It is an honour to address the House of Commons Standing Committee on Aboriginal Affairs to discuss land use and sustainable development.
For those of you who don't know me, I am Clarence T. “Tax” Manny Jules. I was named after my father. He was chief of our community in the 1960s. He taught me all I know about politics, and he is still the person I most often turn to for encouragement and insight. I, myself, was a council member from 1974 to 1984. I was elected chief of my community three times by acclamation, and I served 16 years.
My father was the first to recognize our two greatest challenges as first nations. First, the Indian Act froze the development of our legal and administrative framework in the 19th century. This has meant that we cannot move at the speed of business, and that we only get a tiny fraction of our share of private investments on our lands. Second, we don't even own our own lands. This has made us wards of the state and created a dependency cycle that steals our hope.
It is because of my father that I am here today to talk about the proposed first nations property ownership legislation, which I will shorten to FNPO.
On March 29 the government announced its intention to work with interested first nations to develop and implement the first nations property ownership legislation. It was a historic announcement, and it was a proud moment for the first nations who have led this initiative, the First Nations Tax Commission, and for all Canadians who want to address the problem of our economic disadvantage.
This legislation will allow participating first nations to help themselves. First nations that choose to participate will own their lands. Our permanent jurisdiction over taxation and lands will be confirmed. Participating first nations will have a model legal and administrative framework. They will be able to make decisions at the speed of business.
The 19th-century Indian Act legislated us out of the economy and took ownership of our lands. They are held in trust on our behalf. It is time to leave the 19th century behind. It is time to legislate our way back. FNPO will accomplish this.
This legislation will mean that we will have the same property and land title systems on our land that the rest of Canada takes for granted. It will mean we can obtain mortgages, build equity, finance businesses, and transfer wealth to our children, as do other Canadians. This is an opportunity to free the imaginations of our entrepreneurs. It is a chance to raise our productivity. More importantly, it is an opportunity to escape dependency and to begin to restore our culture of independence.
FNPO is good for Canada. The March 29 budget accurately frames our policy challenge over the next 30 years. In 20 years, two workers are going to have to be as productive as seven were in the 1970s. If we can't make these two workers more productive, then we must accept some combination of cutbacks in government, reductions in personal disposable income, longer working hours, or delayed retirements.
Just as a quick note on that, I absolutely support the Prime Minister in his announcement that we should raise the age of being elders to 67. In my community it's 60, and I'm 59. I'm not ready to be an elder yet.
If we become poorer, politics will become more divisive. Because of it, we will fight over who bears the most pain. None of us want this. We must create the conditions that lead to long-term economic growth in Canada.
First nations must be part of a productivity strategy. We are a younger population. One in 10 new workers is going to be a first nations person over the next 20 years. We are currently the most underemployed component of the workforce. If we remain underemployed, then Canada's productivity challenge will become even more difficult.
FNPO will make first nation lands and individuals more productive. The legislation will reduce tenure uncertainty and investor certainty. It will reduce the costs associated with business transactions such as issuing a mortgage, transferring title, and securing financing. It will confirm and help implement first nation jurisdiction and enable open markets.
The titles of reserves are held by Canada. The titles of FNPO lands will be held by the first nation. Individual ownership is limited to certificates of possession and leases on reserves. FNPO will allow for fee simple ownership. FNPO lands will have the same tenure certainty as other lands in Canada. FNPO lands will not be constrained by the inefficiency of the Indian Act.
FNPO will mean access to financing for housing without requiring ministerial or first nation guarantees. According to information from the Assembly of First Nations and Aboriginal Affairs and Northern Development Canada, at the current rate, it will take between 200 and 850 years to reduce the existing backlog of needed housing units for our reserves. If our members had title to their individual lands, they could obtain mortgages like any other Canadian. Think of what that would do to the housing backlog. Think of what that would do for first nation and Canadian economies.
FNPO will mean improved outcomes for other initiatives related to first nation education and resource development. Investments in first nations education will work better when the people receiving that education are living on lands that are productive and that generate economic and employment opportunities. People need to be exposed to workplace opportunities and business success stories early in life so they can see the value of education.
