Post by Okwes on Jan 29, 2008 17:50:30 GMT -5
Shackled by red tape
Even when First Nations wants to get ahead they find that leveraging
their land is far from easy
Saturday, January 26, 2008
www.nationalpost.com/news/canada/rethinkingthereserve/story.html?\
id=264278
<http://www.nationalpost.com/news/canada/rethinkingthereserve/story.html\
?id=264278>
Take a right a few dozen yards south of where Glenmore Trail, one of
Calgary's busiest traffic arteries, crosses 37th street SW, and you will
find yourself on a potholed gravel road, in front of a sign that says
you have entered "Tsuut'ina Peoples' Lands." Below that is this quote:
"My people once owned all this country and went where they wanted and
now you would take away from us the small remnant that is left to us."
It is attributed to Chief Bullhead, in 1906 - only, some wiseacre vandal
has spraypainted over half of the great Sarcee warrior's name, so it now
reads: "Chief Bull."
Even without the sign and the "No Trespassing" warning that alerts the
rambler, or the lost, that he has stumbled on to reserve land, it would
be hard to mistake this rugged, 300-square-kilometre plot, shouldered
deep into Calgary's southwest, for much else.
New housing developments, power malls and office complexes have sprouted
all along the reserve's north and eastern perimeter. But in this booming
corner of the city, the Tsuu T'ina Nation 145 reserve is a conspicuous
bald spot, a largely barren expanse of yellow hills and groves.
There is something pleasant about seeing such unspoiled wilderness
literally across the street from a metropolis where bulldozers, cranes
and cement trucks seem never to rest. Unless, of course, you are a young
Sarcee trying to get ahead, in which case, serenity comes at a steep
price.
The Tsuu T'ina are doing an admirable job trying to make the most of
their select location, but there is only so much they can do. There is
the Grey Eagle casino, just opened in December, a golf course and an
asphalt plant, which ran into a bit of trouble with Ottawa this year for
emitting headache- and vomit-inducing smells across several city
neighbourhoods. The band built a 350-home residential neighbourhood
outside the city, Redwood Meadows. But all of that is small potatoes
compared to the kinds of development the band council has been chasing
for years.
In the boardroom of the Tsuu T'ina's administration office, posterboards
detail plans for multi-million-dollar office buildings, industrial
parks, shopping centres and two hotels.
Chief Sandford Big Plume has made it clear, he's "tired of going to
Ottawa for a handout." The Tsuu T'ina want to make a deal, many deals,
to develop their land. "We want to do business with Calgary," the chief
said, insisting that he wants the Tsuu T'ina community - which faces a
grievous housing shortage and unemployment rates as high as 40% in the
winter months - to become self-sustainable.
The projects are all in the works. In fact, they have been in the works
for years. It would seem they're rather stuck there.
Peter Manywounds, a projects consultant with Tsuu T'ina, remembers when
he was 11 years old and his parents took him to the initial planning
meetings for Redwood Meadows, the non-native neighbourhood built on the
reserve's west side. That was 1967. By the time the project started, it
was 1980 and the city was slipping from glorious boom to dismal bust.
At the rate things are going, there is a real risk that by the time the
band sees some genuine movement on their current projects - some of
which have been on the drawing board since the days of disco - another
one of Alberta's economic cycles may have again turned.
This is no way to do business. And were this land privately owned -
truly owned, as Chief Bullhead recalled, in a way that allowed the
Sarcee the freedom to use it as they wished - the malls and business
centres would likely already be a reality on this reserve. But the idea
that this is Tsuu T'ina land, in any meaningful way, is, to paraphrase
the graffiti on that sign, bull. Every acre of the reserve is controlled
by the Crown, as legislated by the 130-year-old Indian Act. Any business
development on reserve land - even something as simple as building a
supermarket - means vetting everything through the federal government,
where over decades, several departments have inserted themselves in the
process (Mr. Manywounds says Tsuu T'ina development plans are currently
bouncing around no less than six different federal departments).
"It's not that they don't want to respond" to on-reserve economic
development initiatives, Mr. Manywounds says. "The framework they exist
in doesn't permit them to respond."
