Indian Band In British Columbia Taxes the Government

On December 7,2001 the Supreme Court of Canada handed down a ruling in a case called Osoyoos Indian Band v. Oliver (Town) whereby the Court recognized the ability of Aboriginal bands in Canada to tax the government for using or occupying portions of reserve lands. It seems that in the Indian Act section 83(l)(a) gives Aboriginal bands the right to create by-laws to tax anyone including the government that uses any part of their reserve lands. The Supreme Court of Canada in their decision said that this section should be interpreted broadly as Aboriginal bands are the government of the land and had the right to tax any interests in or use of reserve lands.

The government had argued that s.35 of the Indian Act had given them the right to take the land for public purposes. In answer to this, the Supreme Court of Canada stated that the government could not look at Aboriginal interests in land through the eyes of common law but that Aboriginal interests in land have an important cultural component. Aboriginal peoples have a unique relationship to the land, the value cannot be determined by looking at a fair market value of the land to compensate them. The government further has a fiduciary duty to ensure any land it uses must be done in a way that minimally impacts the band’s use and enjoyment of Indian lands. Therefore, if they take land for public purposes, they must preserve the right of bands to continue to cam income from the land.

The following is a conversation with Joseph R. Linkevic, tax administrator for the Osoyoos Indian Band, and his involvement in initiating this case: the NATION: First of all congratulations Mr. Linkevic, now, could you tell us about your involvement in the Osoyoos case just to come down from the Supreme Court?

Mr. Linkevic: I was working for the Osoyoos Indian Band in 1995/96 as what I would consider tax administrator as I looked at all aspects of reserve land use. There was an irrigation ditch put in place by the Province of British Columbia in the early 1900s and was listed as still being owned by the Province. The maps said the land was “owned” by the Province but it went through our reserve. So I approached the Band Council to advise them that I thought the land should be taxed and could be taxed. The Band Council gave me their consent to proceed so I went to our Board of Review to have them formally request on our behalf that the lands be included in our tax rolls. The Board of Review was set up to be an impartial review and include all taxable property In our jurisdiction. The Board agreed to include these lands.

How did you assess the tax to place on the reserve lands the Province had built on?

I approached the B.C. Assessment Authority, who we used to appraise our taxable properties, to have them include the lands for the irrigation ditch in our tax rolls. The B.C. Assessment Authority represents the provincial government in assessing all taxable lands within the Province. We contracted them to provide not only an impartial assessment of the lands but to also provide unquestioned and most appropriate assessment.

Given that they were the B.C. Assessment Authority, how co-operative were they in this assessment?

Well, they were contracted to work for us, and if we wanted to have them assess lands for taxation, that was their job. I do not believe they ever thought we would be able to tax the lands because of the ownership issue, but they went ahead and assessed the lands. We needed the information as they had never been valued or assessed for taxes before because they were always either considered reserve land or after the 1900s provincial land. That is what we wanted the Assessment Authority to do and they did it for us.

So after you find out how much the land is valued at for taxing purposes, what do you do?

The next step was to attempt to tax the lands. We divided the land into four individual lots. The taxable property was owned by the Province but held by the Town of Oliver. Our idea was to create a grant in lieu of taxes because taxing jurisdictions do not really tax each other, they create a value and give a grant in lieu of taxes. That is what we wanted – more income for the Band through this taxing mechanism.

So now you have valued the land and set up this grant which is really a taxing arrangement, what next?

Well, of course, the town of Oliver objected to the assessment of property by the Band. They objected to the Board of Review we had set up to clarify who has the authority to tax in these cases. The Board of Review started a case at the B.C. Supreme Court who said the Band did not have the power to tax as the land had been given up under s. 35 of the Indian Act. We appealed and the Supreme Court of Canada decided to hear the case.

And the Supreme Court of Canada agreed with you that the Band had the power to tax the land that the Province had built structures on, it must have been a good moment for you?

Yes, it was. Although I was not there for the whole process as I resigned as Tax Administrator sometime in 1996 to go to school but am certainly glad the Band Council supported my thinking back in 1995.1 am also very pleased that the Supreme Court has come out with the decision it has, because there are all kinds of ramifications on a national level. All Indian Bands in Canada who have taxing authority should look at this decision very closely, because it could open the door for taxing highway, power lines and other utility services that have “expropriated” Indian reserve for public use. There are great benefits to being a taxing authority for Bands considering this. The taxing authority we exercised in 1996 brought an additional quarter of a million dollars to our community and all we had to expend was really incidental compared to that. The Province and townships around reservations have been collected taxes in one form or another for years so why not us. At the end of the day, I think taxing authority gives a Band more of an equal footing with respect to things like negotiations with local towns and the provincial government.

