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When the federal government first set up the reserve system, it was supposed to be temporary.

The reasons behind the arrangement were mostly sincere. The government believed Canada's natives might die off unless they could be shielded from the ravages of civilization.

Reserves were meant to be safe havens, a place where natives could continue to commune as a group while learning to adapt to all that living in the modern world entailed. Under the plan, they would eventually leave reserve life behind and acquire the same civil and political rights of all British subjects.

They would also be given a piece of land to own. In due course, reserves would disappear as band members became participants in a mainstream existence, with all the attendant social and legal privileges it entailed.

As we know, it didn't quite work out that way. Canada's native population was quickly forgotten, left to live in squalid, destitute conditions on those same reserves. The federal government would never forfeit control of the land it gave them.

But we live in a different world today. First nations are increasingly taking control of their economic and social destiny. As populations have grown and cities have expanded, most urban reserve land has become incredibly valuable. It has dawned on many native leaders that they are sitting on proverbial gold mines.

One of those groups is the Squamish First Nation, which owns tracts of real estate between Vancouver and Whistler. For years, the band allowed others to lease and develop the land and reap the profits. No more.

The Squamish are getting into the development game, big time. Plans are under way for retail and residential complexes in West Vancouver and on a prime piece of land on the south shore of False Creek near the Burrard Bridge. While still in the concept phase, the latter proposal is attracting lots of discussion, some of it quite provocative and alarmist. It is a chatter that goes something like: "Oh, no, the natives are going to ruin our beautiful city."

The fact is, the Squamish and others are trying to do precisely what many Canadians have been demanding for years: stand on their own and become less of a financial burden to society. Yet doing it takes enormous patience and perseverance.

Because their land is still owned by Ottawa, first nations have to get approvals from the federal government for any development. This can delay plans for years. A bill is now in the Senate for first reading that will allow a land title and registry system to operate on reserve lands, which effectively enables the bands to transfer property rights to non-aboriginals.

This is important when building residential complexes. It's important for investor confidence and it's important to lending institutions. First nations have been seeking this authority for years.

The bill will also allow first nations to collect property taxes, too. This will help fill band coffers but it will also mean that residential developments on their lands don't become tax havens, which would likely anger neighbouring municipalities. But the government has refused to allow aboriginal groups to collect a property transfer tax, which would help them pay for the costs of using provincial legal regimes. No one is sure why.

Tom Flanagan, the University of Calgary political scientist and former adviser to Stephen Harper, is now providing guidance to the Squamish. Mr. Flanagan wrote a thoughtful paper last year in which he talked about the "aboriginal paradox."

First nations are the least prosperous group in Canada, yet they are one of the largest landholders. But that potential wealth is hard to unlock because of the deficient property rights created by the Indian Act. Eventually, Mr. Flanagan argues, the government must transfer ownership of the land to first nations and allow them to introduce fee simple title. He's right.

Gibby Jacob, the bright, headstrong Squamish chief, says the public has nothing to fear when it comes to his group's plans to jump into the development business. "We're not a tribe that just fell off the turnip truck the other day," he says.

"I've got a little less than 3,600 people to look after, 60 per cent of whom are under 25. Our population will double in the next 20 to 25 years and unless we start creating new revenue to support our programs and services, we're setting ourselves up to be managing poverty in the future and nothing else. I refuse to accept that as our fate."

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