The Modern Treaty Era
Flanagan and Johnson (2015) found that Community Well-Being Index scores were correlated with a community’s own source revenue, but not with a community’s per capita financial assets. “The money has to be put to work to create opportunities for earned income, better housing, and higher levels of education in order to raise the CWB.”
Even with financial capital, and even with local sources of natural, human, or physical capital to employ, economic growth is not guaranteed. Capital is like the wood, and business is like the flame. But no fire can take off without oxygen. The oxygen is the supportive, business-friendly environment based on good governance. A business-friendly environment has reliable leadership, complete legal frameworks, quality infrastructure, and prudent taxation. Says the Tulo Institute:
“…possessing access to resources or having a good location is important, but it is not enough to create economic growth. Both Russia and Peru are well endowed with natural resources; indeed, Russia is also well-endowed with technology and human resources. However, neither country provides a high standard of living because they have been unable to offer the supportive public sector input that is also required. By contrast, countries such as Singapore and Japan have achieved very high standards of living with relatively poor natural resources…The barrier to prosperity on First Nation and tribal lands is an inability to provide sufficient certainty to investors. [First Nations and Tribes] must use the powers available to them now to lower the transaction costs of investment.”
In one 1999 comparison, it cost developers an average of 11 months to get the necessary approvals for projects in Calgary/Vancouver/Kamloops versus 48 months on Siksika/Squamish/Tk’emlups reserves. The financial costs differed by approximately the same proportion.
The Table below shows many of the transaction costs and uncertainties that investors face when considering a First Nation site for their business or project.
How can these uncertainties be resolved, and transaction costs be minimized? Communities must provide quality infrastructure, reliable leadership, reasonable taxation, and a complete legal framework. In a word, good governance, as discussed in a previous chapter, is essential.
Investors like good infrastructure – roads, parking, water pressure, internet; and they need good services – mail delivery, waste removal, and policing. All of these things reduce the costs of business and and are attractive to customers, suppliers, and business partners. Good infrastructure attracts business while, in a positive feedback loop, business can be taxed or charged fees to fund infrastructure.
Communities are better able to supply good infrastructure when they have tax revenues to spend.
Because of amendments to the Indian Act, First Nations have the right to impose property taxes on residents (1988), charge sales tax (2003), and charge fees for services provided to residents (2005).
Would-be investors need to know what these taxes, or any service charges, will be. Taxes, fees, and licenses should be transparent, be applied fairly, be predictable, and be reasonably low.
The First Nations Financial Management Board and the First Nations Tax Commission, instituted by the First Nations Financial Management Act (FNFMA), offer sample financial administration laws and tax laws (property tax, service charges, development cost charges, business activity taxes).
As of December 2017, 113 First Nations had developed property assessment and taxation bylaws under the FNFMA, and 154 Nations, about a quarter of all First Nations, were collecting property tax; however, the word on the street is that the tax is usually applied to non-member leaseholders, not band members, due to its inherent unpopularity.
Hillel (2019), in a sample of 38 Albertan reserve communities, found that the presence of a property tax in 16 of the communities in 2006 was correlated with income growth, the probability that the correlation was spurious being 22%. She notes that the communities having a tax tend to be either the wealthiest, who can better afford it, or the poorest, where few people will be paying and so the political backlash will be less.
Leadership needs to be unified, so as to better make the case for investment to community members, and to better communicate with potential investors. Leadership needs to make decisions in a timely manner. There must be regulations in place to protect investors as administrations come and go. Investors need to be confident that the next local election will not reverse the decisions of the present administration.
Complete Legal Frameworks:
Potential entrepreneurs and investors need to be given all relevant information regarding land use and building codes. How high can an office building be built? What standards must be met for septic tanks? The rules must exist, and community leaders need to have those rules at their fingertips. Entrepreneurs and investors want to know that the arrangements they make with the community are rock solid and legally defensible.
Unfortunately, the legal framework around reserve land is incomplete. When it comes to building regulation, health and safety, drinking water, environmental protection, and resource exploration and development, provinces have detailed laws but First Nations typically have only a limited set of federal laws.
There are reasons for the lack of federal regulation. One is that creating and updating laws is an onerous task requiring expertise not usually found at the federal level because these matters (building standards, health and safety, etc.) are usually regulated at the provincial level. Second, the process would have to involve the reserve community, in recognition of the Aboriginal right to self-determination. The new laws created are not necessarily going to be appropriate for all reserves or acceptable to all reserves.
