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Tom Flanagan, professor of political science at the University of Calgary and a former federal Conservative campaign manager

Legal property empowers individuals in any culture.

- Hernando de Soto

Canada's first nations are potentially wealthy landlords, with land reserves totalling nearly three million hectares. Dozens of reserves are near major cities such as Vancouver, Edmonton, Calgary and Montreal, as well as rapidly growing smaller towns such as Kamloops, Kelowna and Courtenay-Comox. This land base represents an economic asset that could make a major contribution to raising first nations' standard of living.

Indeed, there has been an explosion of entrepreneurship on Indian reserves. First nations have opened casinos, shopping centres, industrial parks, golf courses and residential developments; they own trust companies, airlines, trucking firms, sawmills and oil wells.

But such developments are often impeded by an inadequate framework of property rights. Investors are deterred by uncertainty; legal work and litigation multiply; projects take longer than they should; and many potentially profitable developments never happen because all these factors raise the cost structure.

Defects in first nations property rights exist at two levels. The first level of difficulty is that most first nations do not own their lands; the federal Crown has legislative jurisdiction over Indian reserves and manages them for the use and benefit of their residents. In practice, this means many transactions involving reserve land have to be reviewed by the Department of Indian Affairs, adding layers of legal work and delay to an already cumbersome approval process.

Quite simply, those first nations wishing to take over the responsibility of ownership should be able to acquire the title to their reserves from the Crown, thus emancipating themselves from the stifling paternalism of the Indian Act.

The second problem is the absence of individual ownership in the full sense. Many reserves are partially subdivided through some combination of certificates of possession, leases and customary landholdings. These three forms of individual rights are useful up to a point, but they are all seriously deficient for economic purposes. Certificates of possession can be transferred only to other band members, leases are temporary and customary rights are not enforceable in court.

Legislation can facilitate an escape from the Indian Act by allowing those first nations people who wish to own land in fee simple to have the same opportunity as other Canadians without jeopardizing the integrity of their land base. The key is for first nations to possess the underlying or reversionary title, which is now held in most cases by the provincial Crown.

Once they have the reversionary title, first nations can create fee simple title for individuals on their own lands, as the Nisga'a have recently done. Like other Canadians, they can be confident that their own governments will protect their land base while also protecting individual rights created on it.

There should be a voluntary approach to property rights. First nations who want fee simple ownership should be emancipated from the Indian Act and allowed - not forced - to create those rights. This is different from what happened in the United States under the 1887 Dawes Act, when Indian reservations were subdivided and privatized in a bid to break up tribal communities.

Broadly speaking, the political left in Canada believes in aboriginal self-government, while the political right emphasizes the integration of native peoples into the mainstream. In this case, left and right can come together: First nations will be able to get underlying title to their land, an important part of self-government; and they will also find it easier to adopt individual property rights for their landholdings, which will facilitate their participation in the Canadian economy.

There are no magic wands in the real world of public policy. Going "beyond the Indian Act" will not solve all problems, but restoring aboriginal property rights will enhance economic activity on reserves, create more jobs and business opportunities for first nations people, and improve both the quantity and quality of housing on reserves.

First nations' property rights will also benefit all Canadians. As the leaders of Manny Jules's Shuswap people wrote to Sir Wilfrid Laurier a century ago, "We will make each other good and great."

Tom Flanagan is professor of political science at the University of Calgary. Along with André Le Dressay, Christopher Alcantara and C.T. (Manny) Jules, he is the author of Beyond the Indian Act: Restoring Aboriginal Property Rights.