Since the first Indian reserves were created, native Canadians have been segregated from Canadian society. This segregation greatly limits the ability of native Canadians to fully participate in the economy. Regrettably, the federal government recently reintroduced a Bill that will continue this segregation and unequal treatment.

With little fanfare or media attention the federal government reintroduced the First Nations Fiscal and Statistical Management Act (FNFSMA), Bill C-23. The government claims the Act will provide native Canadians with real property taxation powers of their communities, create a First Nations Tax Commission, a First Nations Financial Management Board, a First Nations Finance Authority and a First Nations Statistical Institute.

So what does all that mean to the average Canadian?

If passed, the FNFSMA will enable native bands to issue municipal-style bonds to borrow funds for local infrastructure such as water and sewage. Native bands will collectively guarantee each other's credit using future revenue from the federal government, funds raised from property taxes and revenue from natural resources. If this sounds to you like a system already in place in Canada, you're right.

In an attempt to reduce dependency native governments have on federal transfer payments, the federal government and native communities have used your tax dollars to reinvent the wheel. The FNFSMA is mirrored after the highly successful Municipal Finance Authority of British Columbia which permits municipalities to collectively guarantee each other's credit worthiness. To fully participate in the Canadian economic mainstream native governments should compete within existing municipal financing systems. To establish a separate bureaucracy and program is not an efficient use of tax dollars.

While this legislation may be intended to reduce the dependency native bands currently have on federal government subsidies and financing, in reality, it is more likely that a "cake and eat it too" environment will be created. This is because revenue generated through property taxes, or revenue from natural resources will not be deducted from the current federal funding received by native bands.

Moreover, the small population base of reserves makes economic self-sufficiency nearly impossible to achieve. Municipal-style governments throughout Canada successfully govern small communities, and are far more appropriate than a "sovereign-style" of government often recommended by native leaders and implied in the FNFSMA. Local government is delegated from the provincial government. If changes are needed, they can be implemented in the light of actual experience. Local governments also have clear limitations on the powers they can exercise, thus providing a greater degree of certainty and accountability.

Of course, individual property rights are integral to a viable municipal style of government. This is because property rights generate wealth, wealth that can be taxed. If individual property rights were extended to native communities, native local governments would be able to tax their community members in the same way as other local governments in Canada. This taxing also provides a degree of accountability because taxpayers demand to know how their money is spent. A growing economic base and political accountability will do far more to ensure the viability and success of native governments.

With this Bill, in addition to the federal government handouts, bands will use revenue generated from property taxes. At present only 90 of the 630 native bands levy property tax. Most of the property tax is levied against non-native leaseholders. These non-native leaseholders, although contributing to the coffers of the native communities in which they live, have no vote in community elections.

If someone is a full-time resident of a municipality, voting rights are assumed. Under aboriginal governance, non-aboriginals living on reserves have no democratic right to participate in the local political community, even though they may pay property taxes to the local native band. Where's the accountability for them?

This initiative also intends to deal with the often high rates of interest bands face. The reason the interest rates are so high is due to the risk involved. This is because the Indian Act shelters native property and assets located on reserves from any process of garnishee, execution or attachment for debts, damages and other obligations. Lenders and investors rightfully demand a risk premium to deal with this lack of security. But rather than addressing why the bands face such high interest rates - lack of property rights - the federal government continues to avoid the issue.

Although well intended, the proposed legislation establishes a parallel yet unequal system - a system solely for native Canadians. Treating one group of Canadians differently is wrong both morally and intellection. The FNFSMA does nothing to change the current segregation faced by native communities. If anything it adds to it.