The Portage Bands' Treaty No. 1 land entitlement : an economic analysis
Penner, Ellery Thomas Henry
This thesis addresses the question of the establishment of a compensation basis for the settlement of outstanding treaty land entitlement between the Government of Canada and Indian Bands. The scope of the study was limited to a determination of compensation based on treaty shortfall lands having agricultural potential. At the present time, entitlement calculations are based soley on the basis of current population. This procedure fails to account for past income losses suffered by Indian Bands as a result of their alienation from treaty lands. The method established by this study, was applied to the Portage Bands' outstanding treaty entitlement. The method is based on a summation of foregone crop and pasture related rental incomes, between 1881 and 1983, plus market value estimates of land in the treaty shortfall areas. Foregone income is included as a measure of compensation since, the unfulfilled treaty entitlement has deprived the Portage Bands of potential incomes that could otherwise have been realized had the bands been in possession of the disputed lands. The inclusion of current land values in the compensation basis enables the band to benefit from future returns to the land. Summing annual rental earnings during each year of the study period captures only part of the foregone incomes due to the shortfall in treaty entitlement. Foregone interest on these monies must be established as well. The study employed long term Canada Savings Bond rates to compound the foregone income streams. In the interests of comparison, compensation based on the current population principle was also considered a possible settlement alternative. Under this scenario, compensation was determined on the basis of current land values. Annual foregone incomes were calculated with respect to two systems of landuse. The first system establishes the historical use of private lands (neighboring management), in the treaty shortfall area. The second, documents the historical use of reserve lands already received under the treaty. It is essential that both historic landuse patterns are known, since the income streams are likely to differ. Treaty shortfall areas were calculated for each of the Portage Bands (Long Plain, Swan Lake and Sandy Bay), on the basis of two separate treaty interpretations specifying the size of an additional twenty-five square mile tract. The size of the treaty shortfall area is critical to the final calculation of compensation, since foregone incomes are determined on a per acre basis. The larger the shortfall, the larger will be the total monetary compensation. Lands subject to the neighboring management assumptions were more productive than lands developed at the reserve rate. Reserve developments however, were found to be constrained by inferior soil quality in comparison to surrounding townships. In all cases, the estimated values of treaty entitlement compensation were greater when neighboring management was assumed. Under neighboring management assumptions, Swan Lake achieved the most advanced levels of development, while the Sandy Bay Band had the lowest percentage of land in a cultivated state. These results were found to be directly related to the location and quality of lands found in the respective shortfalls. Under reserve management, the Long Plain Band was considered to have the greatest amount of land in crop production and the Sandy Bay Band once again had the lowest level of improvements. Sensitivity analysis revealed that, changes in the interest rate variable were found to have the greatest impact on total compensation while percentage changes in pasture capability had the least effect. The value of current population based monetary compensation was related to both, estimated unimproved land values and the absolute magnitude of the various band shortfalls. Long Plain compensation was the highest due its high estimated land values. Sandy Bay, despite its large population, had the lowest compensation value, due mainly to low estimated land values. The thesis did not conclusively establish that foregone income based compensation will necessarily always exceed that of compensation based on the current population principle. Foregone income based compensation was very sensitive to the assumed rate of development and the size of the calculated shortfall. Current population type settlements, on the other hand, are dependent only on current population numbers and current unimproved land values. Advantages to Indian bands for settling on the basis of foregone incomes and current land values definately exist when large shortfall areas are included and where substantial income losses from these areas may be documented. Should the growth rate of band populations surpass gains in foregone income during subsequent years, future comparison of the two types of settlement may well reveal definite advantages to settling outstanding treaty entitlement on the basis of current population. Until such a time however, higher estimates of treaty compensation will generally result where measures of foregone income are included.