Nisga’a property rights and aboriginal dependency
November 24, 2009
On November 23, 2009, Joseph Quesnel, a Policy Analyst for the Frontier Centre for Public Policy, wrote an article in the National Post entitled “Nisga’a leading a quiet revolution in northern British Columbia” (http://troymedia.com/?p=5989). In the article, Quesnel argues that the passage of a law that permits Nisga’a individuals to sell Nisga’a lands is “revolutionary” because it provides them with an advantage not available to aboriginal groups living on reserves. Rather than having title “held by the Crown and controlled by band councils” under the Indian Act, which results in insecure and weak allotment arrangements that cannot stand up in the courts, Quesnel notes that “property ownership can be taken to the bank” by individual Nisga’a.
According to Quesnel, this development is “an important concession because being allowed to own your own property is the foundation of wealth creation”. In the case of the Nisga’a, they will be able “to finance their own business enterprises by obtaining loans using their home as security”, and thus take an initial step in reducing the poverty that plagues their community – something that Quesnel implies could work in addressing poverty more generally in the native population. Quesnel’s viewpoint is based on the the work of Hernando de Soto, the Peruvian economist who wrote The Mystery of Capital. According to Quesnel, de Soto maintains that impoverishment continues in developing countries because the poor do not have legal title to their homes and other belongings. As a result, ”they cannot access the capital needed to perform meaningful economic activities”, and must engage in business activities illegally.
While not knowing enough to analyze de Soto’s assertions about developing countries (although his claims appear implausible at first glance), Quesnel’s comments about the benefits of private ownership for aboriginal communities cannot be sustained. While the Nisga’a may be able to “take” their property ownership “to the bank”, as Quesnel claims, this does not mean that the bank will lend them any money for “business enterprises”. In order for the bank to do this, the resale value of the house must be equivalent to the money loaned. This would be unlikely when one considers that these homes are located in isolated locations and “outsiders” buying homes would be subject to “Nisga’a law”; these conditions mean that the market value of these homes would be very small.
And even if the Nisga’a and other aboriginal people were able to “use their home[s] as security”, this would not provide “native Canadians their rightful place within the economy”, as Quesnel asserts. This is because most people in Canadian society do not become participants in economic processes by “financing business enterprises”. As was pointed out in Disrobing the Aboriginal Industry (p. 94), most people participate as wage earners, and it is unrealistic to assume that unskilled, uneducated and isolated aboriginal people who have little knowledge of how the economic system actually works will become movers and shakers in the capitalist system. Rather than lauding dubious “revolutionary” developments that encourage aboriginal people to start “businesses”, Quesnel would be better to focus on improving aboriginal educational and health services so that the native population will have the skills, values and attitudes to participate in the Canadian workforce.
4 Responses to “Nisga’a property rights and aboriginal dependency”
Leave a Reply
November 25th, 2009 at 11:28 am
Thanks for feedback, Prof. Widdowson:
I share your concerns about “marginal reserve land.” I guess I should clarify that I don’t have illusions this move will create a sprawling economy right away, but I think it is a start, as it will allow smaller enterprises to spring up. With more capital attained through these, there is the potential of bigger and better enterprises.
Another key difference is Nisga’a territory is located on significant tourist hot spots. The picturesque Nass Valley is not an isolated reserve like say in northern Manitoba. I think there is more potential for development there than the non-viable reserves we both believe may have no hope.
the real revolutionary part of this law is a shift in terms of First Nation land tenure and how it is perceived. The banks being able to seize the property is the daring move on the part of the Nisga’a.
It will likely inspire other indigenous communities as will have seen it done before.
November 26th, 2009 at 6:14 am
No one, I don’t think, would argue that property rights are a panacea for successful economic development. But I think most people would agree that they can serve as a powerful impediment to economic development. Others might also say that efficient and enforceable property rights are one of a set of necessary conditions for successful economic development.
November 28th, 2009 at 3:08 pm
It would also create a distinct and powerful disincentive for corrupt band councils to use housing as a form of rewarding their cliques and punishing their opponents.
December 7th, 2009 at 3:41 pm
Louise: You have identified another area of advantage with private housing that I had wanted to explore but could not in any great detail with this paper.
I had to focus on the main advantage, which was economic empowerment.
Political freedom is also a main attraction. Taking housing out of First Nation government authority would give these people that much more of a “buffer” from state authority. Getting a house and land would be about mortgages and not political considerations (on Indian Act bands housing is used as a means to reward voting for the “Right” candidate. I have encountered this countless times on reserves).
I do agree with Frances that education and training would have to be a central strategy of Aboriginal economic opportunity. I don’t deny this. However, putting up a home as security for a loan does not take a post-secondary education. Many entrepreneurs in mainstream society do not possess an advanced degree. Yes, most are wage earners, but if there are no businesses to hire people to start with, you’re left in a dismal state where jobs are chiefly in public administration, which is ultimately unsustainable.
If we’re talking about Aboriginal dependency, the chief cause is economic disempowerment. I agree that part of the solution is many First Nations realizing that the jobs are outside their communities. But, I also think we ought to try to empower the residents of reserves to try to advance their own economies where they live.
If jobs can’t be created under the best of conditions (enforceable property rights, good infrastructure, etc) than I think the rational decision is to move off the reserve.
The problem is by promoting ONLY education and entering the labour force is to assume first that all jobs must be off-reserve. I think we ought to try to advance reserves as they are.
You know I support recognizing the marginal reserves problem. But, one must also recognize that the economy has changed. It’s not all about natural resource extraction and primary products. Internet-based businesses, knowledge-based economy can be done from some isolated reserves. It is already being done. So, I think we ought to try a multi-pronged approach that both advances First Nation education and training, while at the same time improving things for people on reserves now to give them a fighting chance.