Some British Columbia municipalities are concerned that new residential and commercial developments on reserve lands could be drawing on municipal services but paying no taxes.
Where the concerns come is if a First Nation government applies under the additions-to-reserve process to covert a property they purchased on the open market into “reserve lands.”
Then the band can engage in market housing to non-Aboriginals and most of the taxes would go to the First Nations, not the municipality. First Nations engage in these developments to raise revenue for the community.
First Nations are often owed land that they did not receive when they originally signed their treaties.
Obviously, these non-Aboriginal communities are quite concerned about this situation and rightfully so.
However, there are ways to avoid this kind of situation and to level the playing field. Looking at a jurisdiction like Saskatchewan where First Nation communities have purchased many plots of land outside their traditional reserves and use for mainly commercial, agricultural or institutional purposes, there are ways to avoid conflicts between First Nations and municipalities.
According to political scientist Joseph Garcea (University of Saskatchewan), the first involves bylaw harmonization between the band and the municipality. This should also involve the creation of a dispute resolution mechanism for the municipality and the reserve.
One of the most crucial elements is the signing of a municipal services agreement which includes tax loss compensation. This is to offset the tax exempt status of the reserves commercial and real estate holdings. In Saskatchewan, the City of North Battleford successfully adopted all these things when they were concerned about an uneven playing field in dealing with Red Pheasant First Nation. The result was less acrimony, no tax disadvantage, and income for the impoverished First Nation.