And so, for First Nations, getting into business necessarily means
hiring experts to wade through knee-deep bureaucracy, sorting through
mounds of red tape, persuading the federal government's lawyers to drop
what can often be unreasonable conditions, all while bearing the risk
that the project may not even be approved in the end. Or, even if it is,
that the favourable economic conditions that got investors interested in
the first place will no longer be there.
The cost alone "is the piece that kills most First Nations trying to go
through the process," says Ted Williams, a former business development
officer for the Cowichan Tribes' Khowutzun Development Corporation. "The
band basically starts to borrow money from their internal departments to
pay advisors, mostly legal, to help them try to get through that
process. It just eventually catches up to them."
It takes about four times as long for even the simplest development plan
on reserve land to come to fruition than it does off-reserve, estimates
André Le Dressay, director of Fiscal Realities Economists, a
B.C-based firm that works with First Nations to get them through the
process.
"A marginal deal that you might do off-reserve, you'd never do here,"
adds Mr. Manywounds.
It takes an uncommonly patient investor, the kind with the deepest
pockets, to tolerate the hassles and delays that are part of developing
projects on reserves. "On a lot of First Nations, it takes between three
to four years to actually get your property to the point where you can
do any development on the land, because predominantly the band land is
not owned by the people ... Off reserve, you can get a permit to
construct in six months," Mr. Williams says.
No wonder then that most venture capitalists pass over First Nations
areas in favour of easier places to do business. Mr. Manywounds says he
has had potential partners simply throw up their hands at the
complications and forget it.
The federal government knows well the obstacles First Nations face in
attracting outside investment, and to its credit, Ottawa has in recent
years created laws aimed at giving First Nations more flexibility in
business development, by enabling, for instance, long-term leases to
create something approximating a sale of lands to outside investors. The
First Nations Land Management Act, passed in 1999, lets certified bands
create a "land code," giving them the ability to manage zoning without
continually seeking the minister's permission. The First Nations
Commercial and Industrial Development Act lets bands apply provincial
standards, such as environmental codes, to fill a regulatory vacuum that
otherwise exists in on-reserve projects.
Although such legislation is unquestionably an improvement for those few
bands able to use them, they stop short of overcoming the biggest
obstacle hampering economic development on reserves: the inability of
First Nations to exercise real control over their land, free of
government paternalism. And as long as bands have to go through Ottawa
to even get access to these tools, their impact will be severely
limited: Two years after its passage, just two bands have managed to get
permission from the Indian Affairs minister to use the Commercial and
Industrial Development Act, while the average number of bands approved
yearly since the Land Management Act was passed is six. Dozens of bands
languish on waiting lists just for the chance to begin what will be an
intensive, heavily bureaucratic process. At this rate, with 615 First
Nations in Canada, it could take a century to get through them all.
Implementing long-term land leases have proved less than optimal anyway
- homes in the Tsuu T'ina's Redwood Meadows development, whose property
leases expire in 2049, sell for sometimes 20% less than comparable homes
in nearby Bragg Creek. These are simply imitations of genuine ownership,
says Toby Baker, project manager at Squamish Nation in B.C., which has
created its own long-term residential leaseholds on residential and
commercial projects. Developers and homebuyers alike are looking for
more than a place to camp out for a while. They want their investment to
accumulate value over time. When you buy property, "you're building
wealth for your family. You are building equity in your home," Mr. Baker
says.
And leases have proven harshly inflexible for bands that try them. The
Squamish nation, with its spectacular waterfronts and West Vancouver
vistas, knows there's huge potential in condominiums. But such
"stratified interests" just aren't possible under the existing
framework. "People would love to be on the 30th or 40th story of a
building [here] and are willing to pay millions to be there," Mr. Baker
says. "We can't create that opportunity in the market right now."
And then there was the time the Musqueam First Nation attempted to
dramatically raise lease-rates on non-native residents living on their
Vancouver reserve to reflect the city's soaring real estate values.
