aboriginal economy

Assigning benefits on the basis of heredity is not compatible with liberal democracy

The largest First Nation in Canada is the recently recognized Qalipu Mi’kmaq of Newfoundland.

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Incentives, Identity, and the Growth of Canada's Indigenous Population

Statistics Canada has reported unprecedented growth in Canada’s Indigenous population (Indian, Métis, and Inuit). Over the 25 years from 1986 to 2011, it grew from 373,265 to 1,400,685, an increase of 275%, while the population of Canada increased by only 32% in the same period of time. Although Canada’s Indigenous peoples have higher birth rates than other Canadian groups, most of this increase resulted from “ethnic mobility”—individuals changing the identity labels they apply to themselves.

By far the greatest growth occurred in the categories of Métis and non-status Indian, which is purely a function of how respondents describe themselves in the census. But the numbers of Registered Indians (a distinct legal status) have also grown much faster than can be accounted for by natural increase. This paper deals with identity issues surrounding Registered Indian status and First Nations membership; a subsequent paper will deal with the Métis.

Ethnic mobility resulting in the growth in the numbers of Registered Indians has been fostered by adoption of equality rights in the Canadian Charter of Rights and Freedoms (1982); court decisions such as Lovelace (1981), McIvor (2009), and Gehl (2017); statutes such as Bill C-31 (1985) and Bill C-3 (2011); and the recognition by order-in-council of landless bands such as the Qalipu Mi’kmak First Nation (2011). The Registered Indian population is now at least 40% larger because of these legal changes than it otherwise would have been.

An important factor in the growth of the status Indian population is the set of positive economic incentives conferred by Registration, including free supplementary health insurance for all Registered Indians and Inuit, and in some circumstances financial assistance for higher education, exemption from taxation on reserve, and special wildlife harvesting rights. Such benefits can be substantial and are particularly attractive now that the former legal disabilities connected to Indian status, such as not being able to vote, have been repealed. The medical insurance plan alone is worth about $1,200 per person per year. Though social disadvantages of Indian status may still exist, the legal and economic benefits are now substantial enough to create incentives to seek Registered status.

First Nations were established as distinct political communities; but political, judicial, and administrative trends are combining to confer Registered status upon many people who have some degree of Indian ancestry but are not really part of First Nation communities. Ethnic mobility resulting in growth of the Registered Indian population means upward pressure on federal and provincial budgets, because population counts affect Indigenous programming. But expense is not the only concern; these changes also raise a fundamental question: is it justifiable to offer special government benefits solely on the basis of ancestry?

Why First Nations succeed in Canada

Successful First Nations pay their elected councillors less than average for First Nations.
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Why First Nations Succeed

The status of Canada’s First Nations is widely debated, but the debate is often based on abstract visions rather than actual evidence. Against the backdrop of the world-wide research findings on governance and economic progress, this paper marshals the empirical evidence on the factors that improve the well-being of Canada’s First Nations. Specifically, it synthesizes the results of eight studies that have used the Community Well-Being (CWB) Index as a measure of outcomes. The CWB, computed every five years by Indigenous and Northern Affairs Canada, aggregates census data on income, employment, education, and housing in First Nation communities. The First Nations CWB average is about 20 points lower than for other Canadian communities, but there is tremendous variance among First Nations, creating the possibility of using empirical research to find what correlates with higher CWB scores.

The eight studies synthesized here highlight the importance of governance. First Nations tend to have higher CWB scores if they run stable governments with leaders serving long terms, pay their leaders less than other First Nations of comparable size, stay out of third-party management, and take advantage of ways to escape the strictures of the Indian Act, such as creating their own property taxes and entering the First Nations Land Management Agreement. Custom governments and Indian Act governments experience similar levels of success; what matters is what governments do, not how they are chosen.

Economic strategies are also important. Successful First Nations take advantage of their main economic assets, which are land, location, and natural resources. This means adopting an open and welcoming attitude toward other elements in Canadian society as they seek investors, customers, and professional advisers. Successful First Nations enter into partnerships with investors in real estate developments, both residential and commercial. They are particularly strong in attracting customers to their entertainment and hospitality industries, featuring casinos, hotels, restaurants, golf courses, and marinas. Where possible, these nations develop natural resources in agriculture, energy, and mining. Though they follow community-based strategies under their political leadership, they also encourage private initiative with Certificates of Possession, which are particularly useful in improving the quality of housing for band members.

Not all First Nations start with the same advantages. Everywhere in Canada, it is advantageous to be located near a city or town, which brings many economic opportunities. First Nations in British Columbia, southern Ontario and Quebec, and the Atlantic provinces have on average achieved higher CWB scores than those in the Prairie provinces or in northern Ontario. The causal explanations for these differences remain to be established, but the statistical evidence shows that they include the general applicability of good governance combined with economic strategies to capitalize on available assets.

It is striking that the measurable progress achieved by First Nations is not a result of government programs. It comes from self-determination: taking control of their own affairs and making the most out of their assets. The most effective government intervention has been legislation to remove roadblocks and create opportunities that First Nations can exploit under their own initiative.