More money likely won’t solve the many ills of First Nations in Canada

Recently the Canadian Human Rights Tribunal (CHRT) said that funding for First Nations welfare programs was not up to par with those benefits granted to the rest of Canada. In addition to addressing the disparity in funds, which could amount to more than $100 million a year, the plaintiff's have asked the CHRT to order the federal government to pay $20,000 in reparations to each child taken off a First Nations reserve over the last 10 years. Federal Minister of Justice Jody Wilson-Raybould indicated that the newly-elected Liberal government will likely comply with the CHRT's decision, though the exact details need to be worked out.

Those details may in fact show there are discrepancies in funding, yet this whole exercise seems to ignore the tragic reality: providing welfare checks to help build up and encourage First Nations has been a policy failure.

In 2012, the Canadian government invested about $8 billion in First Nations and aboriginal issues, and that number has been growing rapidly. To wit, over the last 50 years, federal spending has increased about twice as fast for First Nations people compared to the average Canadian. Accommodating for inflation and population growth, the federal government now spends more for each registered First Nations person ($9,056) than the average Canadian ($7,316). Likewise, First Nations students living on reserve receive education funding comparable to students attending off-reserve public schools.

Yet the challenges facing First Nations people persist. As of 2012, less than 40 per cent of students on reserve graduate from high school. All told, more than 60 per cent of First Nations people aged 20-24 do not have a high school diploma, compared to 13 per cent for the rest of the population. In 2003, more than a third of First Nations were on social assistance, compared to about five per cent for the rest of Canada. Unfortunately, drug and alcohol abuse also remains a major problem and may be getting worse. Unemployment, family abuse, suicide, and other social pathologies continue to disproportionately harm First Nation families and communities.

Perhaps funding is not the fundamental issue.

To begin with, accountability controls in First Nations communities have been diminished. For example, the federal Liberal government chose to recently reinstate non-essential funding to communities that choose not comply with the First Nations Transparency Act. The First Nations Transparency Act requires chiefs to make public the community’s audited financial statements, which includes chief and councillor salaries. The release of this information informs First Nations members how their band finances are managed and informs Canadian taxpayers how their tax dollars are being spent. Governance that faces no standards or discipline is unlikely to further the public good.

In addition, giving a hand up brings an inherent risk of discouraging self-sufficiency and sapping self-worth.The group that faces the highest marginal tax rates in Canada are not the wealthy or the middle class, but those on welfare. The reason is that increased income typically results in reduction in benefits or loss of program eligibility. For instance, between 1986 and 2009, the average tax on employment earnings by social assistance participants was more than 80 per cent. For First Nations, incentives to work, take risks, and innovate are muted.

Finally, perhaps a more fundamental problem is that money is unlikely to strengthen families of First Nations peoples, but may rather shape a welfare culture where family roles of provider, teacher, and leader are increasingly undermined or replaced by the state.

The Canadian Human Rights Tribunal says Canada can do more to help First Nations. Tragically, it seems we've already helped enough.