent, pre-existing individual and collective rights, and for working with Indigenous peoples in the process.
Shifting from Crown Ownership to Crown Custodianship
One of the BCLI’s noteworthy proposals is to stop using the traditional law of escheat to address lapses in ownership of property. Rather than have the Crown acquire property for its own benefit once private ownership comes to an end, the BCLI is recommending a statutory custodial regime under which the responsible minister would hold and administer the property while determining what should happen to it. Under the BCLI’s proposed framework, the minister’s responsibilities would include:
- Promoting recovery by legal and moral claimants;
- Consulting and cooperating with First Nations whose rights, title or jurisdiction may be affected by decisions related to the property;
- Facilitating the return of property or other forms of restitution or redress to First Nations where appropriate; and
- Facilitating the exercise of First Nations’ inherent rights, title and jurisdiction.
Under the proposed framework, the responsible minister generally would not be able to transfer the property to another government ministry or local government, or offer it for sale, until the property has been under custodial control for five years. If no claimant comes forward during the five-year period, the minister would also be required to consider, in consultation and cooperation with affected First Nations, whether the property should be returned to a First Nation or whether another form of compensation should be provided.
Other Legislative Proposals
In keeping with the objective of respecting First Nations’ rights and laws, other recommendations on which the BCLI is seeking feedback as part of the Escheat Act Modernization Project include:
- The creation of notice obligations that would require the province to notify the public, including potentially affected First Nations, of property with a lapsed ownership interest. Before transferring ownerless property to a legal or moral claimant or otherwise disposing of it, the BCLI also recommends that notice be provided to First Nations that have asserted or established title to an area encompassing the property.
- Establishing mechanisms for First Nations to make submissions to the responsible minister where their rights or title may be impacted by a decision concerning ownerless property in the minister’s custodial control.
- Requiring the responsible minister to enter into good-faith negotiations with First Nations where they claim ownership or title to property under custodial control, or exercise jurisdiction over the property under their own laws.
- Where a person dies without heirs, allowing the responsible minister to apply for an order authorizing inquiries to determine whether to assume custodial control over any part of the estate. Such inquiries could address whether First Nations laws apply to the estate – for example, if the property is culturally significant to a First Nation, or because the deceased was a member of a First Nation.
Comparing BCLI’s Recommendations to Ontario’s Legislation
If the approach recommended by the BCLI is adopted, it would be markedly different from Ontario’s escheat legislation. While the Escheats Act, 2015 contemplates the return of escheated property to individuals with legal or moral claims, it does not expressly address Indigenous rights, title, or laws. It is also unclear how Ontario’s legislation would be applied if a First Nation asserted rights or title in relation to escheated property, particularly given the differences between Indigenous title and the kinds of individual legal and moral claims expressly contemplated by the legislation.
Whether the BCLI’s draft recommendations ultimately become law remains to be seen. The proposals are currently the subject of public consultation, with feedback due by September 18, 2026. It will be interesting to see whether any of the BCLI’s recommendations are revised or abandoned once the public consultation is complete.
Thank you for reading, and have a great week!
Ian.