Duhaime's Law Dictionary


Reserve Definition:

Government-owned land set aside for the exclusive use of Aboriginal people.

Related Terms: Indian Country, Indian Tribe, Indian

The term is used in law as to aboriginal law and as to tax law.

"Reserve" in Aboriginal Law

The 2010 version of Canada's Indian Act, at §2(1) defines a reserve as:

"... a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band."

Compare this with the words of the Indian Act, 1876:

"The term reserve means any tract or tracts of land set apart by treaty or otherwise for the use or benefit of or granted to a particular band of Indians of which legal title is in the Crown, but which is unsurrendered."

In Van Der Peet, Justice L'Heureux-Dube of the Supreme Court of Canada wrote (in dissent), at ¶118:

"Reserve lands are those lands reserved by the Federal Government for the exclusive use of Indian people; such lands are regulated under the Indian Act. On reserve lands, federal legislation, pursuant to s. 91(24) of the Constitution Act, 1867, as well as provincial laws of general application, pursuant to s. 88 of the Indian Act, are applicable. However, under s. 81 of the Indian Act, band councils can enact by-laws, for particular purposes specified therein, which supplant incompatible provincial legislation — even that enacted under s. 88 of the Act — as well as incompatible federal legislation — in so far as the Minister of Indian Affairs has not disallowed the by-laws pursuant to s. 82 of the Act."

"Reserve" in Tax Law

 In Crane, Justice Kearney of the Exchequer Court of Canada adopted these unusual words:

"Historically, accountants have for centuries used the word reserve to denote three quite different things — to the considerable confusion of themselves and the utter confusion of the student and the layman. These three different things are:

"(1) An estimate of the amount required to compensate for some over-valuation of assets which is known to exist but whose precise incidence or amount cannot be determined at the moment, e.g., estimated bad and doubtful accounts receivable and estimated depreciation of fixed assets, or

"(2) An estimate of the amount required to meet some liability which is known to exist but whose precise amount cannot be determined at the moment, e.g., income taxes not yet assessed, or

"(3) A voluntary appropriation of earnings designed to reduce the amount of earned surplus immediately available for distribution in the form of dividends but itself constituting a part of the proprietorship or net worth of the business, e.g., general reserve or reserve for contingencies....

"In ordinary parlance the word reserve signifies something set aside that can be relied upon for future use...."

In Fédération des Caisses Populaires, Justice Desjardins of the Federal Court of Appeal of Canada borrowed from the Quebec order of chartered accountants to adopt these words, at ¶54-55 of his reasons: 

"In accounting, a reserve means the recognition of an asset's decline in value (e.g. a reserve for depreciation of securities) or of an increase in liabilities payable in the relatively long term (e.g. a reserve for contingencies and charges); while its nature is clear, its discharge is uncertain, and events that have occurred or are occurring make it foreseeable at the balance sheet date.

"A reserve only exists if the occurrence of the expense is uncertain...."

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