Angry homeowners ultimately blocked them at the Supreme Court, which
ruled, in 2000, that Musqueam land was not worth as much as other city
property because, well, it was located on a reserve. So, while First
Nations aren't able to set their own lease rates and let the market
determine whether they're appropriate, a panel of judges in Ottawa is
apparently qualified to set the right price.
It is no surprise, then, that those who have spent years stymied by
restrictions and seemingly endless red tape suggest it may be time to
stop finding circuitous and ultimately inadequate tricks to keep trying
to get around the problem, and just obliterate the problem itself - by
treating First Nations "like grown-ups," as Mr. Le Dressay phrases it,
with the same rights as everyone else to sell, buy, lease, develop and
leverage their property.
For one thing, it's a basic way to build wealth: the equity millions of
Canadian homeowners accumulate in their property that usually
constitutes their most valuable asset. Without it, it's safe to say,
most of us would be a lot less sure of being able to pull off a
comfortable retirement. Meanwhile, no one would bother sinking resources
into maintaining or, better, enhancing the value of a property they have
no chance of one day selling. And so, many band-owned houses, paid for
by the government, end up poorly cared for, gather mould, and fall
apart. (The shoddy state of reserve housing was recently singled out by
the Public Health Agency of Canada as a leading cause of soaring
tuberculosis rates in First Nations communities; in November, residents
of the Piikani Nation near Pincher Creek, Alta., were evacuated after
Health Canada condemned their homes as unfit for human habitation.)
But while equity gives people incentive to create value in their
existing property, it's the capacity to borrow against that appreciating
asset that is most critical for building real wealth on reserves,
enabling natives to leverage one asset so they might come to own more.
Peruvian economist Hernando de Soto concluded in his 2000 book, The
Mystery of Capital, that property rights are the key determinant to why
some national economies flourish while others fail. He has pointed out
that in the North American economy, as much as 70% of starting
businesses require credit to get off the ground, "and they get it on the
basis of some kind of real-property collateral" - frequently, their own
homes. It is hard to overstate the significance of this missing piece.
Without an ability to leverage a valuable, legal land asset, most
Canadian entrepreneurs would be unable to secure a loan to start
businesses and most businesses would probably find themselves without
the capability of issuing bonds or shares or of investing in new
machinery and expansions.
In his book The Age of Turbulence, former U.S. fed chairman Alan
Greenspan wrote that "the presumption of individual property ownership
and the legality of its transfer must be deeply embedded in the culture
of a society for free-market economies to function effectively." As long
as Canadian native bands enjoy the same land rights as feudal serfs, it
only follows that, for the most part, their reserves remain frozen in a
pre-industrial era, exhibiting what the Assembly of First Nations calls
"Third World conditions."
Yet, of the 2.6 million hectares of Canadian land occupied by First
Nations, an amount roughly four times the size of Prince Edward Island,
much of it has outstanding potential value. In cases like Tsuu T'ina,
Enoch and Stoney reserves in Alberta, the Musqueam, Squamish and
Kamloops in B.C., the Rama reserve outside Toronto, or the Kahnawake
reserve across the St. Lawrence from Montreal, just to name a very few,
we are talking about some of the most desirable property in the country.
A study presented by Fiscal Realities to the Indian Affairs department
last spring measured the potential value of land waiting to be unlocked
from a sample of B.C. First Nations. On just the 68 reserves studied,
the estimate was close to $4-billion - or about $60-million per reserve
on average. Even some of the most far-flung reserves, north of 60, are
thought to be sitting on top of billions of dollars in mineral and
energy resources as yet untapped. There are, admittedly, reserves on
land close to worthless. But while permitting private property ownership
certainly won't enrich every single First Nation, doing something that
benefits a good number of them should, nevertheless, be something well
worth doing.
Whether or not some long-ago Indians, at some point, questioned the
concept of land ownership (Chief Seattle's oft quoted anecdote - "How
can you buy or sell the sky, the warmth of the land? The idea is strange
to us" - actually came from a Hollywood film), the Crown's refusal to
cede property rights on reserve land has benefited the federal
government alone. Historically, it has allowed it to confine and
displace aboriginals where it pleased, while laying claim to the most
fertile lands for itself.
