First Nations, property rights and mortgages

Andrew Findlay has an excellent article in March's BCBusiness magazine about Canada's First Nations peoples and property rights. It seems like First Nations issues are often shoved under the rug because of their contentiousness, so it's nice to see one of my favourite magazines take this on.

The standard of living for First Nations people in Canada is, on average, far worse than the standard of living for Canadians as a whole. Governments and First Nations leaders have tried numerous strategies to try to narrow the gap, but one strategy that doesn't get much attention is individual property rights. First Nations people in Canada aren't on an equal playing field with other Canadians when it comes to home ownership.

Findlay's article explains how in Canada, First Nations people can't own land on their territory — with the exception of the Nisga'a people, who live in northwest B.C. near the Alaska border. This may seem trivial, but it's probably not.

A big problem with not being able to own a house and the land that it sits on, as Findlay points out, is that you can't mortgage it. And for people looking to start their own business, not being able to get a loan might be the difference between becoming a successful entrepreneur and being unemployed. Data shows that almost two-thirds of small- and medium-sized businesses are started mainly with financing from loans.

The Nisga'a treaty ensures the nation's members can own the land their homes sit on, and thus mortgage their homes. But there is a tradeoff, of course: banks can take houses away from Nisga'a citizens who default on loans. Non-native bankers repossessing First Nations land is understandably a huge concern for many people.

It will be interesting to see how things evolve in the aftermath of the Nisga'a deal. Hopefully the improved access to financing that Nisga'a homeowners now have will help improve their economic situation and provide them with more entrepreneurial opportunities.