CRUNCHING THE ANNUITY NUMBERS
The amount that the Indigenous Affairs (IA) department spends on annuities had gone up over the years as the number of eligible recipients increased, but it hadn’t gone up very much. In 1966, the year that Indian Affairs became a department of its own, IA paid out $513,493 in annuities to just over 112,000 Treaty people.1 In 2016, IA paid out some $1.9 million for annuities to about 579,000 Treaty people.2
Perhaps there is a very simple explanation for why treaty annuities have never been high on the agenda as an Indigenous issue. Just over half the bands are Treaty, and, due to changes in Status eligibility and IA’s creation of new, non-Treaty bands like the Qalipu Mi’kmaq First Nation in Newfoundland, Treaty people now count for about 60 percent of Status Indians.3 The majority live in Ontario, Manitoba, Saskatchewan and Alberta. However, one-third of Canada’s bands are in British Columbia — making it the largest voting bloc in the Assembly of First Nation — but only a few bands in northern BC are in treaty territory. Pursuing an increased annuity would offer little benefit to non-Treaty First Nations people in BC. Neither would it benefit Quebec and the Maritimes.
Further, the annuity is considered a benefit paid to individuals, rather than a payment to the band government to distribute under its authorities. Historically, the treaties required that the annuity be paid in cash to eligible recipients in their communities,4 but that has since been modified to include Treaty tents in urban centres and payments by mail.
IA did explore the idea of turning annuity payments over to the band councils in 2013 when it conducted a review of annuity payments. The department was trying to manage the increasing costs for Treaty Day events during which ceremonies were held to hand out five-dollar bills. In BC and Northwest Territories, the department was spending more on the delivery of the annuities than on the annuities themselves.5 Another concern was the cost of mailing annuity cheques. The report estimated that issuing and mailing out a single $5 annuity cheque cost the federal government between $50 and $60.6
IA considered reducing costs by, for example, making direct deposits; “making payments every two years; sending a cheque for the total amount to the band council for redistribution to members; or establishing a minimum amount of $20 for payments by cheque.”7
In the end, IA did not move to paying annuities to band councils to distribute. Annuities were not band government business, any more than a bequest in a will was band government business. (It was, however, IA’s business, since IA has “exclusive jurisdiction and authority over the estates of deceased First Nations individuals” living on Canada’s reserves.8)
All other important aspects of the treaties have been modernized over the past fifty years. The nets, ammunition and other equipment itemized in the treaties have evolved into multi-million-dollar spending each year on economic development programs. The “medicine chest” clause in Treaty 6 has been modernized to mean providing health care services and benefits to all Status Indians at a cost of several billion dollars a year. And the “pestilence and famine” clause, which appeared only in Treaty 6, was modernized to mean social assistance for people in FN communities at a cost of about $1 billion a year.
However, Indigenous politicians — and non-Indigenous politicians, for that matter — have not bothered to champion the single provision of the treaties which directly benefits individuals and families.
Jean Allard argued in “Big Bear’s Treaty” that, despite the harm done to Indian families by the Indian Residential School system and other misguided government policies, the tragic social breakdown on so many reserves can be better explained by 150 years of powerlessness, the last fifty years under the rule of their own leaders on reserves.9 The fact that the $5 annuity of 1873 was still $5 in 2019 was perhaps the most damning evidence available of just how voiceless and powerless ordinary First Nations people were.
Since annuities were intended all along to be a livelihood support and not just a symbolic gesture, it seems long past time to take another look at annuities as means of rebuilding families and empowering First Nations people to make their own choices, and see if it offers a meaningful path to reconciliation between Indigenous and non-Indigenous Canadians.
It is a move Harold Cardinal would agree with, if he were still around, fringed and beaded buckskin jacket and all. Cardinal died in the summer of 2005, right around the time the Kelowna discussions were going full-tilt. Cardinal had been admitted to the Bar of Alberta six months earlier, and just days before his death from cancer, he was awarded a Doctorate in Law. At a memorial service in Edmonton, former AFN leader Phil Fontaine acknowledged Cardinal as a true “Doctor, lawyer and Indian chief” and “an inspirational warrior and leader for First Nations for all of his life.”10
When it came to a modernized treaty annuity, said Cardinal, “The livelihood arrangements of treaty must be the basis for bringing back on track the treaty relationship, which seemed to have become lost somewhere in the entrails of colonial history.”11
However, the IA’s policy on modernizing annuities, firmly embedded in the entrails of colonial history, was clear. For the government, “historic treaties are closed, non-negotiable agreements.”12
A path of dignity
For some Treaty people such as Leona Freed, the annual payment was demeaning.