The land reservation system "never has worked, it was never intended to
work," argues Clarence Louie, chief of the Osoyoos Indian Band, located
in B.C.'s Okanagan. "Their first intention under the reserve system was
to destroy the economy. The way you bring any society to its knees is to
take away the economy first, and that's their ability to support
themselves."
In fact, there is sufficient evidence that a tradition of property
rights has existed in many native cultures. It was Europeans who
"popularized the notion that aboriginal peoples ... could not possibly
have the civilized and Christian attributes that would enable them to
assert sovereign ownership," noted the Report of the Royal Commission on
Aboriginal Peoples, issued in 1996. In reality, family-held estates
existed and were passed down within several tribes, such as the Iroquois
did with cornfields.
"I think that a lot individuals forget our traditional past," says Manny
Jules, a former chief of the Kamloops Indian Band, and a longtime
advocate for property reform on reserves. "We weren't some socialist
utopia where nothing was owned by anyone. Those people who say economic
development and ownership was not our way, really don't understand. It
was a fundamental part of our way."
In any case, arguments over historical native real estate philosophies
have little bearing on the fact that there exist scores of First Nations
today who fully appreciate, and want to capture, the commercial value of
the property that they have for decades been told is theirs, despite
never having been entrusted with its actual proprietorship.
There are, of course, those who look skeptically upon the idea of
private property possession, worried it will lead to some natives being
exploited, losing their land to modern-day whiskey traders. And in some
cases, it could. But there are available ways to limit the impact.
At the very least, bands should be entitled to group ownership: rather
than reserves being designated as Crown land in trust to the federal
government, Ottawa could transfer it `in trust' to First Nations.
Just as provinces control their own Crown land - `in trust' to the
province - First Nations would be free to do the same on reserves,
enabling them to zone and develop their own property without forever
seeking out Ottawa's blessing, free of the roadblocks put up by a
dispassionate and overtaxed federal bureaucracy. That alone would
represent a big improvement. Still, such a kibbutz-style approach
ultimately falls short of letting individual aboriginals on reserves
enjoy the economic freedoms and opportunities non-natives do to buy,
sell, mortgage, exploit or develop their own, privately owned land.
But it is this scenario that most alarms more traditional-minded
natives, since it would risk ending any historic or cultural integrity
attached to reserve land, as land gets sold off to everyone from
non-native yuppie families to multinational corporations. But that
needn't be so. Consider that no landowner in any Canadian city has
fundamental control over his property - the government always has the
ability to take it away if it decides it needs it, or if you don't pay
your taxes. And so a possibility for First Nations, says Mr. Le Dressay,
is to follow the model, enshrining in band legislation a level of
underlying control, using something like an "eminent domain" provision -
the right of a government to expropriate lands under certain conditions
and only with fair compensation. (In the U.S., the Fifth Amendment has
been interpreted to mean that governments may force the sale of private
land only for purposes of the "public use," say, to make way for a
freeway.)
As off-reserve, while land can be bought, sold and mortgaged between
willing traders, First Nations would, in principle, retain the right to
expropriate for a limited, reasonable and legally testable list of
justifications, while making those risks abundantly clear to buyers
beforehand. For bands eager to make investors comfortable, though, such
potency would surely be used sparingly. But the mere symbolism of such a
fundamental power, even if it is never exercised once, would nonetheless
go a long way toward assuaging fears among skeptics that creating
individual deeds for reserve real estate would forever disconnect the
property from culture.
There will, of course, always be risks, and certainly the occasional
fiasco. But if Canada hopes to see its First Nations one day assume a
mature level of self-sufficiency, it surely requires entrusting them
with any attendant mature risks and responsibilities, and that means the
freedom to make the same good and, occasionally, bad land deals as
everyone else. There are, after all, a number of non-natives who protest
the idea of private ownership of land off reserve, too. Canadians as a
whole do not, however, choose to allow those people to run our national
economy on the long failed model of collective ownership. Given the
choice, there is no reason to expect most aboriginals would either.
