first nation prosperity

Canadian governments damaging opportunities for First Nations

Fort McKay has prospered by selling services to oilsands corporations.

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The Community Capitalism of the Fort McKay First Nation: A Case Study

“Community capitalism” is the term used here to describe a politico-economic system in which a First Nation uses its assets (land, location, natural resources, and money) to generate income and provide social services for its members. The Fort McKay First Nation (FMFN) furnishes an important case study of community capitalism. As a result of its remarkable success, its characteristic features stand out in sharp relief. Its wholly owned and joint-venture business enterprises generated an annual average of $506 million gross revenue in the five-year period from 2012 to 2016. But FMFN does not just have an impressive business portfolio; it has also succeeded in raising the standard of living of its members, as measured by the Community Well-Being Index.

FMFN has achieved prosperity by participating in the economy of the Alberta oil sands, which is important because the best hope for prosperity of many First Nations in remote locations is involvement in nearby resource plays. Yet FMFN has never produced a drop of oil or earned a dollar in royalties; its success has come from providing services such as janitorial care, earth moving, logistics, and workforce lodging to corporations developing the oil sands.

For the last five years, government transfers have averaged only about 5% of FMFN’s total revenues. Own-source revenue (OSR) has accounted for the other 95%. Revenues consist of business profits, interest from investments, property taxes, rent on land and housing, and payments from corporations that have had an impact on FMFN’s traditional territory. There was one bad fiscal year ending March 31, 2016, when OSR plunged because oil prices plunged from US$109.89 per barrel (West Texas Intermediate) in June 2014 to US$29.67 in January 2016. But FMFN reduced its expenditures, liquidated non-performing enterprises, modified its investment strategy towards greater income stability, and quickly returned to the black. Its performance in dealing with this challenge was better than that of many senior governments faced with similar losses of revenue.

FMFN uses its revenues to provide an enhanced standard of living for members. Benefits include comfortable housing, better education and medical care, new community facilities, and annual cash distributions to members calculated by a formula based on business profits. Chief and council are considered to be business executives and remunerated accordingly. The relatively small population of the local community (560 in the 2016 census) fosters such generosity, but FMFN also provides benefits to off-reserve members, many of whom live in Fort McMurray.

FMFN’s economic and social success is underpinned by its practice of “consensus government,” which includes adherence to the rule of law, separation of business and politics, and extensive consultation with members. Political leadership is crucial, and Chief Jim Boucher has provided stable leadership and vision since 1986. But the model of consensus government is also an important part of its success. It means not only obtaining agreement of all members of council for important initiatives, but also holding frequent consultative meetings with members (both on and off reserve) while fully disclosing information such as annual audited financial statements and the compensation of Chief and Councillors. It also means separating business from politics by appointing independent boards of directors.

Community capitalism, based on consensus government and ongoing political support from members, is a promising model for promoting the independence and improving the standard of living of Canada’s First Nations. FMFN’s dramatic results are to some extent dependent on its relatively small population and the opportunities afforded by its location in the heart of the oil sands, but opportunities have to be seized in order to become beneficial. FMFN has developed friendly business relations with nearby corporations, reinvested revenues generated from impact-benefit agreements, and also used the Indian Act exemption from taxation to turn its reserve into a no-tax growth zone. Other First Nations, no matter their size and location, may benefit from studying the principles of FMFN’s community capitalism and adapting them to their own unique situation.

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The Top Ten Uncertainties of Aboriginal Title after Tsilhqot’in

In 2014, the Supreme Court of Canada rendered a historic decision on Aboriginal title in the Tsilhqot’in Nation case. For the first time, a Canadian court made a declaration that an Indigenous community owned specifically defined lands in Aboriginal title. Amid all the commentary about the case, there has not been enough attention to date, though, to the legal uncertainties that remain after the decision—and that have even been perpetuated and expanded by the Court’s decision.

Legal uncertainties are often most harmful to the most vulnerable and marginalized within society. The legal uncertainties after the Tsilhqot’in Nation decision include uncertainties for Indigenous communities themselves on how they are permitted to use their own land. By not reaching more certainty, the decision may well have caused harm to fledgling Indigenous economies.

Legal uncertainty is of course also highly damaging to investment that would build economic prosperity for all, Indigenous and non-Indigenous British Columbians alike. The present paper tries to assess some of the key legal uncertainties left after the Tsilhqot’in Nation decision. Using a risk analysis, it considers the degree of uncertainty left on a number of points in the law and the impact of uncertainty on that point for investment in British Columbia. The key uncertainties are these:

  • restraints imposed on Indigenous communities’ use of their own lands through cultural assumptions by the courts;
  • the potential effects of the United Nations Declaration on the Rights of Indigenous Peoples on Canada’s approach to Aboriginal title;
  • remedies applying if a project is commenced on land later subject to Aboriginal title;
  • ownership of subsurface rights on Aboriginal title lands;
  • requirements of the Aboriginal title test;
  • land claims to land previously occupied;
  • scope of justified limits on Aboriginal title;
  • restrictions of Indigenous communities’ use of their own lands through court-imposed rules about future generations’ potential use of the land;
  • impact of Aboriginal title on fee simple (privately owned) land;
  • impact on sovereignty.