“I used to be ashamed to get the five dollars. It was an insult, a slap in the face.”13
That’s why she liked the idea of the modernized annuity from the time she first heard about it from Jean Allard.
“What appeals is the $5,000. For a family of four, that would get Indian people off welfare, get more self-esteem, and get people on their feet.”14
Allard based that $5,000 figure by linking it to land values, but there are other ways to calculate a modernized annuity. Recall that the foundation of Allard’s proposal is providing enough income so that family members could, together, have some degree of security and independence. At $5,000 per person, his land-based valuation for a family of five would mean an annual income of $25,000.
Demographer Stewart Clatworthy took a look at the annuities in 2007, and calculated what they would be, based on cost-of-living increases. He used the Consumer Price Index and the wholesale price index, both of which have relatively reliable data on the cost of living that date back to 1867.15 By Clatworthy’s calculations, the five-dollar annuity paid in 1871 for Treaties 1 and 2 would be worth $100.32 in 2007,16 which translates into about $500 for a family of five. That $500 would be enough to buy one decent bolt-action rifle with a scope at a sporting goods store, or maybe winter boots for the whole family. In other words, an annuity increase based on inflation would not deliver security or independence.
Another technique for calculating annuities would be a wage-based comparison. The $25-annuity for a family of five in 1870 was considered to be the equivalent of about one-third to one-half of a year’s wages for an unskilled labourer in Montreal or Toronto.17 How would that compare to a minimum-wage, unskilled worker 135 years later in 2005 when the Treaty Annuity Working Group was studying this issue? Manitoba’s minimum wage for that year was $7.25 per hour.18 A person working full-time at 40 hours a week would earn just under $15,080 before deductions, and one-third of that would be $5,026. Multiply that by five people, and you’ve got a family income of about $25,130 which aligns with Allard’s land-base valuation.
Basing an annuity increase on one-third of the minimum wage sounds a lot more like a poverty-related program, like enhanced welfare or a guaranteed basic income for First Nations people. Both miss the significance of the annuity being linked directly to the land through the treaties. Calculating an increased annuity based on land values is complex, but when Indigenous activists denounce Canada’s failure to “share the wealth” derived from the land, this is a link they are making, too.
It might help to think of the treaties as an agreement between settlers and Indigenous people, where the Always people made space on the land as the “start-up” resource for this grand enterprise called Canada that would be rewarded through annuities. The country has flourished as a result of the sweat and toil of the many settlers who sought to make a better life for themselves and their families in this land, but the accompanying “return on investment” for Indigenous people didn’t happen.
What would those “investor’s fees” for the land have turned out to be, if they had actually been paid?
Allard used the price his grandparents paid for their good agricultural land in the Red River Valley as a benchmark for linking the annuity to land values. Canada is a vast country with a landscape of muskeg and black spruce swamps in the north, high-value agricultural land in the south, and even higher-value land for residential development in cities like Vancouver and Toronto. The value of farmland in the Red River Valley is somewhere in the middle, so let’s work with that.
In 1871, Allard’s grandparents’ land was worth $5 for five acres. In 1871, there were just over 100,000 Status Indians in Canada, most of whom lived on reserves, although only about half lived in areas covered by treaties.19 Many bands had not yet signed treaties by 1871 but would do so shortly, so we’ll go with half of Status Indians being Treaty people. The $5 annuity paid out by the Government of Canada that year to some 50,000 eligible Treaty people on reserves would have totalled about $250,000.
If all the roughly 572,000 eligible Treaty people20 had collected their $5 annuity in 2015, it would have come to a total of $2.9 million. So, just how much has the Government of Canada distributed in treaty annuities throughout the years?
Using Indigenous Affairs, Statistics Canada and other government data, the average population figures for Treaty Indians for the 145 years from 1871 to 2015,21 the number of Treaty Indian recipients would have averaged about 214,000 per year.22 At $5 per person for 145 years, the amount paid directly to Treaty people since 1871 until 2015 would be in the ballpark of just under $155 million. However, not all annuity monies have been collected. As of 2016, about $16 million remained unclaimed,23 suggesting the payout figure is closer to $140 million.
