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First Nations are using ‘creative disruption’ to foster economic growth in their communities

Prime Minister Justin Trudeau and Squamish Nation councillor Khelsilem hold a ceremonial paddle after a groundbreaking ceremony at the First Nation’s Sen̓áḵw housing development site in Vancouver in September 2022.

First Nations have been resisting the historic and ongoing impacts of Canada’s extractive economy on their communities by exercising their right to self-governance and taking control of their economic futures.

Creative disruption stands in contrast to creative destruction, a term coined by Austrian political economist Joseph Schumpeter. Schumpeter argued that capitalism causes old ideas and technology to quickly become obsolete through the process of innovation. In the pursuit of profit, capitalism ruthlessly and relentlessly eliminates old ideas and installs new ones.

Creative disruption, on the other hand, aims to make space for new ideas by forcing the old ways to adapt and adopt. First Nations communities are doing this in a number of ways.

As an academic with a background in urban land economics, I have studied how First Nations are using creative disruption to shape businesses, urban communities and the health-care system in Canada.

Sen̓áḵw development project

One of the ironies of modern Indigenous land law is how the reserve system defined by the Indian Act, originally designed to assimilate Indigenous nations and communities into mainstream Canadian culture, has morphed into a strategic asset for First Nations.

As author Bob Joseph notes in 21 Things You May Not Know About the Indian Act, the Squamish Nation lost 14 acres (about 0.05 square kilometres) of their territory in Vancouver to a lumber company through expropriation in 1904.

A man in a suit speaks from behind a podium that says 'Building More Homes' on the front of it. In the background a group of people wearing fluorescent vests and hard hats stand in front of an excavator.
Prime Minister Justin Trudeau speaks during an announcement and groundbreaking ceremony at the Squamish Nation’s Sen̓áḵw housing development site in Vancouver in September 2022. THE CANADIAN PRESS/Darryl Dyck

After a century of litigation, the Squamish Nation recovered some of the lost land and is now in the process of building Sen̓áḵw, a massive economic development project in Kits Point, Vancouver.

Sen̓áḵw is the largest Indigenous-led housing retail development in Canadian history and will add much-needed housing supply to a market that has become unaffordable for most. The development plans to build 11 towers and 6,000 housing units.

Naawi-Oodena urban reserve

A second example of creative disruption is the creation of the Naawi-Oodena urban reserve in Winnipeg. It’s the largest urban reserve in Canada, covering 64 hectares.

Naawi-Oodena was officially established after the land the reserve sits on — the former Kapyong Barracks — was recently repatriated to the seven Treaty One First Nations.

Read more: Urban reserves are tests of reconciliation

Treaty One Nation fought to have the land returned to them under the provisions of the Treaty Land Entitlement Framework Agreement after the Canadian government tried to transfer the land to a Crown corporation years ago.

After a prolonged legal process, a judge ruled the federal government failed to adequately consult with Treaty One Nation and the land transfer was ruled illegitimate in 2015.

An incorporated consortium run by the Treaty One Nation, called the Treaty One Development Corporation, will oversee developments on Naawi-Oodena.

As a self-governing nation, Treaty One will set its own land management policies, potentially in contrast to the zoning and building codes of Winnipeg. In reality, it’s likely to gently push or disrupt urban development, rather than outright destroy current practices since its goal is to attract tenants, the majority of which will be non-Indigenous.

First Nations health care

First Nations entrepreneurs are also seeking out ways to revolutionize the Canadian health-care system. Enoch Cree Nation in Alberta entered into an agreement with contractors to create a private health clinic offering simple hip and knee surgeries.

The provincial government will fund the procedures through medicare and publicly funded hospitals will still handle more complicated surgeries.

Enoch Cree Nation joins a growing number of private health clinics in Canada forming public-private partnerships. They are not the first First Nation to get involved with health care, either.

In 2012, Westbank First Nation announced a plan to build a private, for-profit hospital. Some constitutional experts warned that Westbank First Nation was violating the Canada Health Act, but the nation responded by arguing that, as a self-governing nation, it was not bound by federal laws.

Enoch Cree Nation’s private clinic will face other challenges. While COVID-19 has shaken the faith Canadians have in our health-care system, and receptivity to private health care may be growing, the affinity for public health care remains strong.

Legal redress

First Nations have also become creative disrupters by pursuing legal redress for past injustices. The courts have reached back through treaties all the way back to the Royal Proclamation of 1763 to widen Canada’s constitution beyond the formal acts to include treaties with First Nations.

Institutional changes supporting disruption include Article 35 of the 1982 Constitution Act that recognizes the “existing aboriginal and treaty rights of the aboriginal peoples of Canada.” This clause is widely interpreted as creating a nation-to-nation relationship between First Nations and Canada.

Equally important for commercial ventures is Article 87 of the Indian Act which exempts First Nations land from taxation by any order of government. This means an urban reserve does not pay property tax to a municipality.

Despite criticism of the Indian Act by authors like Joseph, Article 87 offers a major fiscal benefit for First Nations individuals and businesses on reserve. Although a complex area of law, this tax exemption is an important reason why First Nations may prefer to add land to existing reserves or to create new reserves, rather than owning land conventionally like corporations.

Furthering reconciliation

Despite some First Nations regaining rights and titles to their lands, Indigenous communities in Canada still face many barriers to economic participation. By engaging in the examples of creative disruption here, First Nations are working toward economic prosperity for their communities and, in the process, are also working toward reconciliation.

The United Nations Declaration on the Rights of Indigenous Peoplesthe framework for reconciliation according to the Truth and Reconciliation Commission of Canada — states Indigenous people have the right to pursue their own means of economic development. By starting their own entrepreneurial and developmental projects, First Nations are engaging in their inherent “right to maintain and develop their political, economic and social systems or institutions.”

Reconciliation also works best when all parties involved benefit from changes. These examples of creative disruption will benefit non-Indigenous Canadians as well as Indigenous people by increasing the housing supply in Vancouver and Winnipeg, bringing remote First Nations into the economic orbit of cities and offering increased health treatment options.

Gregory C Mason
Gregory C Mason
Gregory C Mason is Associate Professor of Economics, University of Manitoba
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