Ottawa will spend $17-million to modernize identity cards for status Indians in a move to stop widespread fraud it says costs $62-million a year.

The federal government wants to introduce updated Indian status cards to Canada’s 700,000 registered Indians by spring, according to a Department of Indian Affairs report on the project done in April. The report, obtained by Access to Information researcher Ken Rubin, recommends issuing more secure Certificate of Indian Status cards countrywide.

A status card confirms the cardholder as registered by the government of Canada as an Indian within the Indian Registration system. It determines that the person is entitled to federal services and tax exemptions totaling as much as $8,000 in benefits per year. That includes sales-tax exemptions for goods bought or delivered to reserves, drugs, dental work and eye exams.

The cards also are used as identification for First Nations people seeking entry to the United States. That makes them prized on the black market, where they sell for $500 to $1,000, according to a 1999 study for Indian Affairs.

A study commissioned by Indian Affairs in 1993 found that the status cards can be easily copied and that fraud by non-Indian cardholders costs the provincial and federal governments more than $62-million a year.

Critics said that it is about time the government acted on the earlier report.

“This is a no-choice item,” said Canadian Alliance native affairs critic John Duncan. “They’re going to have to do it.”

Status cards replaced birth certificates in 1951 to identify registered Indians. Use of the cards, which have a photograph but no bar code or embossed number, was expanded over the years to become a ticket for federal and provincial programs.

The current CIS card, which has been in use for more than 15 years, is a laminated paper document. A 2002 report by Indian Affairs found the card “is extremely easy to modify or replicate.”