It is easier to reach agreement on resource developments when first nations have productive land. Presently, first nations are able to receive only a tiny part of the benefit from resource development on their current lands and traditional territories. They miss out on most of the benefits of investment because it is so difficult to do business on their land. Consequently, they focus on receiving a large share of a relatively tiny part of the benefit stream, such as royalties, and it is harder to reach agreement. When first nations are able to fully share in benefits, agreements will be easier to reach because the agreements will focus on our mutual economic interests.
FNPO will mean we are less likely to be treated as a social issue. Social problems follow from a lack of opportunity. The platform for addressing social problems must be an economic one that starts with making our lands more productive. FNPO can increase our revenues and improve our self-reliance. As we say at the tax commission, investors are taxpayers.
Many first nations have already pursued a great deal of investment on their lands, and under FNPO they can facilitate more. We are not afraid of investment. It is how we generate revenues. It is how we improve the quality of services. It is how we create our own circle of growth, where investment leads to more public revenues, which lead to better public services and infrastructure, which attract more investment to start the cycle again.
FNPO can help resolve disputes related to matrimonial property and estates. These disputes are often not settled because we can't use the value in our lands to resolve them. FNPO will allow a broader range of property owners. It will enable the real estate markets to work effectively on our lands. This will mean fairness in the division of matrimonial assets. It will mean estates held by multiple heirs, or those that are intestate, can remain or become productive.
The additions to reserve process should be adapted to allow FNPO as an option. It would have immediate benefits in Saskatchewan and Manitoba. In Saskatchewan, 25 first nations are spending $440 million to purchase land as part of the TLE Framework Agreement. Over 1 million acres of land are being added in Manitoba through the Manitoba TLE Framework Agreement.
These lands could provide locations nearer to markets for these first nations. FNPO status would allow these lands to become productive. They would provide home ownership, home equity, and business investment opportunities.
The First Nations Tax Commission contracted research to estimate the benefits of applying property ownership legislation to additions to reserve lands. Despite using very conservative estimates—no pun intended—the results are impressive.
It is estimated that, during the next 15 years, a combination of FNPO, additions to reserve, and more open markets could generate $3.7 billion in investment, create over 30,000 employment opportunities, and lead to $48 million in annual property tax revenues to provide local services and build infrastructure.
These are conservative estimates because we assumed that only 1% of the TLE lands in Saskatchewan and Manitoba became FNPO lands. No other provinces were considered. We also assumed that only 40% of that 1% would be developed over the next 15 years. We also assumed that the values would approach the current values of smaller communities in rural areas over that time. Saskatoon, Regina, and Winnipeg values were not included. Finally, we did not include resource development opportunities, only commercial and residential.
Some $3.7 billion in investment represents much less than the 1% of anticipated total investment in these provinces over the next 15 years. In other words, the benefits will likely be much higher. The FNTC has also commissioned research to estimate the fiscal and economic benefits for 10 possible proponent first nations. Using similar conservative estimates, the estimated increase in the potential investment, property values, tax revenues, and employment is close to $3 billion for these communities.
To put these benefits in context, consider that each year the federal government is allocating about $100 million to improve first nation access to capital and economies. They have to do this because there is a credit crisis on our lands. We can't access capital like other Canadians because the market does not work on our lands.
With FNPO, the ten first nations that have so far expressed interest will see their access to capital increase by $500 million once the legislation is passed. In addition to providing significant economic benefits, FNPO can better protect first nations lands than the current system because participating first nations will be able to establish land-use plans that can protect and set aside community lands.
The FNPO initiative has been criticized because there is a fear that some first nations will sell all of their lands. This is ridiculous. Over 90% of land in Canada is held by the crown. First nations know the importance of land and jurisdiction, and their response is likely to be similar. Furthermore, FNPO will mean that first nations will always have tax and land management jurisdiction over their lands regardless of who lives there.
