Urban Reserves, A Temporary Stop-Gap

The implementation of urban reserves in Prairie cities is not perfect public policy, but the concept holds promise as a vehicle to enhance native incomes until other laws are reformed.
Published on October 21, 2003

The heat and fury over the endorsement of urban reserves by Winnipeg’s City Council has subsided enough to allow for some reflective consideration of the new policy. What have we embraced, and what do we expect to accomplish?

First, let’s give the critics their due. The main bone of contention – that special tax treatment for band-owned businesses is inherently unfair, and racist to boot – is completely accurate. A basic principle of our rule of law is blindness; every citizen is supposed to be treated equally by government.

But in this case, that of native Canadians, our forebears abandoned that principle long ago, when they constructed the exurban reserves. In those enclaves, provisions of the Indian Act constrained, and still constrain, aboriginal commerce. Several generations of poverty later, neither governments nor native leaders have connected cause and effect, and there is little prospect for reversing that corrosive error. Even the salutary reforms to reserve government proposed by the minister, Robert Nault – necessary, basic measures to strengthen democratic accountability, a precondition for economic growth – look not to survive the next Parliament. In a context of hoary, antiquated laws that inflict great harm, the idea of using them to confer economic benefit moves into an entirely different light.

The tax unfairness is partly illusory. The several enterprises on urban reserves in Saskatchewan pay fees for municipal services, as would their Winnipeg counterparts, with the same amount of revenue recovered that’s waived in property taxes. School taxes are another issue. The agreement in Manitoba does not provide for them, but as one native leader from our western neighbour pointed out in the Winnipeg Free Press in September, “the Saskatchewan agreement calls for specific compensation for municipal tax loss relating to the school portion.” He recommends that we fix that error. Remember also that school divisions already bill other governments for students who hold treaty cards, a fact which mitigates the size of the tax loss.

Urban reserves in Saskatchewan were twenty years in the making. The first one opened in Saskatoon in 1988, since joined by four others there, with a total business volume of $18 million. A previously decrepit industrial district turned into the McKnight Commercial Centre, run by the Muskeg Lake Urban Reserve, which employs 300 people. On September 28, a new $3.6 million business centre anchored by Tribal Council offices, a law office and a thriving trucking company, opened its doors. In North Battleford, the already successful Gold Eagle Casino simply changed its legal stripes and converted to urban reserve status. Dozens have proliferated throughout the province.

Citizens worried about urban reserves gathered at a town hall meeting in River Heights on September 23, with ample evidence of a functioning economy just outside the door, Behind the manicured lawns live thousands of families who work throughout the city, in diverse centres of value. The quiet prosperity that sustains them consists of a shop here, a professional office there, a civil service service desk or a factory stall. Encouraging aboriginal enterprises is a means to bring a commercial base to the poorest ethnic group in town, and thereby replicate those dynamics.

It sure beats social services. Although some statistical trend lines for natives are showing significant improvement – a falling high school drop-out rate, more young adults with post-secondary education, incomes improving faster than the Canadian average, for instance – other numbers are worrisome. The percentage of reserve natives on welfare actually went up a point during the 1990’s. If the active promotion of native entrepreneurs extends the dignity of work and its rewards to some of the appalling high proportion who remain on the dole, urban reserves may be worth the breach in perfect racial blindness.

Urban reserves will always be a stop-gap. They should not prevent us from addressing the root causes of First Nations poverty, which are themselves racially based. The federal Liberals should insist on passage of the new governance act, and follow it with changes to the Indian Act that allow an atomistic economic process on reserves. Winnipeg’s Treaty Annuity Group, a group of activists pushing the federal government to address the problem of native poverty, has proposed striking reforms that would demolish this distress in the same way that old age pensions conquered senior poverty in Canada. Paying each native $5,000 a year instead of $5 would transfer about half of federal spending from unaccountable, bureaucratic processes directly to native families.

Arguably Indian reserves represent the most deficient public policy model in Canadian history, so the idea that we should replicate that model in our cities seems distasteful. The ultimate answer is to bring this community back into the economic mainstream by ending all special reserves. In the interim, to people who are fleeing a framework biased in favour of poverty and failure, the urban reserve is a temporary leg up, in the other direction.

For more on aboriginal policy . . .

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