Loss of tax revenue heats up services dispute

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An ongoing battle between the Burns Lake First Nation and the Village of Burns Lake over service provision has finally come to a head, with the village setting an April 30 deadline for withdrawal of services if an agreement can't be reached.

The village has provided water and sewer services to the band since 1971, when the two parties signed a 40-year service agreement. Another 40-year contract was signed in 1974 for provision of fire protection services. As part of the agreements, which set the price for service provision at cost less 10 per cent, the village received federal infrastructure grants of more than $330,000 for improvements to water and sewer services.

The service agreements were honored by both parties without incident until 1994, when the band, acting under provisions in Section 83 of the Indian Act, passed bylaws giving it jurisdiction to assess and tax properties on reserve. This included taxation of the lease on the Babine Forest Products mill, located on the band's reserve lands, I.R. #19. From the time it was constructed in 1974, up until the band's assumption of taxation, the mill had paid taxes to the Village of Burns Lake.

Although the mill was located on reserve land 26 km away, the village extended its boundaries in 1975 to take in I.R. # 19, and the mill. During the two decades the mill paid its taxes to the village, those taxes made up 26 per cent of the village's tax base. With that tax base gone following the band's assertion of its right to tax the mill, the village responded by increasing the fees charged to the band for service provision. It required payment equal to the amount band members would pay if they were residents of the village and paying taxes on their properties. This move saw the annual fees charged by the village increase to $156,000 from just over $4,300.

The village claimed it wasn't bound by the service agreements signed with the band in 1971 and 1974, because it wasn't within the village's authority to enter into the agreements at that time. That argument was supported by a March 2000 decision by the Supreme Court of British Columbia, which ruled the village was within its rights to withdraw provision of services to the band. The court also ruled the fee charged for the services must be at the rate set out in the agreements.

In November 2000, the band offered to increase the fee for services to costs plus 10 per cent, but the offer was rejected by the village. Attempts by the band to pay fees for service at the rate set in the agreements were also rejected by the village each year from 1993 to 2000.

Paul Jean has been mayor of the Village of Burns Lake since 1995. He said the village has refused to accept the band's attempts at payment because taking the cheques would prejudice the village's case.

"Since I've been mayor, we have lost the taxation from our local sawmill, and that's where the tax was coming from," said Jean.

"The sawmill is built on an Indian reserve, so the tax dollars have been there. About 26 per cent of our total tax base was lost, and so what's happening is in the community, the residential people have been picking up the difference. Every year we've had to raise our taxes by about five per cent to eventually bring our taxes up to the standard where we can afford to do the work maintaining the community," Jean said.

"We need that funding to be able to support the community, and supply the rest of the community with the services that they need, whereas right now the band has been getting their services for nothing. They haven't paid anything. And on the reserve, there's a helicopter base, there's a motel, a bus depot, and 12 or 15 homes, I believe, plus the sawmill. And they're not paying anything towards any part of the community taxation base," Jean said.

"They would like to pay piecemeal, you know. What they would like to pay is just whatever they want to pay, which is just water, sewer and fire protection, are basically the three main ones hey would like to have. But if you're a resident of the community, you can't pick and choose the services that you get."

Larry Fast is lawyer for Burns Lake First Nation.

"We still stand at a position where the band has offered cost plus, and the village is saying, 'no, we're going to pretend that the reserve doesn't exist, and you pay as if you were paying taxes to us,'" Fast said.

"They're basically refusing to recognize that the band has a separate government and has its own separate priorities and separate concerns. They really want, at the moment, for the band to be nothing more than a tax collector for the village."

Fast said eventually, things will be sorted out.

"At the moment, I think the village believes that if it threatens the band enough, the band will cave in, or the federal government will cave in, and say, 'whatever they want.' And I don't think either of those things are likely to happen.

"A new relationship is needed, but it's a relationship between governments, and a relationship between equals. And eventually, the village will come around to recognizing that," Fast said.

Toni Timmermans is spokesperson for Indian Affairs, BC region.

"I think its fairly well understood that what the village is really upset about is lost tax dollars," Timmermans said. "I mean, the band has taxation authority, which is not an uncommon thing. A lot of First Nations have taxation authority, and that mill-the Babine Forest Products mill-is located on reserve. So it's quite natural that any property taxes to be paid would be paid to the band. And apparently the village is upset by that."

Although Timmermans said the department isn't going to get involved in trying to settle the dispute, Indian Affairs will get involved in providing the band access to water and sewer services if an agreement can't be reached by the end of April.

"We do have a responsibility to make sure that the band has access to clean water and to sewer services. If they can't come to an agreemen with the village, we have to make sure that, somehow, they're getting those services," Timmermans said.

Scott Miller holds the portfolio of project management and negotiations with the Burns Lake band.

"It's a jurisdiction issue. They [the village] have actually come out in the press and said, 'We are the only sanctioned government in Burns Lake, and as such, we are the only ones that should collect taxes.' So basically, they do not respect or recognize the Aboriginal self government of the Burns Lake band," Miller said.

"They [the band] are the rightful government, and the Indian Act says they are the rightful government, so, as such, and their goal is self-sufficiency through economic activity, so in order to become self-sufficient as a government, one of the things you do is you tax, and you provide services in return, and then you take those taxes and you budget for such things as educational capacity, infrastructure capacity, things like that. So it's one of the steps that all Aboriginal governments must take on the road to self government."

To complicate an already complex situation, the band is also dealing with potentially serious health risks because of the current location of their community.

As Fast explained, the village of Burns Lake zoned the area surrounding the band's reserve lands as industrial, which, he alleges, has lead to contamination of the land under the homes of some of the band members.

"The people there have their homes next to a municipal recycling dump on one side. On the other side is the railway, and the railway had leased part of its land out to Chevron and Esso, so they had big bulk storage tanks, which leaked, and led to the ground underneath some of the people's homes being polluted and contaminated. So it's a pretty sad situation," Fast said.

Just how bad the situation actually is is something the band is in the process of finding out. According to Miller, an environmental impact assessment of the reserve lands is currently nderway.

"The first phase of the environmental impact assessment was completed," Miller said, "which confirmed that there are indeed contaminants of a toxic level on reserve."

Miller said the next step from the Indian Affairs perspective is to find out how widespread the contamination is and what health risks are involved. The band however is not waiting for that information before they act.

"From the Burns Lake band government position, as soon as they identified that there were contaminants, that was more than enough evidence to say, 'well, we can't make this an experiment in process, a petri dish. We have to move. We have to act,'" Miller said.

The band has purchased land adjacent to its reserve land on the other side of Burns Lake, and has already begun relocating the community.

"We're already building five houses, and we have a plan to build so many a year," Miller said, adding the band is hoping to have the entire community relocated within two years.

By relocating the community to deal with the contamination issue, the band will also be eliminating the issue of service provision, as the new community will have its own services in place.

In the interim, Miller said, the band is looking at a number of contingency plans for provision of services.