Property Rights Are the Key to Indian Prosperity
Author:
Richard Truscott
2002/07/29
A series of "new" proposals to deal with persistently high levels of poverty and misery on Canada's Indian reserves have recently grabbed headlines. Jean Allard, a veteran of metis and aboriginal political circles and a former member of the Manitoba legislature, has written a book that again documents the social and economic dysfunction of Canada's system of Indian reserves.
Allard argues that the top-down structure of the Indian Act contradicts the spirit and the history of Canada's aboriginal people. But he also points out that the transition to self-government has done little but replace the top-down Indian Affairs department with top-down self-serving Indian leaders. In the meantime, poverty and misery on reserve persists.
Allard states: "A vast, absorbent layer of consultants, program officials and administrators, and professionals of all kinds- soak up much of the money that filtered down through the system." Allard goes onto say: "Reserves are one-dimensional systems-[that have no political checks and balances so all problems are addressed through]-the single field of politics- The ruling elite exercises total control while the impoverished class is voiceless and powerless."
Allard's solution: expand and redirect treaty money to individuals in order to address poverty and restore democracy. He points out that the treaties conferred both land and money to Indian people. To this day $5 payments are still distributed at annual pow-wows. Using today's values, Allard argues the annual treaty payments should be $5,000 per person each year and sent to the individual directly. Ottawa could then reduce funding on other programs by a commensurate amount, largely leaving in place the overall $7 billion taxpayers spend each year on aboriginal programs.
The Canadian Taxpayers Federation has been barking up a similar tree for years. The best and quickest way to improve the lives of Indians living on reserves is to change the lines of accountability by transferring a big chunk of the billions the federal government sent to Indian bands each year to the reserve residents instead (perhaps in the form of vouchers). Indian government would then be required to tax their people for the services they provide. Such a reform would immediately tip the balance of power away from the politicians and put the purse strings and the political control in the hands of the people where it belongs.
But 'representation with taxation' is only half the solution. Allard fails to address the real root cause of Indian poverty - the ban on individual ownership of reserve property. Without a system of authentic individual property rights to activate the wealth of the land, fuel native entrepreneurship, and encourage investment, Indian reserves will remain Indian ghettos.
In the absence of proper property rights, reserve residents will continue to have great difficulty securing loans from banks or financing from investors without being backstopped by the federal government. Economic development will forever depend on taxpayers' money funneled through Indian band leaders.
No amount of money or collective land claims will create prosperity if all the conditions for success are not present, particularly property rights. It is the lack of these individual rights that continue to isolate many Indian people from the economic mainstream. As long as reserve residents are denied basic rights afforded other Canadians, they will continue to be the impoverished tenants of their politicians.