National Post
Even when First Nations wants to get ahead they find that leveraging
their land is far from easy
Saturday, January 26, 2008
www.nationalpost.com/news/canada/rethinkingthereserve/story.html?\
id=264278
<http://www.nationalpost.com/news/canada/rethinkingthereserve/story.html\
?id=264278>
Take a right a few dozen yards south of where Glenmore Trail, one of
Calgary's busiest traffic arteries, crosses 37th street SW, and you will
find yourself on a potholed gravel road, in front of a sign that says
you have entered "Tsuut'ina Peoples' Lands." Below that is this quote:
"My people once owned all this country and went where they wanted and
now you would take away from us the small remnant that is left to us."
It is attributed to Chief Bullhead, in 1906 - only, some wiseacre vandal
has spraypainted over half of the great Sarcee warrior's name, so it now
reads: "Chief Bull."
Even without the sign and the "No Trespassing" warning that alerts the
rambler, or the lost, that he has stumbled on to reserve land, it would
be hard to mistake this rugged, 300-square-kilometre plot, shouldered
deep into Calgary's southwest, for much else.
New housing developments, power malls and office complexes have sprouted
all along the reserve's north and eastern perimeter. But in this booming
corner of the city, the Tsuu T'ina Nation 145 reserve is a conspicuous
bald spot, a largely barren expanse of yellow hills and groves.
There is something pleasant about seeing such unspoiled wilderness
literally across the street from a metropolis where bulldozers, cranes
and cement trucks seem never to rest. Unless, of course, you are a young
Sarcee trying to get ahead, in which case, serenity comes at a steep
price.
The Tsuu T'ina are doing an admirable job trying to make the most of
their select location, but there is only so much they can do. There is
the Grey Eagle casino, just opened in December, a golf course and an
asphalt plant, which ran into a bit of trouble with Ottawa this year for
emitting headache- and vomit-inducing smells across several city
neighbourhoods. The band built a 350-home residential neighbourhood
outside the city, Redwood Meadows. But all of that is small potatoes
compared to the kinds of development the band council has been chasing
for years.
In the boardroom of the Tsuu T'ina's administration office, posterboards
detail plans for multi-million-dollar office buildings, industrial
parks, shopping centres and two hotels.
Chief Sandford Big Plume has made it clear, he's "tired of going to
Ottawa for a handout." The Tsuu T'ina want to make a deal, many deals,
to develop their land. "We want to do business with Calgary," the chief
said, insisting that he wants the Tsuu T'ina community - which faces a
grievous housing shortage and unemployment rates as high as 40% in the
winter months - to become self-sustainable.
The projects are all in the works. In fact, they have been in the works
for years. It would seem they're rather stuck there.
Peter Manywounds, a projects consultant with Tsuu T'ina, remembers when
he was 11 years old and his parents took him to the initial planning
meetings for Redwood Meadows, the non-native neighbourhood built on the
reserve's west side. That was 1967. By the time the project started, it
was 1980 and the city was slipping from glorious boom to dismal bust.
At the rate things are going, there is a real risk that by the time the
band sees some genuine movement on their current projects - some of
which have been on the drawing board since the days of disco - another
one of Alberta's economic cycles may have again turned.
This is no way to do business. And were this land privately owned -
truly owned, as Chief Bullhead recalled, in a way that allowed the
Sarcee the freedom to use it as they wished - the malls and business
centres would likely already be a reality on this reserve. But the idea
that this is Tsuu T'ina land, in any meaningful way, is, to paraphrase
the graffiti on that sign, bull. Every acre of the reserve is controlled
by the Crown, as legislated by the 130-year-old Indian Act. Any business
development on reserve land - even something as simple as building a
supermarket - means vetting everything through the federal government,
where over decades, several departments have inserted themselves in the
process (Mr. Manywounds says Tsuu T'ina development plans are currently
bouncing around no less than six different federal departments).
"It's not that they don't want to respond" to on-reserve economic
development initiatives, Mr. Manywounds says. "The framework they exist
in doesn't permit them to respond."