By using a risk-analysis approach to these uncertainties, the paper is able to rank them so as to highlight those that have the most significance and thus to establish a top ten list of uncertainties on Aboriginal title. Many of these uncertainties have very significant implications for British Columbia. Many have major implications for Indigenous communities themselves. Yet, the Tsilhqot’in Nation decision has left many issues unresolved. In some ways, it illustrates the limitations on any hopes of having the courts settle these matters and demonstrates once again the need for political leadership.

The concluding part of the paper highlights several options for policy steps that would be legally permissible if political leaders were ready to use them to resolve these uncertainties. There are advantages and disadvantages of simply continuing to press ahead on the treaty negotiation process, of referring some questions back to the courts, or of using an often under-discussed part of the constitutional amending formulae to legislate on some of the issues in ways that would work for governments and Indigenous communities.

There are many reasons people do not talk about these issues. Some wish to offer reassuring words to the business community. Some want to assess each step as either a progressive step forward or further colonialism. This is an area of policy beset by ideologies to a greater degree than any other. What is needed is sophisticated discussion of tough issues. This paper tries to contribute to the conversation by highlighting a number of ways in which legal uncertainties after the Tsilhqot’in Nation decision imply ongoing problems, imply ongoing threats to fledgling Indigenous economies, and imply challenges with which all British Columbians and Canadians should be concerned.

Métis self-government in Canada is a non-starter

There is no principled constitutional basis for Métis land claims.

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The Debate about Métis Aboriginal Rights—Demography, Geography, and History

In the 2015 federal election campaign, the Liberal Party promised to engage in “nation to nation” negotiations with the “Métis Nation” to establish Métis self-government and to settle unresolved land claims. Discussions are now under way with the provincial affiliates of the Métis National Council in Alberta, Manitoba, and Ontario. Success, however, will be difficult to attain for reasons of demography, geography, and history.

According to the census, the Métis population has grown explosively, from 178,000 in 1991 to 418,000 in 2011. Most of this growth is not from natural increase but from “ethnic mobility,” that is, people adopting new labels for themselves when they answer census questions. As a result of this particular form of population growth, social and economic indicators for the self-identified Métis population are now converging with Canadian averages. At the same time, the category of non-status Indians, which overlaps with the Métis, has grown even faster, from 87,000 in 1991 to 214,000 in 2011.

The Métis National Council claims to represent the historic Métis, whose roots go back to the fur trade in Rupert’s Land and the Canadian North-West. But these people today are only a minority of those who designate themselves as Métis or non-status Indians. If the government of Canada signs an agreement conferring substantial benefits on the historic Métis, it will be hard to exclude other groups with some degree of Indigenous ancestry. This particularly true now that the Supreme Court of Canada in the Daniels decision has held that Métis are Indians under section 91(24) of the Constitution Act, 1867. To determine who will be eligible for benefits, Canada may have to set up a Métis Registry similar in principle to the Indian Registry. That would be an unfortunate further step toward officially classifying Canadians by race.

Geography also poses barriers to Métis self-government. Indigenous self-government in Canada has always had a territorial basis—Indian reserves for the First Nations and the province of Nunavut for the Inuit. But the Métis, no matter how they are defined, are not concentrated in any one city, province, or region. Theoretically, a land base could be set up on unoccupied Crown land, but Métis who have chosen to live in Winnipeg or Edmonton are unlikely to move to a remote rural location for a life of farming, trapping, and lumbering. It may be desirable for provincial or regional Métis organizations to administer some educational, housing, or welfare programs, but that is far removed from genuine self-government and certainly not a basis for “nation to nation” negotiations.

History as well presents serious problems for these negotiations. Métis organizations claim that the distribution of land and scrip in the nineteenth century did not extinguish Métis Aboriginal rights, even though the enabling legislation for these programs justified them in terms of extinguishment. The Supreme Court of Canada has held that in one case, the distribution of land and scrip in Manitoba, administration was so slow and so many mistakes were made as to violate the “Honour of the Crown.” The Court, however, did not prescribe a remedy, nor did it find that Canada had a fiduciary duty to the Métis. Most importantly, the Court has never declared a Métis Aboriginal title to land in the sense of full ownership. The most that the Court has affirmed is harvesting rights in certain situations, which might be useful for a few Métis communities but are largely irrelevant to the hundreds of thousands of Métis and non-status Indians living in the towns and cities of modern Canada.

Governments like to say they have fulfilled their campaign promises but fulfillment in this case may do more harm than good. Implementing this promise threatens to further divide Canada by race, set up new forms of administration falsely labelled as governments, and recognize land claims that go beyond any existing judicial authority.

Indigenous peoples should embrace Canada 150

Over the next decade, more than 650 projects worth $650 billion will benefit First Nation communities.

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