Let me start today by thanking you for the opportunity to speak at the Fraser Institute. Before I present an overview of "The Lost Century" and the 8 recommendations, I will provide a brief explanation of the Federation and its newly created Centre for Aboriginal Policy Change.

The Canadian Taxpayers Federation (CTF) is a federally incorporated non-profit, non-partisan, voluntarily funded citizen organization. The Federation has offices in five provinces from Ontario west, in addition to a federal office in our nation's capital. The CTF was founded in Regina, in 1990 when the Association of Saskatchewan Taxpayers and the Resolution One Association of Alberta joined forces to create a national taxpayers organization. The Federation advocates for lower taxes, less waste and accountable government.

For years the CTF has challenged conventional wisdom as it pertained to Aboriginal policy and built the case for change. Because no one was doing this work in the country, it quickly became apparent that a dedicated, issue-specific research and advocacy branch of the CTF was needed. In March of 2002 the CTF opened the Centre for Aboriginal Policy Change (the Centre) in Victoria, BC. Not only is the Centre a first for the CTF, it is the first of its kind in Canada: a full-time, permanent, and professional advocacy presence to monitor, research and provide alternatives to current Aboriginal policy.

One of the first tasks of the Centre was to develop a comprehensive position paper bringing work together the CTF has done since 1997. The Lost Century – Moving Aboriginal Policy from the 19th Century to the 21st Century was released November 14th. This paper shows that treating one group of Canadians differently – often with preferential treatment – is wrong both morally and intellectually.

The position paper assumes that Canadians – all Canadians – are fundamentally alike. With the discovery of the human genome, science has shown that all humans share similar genetic codes. It is only about one percent of the genetic code that differentiates us by determining visible traits such as skin, eye and hair colour. Therefore all legislation and government policy must be based on fairness and equality – not race.

BACKGROUND
It can be argued that the current plight of Aboriginal people was created in 1867 when the Canadian Constitution gave the federal government explicit responsibility for "Indians and lands reserved for Indians," thereby precluding provinces from legislating for Indians. Meaning the myriad of programs available to any other citizen of a province are not available to Indians living on reserve land, therefore; the federal government must create a separate layer of bureaucratic overlap. Consequently the federal government – by having programs specifically for Indians – treats Indians differently than other Canadians.

The 1969 White Paper illustrates a vivid example of why the Indian Act should be phased out. "…the separate legal status of Indians…[has] kept the Indian people apart from and behind other Canadians. The Indian people have not been full citizens of the communities and provinces in which they live and have not enjoyed the equality and benefits that such participation offers. The treatment resulting from their different status has been often worse, sometimes equal and occasionally better than that accorded to their fellow citizens. What matters is that it has been different."

The federal services provided to status on-reserve communities include education, social assistance, housing and community infrastructure. Some programs, such as post secondary education and housing, are also available to off-reserve status Indians.

The federal government spends approximately $7-billion annually on Indian affairs. From 1990 to 2000, the amount of federal funding increased by approximately 49 per cent.

The Department of Indian Affairs is the primary agent of federal spending on Indians. It provides a range of services to status Indians and Inuit. Some of the areas the Department funds are: Education, social support services, Indian government support, social maintenance, construction and maintenance of houses, schools, roads, bridges, sewers and other community facilities, management of lands, oil and gas management and development, resources development management of trust funds, community economic development, commercial development and Indian taxation services.

There are 12 other federal departments which also fund status Indians, in addition to federal government support, provincial and municipal governments spend approximately $3-billion per year on Indian, Inuit and Métis programs.

The depths of duplication, and the overlap of expenditures and resources, are enormous. This is because the expenditures by federal departments, and many provincial and municipal agencies, are not generally tracked in a way for those directed toward Indian people to be easily identified.

According to federal Auditor General reports, 80 per cent of federal funding is transferred to Indian band councils to then distribute the funds. Unfortunately, the money is sometimes spent on excessively high salaries for the Chief and council, leaving little money for health care, housing, social services and education. For example, for the year ending March 21, 2000, there was one native politician for every 177 people. These politicians earned salaries and honoraria of approximately $91 million tax-free. Their travel expenses were another $29 million.

To put the example in perspective, if all Canadians were as thoroughly governed as reserve Indians, there would be 295,000 politicians and Canadians would be paying them approximately $10 billion per year, plus travel.

Some of the additional government spending may have improved living conditions on reserves. However, since native band councils receive native-specific funding in addition to receiving the benefits of roads, universities and hospitals that other levels of government finance, then natives should live longer and be healthier than non-natives. As the above indicators illustrate, this is not the case. Clearly, the problem is with something other than money.

What follows is a brief overview of the position papers contents and its eight recommendations:

The Indian Act
Clearly, treating one group of Canadians differently – often with preferential treatment – is wrong both morally and intellectually. For more than 130 years, Indians have been segregated from Canadian society by the Indian Act. Fortunately there are no legal or constitutional barriers to ending the exercise of federal jurisdiction over Indians. Though the federal government has sole jurisdiction, that does not also mean that it must exercise it. Therefore, the federal government can abolish the Indian Act and polices of segregation at any time.

