If First Nations want prosperity and economic
development for their people, private property rights must be
enhanced in the substantial land base they now control, says a
new paper,
Individual Property Rights on Canadian Indian Reserves released today by The Fraser Institute.
"First Nations now have collective property rights to reserves
totaling more than 2.7 million hectares and these totals are
growing as aboriginal and treaty claims are settled. But these
large amounts of land will never yield their maximum economic
benefit to Canada's native people as long as they are held as
collective property subject to political management," says Tom
Flanagan, co-author of the paper and a Senior Fellow of The
Fraser Institute.
It is clear that the material standard of living on Indian
reserves is much lower than the Canadian average. Most aboriginal
leaders have clearly stressed their commitment to economic
development on reserves and recognize that the commercial,
recreational, or residential potential of their land is the
greatest economic asset of many First Nations. This new paper
suggests the practical implications for economic growth and
development on reserves that will result from increased property
rights.
Long-established policy has tended to channel Indian property
rights in a collective, government-dominated direction and many
Indian reserves in Canada have no formalized individual property
rights. The current structure has deprived many residents of
Indian reserves of the individual property rights that other
Canadians take for granted.
However, this paper illustrates that reserves do not function
entirely as regimes of collective property and looks at both
established and emerging systems of property rights. Band
councils control much reserve land as collective property, but
there is also a good deal of individual property, although not in
the form of fee-simple ownership that is familiar to most
Canadians.
Flanagan and co-author Christopher Alcantara assess the four
different but overlapping regimes of private-property
rights-customary rights, certificates of possession, land codes
emerging under the recently-passed First Nations Management Act,
and leases-that already exist on reserves across Canada.
The authors argue that these various nascent systems of property
rights are worthy of serious study by economists, lawyers, and
political scientists with a view to establishing how well they
work and how they might be perfected for the benefit of First
Nations people. They recommend that embryonic systems of private
property, such as those under the Nisga'a Treaty, be carefully
examined to see how they can be expanded and perfected for the
long-term benefit of reserve residents.
Although there is no single model of property rights, the
conclusion reached by economics and political science indicates
that in the long run collective property is the path of poverty
and private property is the path of prosperity.
"Twentieth-century history has reinforced our understanding of
the role of private property rights in creating an efficient
economy," says Alcantara. "Against this backdrop, it seems
evident that developing workable systems of private property
rights to facilitate market transactions will be a necessary
condition to attaining widespread prosperity on Indian reserves."
Flanagan points out several unique challenges in providing a
clear model for First Nations lands: the fee simple model that
works well for most Canadians will not be appropriate for reserve
lands as long as residents wish to ensure that they remain
preserved for future generations of their people.
On the other hand, the desire to protect reserve land from being
sold to outside owners lowers its value in the land market
because it ensures that many potentially profitable transactions
cannot be concluded.
"We do not present private property rights as a panacea for all
the economic and social ills of native communities. Nonetheless
their intelligent application will help many reserve residents
obtain better housing and business opportunities while remaining
connected to their aboriginal communities," the authors conclude.
About the Authors
Tom Flanagan is a professor of political science at the
University of Calgary, a senior fellow of The Fraser Institute,
and a fellow of the Royal Society of Canada. He has written
extensively on Canadian politics, history and aboriginal issues
and is the author of
First Nations? Second Thoughts
.
Christopher Alcantara is an MA Candidate in Political Science at
the University of Calgary. He is writing his Masters thesis on
Certificates of Possession and the housing program at Six
Nations.