By Joseph Quesnel
First Nations poverty may be Canada’s most important moral issue in generations.
Perry Bellegarde, the newly elected national chief of the Assembly of First Nations (AFN), cites United Nations statistics showing the tragic gap between First Nations and the rest of Canadian society. Canada, according to the United Nations Human Development Index, ranks sixth in terms of quality of life among countries of the world.
Applying those same indices to Indigenous peoples, it is 63rd. Addressing this gap was central to Bellegarde’s campaign.
Bellegarde is right that poverty need not be the destiny of Canada’s Indigenous populations. The answer is for First Nations to embrace economic development. Unfortunately, First Nations economies are handcuffed by the Indian Act.
Independent economic analyses have concluded that the Act has indeed impeded Indigenous economies. Fiscal Realities Economists – a B.C.-based firm – estimated that the cost of doing business on reserves is as much as six times higher than it is off reserve. The firm concluded that, “the lack of opportunities on reserve has resulted from the imposed system of First Nation governance, which has artificially raised the cost of doing business far beyond what prevails off reserve…As a result, even favourably located reserves have low business presence and see potential investment diverted to adjacent jurisdictions even when those alternative locations are less favourably sited.”
In 2007, the Standing Senate Committee on Aboriginal Peoples released a study called Sharing Canada’s Prosperity: A Hand Up not a Handout, which identified regulatory and legislative barriers to economic development on Aboriginal reserves, most of which are rooted in the Indian Act. The Act, says the report, has prevented market forces from operating properly on Indian lands. The law also creates inefficiencies around land tenure and land registries and acts as a disincentive to economic development. Indian Act processes, it said, are slow and burdensome, driving away business and investment. Most troublesome, the restrictions placed on the use of property as collateral has made it very difficult for individuals and communities to secure financing for economic development projects.
Perhaps the most important way for First Nations to fight poverty is to adopt property rights. Some observers have noted that First Nations are potentially wealthy landlords with land reserves totaling 6.5 million acres (2.7 million hectares). Property rights are the bedrock of a modern economy. Entrepreneurs use property as collateral to secure loans to build and expand businesses. Back in 2011, Ottawa talked about exploring a First Nations Property Ownership Act that would transfer title over reserve lands from the Crown to First Nations governments, which could then transfer them to individuals. It’s time for Ottawa to finally introduce this law.
On their way towards property rights, many more Indigenous communities should embrace the First Nations Land Management Act (FNLMA), which allows bands to opt out of the 34 provisions of the Indian Act dealing with land management. Controlling their own lands allows bands to undertake long term economic development. A 2009 study by KPMG found that 17 bands under the FNLMA reported an average of a 40 per cent increase in new businesses.
First Nations should also look to urban reserves as an economic development strategy. The National Aboriginal Economic Development Board (NAEDB) released a report in 2014 showing that six communities with urban reserves were benefitting both their reserves and the surrounding non-Aboriginal communities to the tune of $77 million in new economic development, including roughly 6,000 jobs.
Finally, First Nations need to work with Ottawa to resolve the on-reserve education reform impasse, since education is another ticket out of poverty. Chiefs of the AFN want the government to withdraw its education bill. Both sides need to sit down to craft mutually agreeable law to break the impasse, and meaningfully improve on-reserve education.
This year will bring many challenges on the First Nations-government file. Let’s hope both sides seriously work on narrowing the poverty gap for First Nations.
Joseph Quesnel is a policy analyst with the Frontier Centre for Public Policy where he writes mainly on Aboriginal issues. www.fcpp.org