Indian Act's good intentions pave the way to poverty for aboriginals

The federal government has recently introduced two pieces of draft legislation intended to amend the Indian Act.

On the surface these pieces of legislation will allow band councils to move toward self-government by establishing accountability and expanding their economic base. Regrettably, the proposals merely prop-up the oppressive Indian Act, and continue to limit economic growth and any real rights to private property; thus continued poverty for native people will result.

The First Nations Governance Act, introduced in June, establishes new rules for band elections and financial accountability. This is an improvement, but as long as the Indian Act is in place, the federal government will be attempting to build accountability and better governance on a crumbling foundation.

If passed, the Governance Act will establish leadership selection criteria for native band councils that will correctly put the power in the hands of those that desire it - the aboriginal people. No longer will a chief have an opportunity to manipulate nominations or the eligible voters list. Band employees will no longer be subject to dismissal when a new government is formed simply because they may hold an opposing view. However, none of these new found liberties for native Canadians are worth much if elections are not guaranteed. As written, the proposed legislation does not state that elections must occur.

The Governance Act will require native band councils to provide their audited financial statements to any person who requests a copy. Assuming “any person” means any Canadian taxpayer, accountability would be significantly better than what taxpayers are provided with now - nothing. But this level of accountability is not enough. Native band councils still will not be required to report on the progress of federally supported programs i.e., those funded by outside taxpayers. Without annual audited progress reports, taxpayers will not be able to evaluate how well their money is spent.

The second piece of draft legislation is the First Nations Fiscal and Statistical Management Act (FNFSM), which would enable native band councils to borrow funds for local infrastructure such as water and sewage.

In addition to the current federal government handouts, native bands will use revenue generated from property taxes to guarantee their credit. At present only 90 of 630 native bands levy property tax. Most of the property tax is levied against non-native leaseholders. These non-native leaseholders, although contributing to the coffers of the native communities in which they live, have no vote in community elections. Where’s the accountability for them?

Another goal of the draft FNFSM is to set up a financial management board to help native bands produce budget documents that gain the confidence of investors and increase the likelihood of attracting financing.

The proposed legislation intends to deal with the often high rates of interest native bands face. The reason the interest rates are so high is due to the risk involved. This is because the Indian Act under section 89 shelters native property and assets located on reserves from any process of garnishee, execution or attachment for debts, damages and other obligations. Lenders and investors rightfully demand a risk premium to deal with this lack of security. But rather than addressing why the bands face such high interest rates lack of private property rights the federal government continues to avoid the issue.

But there is a glimmer of hope. This fall, both pieces of draft legislation will be subject to public debate and a series of reviews before being passed into law. It is not likely the proposals will be made into law before June 2003. The federal government has an opportunity to stop ignoring the issue of private property provisions for native Canadians living on reserves.

The key to generating wealth and prosperity is easily identifiable individual private property rights which can be leveraged for loans and wealth creation. But as long as the Indian Act remains and native bands continue to receive federal government handouts, the legal straightjacket that prevents native Canadians from assuming all the rights and responsibilities allowed other Canadian citizens, will remain firmly fastened.