Governments in Canada are famous for creating dependent client governments where none previously existed. In bizarre transfers of wealth, and despite noble intentions, the transfers often penalize productive regions with the express purpose of helping poorer ones.
But like welfare for individuals, government-to-government transfers risk creating dependencies on the part of the recipients, not because individuals or regions are necessarily lazy but because people react (mostly) rationally to incentives. Thus, once a province is hooked on federal transfer payments, the incentive to develop economically through resource development or other methods is thwarted because it may mean an equivalent immediate reduction in federal transfers with no overall revenue growth.

The same perverse incentive system also occurs on many native reserves. And the dependency scenario is compounded by the lack of individual private property rights. Wealth creation the world over flourishes with the general rule of private property then leveraged for wealth creation, an impossibility on native reserves where privately held title is usually non-existent.

That leads to another problem: a tiny local tax base. Normally, local governments are limited in size by whatever local taxpayers can afford through local taxes. Depending on the province, municipalities may also receive a top-up from the provincial government, but most revenues are derived from local taxpayers. That means the size and scope of government has a natural limit: if the mayor and council tax too much, property owners and other taxpayers squawk. Also, accountability is built into the system as local taxpayers will object if councilors take too many business trips or if patronage or outright nepotism occurs.

Contrast this with the reserve situation where very little money comes from the local tax base (itself already small and stifled) and where local government is highly dependent on transfers. To make matters worse, a related political illness results from the direction of the transfers (i.e., from the federal government to band governments and not to individuals). Because reserve residents feel little of the squeeze on their wallet whether a band's budget is moderate or excessive there are accountability problems. If your mayor decided whether you get a housing repair or whether your daughter gets a university scholarship, how often would you hassle your local politician on pay, perks, or patronage, even if he was corrupt
There are exceptions to the above models but they are just that - exceptions, and such anomalies are not worth building general policies on. The lack of private property combined with top-down transfers currently produces little in the way of wealth creation on reserves. Further, unaccountable and sometimes corrupt government is the wholly predictable result.

Given the treaty process in British Columbia, the provincial government and native leaders have a chance to cut through this Gordian knot of poverty and unaccountability by fundamentally changing how native reserves are structured. Here are the main recommendations from the Canadian Taxpayers Federation to the provincial government on what a referendum on treaties should contain in the way of negotiating principles:

Government funds directed to aboriginals should be directed to individual natives wherever possible with local native governments tasked with taxing back an amount necessary for the running of the territory in question.

Natives should decide private property rights on reserves. But as a condition of signing a treaty, the provincial government should seek a guarantee that natives on a reserve will have the chance to vote on a private property measure.

Taxpayer assistance and differing treatment of Canadians should be wound up over several decades, the exception being explicit constitutional exceptions.

Local government voting rights should be guaranteed to non-natives on reserve as a condition for the provincial government to sign a treaty.