Given that they were the B.C. Assessment Authority, how co-operative were they in this assessment?

Well, they were contracted to work for us, and if we wanted to have them assess lands for taxation, that was their job. I do not believe they ever thought we would be able to tax the lands because of the ownership issue, but they went ahead and assessed the lands. We needed the information as they had never been valued or assessed for taxes before because they were always either considered reserve land or after the 1900s provincial land. That is what we wanted the Assessment Authority to do and they did it for us.

So after you find out how much the land is valued at for taxing purposes, what do you do?

The next step was to attempt to tax the lands. We divided the land into four individual lots. The taxable property was owned by the Province but held by the Town of Oliver. Our idea was to create a grant in lieu of taxes because taxing jurisdictions do not really tax each other, they create a value and give a grant in lieu of taxes. That is what we wanted – more income for the Band through this taxing mechanism.

So now you have valued the land and set up this grant which is really a taxing arrangement, what next?

Well, of course, the town of Oliver objected to the assessment of property by the Band. They objected to the Board of Review we had set up to clarify who has the authority to tax in these cases. The Board of Review started a case at the B.C. Supreme Court who said the Band did not have the power to tax as the land had been given up under s. 35 of the Indian Act. We appealed and the Supreme Court of Canada decided to hear the case.

And the Supreme Court of Canada agreed with you that the Band had the power to tax the land that the Province had built structures on, it must have been a good moment for you?

Yes, it was. Although I was not there for the whole process as I resigned as Tax Administrator sometime in 1996 to go to school but am certainly glad the Band Council supported my thinking back in 1995.1 am also very pleased that the Supreme Court has come out with the decision it has, because there are all kinds of ramifications on a national level. All Indian Bands in Canada who have taxing authority should look at this decision very closely, because it could open the door for taxing highway, power lines and other utility services that have “expropriated” Indian reserve for public use. There are great benefits to being a taxing authority for Bands considering this. The taxing authority we exercised in 1996 brought an additional quarter of a million dollars to our community and all we had to expend was really incidental compared to that. The Province and townships around reservations have been collected taxes in one form or another for years so why not us. At the end of the day, I think taxing authority gives a Band more of an equal footing with respect to things like negotiations with local towns and the provincial government.

The question is would this apply to the Eastern James Bay Cree Territory?

First at foremost, I would suggest this is a question best answered by legal counsel, who is a member of the Quebec Bar, as there a number of issues that require closer scrutiny. There is first the issue of the extinguishment clauses in the James Bay and Northern Quebec Agreement. While the government sought to extinguish all Cree rights and interests in section 2.1, the Agreement says “in consideration of the rights and benefits herein set forth in favour of the James Bay Crees.” Again in section 2.2 when talking about the benefits and obligations owed, it says “the whole in consideration” for the surrender of rights. This is why I say a legal opinion should be sought in Quebec to examine this situation more closely, has extinguishment occurred if in the Agreement, the Province has failed to live up to their obligations for which Cree rights in the land were traded? If we look at the balance sheet, has not Quebec taken billions of dollars in resources from the Cree territory in the last 26 years and the Crees are still owed in the hundreds of millions of dollars in promises for services, economic development, justice, etc? Considering the amounts of money the Quebec government has received they have had ample money to accomplish their promises and would not any court agree that 26 years has been more than a reasonable amount of time to give them? Thus, with a substantial breach of the Agreement, would this mean that all the lands and rights would revert back to the Crees? Would we take ownership of the dams, in recognition of the balance sheet showing they have made more than their initial investment and we have been enriching them with profits from our resources for 26 years without receiving what was promised to us? Or, would we be charging rent or taxes in the millions per year for use of our lands, meaning assessing the dams, hydro stations, hydro lines, highways, airports, forestry, mining, etc? Would this not be a re-assertion of our rights to the land as given to us by the Creator, or as the Supreme Court says in the Osoyoos case that Indian Bands are the government of reserve lands, and without the need to rely on agreements that have a history of being disrespected and unfulfilled?