The Red Sucker Lake Indian Band of Manitoba has launched a constitutional challenge to force the federal government to improve housing for aboriginals. If successful, the decision could cost Canadian taxpayers tens of millions of dollars.

The constitutional challenge is based on section 36.1 of the Constitution. The section states Parliament is "committed to promoting equal opportunities for the well-being of Canadians; furthering economic development to reduce disparity in opportunities and providing essential public services of reasonable quality to all Canadians." The Red Sucker Indian Band believes those public services include housing.

Currently, the housing system on reserves works this way: The Department of Indian Affairs and the Canada Mortgage and Housing Corporation (CMHC) transfers money directly to native band councils. Since all the land which comprises an Indian reserve is held communally, it is up to the chief and council to determine who gets a new house or repairs.

If the federal government wants better housing conditions on reserves, one way to encourage it would be for home ownership through more widespread use of Certificates of Possessions (COP) on native reserves. Since it is difficult for natives to obtain a traditional mortgage, here's how it works: a holder of a Certificate of Possession transfers the certificate to the band as collateral. The band then signs a ministerial guarantee with CMHC in which it agrees to assume the mortgage in the event of a default. Once the mortgage is paid off, the certificate is transferred back to the individual. The process of paying for one's house promotes pride of ownership which results in individuals maintaining, repairing and renovating their property, thus saving taxpayers millions of dollars.

Pride of ownership is a powerful motivation for individuals to improve their property, and also to work, save and invest. It's why most homeowners are willing to invest 'elbow grease' in their possessions, including homes. But the reason they do so is because they have the ability to own property in fee simple; it's the most common type of ownership that allows a property owner to have almost unlimited control over their property.

In contrast, as any drive through most native reserves reveals, the dilapidated state of housing is regrettable and predictable because the Indian reserve system does not allow for native Canadians to own their homes in fee simple. Thus, new housing quickly becomes damaged. No one has an incentive to spend money on improvements if the prospect of recovering such money from a future sale is non-existent. Similarly, no one builds housing stock, for sale or rent, where a return is similarly unlikely.

Unsurprisingly then, a 2003 Auditor General's report revealed there was a shortage of 8,500 houses on native reserves in 2001. But it's not for a lack of money: the federal government spent $3.8 billion over the past decade on housing for 97,500 native households. The problem is in who spends the money and who owns the property.

Although the Red Sucker Indians Bands court challenge is a long-shot it has brought the issue of reserve housing to the forefront. To end the merry-go-round of spending on housing for native reserves, workable systems of private property need to be established and maintained. A step in this direction would be to increase the utilization of Certificates of Possession. Through this process, the establishment of basic private property on reserves, pride and prosperity will be recognized. And, homes that get fixed might just stay fixed.