Over the past 50 years, the economic landscape in Indigenous communities has undergone some dramatic changes. How would you describe them?

There really have been significant changes. It’s almost hard to believe that only 50 years ago, the federal government turned its back on treaties and revved up the Indian Act in an effort to assimilate the Indigenous population into the rest of the country with the goal of eliminating Indigenous identity, to some extent. That is obviously not where we are today. We are now on a path in which there has been significant recognition — at least in some sense — of Aboriginal rights and titles. It’s night and day. We’ve gone from a period in which the government, in the best-case scenario, ignored harms—and in many cases, drove harms—to one where Indigenous nations get to interact as a bargaining partner in engagements with the government, where their claims are taken seriously—not just by the courts, but by regular people. In terms of outcomes on the ground, we’ve seen meaningful improvements to income, education and community well-being.

How would you describe the current state of well-being in Indigenous communities?

As indicated, we’ve seen improvements in income, health and educational outcomes, but gaps persist. My colleagues and I address this in our research. After the recognition of Aboriginal right and title, some Indigenous communities refused to cede their land to the government. And we have seen the nations that continue to have a claim over their land do much better than those that engaged in treaty-making and ended up ceding their land. This is particularly pronounced today: There is a $7,000 per capita income gap between these communities, which for household earning of about $40,000 and change, is a significant gap.

At the national level, many remote nations are still struggling. But in Vancouver, if you look at the Musqueam, the Squamish, the Salish — all of those nations are prospering. They have a shared development corporation. They have resources, policy capacity and legal teams that can challenge governments, and they’re doing really cutting-edge work.

That being said, even for nations where things are going fairly well, there is still a high level of institutional complexity. There is an under-provision of core services. There are different political actors fighting over who gets to provide what. There is limited ability to control whether or not people who are not Indigenous can discriminate against Indigenous peoples, and so forth. So there are still lots of things being worked through, and lots of variation across the country.

In your research, you look at how public policy affects the economy. Which aspects of public policy are holding Indigenous communities back?

The governments of Canada and many provinces have a long history of harmful policies that did active, purposeful damage to Indigenous communities over a century. Examples include the scourge of residential schools and the Pass System — whereby Indigenous people had to present a travel document to leave and return to their reserves. There were a series of policies essentially designed to either assimilate people or to restrict their opportunities.

While many of those policies have disappeared, the harms they caused will not immediately go away. Even if you provide compensation for those harms, that won’t fix things overnight. It’s probably going to take generations to recover from some of those horrendous policy decisions of the past. That’s the negative side of the story.

In terms of areas where we’re seeing progress, there has been a gradual strengthening of Aboriginal right and title, but I don’t think it’s complete. There is still uncertainty for many actors involved. I don’t think there are always shared views on the nature of right and title and on notions of Indigenous sovereignty. Figuring that out and recognizing that these are nations that did not cede their land, that did not necessarily give up their sovereignty and making sure that we end up on the same page — that’s going to be essential for economic well-being.

We are seeing the rise of self-determination in many spaces on the government side, in program delivery. For example, the repatriation of child welfare services from government into nations. I think these programs will reap large returns over the long run; I wish we’d done that sooner, because it’s going to take a while to get it right. But once we do, it will lead to better outcomes.

Another thing that is top of mind right now is the arbitrary caps we are seeing. As an economist, I really don’t like restrictions. I like things to be fair and market-based. In general, most of us would like to think there is a way to have our reasonable grievances addressed through a fair and impartial process, with compensation that is going to match the harm. When a nation has had a treaty violation, it has to go through the Specific Claims Process to get it addressed. This could be improved, but it could also be worse. The big issue is that there is a cap on the settlement value. If the claim involves land, the cap is $150 million. Good luck resolving a land claim on that budget. It just drags things out, which hurts the community. That compensation is essential for helping to boost economic growth in these communities.

For business leaders, what can be done to ramp up this progress?

My first recommendation would be to look to Indigenous peoples, Indigenous nations and Indigenous businesses as your neighbours — people you can engage with as potential partners, suppliers and customers. Just approach them as equals. At the same time, take notions of sovereignty and Aboriginal right and title seriously and recognize that whoever has property rights in a situation is going to inform what your relationship looks like in an economic transaction.

I think firms are generally doing that. Historically, many approached notions of Aboriginal right and title as something that they needed to overcome. Like, ‘We need to negotiate an agreement so that we can make this project happen, and this is an obstacle.’ That’s not a good way to view it. I think folks often overlook cases where Aboriginal right and title can open up opportunities. If we think about some of the housing developments occurring on the West Coast, Indigenous property rights over land are affecting zoning restrictions and other restrictions on housing development. It doesn’t apply to those Indigenous projects on Indigenous land. And that’s a case where we have ‘market failure’ driven by the non-Indigenous community, and in this case, the application of Indigenous property rights has solved the market failure.

Access to credit is another ongoing struggle, and this is true for many remote communities, in particular. Indigenous firms and workers must have access to credit so that they can engage in the marketplace freely. On the East Coast, we’ve seen successful examples of Indigenous entrepreneurship. But sometimes it is being met with threats of violence and incidents of discrimination. That is not acceptable. It’s primarily on government to come down and say, ‘Look, this is not how Canada works.’ Firms should have no time for anyone engaging in that.

Why is Indigenous self-determination so good for Canada?

Actually, I don’t think it matters if it’s good for Canada. It is a right. Self-determination and sovereignty are things that Indigenous peoples are entitled to. With that being said, there is a large body of literature showing that self-determination and greater levels of sovereignty lead to better outcomes. From my work with Donn Feir and Maggie Jones on treaty-making, which I touched on earlier, we found that nations that refused to cede their territory now have stronger property rights. They practise stronger sovereignty as a result, and see much higher incomes into the present.

So, is self-determination a right? Yes. Is it good for First Nations? Yes. And is it good economically and politically for Canada? Yes. Higher incomes are better for the country both economically and politically.

What lessons can we draw from other countries on this front?

Through my research I know the American context much better than the Australian, New Zealand or other contexts, so I’ll focus there. The U.S. evidence for a long time has pointed to restrictions on access to credit and restrictions to mobility as having major costs for Indigenous peoples. So that’s one lesson, which we’ve already discussed.

Two, as I mentioned earlier, the American evidence points toward self-determination having significant returns. Unsurprisingly, things like forcing Indigenous peoples with different governance structures to live in one community and try to merge those political institutions can lead to economic and political harm.

Property rights clearly matter. And then lastly, there is clear evidence that annuities of several thousand dollars a year going into Indigenous households can lead to much better outcomes, particularly for children. I believe the amount studied was US$3,000 a year. If we did this in Canada, it would be money very well spent.

For people who want to contribute, what is the first step?

If you’re in the private sector, start looking for Indigenous peoples and firms you can work with. Understand that there’s a long history of undermined potential because of discriminatory behaviour from government, people and firms. Take this seriously and do the hard work that you would do before you hire or partner with anyone. That is genuinely the first step.

For non-profits, recognize that Indigenous peoples don’t need external saviours. I would think about supporting work in, by, for and from the Indigenous community. That will build capacity internally and makes sure that the work is actually supporting what people want and need.

And lastly, as indicated, government really is responsible for so many of the past harms. I would just say, respecting the nation-to-nation relationship, respect property rights and respect sovereignty. If all of these practices are followed, we will see more and more positive outcomes.

This article originally appeared in the Fall 2024 issue of the Rotman Management magazine. Subscribe now for the latest thinking on leadership and innovation.