Economic citizenship and Canada's First Nations

One of the questions I have wrestled with as a researcher is how Canada's policies towards the First Nations ended up creating such a mess. I grew up thinking that Canada had fairly enlightened policies towards our "Indians." The Western movies I watched depicted a violent American past that we Canadians were supposed to have avoided. Our symbol of the "Wild West" was not the cowboy but the Mountie, red-coated and respectful. We didn't shoot our Indians, we negotiated treaties with them. How civilized!

Today, we know that our history was not so benign. Residential schools operated by Canada's churches on behalf of the Department of Indian Affairs were facilities for systematic cultural extermination, organized with the explicit intent to assimilate the First Nations. Native children were forcibly taken from their homes. Indigenous languages and cultural practices were forbidden at the schools. Rape and child abuse were prevalent.

Many First Nations communities today feature living conditions that have been called "Third World." The First Nations are blamed for being dependent on the federal government, which has long regarded the First Nations as incapable of governing themselves. To be clear, fiscal mismanagement in some bands is a reality.* One in four First Nations was under the federal government's financial supervision in 2013, and while this may say as much about the Harper government's views on aboriginal peoples as it does about First Nations fiscal practices, there is no denying that some First Nations have experienced criminal levels of fraud.

So how did we get here?

My research on this question involved constructing what Michel Foucault calls a "history of the present." With Dean Neu, I looked at the accounting practices of the Department of Indian Affairs in the 1800s. That's when the narrative of First Nations "fiscal incompetence"  began. Our paper dealt with a lot of historical material from various archives. We identified three sets of practices that were used in a systematic attempt to assimilate the First Nations at that time.

I'll leave two of these sets of practices (land acquisition and cost control) for another day, and focus here on what we called "economic citizenship." This refers to the various ways that the federal government tried to break down the collective tribal identity of the First Nations, in order to turn them into individual citizens. Divide and conquer, basically.

Funding relations have played an important role not only in defining federal government responsibilities, but also in encouraging certain behaviours on the part of First Nations peoples.
— Neu & Graham (2006)

These practices can be traced back to the Management of Indian Lands and Property Act of 1860. This act declared the Chief Superintendent of Indian Affairs. to be the financial steward for indigenous peoples. This gave his office all-encompassing powers that allowed the Indian
Department (as it was called at the time) to govern the day-to-day activities of indigenous peoples.

Viewed from today's perspective, the paternalism of appointing a government bureaucrat as steward over an entire race of people seems shocking. However, in the culture of the times, this paternalism was accepted and indeed celebrated as a wonderful thing for the Indians. "Thanks to the fatherly protection of the Government, the Indian tribes in general continue to be in a prosperous condition," said a report to Parliament in 1868.

Government policies from this period deliberately stripped the First Nations of any agency in decisions made about their money, and then used that lack of agency as a reason for the continuation of the policies. White men were appointed as agents of the government and sent to run local band offices. Here, they handled all the money, and did so in such a way that it was not only impossible for the First Nations to continue to govern themselves in traditional ways, but also impossible for them to learn to govern themselves in the newly prescribed ways.

Replanted Canadian forest. So orderly! (Muskoka, 2013)

Let me give you an example:

A circular in 1889, from the Indian Department to its Agents on the reserves, stated, "No doubt ... the mainstay of the great majority of Indians must be farming and it is therefore most important to teach this industry in the manner best calculated to render them self-supporting when left to their own resources." The explicit goal here was to make the First Nations self-supporting. What is unstated is that "self-supporting" refers to individual members of the First Nations, not the communities. Farming referred to individual plots of land, not shared tribal lands. (This tactic of individualizing traditional cultures is, not coincidentally, central to microfinance programs in the Global South today.)

So, how did the Indian Department use accounting to create "self-supporting" economic citizens? By tracking money at the individual level. The Agents had to account for the money that each First Nations person had ‘‘earned’’ through various activities: farming, making belts and harnesses (which the Agent would sell on their behalf to local white settlers), and services they provided to the Agent. The Indian Department had to develop procedures to account for the funds it distributed by way of payment to these individual Indians.

The solution was not to distribute the money directly to those who had earned it, but to set up bank accounts at the nearest Post Office in the name of each person who was to be paid.

Procedures had to be developed for handling withdrawals on behalf of the Indians, since the Post Offices were often located off the reserve. Indians could not leave the reserve without an official departmental permission slip. The Agent therefore had to apply to the Indian Commissioners Office for approval for each withdrawal.

Initially, this application needed to state the reason for the withdrawal, and bear the signature or witnessed mark of the Indian. To this requirement was later added the need to record the Indian's number in the band, and the name of the band. Then the procedure was elaborated to require a receipt from the individual Indian for the expense to be reimbursed, plus an ‘‘order’’ for it to be paid from his account at the Post Office. Finally, a requirement was added for the application to be in duplicate and state ‘‘how the applicant proposes to expend the money withdrawn, in order that the Department may have some assurance that the money is to be spent for some useful purpose’’

You can see that, over time, the procedure became more and more elaborate. You can also see that at no time is the "Indian" trusted with his own money.

This is the root of the problem we have today. Blaming the First Nations for fiscal mismanagement and dependency, when the accounting practices of the Department of Indian Affairs have fostered fiscal dependency since the 1800s, is a bit rich.


For more on this topic, you are welcome to read the academic article Dean and I wrote, published in Accounting, Organizations and Society in 2006. It's called "The Birth of a Nation: Accounting and Canada's First Nations, 1860–1900." It's really not worth reading unless you are interested in how academics talk to each other. I will draw more from this article in later postings if you are willing to be patient with me.

* It is important to note fiscal mismanagement is also a reality in many non-First Nations communities and corporations, but there it is typically considered the result of bad individuals, not a cultural or racial problem.