Recommendation 1:
To achieve equality for all Canadians, the Indian Act must be phased out over the next 20 years. By 2023 the Indian Act should no longer be part of the Canadian landscape.

Private Property Rights
Markets work best when property is privately owned. The land which comprises a reserve is owned by the Crown and is controlled collectively by the native band council, not by individuals. This communal arrangement imposed by the Indian Act produces problems for aboriginal individuals and entrepreneurs. Most Canadians can borrow against their own private property, which is how capital is obtained to invest in new business ventures.

Recommendation 2:
If native communities are to become economically self-sustaining, the reserve land which is now held by the Crown should be transferred to individual natives living on-reserve, and to band members living off-reserve. It will be up to natives themselves to decide if they want to transfer the land into a communal arrangement or allow for the property to be owned and managed individually.

Tax Exemptions
The CTF strongly supports tax relief and tax reform for all Canadians. However, both must be based on the principle of fairness. Taxes should be based on income; meaning if people do not pay taxes, it should be because they are too poor to pay, not because of their ancestry.

Recommendation 3:
The tax exemption now provided for natives living and working on reserves is a provision of the Indian Act, not the Canadian Constitution. The Indian Act is like any other piece of legislation, capable of being amended and/or abolished at any time. Taxation at all levels (municipal, provincial, federal) should be phased in for natives over a period of ten years. As it is now, an artificial competitive advantage for native businesses has emerged.

Accountability
Accountability on native reserves is lacking but there are ways to solve that problem. One possibility is to have native governments collect taxes in the way other levels of government collect taxes: through income taxes, property taxes and a multitude of other measures. This would have an immediate effect on the size of government on reserves, which is unreasonably large in comparison to non-native communities of similar size. Reserve governments should be subject to the discipline of being accountable to taxpayers. This would gradually reduce the excessive size of government on reserves.

Recommendation 4:
In order to increase the level of accountability on reserves, the payments currently transferred to native band councils should be re-directed to individuals. The money necessary for native governments could then be taxed back by the local native government.

Independent Audits
Under the current systems, once the federal government transfers money (tax dollars) from the federal departments to native band councils, The Auditor General of Canada no longer has the authority to audit how and where the money is spent. Without checks and balances, inefficiencies, redundancies, corruption and even abuse may occur.

Recommendation 5:
A system of independent annual financial audits and operation audits of Indian bands – similar to how the federal and provincial auditors conduct their audits of government departments and programs should be implemented. Expansion of the current Auditor General's mandate to include native bands is imperative for true accountability and transparency to occur.

Unequal Legal Rights and Entitlements
Native Canadians that live on reserves do not have to worry about paying their bills like other Canadians. They do not have to worry about their credit being ruined, or about possible fines. This is because section 89 of the Indian Act protects native property and assets located on reserves from any process of garnishee, execution or attachment for debts, damages and other obligations, including taxes, however justly due and owing.

Recommendation 6:
If native reserves are to become economically viable and compete within Canada, they must be subject to the same rules. The Indian Act must be changed to eliminate section 89 which shelters native property and assets located on reserves from any process of garnishee, execution or attachment for debts, damages and other obligations.


Municipal-Type Governments
There are more than 600 native bands in Canada. Seventy-five per cent consist of less than 1,000 registered Indians and almost 50 per cent have fewer than 500 members. Band sizes range from two members to over 17,000. The average band population on-reserve is 500. Municipal-style governments throughout Canada successfully govern small communities. Local government is delegated from the provincial government. If changes are needed, they can be implemented in the light of actual experience. In addition, local governments also have clear limitations on the powers they can exercise, thus providing a greater degree of certainty and accountability.

Recommendation 7:
Municipal-type governments successfully manage small communities all over Canada. This model should be implemented for native reserves rather than a constitutionally protected "third order" style of government. In addition, the development of individual property rights must be established and protected in order to generate the wealth needed for a self-financed municipal-style of government.

Votes for Non-Aboriginals Living on Reserves
If someone is a full-time resident of a municipality, voting rights are assumed – regardless of ethnicity. Under aboriginal governance, non-aboriginals living on reserves have no democratic right to participate in the local political community, even though they may pay property taxes to the local native band.

Recommendation 8:
Non-natives living on reserves and paying taxes in their local communities must be granted the democratic right to participate in the local political community by being granted the right to vote. In addition to a right to vote, non-natives living on reserves must be given the opportunity to serve as elected representatives on band councils.

The CTF believes Canadians – all Canadians – are fundamentally alike. Therefore all legislation and government policy must be based on fairness and equality – not race. As former Prime Minister Trudeau once stated, "The time is now to decide whether the Indians will be a race apart in Canada or whether [they] will be Canadians of full status." In other words, the time for equality is now.

By: Tanis Fiss
Posted: February 25, 2003
Topic: Federal

Contact the regional director Gregory Thomas for further information.

Type: Related

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