And so, for First Nations, getting into business necessarily means
hiring experts to wade through knee-deep bureaucracy, sorting through
mounds of red tape, persuading the federal government's lawyers to drop
what can often be unreasonable conditions, all while bearing the risk
that the project may not even be approved in the end. Or, even if it is,
that the favourable economic conditions that got investors interested in
the first place will no longer be there.
The cost alone "is the piece that kills most First Nations trying to go
through the process," says Ted Williams, a former business development
officer for the Cowichan Tribes' Khowutzun Development Corporation. "The
band basically starts to borrow money from their internal departments to
pay advisors, mostly legal, to help them try to get through that
process. It just eventually catches up to them."
It takes about four times as long for even the simplest development plan
on reserve land to come to fruition than it does off-reserve, estimates
André Le Dressay, director of Fiscal Realities Economists, a
B.C-based firm that works with First Nations to get them through the
process.
"A marginal deal that you might do off-reserve, you'd never do here,"
adds Mr. Manywounds.
It takes an uncommonly patient investor, the kind with the deepest
pockets, to tolerate the hassles and delays that are part of developing
projects on reserves. "On a lot of First Nations, it takes between three
to four years to actually get your property to the point where you can
do any development on the land, because predominantly the band land is
not owned by the people ... Off reserve, you can get a permit to
construct in six months," Mr. Williams says.
No wonder then that most venture capitalists pass over First Nations
areas in favour of easier places to do business. Mr. Manywounds says he
has had potential partners simply throw up their hands at the
complications and forget it.
The federal government knows well the obstacles First Nations face in
attracting outside investment, and to its credit, Ottawa has in recent
years created laws aimed at giving First Nations more flexibility in
business development, by enabling, for instance, long-term leases to
create something approximating a sale of lands to outside investors. The
First Nations Land Management Act, passed in 1999, lets certified bands
create a "land code," giving them the ability to manage zoning without
continually seeking the minister's permission. The First Nations
Commercial and Industrial Development Act lets bands apply provincial
standards, such as environmental codes, to fill a regulatory vacuum that
otherwise exists in on-reserve projects.
Although such legislation is unquestionably an improvement for those few
bands able to use them, they stop short of overcoming the biggest
obstacle hampering economic development on reserves: the inability of
First Nations to exercise real control over their land, free of
government paternalism. And as long as bands have to go through Ottawa
to even get access to these tools, their impact will be severely
limited: Two years after its passage, just two bands have managed to get
permission from the Indian Affairs minister to use the Commercial and
Industrial Development Act, while the average number of bands approved
yearly since the Land Management Act was passed is six. Dozens of bands
languish on waiting lists just for the chance to begin what will be an
intensive, heavily bureaucratic process. At this rate, with 615 First
Nations in Canada, it could take a century to get through them all.
Implementing long-term land leases have proved less than optimal anyway
- homes in the Tsuu T'ina's Redwood Meadows development, whose property
leases expire in 2049, sell for sometimes 20% less than comparable homes
in nearby Bragg Creek. These are simply imitations of genuine ownership,
says Toby Baker, project manager at Squamish Nation in B.C., which has
created its own long-term residential leaseholds on residential and
commercial projects. Developers and homebuyers alike are looking for
more than a place to camp out for a while. They want their investment to
accumulate value over time. When you buy property, "you're building
wealth for your family. You are building equity in your home," Mr. Baker
says.
And leases have proven harshly inflexible for bands that try them. The
Squamish nation, with its spectacular waterfronts and West Vancouver
vistas, knows there's huge potential in condominiums. But such
"stratified interests" just aren't possible under the existing
framework. "People would love to be on the 30th or 40th story of a
building [here] and are willing to pay millions to be there," Mr. Baker
says. "We can't create that opportunity in the market right now."
And then there was the time the Musqueam First Nation attempted to
dramatically raise lease-rates on non-native residents living on their
Vancouver reserve to reflect the city's soaring real estate values.
