QUESNEL: First Nations need property rights to succeed in real economy
Posted on November 01, 2021
An Indigenous band bylaw dispute in nearby Saskatchewan highlights the problems of First Nations lack of property rights under the Indian Act.
The dispute arose when a group of protesters occupied the band office at Carry the Kettle First Nation, south of Indian Head, Saskatchewan. The protesters alleged that the band council did not formally ratify a new land management bylaw with the band membership.
The local law had to do with on-reserve agricultural lands. As in the case with many First Nations, band members entered into informal agreements with non-reserve members to farm or otherwise use that land. Individual band members must contend with being forced to operate with the onerous requirements in the Indian Act that force them to go through the federal government for even simple things.
These informal agreements are known as “buckshee agreements” which operate outside the Indian Act and are not legally enforceable. As such, they leave both parties vulnerable. Instead, under the new land law, members and non-members are required to pay a permit fee that is equivalent to fair market rent.
Now, in one respect, the bylaw makes sense as it formalizes the law for everyone, but it demonstrates how Indigenous people on reserve are often forced to go outside the law to try to rent land or otherwise make a profit from it. It reveals a natural entrepreneurial drive amongst band members, which is unfortunately suppressed by the Indian Act’s antiquated controls. Land title and management is legally tied closely to the Indian Act, so band members must find creative ways to go around it.
Even in the case of reserve land management, some federal legislation allows bands to avoid federal oversight – which is obviously better than the status quo – but the underlying title remains with the Crown and not the First Nation.
This reminds me of what Nobel Prize finalist Peruvian economist Hernando de Soto called the “informal economy.” In his influential book The Mystery of Capital , de Soto documented how in developing countries without formal property rights, poor people often had to resort to acting outside the law to maintain a livelihood.
In recent history, Indigenous people on reserve have had to find other ways to maintain a livelihood that can involve dipping into the “informal economy.” In Ontario and Quebec, Indigenous groups have resorted to the cigarette trade or online gambling, both areas that quickly fall into grey legal areas.
Many of these problems come back to the paternalistic 19th-century land restrictions of the Indian Act that treat Indigenous people like children and assume they can’t own or manage their own lands. Since they don’t have property rights, it bears mentioning again and again, they can’t borrow from the bank. The chief obstacle to on-reserve Indigenous business is the lack of access to capital.
The “buckshee agreement” issue mentioned above is just a microcosm of a much wider issue within Indigenous Canada where federal law freezes on-reserve people out of the normal economy.
With a newly minted federal Cabinet, Manitoba First Nations, as well as the provincial government, should once again encourage the federal government to put Indigenous property rights and Indian Act reform front and centre on the Indigenous policy agenda.
It’s time to put First Nations on an equal economic footing with other Canadians.
— Joseph Quesnel is a senior research associate with the Frontier Centre for Public Policy. www.fcpp.org