Indian Act inhibits business, Mohawks tell Royal Commission

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The Indian Act restricts the growth of Native businesses and fosters underground markets, Mohawks from the Kahnawake reserve told the Royal Commission on Aboriginal Peoples.

The act prevents Natives from starting their own businesses by limiting the size of the investment, said Ron Abraira, director of the Kahnawake Economic Development Group.

"The Indian Act ties our hands," he said. "It says you can have all the businesses you want as long as they're no bigger than a french fry stand. This perpetuates the underground economy."

The commission was in Kahnawake May 3-7 listening to concerns about the local economy, education, social services, reviving the Mohawk language and government autonomy.

To encourage economic development on reserves, Native-owned businesses should have the same tax status as Natives themselves, Abraira said. And Aboriginal entrepreneurs should retain their tax exemptions when operating off-reserve.

The Indian Act prohibits Native enterprise, said Michael Rice, director of the Caisee Populaire Kahnawake, one of six credit unions in the Mouvement des Caisses Populaire Desjardin.

While it protects the territorial integrity of Indian reserves, the act is also an obstacle for Natives seeking loans, he said. It is so restrictive, in fact, that status Indians looking to get a mortgage or a credit card could not do so until the credit union opened in 1987.

And when reserve residents wanted to take out mortgages, the union had to set up a complicated system of land trust transfers because the act prevents reserve land from being used as collateral, Rice said.

The Indian Act is not the only sore point with Kahnawake residents. The federal government should also follow the terms outlined in the Jay Treaty of 1794, Abraira said. Under the treaty, Mohawks on the reserve, located 16 kilometres south of Montreal, would be exempt from duty and excise taxes on goods imported from the United States.

In conjunction with tax exemptions for Native-owned companies, the treaty would allow the band to attract large-scale business, including manufacturing plants and retailers, Abraira said. Until such a time, Kahnawake residents will be forced to rely on the sales of cheap cigarettes and industries like casinos to create jobs.

Although one of the wealthiest reserves in Canada, with an average family income of about $30,000 a year, the unemployment rate at Kahnawake currently stands at 50 per cent.

Kahnawake Grand Chief Joseph Norton said he does not expect the federal government to act swiftly on the commission's final recommendations, due next year. But the commission's presence on the reserve will hopefully clear up the band's image as a haven for criminal activity, an image Norton said was created by media and government during the Oka crisis.

He added that the commission owed its existence to Kahnawake and Kanesatake, the two communities at the centre of the Mohawk up-rising in the summer of 1990.