by John Beaucage

I hope the title has grabbed your attention as it should. There seems to have been a misplaced idea among many Canadians and including some First Nation citizens that we should not be pursuing wealth as other Canadians do. In my many discussions with Indigenous people across the country there is a perception that the pursuit or accumulation of wealth will sully our ideal of (dare I say), the “Noble Savage”. We are often seen as a people who demonstrate against environmental damage caused by irresponsible development, we go to court to further delineate our rights which have been trampled upon since the day after the treaties were signed. Many know us only as an anachronistic part of the Canadian fabric, perhaps a footnote in the fullness of the historical record of how Canada came to be.

We often see news stories about budget appropriations by the government set aside to look after Indigenous issues, huge totals for housing and infrastructure, for education and health, and it looks like First Nations people are living off the backs of other Canadians who are paying taxes to fund these huge expenditures. Then we see the Indigenous politicians say that the funding is not enough to look after the problems. What Canadians don’t hear is the reasons for the seeming endless displays of government largesse. For instance, how the British Crown willingly took on the fiduciary responsibility for all native people and communities in order to gain access to land and resources by following rules of law laid out by the King of England. In doing so, the Crown, eventually transferred the responsibilities to a fledgling Canada whose government at the time felt that they could manage the fiduciary duty by “taking the Indian out of the child” and by “civilizing the savage”. They did this by setting up residential schools and creating an Indian Act, that would eventually eradicate all Status Indians in Canada. Over time the “Indian problem” would be resolved.

Well, guess what? We’re still here, our numbers are growing and our position in the socio-political landscape is getting stronger every day. There is recognition that our rights were not protected properly by the fiduciary, the majority of countries in the world now understand that indigenous populations have a right not to be assimilated by colonialist intruders. There is a slow understanding dawning upon many Canadians that First Nation people are not a drain upon the GDP of Canada, but that we are initiators of the original new world economy and the so called founding nations are repaying a debt to the First Nations for the sharing of the land that will last as long as the “sun shines”. These were words not coined by the First Nation leaders but by the Crown negotiators of the treaty.

Now to get back to the original thesis of this paper, creating wealth in First Nation communities. I taught a business class to a group of First Nation people a number of years ago. We endevoured to understand business principles and from there create a business plan that had a chance of success. One of the very first things that we talked about, which became a mantra to the class was that “wealth” was not a dirty word. It is Ok to work hard, be innovative and to derive economic benefit from your hard work. We see many successes every day across Canada, some First Nations are doing very well with oil and gas revenue, others are involved with tourism, or land lease. It is good that we do see many successful communities getting ahead. But what about the ordinary person living in one of our communities does he or she have the same opportunity as a non-native person to accumulate wealth? By and large the answer to this question is a resounding NO.

The majority of Canadians accumulate a good portion of their wealth from real estate. When they were young and one of their first ventures into a major investment was to buy or build a house. As the years go by the value of the real estate rises. I recently did some research on house prices in Toronto and I found some interesting information. In 1957 a couple recently moved to Toronto from the US and bought a 2 story detached house in a nice neighbourhood for $30, 500, the purchased was financed by the husband’s employer. In 2014 the husband passed away and his widow sold the house for $1.6M or 52.4 times its original purchase price. Even though she had a good survivor benefit from his husband she does not have to be concerned about not having enough resources to spend the rest of her days in comfort. In 1967 the average house price in Toronto was $24,078 in 1973 the average was $40,605. Today the average house price is well over a million dollars. It all leads to the average person being able to accumulate wealth from a very simple source, the house they live in is a major investment that they can sell, give to their children or live in it until they pass on to the next world and their estate looks after it.

This is a very simple method of wealth accrual that First Nation people have not been able to access. My neighbor in my First Nation built his three bedroom house in the 1970’s on a nice piece of land overlooking Georgian Bay, he and his wife raised their son in the house and when he and his wife were ready to move into a retirement home, he wanted to sell the house. He put the word out to friends and family. It just so happened that a distant cousin was moving back to the community with her husband after they retired from their jobs in the southern Ontario. They bought the house for $34,000. That was in 2003. The value of a similar property off reserve, without lake frontage was approximately $200,000, a lake frontage property double that. Even though he and his wife were not unhappy with the sale amount it does seem that he was unable to benefit from a rising value asset. Present day value for a house or cottage on Georgian Bay is probably in the seven figures. Even though it is un-realistic to believe that values on-reserve could approximate off-reserve values, mostly because of the limited number of eligible buyers, it is still not unreasonable to believe that a sale value should exceed replacement value.

The main problem over the years is that there have been expectations built up concerning the rights of First nation people to have housing provided as part of the fiduciary duty of the government of Canada. In most instances the right to housing has been secondary to the budget available, as one Chief characterized it, “You have a right to have a house provided for you, but you’re going to have to wait, sometimes a very long time.” To today’s generations many of whom have good jobs and a steady paycheque this is not good enough. They’d like to obtain a good house now. They are also ready to pay for it. This entails going to the Chief and Council and asking for a Ministerial Guarantee, which is misnamed, it is not the Minister who’s guaranteeing the loan, it is the Minister of Indian Affairs telling the lender, “Yes, your loan is guaranteed by your band’s revenue.” Having gone through the process myself in the late 80’s and my daughter going through the process two years ago, I can testify that it is still slow and painful. A loan guarantee can take anywhere from several months to a year to get completed. So, if you are selling a house, no potential buyer wants to wait that long.

What is the alternative? The First Nation Market Housing Fund now working with over 230 First Nation communities in Canada has negotiated with lenders to obtain mortgage financing within days not months at competitive rates. They work with First Nation to provide much needed capacity to communities, and they will provide a credit enhancement facility to those communities that qualify.

By having a credit facility that can readily respond to the needs of the consumer in a timely basis will enable a market process to start up in First nation communities. In one community in Ontario we do see for sale signs on lawns of First Nation houses. It creates a process where people treat their houses as an asset and know that if they keep their houses in good repair they will be able to realize a capital gain when they are ready to retire. It is something that the majority of Canadians take for granted, and something that First Nation homeowners are starting to buy into.

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