A recent Auditor General's report reveals there was a shortage of 8,500 houses on native reserves in 2001. It is hard to believe that a shortage in native housing could exist given the federal government has spent $3.8 billion over the past decade on housing for 97,500 native households. If money isn't the problem, the system and the lack of ownership must be.

The Department of Indian Affairs and the Canada Mortgage and Housing Corporation (CMHC) transfer money directly to native band councils. From there it is up to the Chief and council to determine who gets a new house or repairs.

As the AG's report notes, there is a fundamental problem in this relationship. The three main players - Indian Affairs, CMHC and native bands - cannot agree on their roles and responsibilities. To make matters worse, according to Department of Indian Affairs internal audits some native governments fail to account properly for existing responsibilities and funding.

One of the responsibilities of band councils, for example, is to ensure any new housing meets National Building Code standards. The AG's report notes that bands often have no competent way to ensure the new housing meets codes, which may explain the high percentage of houses in desperate need of repair.

Land on a native reserve is owned by the Crown and is controlled collectively by the native band council, not by individuals. As a result, Native Canadians living on reserves do not own their houses in fee simple. This leads to a lack of desire on the part of Native Canadians to maintain, repair or renovate their houses.

Developing workable systems of private property rights on native reserves is required. This will empower individual Native Canadians and facilitate market transactions necessary to attain widespread prosperity on native reserves. Private property rights that are stable and transferable are the foundation for wealth creation the world over and communally held property that produces wealth is the very rare exception, not the rule.

Anyone who doubts this need only look at the resource-rich countries in Africa or oil-rich native reserves such as Samson in Alberta, to see that an abundance of resources does not guarantee prosperity. The connection between identifiable individual property rights and prosperity is not accidental.

As a step toward securing individual private property for Native Canadians, the use of certificates of possession should be better utilized. Certificates of possession, outlined in the Indian Act, do not take the form of fee simple ownership. However, the land held under a certificate of possession can be subdivided, left to an heir or sold to another person having a right to reside on that reserve. Canadian courts will settle disputes and enforce the rights generated by these certificates.

To achieve this, a holder of a certificate of possession transfers the certificate to the band as collateral. The band then signs a ministerial guarantee with CMHC in which it agrees to assume the mortgage in the event of a default. Once the mortgage is paid off, the certificate is transferred back to the individual. The process of paying for ones house promotes pride of ownership which results in individuals maintaining, repairing and renovating their property, thus saving taxpayers millions of dollars.

To end the merry-go-round of spending on housing for native reserves, workable systems of private property need to be established and maintained. Through the establishment of private property on reserves, pride and prosperity will be recognized.