I want to thank you for having us here. We look forward to the discussion and questions after my opening comments.
My name is Clarence Louie. I am chief of the Osoyoos Indian Band in southern Okanagan, British Columbia. Some of you have been to our resort. I thank you for coming there.
I am appearing before this group today as chairperson of the National Aboriginal Economic Development Board. The NAEDB is a federal advisory board created in 1990 to provide strategic policy and program advice to the federal government on aboriginal economic development. The board brings together first nations, Inuit, and Métis people from across the country to advise the federal government on ways to help increase the economic participation of aboriginal men and women in the Canadian economy.
The NAEDB plays a central role in the development of federal policies and programs that increase the economic participation of aboriginal people in this country, including in the areas of job creation, business development, and land management. The board played a key role in the development of the federal framework for aboriginal economic development and continues to advise the federal government on its implementation across the country.
Appearing with me today is Chief Sharon Stinson Henry of Rama First Nation in southern Ontario. Unfortunately our colleague, Chief Terrance Paul of Membertou First Nation, was unable to join us today. Dawn Madahbee, co-chair, is also with me today. We are pleased to provide some information that may assist this group in its study of sustainable economic development and land use.
Today my colleagues and I would like to offer the NAEDB’s views on land and environmental management on reserve. We will also offer some specific recommendations, based on our own experiences as leaders, to improve current federal policies and practices.
In Canada, as in most of the developed world, a secure land base is the foundation of economic development. Land provides equity to allow access to financing for investment and entrepreneurship, provides a revenue base to promote community development, and is a critical input for the development of business opportunities in a range of sectors, including natural resource extraction. The World Bank has noted that real property represents between one-half and three-quarters of wealth in most economies. When governed through effective management and regulatory regimes, land is a primary driver of economic growth.
In Indian country, the story is quite different. On 96% of reserves in Canada, the Indian Act regulates nearly every aspect of community life. It defines who is an Indian and regulates band membership and government, taxation, elections, schooling, title, lands and resources, and money management, among other matters. Its land management provisions play a major role in setting the conditions for business development and on-reserve investment.
Let me provide three examples of the challenges to developing strong and vibrant economies on reserve that derive from operating under the reserve system.
Section 89 of the Indian Act, by explicitly prohibiting the mortgaging of property on reserve, removes one of the key drivers of small business development.
Federal legislation such as the Species at Risk Act sets a different legislative and regulatory environment on reserve than exists on provincial land, increasing the complexity and risk for investors.
Under the Indian Act, land management processes involving common activities such as leasing and registration are expensive, complex, and often extremely slow. This presents significant challenges for large-scale, land-based economic activity, such as major resource development.
There are many more examples like these. Taken together, the negative effects of the Indian Act on land management and economic development result in time-consuming processes. Decisions made on reserve take too long—simple transactions in a normal business climate take up to five times longer in an on-reserve setting—and they require too many approvals, delay investment, and are preventing economic activity entirely.
There is the high cost of doing business. The cost of doing business on-reserve is up to six times more than off-reserve, creating a strong disincentive for investment.
There's an absence of market forces. The Indian Act regime often requires federal involvement in a community’s economic development decisions, interfering with business activity and creating uncertainty.
There are inappropriate and outdated rules. Regulations under the Indian Act are cumbersome and complex and have not kept pace with the rapid pace of change in the broader economy.
In 2012 the NAEDB will be releasing the aboriginal economic development benchmark report, the first comprehensive effort to assemble indicators to establish benchmarks for the social and economic well-being of first nation, Inuit, and Métis in Canada.
The report reveals some of the staggering effects of the Indian Act on the economic outcomes of first nations.
First, despite an increase in first nations land used for economic development and the enactment of new legislative tools to overcome the deficiencies of the Indian Act, 80% of the 27,000 aboriginal businesses across the country continue to operate off reserve.
Second, 68% of first nations still have little or no land and resource management responsibility or capacity.
Third, while on-reserve unemployment was 23% in 2006, non-aboriginal Canadians experienced unemployment rates of 6%.
Clearly, first nations that manage their own land under the Indian Act are at a serious disadvantage.
In terms of case studies, the members of our board appearing before you today represent two first nations that have achieved relatively high degrees of economic success, despite operating under the reserve system. Both of us, as well as Chief Paul of Membertou, are completing case studies to help people better understand the impact of legislative and regulatory barriers on economic development. Each case study provides an in-depth analysis of the costs and delays that are created from operating under the existing federal land management system. We would be pleased to share them with the committee for its consideration when they are complete.
These case studies reveal a number of things.
First, the Indian Act makes economic development, and just about any other land-related decision, extremely expensive and time-consuming. Dealing with third parties such as lenders or business partners can also be challenging, owing to the lack of final decision-making authority and certainty.
Second, land transactions under the Indian Act require various approvals of decisions on reserve lands from any or all of Aboriginal Affairs and Northern Development Canada, the Department of Justice, and Environment Canada. Involving the federal government to this degree, which operates far away from the realities of the first nations and is generally risk-averse, compromises our ability to move at the speed of business.
Finally, the Indian land registry is inaccurate, lacks clear standards, and is unable to guarantee certainty of land title for landholders. This is compounded by the fact that the Indian land registry does not have formal regulations that govern the system, that registering certain transactions can take anywhere from months to years, and that the system allows for multiple descriptions and ownerships to be registered against a single property.
Chief Sharon Stinson Henry of Rama First Nation will now speak to her community's case study.