The former Kapyong Barracks site, located on 160 acres of prime Winnipeg real estate, has been vacant since 2004.
The Southern Chiefs’ Organization — the organization representing Treaty 1 First Nations in Southern Manitoba — has elected Jerry Daniels of Long Plain First Nation as the grand chief, replacing firebrand and scandal-engulfed Terrence Nelson.
Daniels must adopt a different and thoughtful approach to the controversial Kapyong Barracks issue. Treaty 1 Nations — such as Long Plain, Peguis and Roseau River — have openly mused about joining together to convert the former Winnipeg military base into an urban reserve. First Nations frequently convert lands they acquire in urban areas into “urban reserves” because of the tax-exemption status attached to the land, which they often view as its primary value.
At present, the ultimate fate of the former base remains uncertain because Treaty 1 bands are still negotiating with the federal government over this surplus Crown land.
Kapyong Barracks is a former Canadian Armed Forces base located on 64 hectares (160 acres) in a prime Winnipeg neighbourhood. When Ottawa closed the base in 2004, it tried to sell this land to the Canada Lands Corporation, a Crown corporation used to sell lands to third parties.
Six First Nations asked the Federal Court to review the decision because Canada did not consult them. The court sided with the First Nations and the former Conservative government eventually dropped its appeal and entered negotiations. The Liberal government inherited those negotiations.
The federal government recently announced it will proceed in 2017 with demolition of the base’s crumbling on-site infrastructure.
But conversion to an urban reserve is not the only option. Whatever happens, First Nations should enter partnerships with non-aboriginal corporations to develop the land.
Some First Nations maintain some of their prime land in fee-simple status. Fee-simple estate is the way most land is held in Canada. The land can be sold or transferred to anyone and can be used as collateral for loans. For example, Membertou, an urbanized indigenous community in Nova Scotia, kept some of its most valuable land in fee simple, rather than convert it into an urban reserve.
Past senior adviser for Membertou Dan Christmas (who has recently been appointed to the Senate), stated, “One of the big reasons is if you leave it as Membertou Development Corporation lands, you could use that land as collateral for any financing or loans. If we converted it to reserve lands, we couldn’t use it as collateral and that severely limits your ability to borrow.”
In other words, holding the land in fee-simple — as opposed to reserve — status would be much more attractive to outside investors.
Manny Jules, chief commissioner of the First Nations Tax Commission, told the Standing Senate Committee on Aboriginal Peoples that, “the problem with additions to reserve is that they make formerly productive lands unproductive by converting valuable fee-simple land into Indian reserves. Reserve lands are generally about one-tenth as productive as other lands in Canada. They are subject to systems of governance and land tenure that make it very difficult to do business or attract investment.”
But Membertou is not Kapyong and Sydney, N.S., is not Winnipeg. Decision makers at Membertou decided the increased economic activity made up for the lost tax advantage. Senior adviser Christmas said paying taxes was the cost of doing business.
Treaty 1 First Nations will need to compare the projected economic activity with the benefits of the tax advantage. If they convert it to an urban reserve, they should make good use of long-term leasing with developer partnerships. Having an urban reserve is much better than nothing.
For many First Nations, the concern is that if they maintain lands in fee simple, they lose jurisdiction.
But, as discussed above, if they convert it to a reserve, they lose substantial value. Commissioner Jules, in his address, stated that in a future First Nations Property Ownership Act, indigenous communities should maintain full economic value and obtain jurisdiction over their lands.
In the meantime, Treaty 1 communities must weigh all options. If it is ultimately advantageous, they should not ignore the benefits of fee simple and resist the louder voices of those insisting only an urban reserve would work.
Originally printed in the Winnipeg Free Press.