An modified version of a paper Elissa Chrapko wrote for POL214 during the 2022-2023 won one of two Department of Economics Essay Prizes in Economic Policy. Awarded on 6 March, 2024, these special prizes are chosen from among the essays submitted for the Smith Family Scholarship in Economic Policy.
“I love economic policymaking, but writing satire has my heart,” confessed Chrapko. “I was raised an Albertan farm girl, so of course I’m obsessed with land and labour economics. ”
Indigenous Land Rights in Canada as a Fundamentally Economic Issue
Canadians tend to forget that First Nations property rights are an innately economic issue, with both historical policies and present-day legislation consistently and blatantly enforcing anti-growth measures against First Nations communities living on land reserves in Canada. The lack of private property rights on First Nations reserve land is a central determinant of First Nations financial disparity, alongside the deep-rooted historical injustices faced by Indigenous communities in Canada. This paper will explore how differences in property rights between reserve and non-reserve land continue to inhibit the economic development and self-determination of First Nations communities today, and how progress can be made through the privatization of reserve lands.
Property rights in this essay are defined as the determinants and protections of land ownership and use, which are critical for any semblance of wealth-building. In Canada, property rights fall under provincial jurisdiction. So long as there is no violation of provincial and municipal laws, Canadians can industrialize, develop, build, and use non-reserve private land as they desire. In contrast, property rights on First Nations reserve lands are based on the 1876 Indian Act, a paternalistic policy that originally established First Nations reserves as Crown property (Alcantara 2007, 424). The Indian Act barred reserve communities from participating in Canada’s developing economy while European settlers pursued wealth-building opportunities, and continues to give the government jurisdiction over reserve land today. Now, non-Indigenous workers are 34% better off financially than First Nations peoples in urban settings, and 88% better off in rural settings, which can be attributed to intergenerational impacts of extreme disparity (Wilson and McDonald 2010, 3).
The Framework Agreement on the First Nations Land Management Act 2022 (FAFNLMA) is new policy that works alongside the Indian Act, fraudulently claiming that “Canada is no longer involved in the decision making of the First Nation’s land and resources” (Canada 1999, Section 29(1)). It’s true that the FAFNLMA allows First Nations groups to develop land codes, which are frameworks for “administering [reserve] lands according to their own rules and customs” (Alcantara 2007, 426). However, the Canadian government retains the right to intervene at any point, on any decision made on the land, so long as government intervention is “justified and necessary for a federal public purpose” (Canada 1999, Section 29(1)). So, really, Canada IS involved–this definition of “appropriate intervention” can justify ANY decision to interfere in First Nations affairs so long that interference “serves the national interest,” even if that interest is nonsensical (Canada 1999, Section 29(1)).
The fact of the matter is that there is a positive relationship between property rights and economic growth, as extensive property rights tend to increase economic activities such as investment, land use, and development (Aragón 2015, 43). Microeconomic equilibrium theories suggest that increasing private land ownership will increase income, with evidence suggesting that even the limited progress made by modern treaties has resulted in a 13% increase in real income on reserves (Aragón 2015, 43). Despite this evidence that property rights improve economic outcomes, current legislation does not protect property rights directly or privately. Land codes have some use in that regard; they help First Nations cut costs through eliminating the “inefficiencies and inaccuracies generated by the involvement of a centralized authority” (Alcantara 2007, 431). However, there is limited evidence to prove that autonomously-designed land codes alone result in better individual economic outcomes or incomes for First Nations peoples on reserves, as increased autonomy can skew average income measurements if an influx of wealthy investors migrate to reserve lands and profit from access to new development projects (Aragón and Kessler 2020, 481). Further, there is no evidence that land codes result in First Nations people escaping the looming threat of federal oversight (Aragón and Kessler 2020, 481). The land must be protected through legitimate property rights that extend beyond individual land codes in order to promote true self-determination and positive economic outcomes on reserves.
While the following statement is controversial for an economics paper, it must be noted regardless: when it comes to First Nations economic policymaking, profit should not be the sole goal. First Nations communities are diverse and their interests may not strictly align with Western, capitalist ideas of development and profit; however, a lack of individualized, private property rights on reserves eliminates First Nations’ autonomy to make the choice to participate in the Canadian economy according to their own personal desires (Alcantara 2007, 422). It should ultimately not be up to the government to decide that First Nations peoples are still wards of the state–thus, privatization and protection under provincial governments is therefore the obvious next step in promoting First Nations’ autonomy over reserve lands. All other Canadians enjoy property rights that are protected by the provincial government, without fear that the federal government will enforce its will over the land; it is time to extend the same dignity to First Nations reserve communities.
It can be argued that increased property rights would not make a large difference in economic outcomes for communities on reserves (Aragón and Kessler 2020, 460). According to limited research, property rights “may improve housing conditions but may not be a transformative tool for poverty alleviation” (Aragón and Kessler 2020, 491). This claim is based on the analysis of specific economic indicators–income and employment outcomes–but is limited as it is based on a study of First Nations reserves where land still continues to be held by the Crown (Aragón and Kessler 2020, 491). As such, we may not yet see the whole picture of what truly privatized land rights can do for economic and social improvements on reserves.
Ultimately, it is the lack of provincially-protected private property rights on reserve lands that inhibits economic development of First Nations communities in Canada. Using economic analysis of income trends increasing with increased autonomy on reserves, there is already strong proof that economic and social progress through privatization can be achieved. Going forward, the Canadian government must level the playing field by allowing all Canadians to participate in the modern, property-owning economy.
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