Angry homeowners ultimately blocked them at the Supreme Court, which
ruled, in 2000, that Musqueam land was not worth as much as other city
property because, well, it was located on a reserve. So, while First
Nations aren't able to set their own lease rates and let the market
determine whether they're appropriate, a panel of judges in Ottawa is
apparently qualified to set the right price.
It is no surprise, then, that those who have spent years stymied by
restrictions and seemingly endless red tape suggest it may be time to
stop finding circuitous and ultimately inadequate tricks to keep trying
to get around the problem, and just obliterate the problem itself - by
treating First Nations "like grown-ups," as Mr. Le Dressay phrases it,
with the same rights as everyone else to sell, buy, lease, develop and
leverage their property.
For one thing, it's a basic way to build wealth: the equity millions of
Canadian homeowners accumulate in their property that usually
constitutes their most valuable asset. Without it, it's safe to say,
most of us would be a lot less sure of being able to pull off a
comfortable retirement. Meanwhile, no one would bother sinking resources
into maintaining or, better, enhancing the value of a property they have
no chance of one day selling. And so, many band-owned houses, paid for
by the government, end up poorly cared for, gather mould, and fall
apart. (The shoddy state of reserve housing was recently singled out by
the Public Health Agency of Canada as a leading cause of soaring
tuberculosis rates in First Nations communities; in November, residents
of the Piikani Nation near Pincher Creek, Alta., were evacuated after
Health Canada condemned their homes as unfit for human habitation.)
But while equity gives people incentive to create value in their
existing property, it's the capacity to borrow against that appreciating
asset that is most critical for building real wealth on reserves,
enabling natives to leverage one asset so they might come to own more.
Peruvian economist Hernando de Soto concluded in his 2000 book, The
Mystery of Capital, that property rights are the key determinant to why
some national economies flourish while others fail. He has pointed out
that in the North American economy, as much as 70% of starting
businesses require credit to get off the ground, "and they get it on the
basis of some kind of real-property collateral" - frequently, their own
homes. It is hard to overstate the significance of this missing piece.
Without an ability to leverage a valuable, legal land asset, most
Canadian entrepreneurs would be unable to secure a loan to start
businesses and most businesses would probably find themselves without
the capability of issuing bonds or shares or of investing in new
machinery and expansions.
In his book The Age of Turbulence, former U.S. fed chairman Alan
Greenspan wrote that "the presumption of individual property ownership
and the legality of its transfer must be deeply embedded in the culture
of a society for free-market economies to function effectively." As long
as Canadian native bands enjoy the same land rights as feudal serfs, it
only follows that, for the most part, their reserves remain frozen in a
pre-industrial era, exhibiting what the Assembly of First Nations calls
"Third World conditions."
Yet, of the 2.6 million hectares of Canadian land occupied by First
Nations, an amount roughly four times the size of Prince Edward Island,
much of it has outstanding potential value. In cases like Tsuu T'ina,
Enoch and Stoney reserves in Alberta, the Musqueam, Squamish and
Kamloops in B.C., the Rama reserve outside Toronto, or the Kahnawake
reserve across the St. Lawrence from Montreal, just to name a very few,
we are talking about some of the most desirable property in the country.
A study presented by Fiscal Realities to the Indian Affairs department
last spring measured the potential value of land waiting to be unlocked
from a sample of B.C. First Nations. On just the 68 reserves studied,
the estimate was close to $4-billion - or about $60-million per reserve
on average. Even some of the most far-flung reserves, north of 60, are
thought to be sitting on top of billions of dollars in mineral and
energy resources as yet untapped. There are, admittedly, reserves on
land close to worthless. But while permitting private property ownership
certainly won't enrich every single First Nation, doing something that
benefits a good number of them should, nevertheless, be something well
worth doing.
Whether or not some long-ago Indians, at some point, questioned the
concept of land ownership (Chief Seattle's oft quoted anecdote - "How
can you buy or sell the sky, the warmth of the land? The idea is strange
to us" - actually came from a Hollywood film), the Crown's refusal to
cede property rights on reserve land has benefited the federal
government alone. Historically, it has allowed it to confine and
displace aboriginals where it pleased, while laying claim to the most
fertile lands for itself.
