First Nations seeking to develop their lands often encounter difficulties obtaining available municipal services from adjacent cities, townships and municipalities even when those First Nations are willing to pay the reasonable costs for those services like sewer and water services. An ongoing issue for some municipalities is that they seek to apply all of their own laws, building codes, zoning, fees and penalties, and approval processes for any and all development that may be approved or planned for First Nations lands. Yet for many First Nations, this is simply not an option as they have their own laws, bylaws and policies in place for their lands and any development that is governed by federal laws such as federal environmental assessment and protection laws as First Nations grow and develop their economies and self-governance. Moreover, some cities seek a 100% recovery rate where all of the property tax revenue collected by a First Nation under its taxation bylaws are forwarded to a municipality even where this tax revenue is well in excess of the actual or reasonable costs for services required. Recent case law in this area is difficult to say the least as there is not a common law based, realistic and practical manner to force a municipality to provide services for a reasonable rate. So what is a First Nation to do? Not every First Nation is able to provide its own services as many of them are small and have few options. Are there any options?
In British Columbia, there may well be an option IF a First Nation has a taxation bylaw, has an unwilling neighboring local municipality and is willing to be assertive in its relationship with the BC Government, particularly the Minister of Finance. Existing BC legislation can be used to insist the involvement and support of the Minister of Finance to solve this problem of services.
The BC Minister of Finance (the “Minister”) must intervene in the dialogue between a local municipality and a First Nation with a taxation bylaw pursuant to BC’s Indian Self Government Enabling Act (the “ISGE Act”). In short form summary, the ISGE Act applies as follows:
Section 10(1)(c) of the ISGE Act provides the following:
10(1) On receipt of a notice in accordance with section 9 [Notice of intention to implement independent taxation laws of a First Nation], the minister must
(c) request any Provincial taxing authorities specified in the notice [in this case the local municipality] and any others the minister thinks ought to be involved to negotiate [such as an observer from the Minister’s office] with the band for the purpose of contracting with the band, as permitted under section 37, for the appropriate services. [Emphasis and notes added]
A First Nation providing such notice of a newly adopted or amended taxation bylaw is common place for a First Nation providing the Province with the requisite notice under section 9 of the ISGE Act, notifying the Province of its intention to implement independent taxation bylaws. Subsequent to this notice will issue a certificate acknowledging and honoring that First Nations jurisdiction to tax leasehold interests on its reserve lands. As such, section 10(1)(c) of the ISGE Act is then triggered, and so the Minister must request the relevant Provincial taxing authorities (the local municipality) to negotiate with the First Nation for appropriate services.
So that typically gets First Nations’ services needs on the agenda but cannot force a deal, or even negotiations. However, this legislation goes further. Section 11(2) of the ISGE Act provides:
11(2) If a band enacts an Indian land taxation law at a time when one or more of the Provincial taxing authorities that were requested by the minister to negotiate with the band do not have contracts with the band for the appropriate services, then, on written application of the band, the Lieutenant Governor in Council by order may require any of the Provincial taxing authorities
(a) to continue or to resume negotiations with the band for the purpose of contracting with the band, as permitted under section 37, for the appropriate services, and
(b) despite the absence of a contract, to provide to the band, during the first calendar year for which taxes are imposed under the Indian land taxation law, any services specified in the order at the price to the band that the Lieutenant Governor in Council considers to be reasonable and that the Lieutenant Governor in Council may specify by order. [Emphasis added and noted]
A written letter and briefing note sent to the Minister would be considered the requisite “written application of the band” under section 11(2). However, the First Nation may need to issue additional correspondence to the Minister and/or Lieutenant Governor in Council in order to obtain intervention under section 11(2).
Section 11(2) may be triggered if the local municipality neglects to negotiate in good faith or somehow avoid completing an agreement even after a request from the Minister to do so. Thus, section 11(2) provides a First Nation with further potential recourse through the Lieutenant Governor in Council if the Minister’s intervention is not sufficient to obtain a services agreement with the municipality. There is no guarantee that the Province can in fact force an agreement by exercising its discretion to do so. The provisions says “may” and not “shall” so no services agreement can be forced out of the Minister of Finance. However, if the decision making process of the Minister is flawed and does not fully review or consider all the issues and otherwise does not comply with Administrative Law principles, the decision not to force an agreement is subject to judicial review. Therefore, a judicial review, or the threat of one, exposing the give and take and considerations of the Province not to exercise its discretion to force an agreement and thwart and perfectly reasonable opportunity for a First Nation to build its local and surrounding economic base and benefit many in the neighborhood, including residents of that municipality where the First Nation is perfectly able and willing to pay the going rate for services, would in the very least, be a difficult legal, public and political burden to overcome in the event of litigation.
For specific guidance on services requirements and specific negotiations on services for a First Nation, please contact Mike McDonald, Q.C., Chair Indigenous Law Group.