Mould-infested homes, contaminated water, dirt roads: It’s hard to advocate for Canada’s native reserve system in light of the obvious dilapidation. Nevertheless, Jonathan Kay’s recent column advocating the dismantling of the system (“Off the Reservation,” Oct. 23) is woefully inaccurate, and fails to identify the real barriers to First Nations development.

The foundation of Kay’s column rests on two myths. First, that the federal government spends “over $8-billion on reserve-resident natives, or $80,000 per reserve-resident household.” In reality, 50% of that amount pays the salaries of bureaucrats and government lawyers. Moreover, federal funding is not keeping pace with the fact that indigenous peoples are the fastest-growing population in Canada. As such, the actual amount spent on First Nation families is less than half that spent on their counterparts in Canadian jails.

Kay’s assumption that self-government doesn’t work is also wrong. Self-governing First Nations actually have fewer health, education and substance-abuse challenges. The Harvard Project on American Indian Economic Development even found that self-government is a key factor to establishing stable First Nation economies.

As for Kay’s “three well-observed empirical truths learned the hard way,” which are supposed to act as an indictment of the reserve model, they are equally untrue in relation to reserves.

First, Kay attacks rural Canada, suggesting that rural economies don’t generate wealth. Yet Canada’s economy is driven by resource exports. The oil, energy, forestry and mining industries are all based in rural Canada and in proximity to First Nations.

If Canada and the provinces fulfill their consultation obligations regarding development that affects First Nations, there is a real chance for prosperity. Attawapiskat is in the diamond business, Pikangikum in forestry, the Blood and Siksika in oil and the eastern Cree in electricity. Kay wants First Nations to move away from their homes and land at precisely the time when it’s becoming profitable to stay.

Next, Kay makes numerous references to the Iron Curtain and Karl Marx, as if First Nations were communists, even making the assertion that the reserve system persists as a “utopian experiment.” In fact, Canada designed reserves with the opposite in mind. The 195 sections of the Indian Act have handicapped reserves with malicious policies such as the criminalization of economic transactions without the permission of an Indian agent. How’s that for a free market?

True, many indigenous peoples do view the land as communal. More specifically, many view it as sacred, as their Grandmother. How do you parcel up and sell your Grandmother? In fact, privatizing reservation land was attempted once in the United States under the Dawes Act. It led to the wholesale pillaging of Indian lands by outside speculators.

Real barriers to economic development include the Indian Act, a lack of formal education, limited access to capital, and ineffective government co-ordination. Canada needs to immediately review the negative impacts of the Indian Act and find solutions to address the restrictions that limit economic development.

The federal and provincial governments must also draft large-scale and co-ordinated strategies for economic development. Currently, Canada operates under the 17-year-old 1989 Canadian Aboriginal Economic Development Strategy, which the Auditor-General eviscerated in 2003. Access to capital can be achieved with the settlement of land and treaty entitlement claims. Recently, Price Waterhouse calculated the cost of not settling treaties in British Columbia at $1-billion in lost investment and 1,500 jobs per year.

For the last 150 years, Canada has essentially legislated Indians out of the economy. However, this does not mean reserves should be abandoned in favour of more assimilation as Kay suggests. Instead, reserves need economic development that is integrated with traditional values and overseen by native leaders, something that is owed to First Nations and well overdue.

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