First nations will have powers of expropriation exercised in a fashion similar to the rest of the country. These lands will revert to the first nation government in certain situations, such as when someone dies intestate. Another example is when a first nations goes extinct right now, the reserve lands that are set aside and which title is vested in Her Majesty reverts to the provincial government. In other words, FNPO lands will be like those in the rest of Canada. If I buy land in Ottawa, it remains under the jurisdiction of Ontario; it does not become part of Tk'emlups. Similarly, if one of you bought land in my community of Tk'emlups, it would always remain and be under the jurisdiction of Tk'emlups.
The FNPO initiative is also criticized because it is suggested that we already have sufficient powers to make markets work on our lands without having title to our lands. Markets on reserves are often limited to band members or only those interested in purchasing a lease. The band member market is small, and trading values are very low. The leasehold market is much larger, but at best represents 65% of the fee simple. Leaseholders lose value when they reach the end of their term. They are significantly more costly to establish and administer than clear individual title.
Land titles are currently registered in the Indian Lands Registry, a deeds system. FNPO will create a Torrens land registry system. The Torrens system is more certain, more stable, and more efficient than the Indian Lands Registry. With a Torrens system we can give our members guaranteed title instead of a certificate of possession. Torrens-based title should enable an open market, and property values that are the same as they would be in the neighbouring jurisdiction.
Establishing the legal and administrative framework for our lands to support markets can take years to establish and cost millions of dollars. Many of our current solutions give our governments powers but no guidance or institutional support. To use a comparison, it is like giving other governments in Canada the keys to the car to set out on their journey, but asking first nations to build the car before they can get started.
FNPO legislation will create a first nations Torrens system and a 21st-century legal and administrative framework that will utilize the best practices seen in the provincial, federal, and local systems across Canada. It will create model standardized laws so first nations will reduce the years they will need to develop their legal framework. We will provide the institutional support through the First Nations Tax Commission. We will utilize the Tulo Centre of Indigenous Economics to build local capacity and implement investment-oriented administrative systems.
We want FNPO to help participating first nations catch up in a matter of years instead of decades, and it will cost a fraction of the implementation costs. This will reduce investor costs so first nation governments can be competitive and finally begin to move at the speed of business.
Some have suggested property ownership is not part of our culture. I disagree. Market economies are not foreign to us. We created them ourselves. We traded goods over hundreds of miles. The Mayans had a complex trade network. How could pipestone, dating back to before contact, end up in my territory in south central British Columbia when it only comes from a few places in the world, such as Pipestone, Minnesota, if we did not trade? How could corn be used throughout the Americas before contact if we did not trade?
Trade cannot be financed without capital. We had to build transportation methods such as boats, and build trails, roads, and public buildings. They required community investments based on a future return to the community and the individuals. They required us to raise our own revenues and pay for them ourselves.
Markets need institutions to facilitate trade. From Alaska to California, we agreed to a common trade language. We recorded transactions relating to labour and goods. That trade language was Chinook. It was a combination of aboriginal languages, English, and French.
We had individual property rights. Our clothes and shoes were not meant to clothe the entire community. Our winter homes belonged to certain families. According to our written history, our community had individual property rights dating to the early 1800s and the reintroduction of the Peruvian potato into our community.
I recognize that FNPO may not work for all of our communities, but it is about restoring our freedom of choice. Throughout our history we had the ability to choose successful innovations and reject poor ones. Our most successful innovators were the Mayans, the Aztecs, and the Incas. Each of our cultures was built on our competitive advantage and created sustainable economies.
After contact, a system of central planning was imposed on us. This did not work in eastern Europe and it does not work for us. It meant that we lost our ability to choose, and we became mired in poverty. We have now begun to re-establish our institutions, and first nations will determine which ones are successful by their own choices.
FNPO is about restoring our hope. We have prospered in the past. We have been decimated by disease, warfare, and most recently, with the good intentions that have created our dependency. We have begun to rebuild the legal and administrative foundation to support markets on our lands. Once we restore property rights to our lands, I believe we will unleash a wave of creative and entrepreneurial spirit.
In the words of one of my cultural heroes, Chief Joseph, from 1879:
Let me be a free man, free to travel, free to stop, free to work, free to trade where I choose, free to choose my own teachers, free to follow the religion of my fathers, free to talk, think, and act for myself.
Thank you very much for this time.
