The first half of this two part series of articles questioned whether establishing Indian urban reserves within the boundaries of Saskatchewan's cities is a good way to help native people make their way in the modern economy.

The argument put forward in the previous commentary was that while land ownership of urban property may appear to be a boon for both Indian bands and local economies, the potential exists for the benefits to be lost if these new Indian enclaves have different rules and tax status than applies to other Canadians.

In fact, we are already beginning to see problems. According to a recent news story, a local gasoline retailer in Saskatoon is upset that he is not only losing customers to a neighbouring native-owned competitor located on an urban reserve (who is able to charge six cents a litre less for their gasoline and 12 bucks less for a carton of cigarettes) but the federal government also gave his competitor a $30,000 grant to help with start-up costs. Not exactly a level playing field.

Supporters of urban reserves disagree with this analysis. They claim that urban reserves will help Indians gain a needed foothold in the cities that remote reserves cannot supply. But it is the application of "reserve status" to these urban landholdings that is the problem, not the landholdings themselves. Why is this a problem

First of all, once land is designated as a "urban reserve" land, it can no longer be disposed of without a majority band vote, and like other reserve land, it can't be transferred to anyone but the Crown. This restriction could be big trouble down the road for a band investing in the fluid urban land market.

Second, there are no property rights on reserves. The Treaty Land Entitlement is based on a calculation of 128 acres per band member, but the band owns all the land and the benefits are portioned out by band leaders. Reserve land can't be owned, mortgaged, traded, bought or sold in any normal sense. Without private property to generate investment capital, economic development on reserve depends on public money funnelled through the band.

Finally, property rights are part of the foundation on which successful Canadian society rests, including individual freedom, the rule of law, and accountable government. These elements are often weak or absent on Indian reserves. As a result, factionalism, corruption, incompetence, misspent money, and abuse of power often mark band politics. Because of its economic and political flaws, the reserve system has been a dismal social failure. But instead of fixing the problem, we are expanding it into our towns and cities. Why are we doing this

There is another long-term danger inherent in urban reserves. If current trends continue, by the middle of the century up to half of Saskatchewan's population will be of native ancestry. If a growing part of the productive workforce of the province is operating from tax-sheltered urban reserves, who will pay the taxes that keep the province running and pay for social services The segregation of Indians leads to the impoverishment of all, and tax-free urban reserves will be no shelter from a failing economy.

The problem isn't Indian ownership and entrepreneurship in cities - quite the opposite. The problem is the replacement of individual ownership and initiative by band government, and the creation of more mistaken enclaves where property rights don't exist and "band politics" rule.