The land reservation system "never has worked, it was never intended to
work," argues Clarence Louie, chief of the Osoyoos Indian Band, located
in B.C.'s Okanagan. "Their first intention under the reserve system was
to destroy the economy. The way you bring any society to its knees is to
take away the economy first, and that's their ability to support
themselves."
In fact, there is sufficient evidence that a tradition of property
rights has existed in many native cultures. It was Europeans who
"popularized the notion that aboriginal peoples ... could not possibly
have the civilized and Christian attributes that would enable them to
assert sovereign ownership," noted the Report of the Royal Commission on
Aboriginal Peoples, issued in 1996. In reality, family-held estates
existed and were passed down within several tribes, such as the Iroquois
did with cornfields.
"I think that a lot individuals forget our traditional past," says Manny
Jules, a former chief of the Kamloops Indian Band, and a longtime
advocate for property reform on reserves. "We weren't some socialist
utopia where nothing was owned by anyone. Those people who say economic
development and ownership was not our way, really don't understand. It
was a fundamental part of our way."
In any case, arguments over historical native real estate philosophies
have little bearing on the fact that there exist scores of First Nations
today who fully appreciate, and want to capture, the commercial value of
the property that they have for decades been told is theirs, despite
never having been entrusted with its actual proprietorship.
There are, of course, those who look skeptically upon the idea of
private property possession, worried it will lead to some natives being
exploited, losing their land to modern-day whiskey traders. And in some
cases, it could. But there are available ways to limit the impact.
At the very least, bands should be entitled to group ownership: rather
than reserves being designated as Crown land in trust to the federal
government, Ottawa could transfer it `in trust' to First Nations.
Just as provinces control their own Crown land - `in trust' to the
province - First Nations would be free to do the same on reserves,
enabling them to zone and develop their own property without forever
seeking out Ottawa's blessing, free of the roadblocks put up by a
dispassionate and overtaxed federal bureaucracy. That alone would
represent a big improvement. Still, such a kibbutz-style approach
ultimately falls short of letting individual aboriginals on reserves
enjoy the economic freedoms and opportunities non-natives do to buy,
sell, mortgage, exploit or develop their own, privately owned land.
But it is this scenario that most alarms more traditional-minded
natives, since it would risk ending any historic or cultural integrity
attached to reserve land, as land gets sold off to everyone from
non-native yuppie families to multinational corporations. But that
needn't be so. Consider that no landowner in any Canadian city has
fundamental control over his property - the government always has the
ability to take it away if it decides it needs it, or if you don't pay
your taxes. And so a possibility for First Nations, says Mr. Le Dressay,
is to follow the model, enshrining in band legislation a level of
underlying control, using something like an "eminent domain" provision -
the right of a government to expropriate lands under certain conditions
and only with fair compensation. (In the U.S., the Fifth Amendment has
been interpreted to mean that governments may force the sale of private
land only for purposes of the "public use," say, to make way for a
freeway.)
As off-reserve, while land can be bought, sold and mortgaged between
willing traders, First Nations would, in principle, retain the right to
expropriate for a limited, reasonable and legally testable list of
justifications, while making those risks abundantly clear to buyers
beforehand. For bands eager to make investors comfortable, though, such
potency would surely be used sparingly. But the mere symbolism of such a
fundamental power, even if it is never exercised once, would nonetheless
go a long way toward assuaging fears among skeptics that creating
individual deeds for reserve real estate would forever disconnect the
property from culture.
There will, of course, always be risks, and certainly the occasional
fiasco. But if Canada hopes to see its First Nations one day assume a
mature level of self-sufficiency, it surely requires entrusting them
with any attendant mature risks and responsibilities, and that means the
freedom to make the same good and, occasionally, bad land deals as
everyone else. There are, after all, a number of non-natives who protest
the idea of private ownership of land off reserve, too. Canadians as a
whole do not, however, choose to allow those people to run our national
economy on the long failed model of collective ownership. Given the
choice, there is no reason to expect most aboriginals would either.
National Post