Meanwhile, the Indian Act already allows First Nations to make local regulations concerning health, stray animals, traffic, roads, zoning, building construction, and water services, but many First Nations have lacked the expertise or energy necessary to develop these regulations.
There is, then, a need for standardized regulations, or a palette of well thought-out regulations from which First Nations might choose. It will also be beneficial to harmonize local regulations with those of other Indigenous communities and those of neighbouring municipalities, where possible and appropriate.
Bylaws on Reserve:
One of the seventeen roadblocks in the way of First Nations’ self-determination, according to Wolf Collar (2020), is “lawless First Nations communities”, by which he means a lack of community laws (“bylaws”) and a lack of resources to enforce existing bylaws. We draw heavily from his chapter in what follows.
All reserves are subject to the Criminal Code, a federal code. Provincial laws may also apply, but only where the province has jurisdiction, for example on highways and county roads which pass through reserves. The Band itself is responsible for policing reserve-only roads.
The Band can make its own bylaws concerning hygiene and disease prevention, domestic violence and abuse of any kind. The Indian Act section 81 gives a Band Council this right, so long as its laws do not clash with federal or provincial law. The Band must deal with trespassing, evictions, noise, nuisance, fights, and stray animals. In these cases, the Band may sometimes wish for more provincial police or RCMP (federal police) intervention. But the community may also fear provincial police or RCMP intervention, which, as recently publicized incidents attest, has sometimes been brutal.
Wolf Collar recommends that a Band create bylaws around construction and land use as we previously discussed. He also recommends bylaws to protect historic sites and signage, and to discourage property damage, dumping, and parking dilapidated furniture and vehicles. He makes special mention of animals. Grazing animals are sometimes neglected. Packs of homeless dogs are known to be a problem on a number of reserves.
The Benefits of Bylaws:
The benefits of a complete system of bylaws on reserve would include not only an improved business environment but moreover enhanced safety of elders, spouses, children, and animals; a more peaceful and attractive physical environment; and preservation of historic and culturally significant sites and buildings.
To resolve violations of local bylaws, a traditional court system could be developed, allowing the community to follow Indigenous legal traditions such as restorative justice. Any fines or community service could benefit the local community. The community could also benefit from training and employment in law enforcement.
What needs to happen?
For more than a century, the paternalistic attitude and interference of the federal government discouraged Indigenous communities from believing they could lead, innovate, and determine the laws governing their communities.
Today, Indigenous communities may need legal and financial assistance to draft bylaws.
Once bylaws are in place, they must be enforced. In an interview with Chief Administrative Officer David Soulière in Tyendinaga in March 2019, he said that his number one wish for the Mohawks of the Bay of Quinte was the ability to enforce existing bylaws.
Public Safety Canada provides funding to support police services in cooperation with federal and provincial/territorial governments, but this funding may not be sufficient.
Perhaps a regional approach would be more affordable: the Mohawks of the Bay of Quinte, for example, might team up with Curve Lake, Alderville, and Hiawatha First Nations not too far away. A regional force would present a more detached and anonymous face to a community, deflecting angry push-back against bylaw officers and police chiefs from band members who take arrests and fines personally.
At present, Indigenous police forces do not have their own courts. However, there are the “Indigenous Peoples’ Courts” or “Gladue Courts”. These statutory courts have full jurisdiction over Canadian law.
Gladue courts specialize in applying the principle affirmed by R. v. Gladue (1999), a principle incumbent on all courts, that judges should consider a person’s Aboriginal identity when sentencing. Judges should be aware that, because of systemic factors, Indigenous people are more likely to appear in court. They should also honour the Indigenous tradition of restorative justice, attempting to find alternatives to imprisonment of an offender.
There are currently 15 Gladue Courts, 5 of which are located in Toronto. The Gladue Court in Thunder Bay serves the Nishnawbe Aski Police Service region. There are also four national restorative justice programs, and dozens more at the provincial or territorial level.
We have seen that laws, leadership, reasonable taxation and quality infrastructure make a community a better place to live and a better place to do business. But when it comes to business, location is also vitally important. In our next chapter we examine the special challenges of remote communities.
- Tulo (2014) Chapter 2. ↵
- Fiscal Realities Economists (1999) ↵
- “Transparent” means that the information is publicly available and easy to understand. ↵
- National Indigenous Economic Development Board (2019), Annex A, Table 23. ↵
- Tulo (2014), pp. 120-2 ↵
- See for example this video of an intoxicated man being hit by an RCMP vehicle https://www.youtube.com/watch?v=yanXOlXNw5s ↵
- Group discussion with author and students ↵
- Public Safety Canada (2020) ↵