To put that $140 million figure in context, in 2016, a Saskatchewan farmer sold his grain farm of some 7,900 acres for $26.5 million.24 That would mean the return-on-investment for all Treaty Indians over 145 years for ceding half of Canada’s landmass was, in total, the equivalent of about five large Saskatchewan grain farms.
The purpose of this exercise is to give a sense of what it would have meant to Treaty people, and to Canadian society, if the land-value-based annuity had been honoured after the vote in Parliament in 1878 and the affirmation by the Supreme Court of Canada in 1895.
What would have happened if the Government of Canada had elected to augment treaty annuities from 1880 onwards based on land values? What would Treaty people have earned in terms of “investor’s fees”? Would it have been substantial enough to make a meaningful difference in the lives of families and Indigenous communities?
Making that calculation requires establishing a benchmark for annuity increases based on a consistent record of land-value increases over time. The benefit of using land values is that inflation is built in. Let’s stay with Manitoba farmland because that’s where Jean Allard began with a $5 annuity, which could buy five acres of land in 1880 (for about the same price as in 1871), and because those data are fairly reliable.
Taking the average number of Treaty Indians in Canada25 and using the average value per acre of farmland in Manitoba from 1880 to 2015,26 over those 135 years the federal government would have directed roughly $27 billion in augmented annuities27 directly into the hands of Treaty people.
Now, consider a scenario where Canadian society, in an outburst of appreciation for the Always people and a willingness to share the wealth of the land, had chosen to extend the livelihood assistance provisions to all Status Indians, regardless of whether or not they signed onto the Robinson and Numbered Treaties. This is not as unrealistic as it might sound, since the federal government has, by policy, modernized and expanded Treaty benefits such as health care and economic development to cover all First Nations people.
If, over the same 135 years, the federal government had chosen to extend augmented annuities to all Status Indians, it would have resulted in sharing about $46 billion of Canada’s economic wealth with First Nations people.28
The augmented annuity payments would certainly have added to the federal expenditures undertaken for providing education, economic assistance and other legally mandated Treaty obligations. If $46 billion for annuities sounds like a large expenditure, consider it in context of expenditures on programs, over time, specifically for Indigenous programs and services.
In 2013, a researcher for the Centre for Aboriginal Studies (Fraser Institute) tackled the question of how much money was spent by federal and provincial governments on programs specifically for Indigenous people from 1946 to 2011.29 Municipal and territorial spending was not included, and provincial spending numbers prior to 1946 were not available. This calculation also did not include services paid for by Indian Affairs that all Canadians are eligible to receive, such as education and regular health care. The actual spending over those 65 years came to just under $235 billion.30
It is, perhaps, an apples and oranges comparison, but the point is that the federal government, through its policy choices, elected to ignore the means of building and strengthening families and FN governance through augmented annuities. It is impossible to assess how different the lives of Canada’s Indigenous people would have been, then and today, if the country had elected to take a path of dignity and honoured the augmented annuity payment; if respect between Indigenous and non-Indigenous people had been knit into the fabric of society in Canada from the time it became a stand-alone country.
Instead, the government of the time chose an entirely different path, one of oppression under the Indian Act, assimilation policies, Indian Residential Schools, the systemic silencing of Indigenous voices, and building the vast empire of Indigenous Affairs Plus. We know how that policy choice turned out.
Before we leave the number crunching behind, let’s see if we can draw a parallel between the significance of the annuity — which was meant to empower individuals and families within the collective by providing a degree of economic independence — as a percentage of the IA budget.
· According to Superintendent-General of Indian Affairs John A. Macdonald, in 1880, annuities for the Robinson Huron and Superior bands and Numbered Treaties 1–7 amounted to $303,242 out of a budget of $667,351.31 Annuities accounted for 45 percent of the budget.
· According to Indian Affairs minister Arthur Laing in 1966–67, out of a budget for IA and its two co-delivery partners of $131 million, annuities for 112,132 Treaty Indians accounted for $587,862 in expenditures,32 or just under 0.5 percent.
· By 2017–18, annuities amounted to about $2.7 million33 for some 582,000 eligible Treaty First Nations people, out of a budget for IA and its 33 co-delivery partners of about$19 billion. 34 Annuities accounted for a little more than 0.01 percent of spending.
Over time, annuities had largely disappeared as a budget item. The wants, needs and controls of the collective fully dominated the concerns of FN band governments. However, those governments have, in turn, been thoroughly dominated by the vast, intrusive and ever-expanding powers of Indigenous Affairs Plus.