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There is a community outside Toronto where most people can’t drink their tap water. Patience is running out.
(newsinteractives.cbc.ca)
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I would assume it is because the Federal Government is responsible for water on the reserve, which is pretty standard information in Canada, and those living on the reserve don't have the authority to privately install anything.
I am happy to hear that you and your neighbors have the means to privately install personal well's and cisterns on your property, but this is clearly a different situation.
You are free to source any information you have on this "plenty of construction" happening on reserve land that the Federal Government does not have a say in.
I didn't say the federal government doesn't have a say in construction, I said that I highly doubt they are somehow only disallowing water projects