Who Should Own Reserve Lands?

Commentary, Aboriginal Futures, Frontier Centre

The First Nation Property Ownership Initiative is drawing fire, with some calling it a proposal to transform reserve lands into fee simple holdings. This is incorrect. The legislation is intended to help first nations participate in the national economy on terms that most Canadians take for granted. But participation would be optional. No one will be forced to do anything with their lands. Those of us who participate, however, will be able to escape the oversight of the Indian Act and actually take legal title to our own lands.

By taking ownership, we would then be able to offer the same range of private property rights that exists off-reserve. This could include fee simple holdings. But if it did, these would be first nations fee simple – not provincial fee simple – holdings. This is an important distinction because it means our lands will always be our lands. Legislation would confirm our governance and reversionary powers.

Our rationale is simple: We want the same standard of living as other Canadians. We need competitive infrastructure. We need a good administrative and legal framework. This legislation would confirm some of the jurisdiction that we need to provide these things. We also need something even more fundamental: We need markets to work on our lands. To do that, we need an improved system of property rights.

Some people want to believe that property and markets are not our way. I disagree. This proposal is loyal to our history. Before contact, we had markets and supportive institutions. The Secwepemc people traded pipestone from Minnesota, fish oil from the West Coast and horses from the south. We had a trading language called Chinook. We had trails that are now highways. There was money and there were private property rights. In traditional times, if you came into my winter home uninvited, you’d quickly find out who owned it.

This old way disappeared because we were systematically legislated out of the market economy. The Indian Act created a system of property rights that wouldn’t allow us to participate on equal terms in either investment markets or credit markets. We slowly forgot our own history. The result is the poverty we see today.

Many of our communities have developed innovative methods, such as transferrable leasehold property rights, to overcome this legacy. But these innovations are often too expensive and time consuming to really level the playing field. It still takes us 10 to 20 times longer to conduct even a simple transaction, such as executing a mortgage, using the Indian Land Registry system versus elsewhere in Canada. The innovations work around these facts, but they don’t address the root cause of the problem – we don’t own our own lands.

Our proposal would help solve the two impediments to markets on our lands. First, it would make it easier to invest on our lands. Right now, it’s simply too time consuming and too expensive for many people to consider an investment on first nation lands. This legislation will dramatically shorten procedures for basic land transactions, and it will increase investment certainty by registering all interests in an efficient Torrens system that is familiar to lenders, investors and lawyers.

Second, our people have suffered from a credit crisis ever since the Indian Act was passed. That’s a 140-year depression. This legislation would help to end that. It would allow members to earn equity and borrow against it. We would finally be able to take out mortgages and business loans on our own lands as easily as anyone else. As Peruvian economist Hernando de Soto said, “It’s time to unleash the billions of dollars of dead capital” on our lands. If we choose, we can abandon the paternalistic practice of having lands held in trust and overcome the constraints of a 19th-century Indian Act.

Some first nations will oppose this. Some won’t be ready. But the rest of us should be free to choose.