Jeff NAGEL and Neil CORBETT Black Press
Long-promised reforms are about to set off a building boom on First Nations-owned land in the Lower Mainland and the Valley.
But some civic leaders fear it will create enclaves of condo towers and commercial developments occupied by tens of thousands of residents and businesses that pay no regional taxes.
It could also skew the region’s vision for development and leave businesses competing on unequal footing.
That warning comes from the Lower Mainland Treaty Advisory Committee (LMTAC), which represents local municipalities on aboriginal issues. It has released a draft discussion paper on the potential impacts of the federal First Nations Commercial and Industrial Development Act and related legislation.
The provisions, now being implemented in B.C., will cut red tape for bands that want to develop reserve lands, allowing them to greatly expand their populations of non-aboriginal tenants.
Many regional bands, including those in the Abbotsford area, are interested in development, and developers have approached their councils.
One of the first aboriginal groups out of the gate is the Squamish Nation, which plans to build 12,000 condo units on its undeveloped reserve lands in Vancouver and West Vancouver.
An extra 25,000 non-aboriginal residents could move onto those Squamish lands over the next two decades, LMTAC estimates.
That’s equivalent to a new city the size of Port Moody being dropped into the Lower Mainland that doesn’t contribute via taxes to the ballooning costs of regional utilities and transit services, according to Belcarra Mayor Ralph Drew, who chairs LMTAC.
“This is a fairness issue at the core,” Drew said. “These are funds that a significant non-aboriginal population would not be paying and it means all of the taxpayers of Metro Vancouver are going to have to pick up the tab.”
The new developments wouldn’t pay school taxes either. And local cities won’t get increased annual property taxes had the projects been built within their borders – or the one-time development cost charges (DCCs) that are levied to help cover the costs of everything from roads to parks.
“If developers don’t have to deal with DCCs, the impact is enormous,” Drew said. “By being able to pursue development on reserve, they don’t have to pay HST, people don’t have to pay Property Transfer Tax, they don’t have to pay property taxes. From the First Nations perspective, there’s no income taxes and no capital gains taxes.”
The tenants of such projects won’t be entirely tax-free. The Squamish Nation is expected to exact its own taxes on its non-aboriginal residents, although they won’t have a vote or elected representation on the band council that controls the reserve land.
Drew and LMTAC say the aims of the legislative reforms are good: they help First Nations throw off much of the restrictions of the Indian Act to attract residential, commercial and industrial development to their communities. The problem lies in the lack of a mechanism to ensure new band-owned developments pay into regional services the way other land owners do and to ensure they fit Metro Vancouver’s regional growth strategy.
Fraser Valley First Nations bands have already been developing their lands, and that will accelerate, predicts Tyrone McNeil, tribal chief of the Sto:lo Tribal Council, which represents bands from Hope to Langley, who have hundreds of hectares of available land.
“We have a large land base that isn’t impacted by the ALR (Agricultural Land Reserve), so we’re basically open for business,” he said.
Chief Dalton Silver of the Sumas First Nation said his council will be meeting with Abbotsford council in early February to discuss commercial development. He declined to mention specific businesses or projects that have been pitched to the band.
“We had plans before the Commercial Industrial Development Act was even heard of,” said Silver, who has been a council member for 20 years, and chief for the past seven.
“We’re becoming urbanized. The city is moving out. We have to look at those opportunities.”
He said the first order of business is simply to open the lines of communication with Abbotsford city hall.
The Sumas band, which has almost 300 members, has interest in commercial and light industrial development rather than housing.
The band has 234 hectares (578 acres), with the band office on Sumas Mountain Road, and the reserve lands both north and south of Highway 1.
Silver said in the past bands have been frustrated by the need for their development plans to be approved by Ottawa – by Indian and Northern Affairs Canada.
“There’s big bureaucracy, and a lot of red tape,” said Silver, adding that typically, developers haven’t been willing to invest the time required to clear the bureaucratic hurdles.
The Matsqui First Nations band has 419 hectares (1,035 acres) bordering Abbotsford to the north, along the south bank of the Fraser River.
A model for a band successfully building business can be found at the Squila Indian Band in Chilliwack, where a new Walmart is the anchor of a 650,000-square-foot project that includes a Cineplex theatre, A&W Restaurant, gas station and a Home Depot coming in spring.
The band negotiated with the municipality to arrive at a taxation agreement, and Chilliwack city hall built a road through the reserve that was needed for traffic flow.
McNeil said bands typically negotiate with municipalities when they need infrastructure to sustain a project, be it sewer, water or road maintenance, and said politicians should not worry that the new laws will create a tax-free zone for businesses.
“They shouldn’t be concerned about that,” he said.
Over the coming generations, reserves and the municipalities will grow together, so it will be difficult to tell where the native land begins and ends.
“My preference is to support that development,” said McNeil.
The aboriginal building boom may also spread beyond existing reserve lands.
First Nations can apply under the additions-to-reserve process to convey reserve status to property they buy on the open market.
That’s intended only for expansions to house and serve a band’s own members, but LMTAC argues there’s nothing to stop a First Nation from developing market housing for non-aboriginals on a property after it’s been converted to reserve.
Colliers International vice-president Howie Charters, who advises First Nations and businesses on real estate matters, thinks the fears are overblown.
“There’s a lot of paranoia out there,” he said, predicting native groups will rely heavily on experienced developers and professional consultants.
“The marketplace is going to govern behaviour,” Charters said.
“The private sector has no interest in getting involved in a boondoggle or anything that’s nefarious in terms of agreements that have been made.”
In theory, Charters said, it should be possible for the Squamish, for instance, to charge tenants equivalent amounts for regional taxes and utility fees and then pass the money on to Metro Vancouver as part of a service agreement.
Cross-boundary issues and challenges between different jurisdictions are nothing new in the Lower Mainland, he noted.
There are already 22 different municipalities in Metro Vancouver (plus the Tsawwassen First Nation and unincorporated areas) and they all have different tax rates and rules for developers.
Local cities need to actively consult and work with nearby aboriginal groups, Charters suggested, just as they would with a neighbouring municipality to coordinate planning and avoid problems.
LMTAC’s concerns go beyond taxation.
It wants to know how or if the province will enforce B.C.’s building code, WorkSafeBC regulations and even environmental standards governing air and water pollution on band-run projects.
How the Squamish projects proceed will set a precedent for the rest of the region and beyond, Drew said.