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Policy Forum: Establishing An Urban Reserve—Property Tax Challenges And Opportunities

Press Release

November 3, 2022

ABSTRACT: Urban reserves offer a unique economic development tool for First Nation governments by providing access to markets and infrastructure unavailable on most reserve lands in Canada. Asimakiniseekan Askiy is Canada’s first urban reserve established on land previously owned by a city. The urban reserve was established in Saskatoon by the Muskeg Lake Cree Nation in 1988. Asimakiniseekan Askiy provides an example of the economic potential of urban reserves for First Nations and their members, as well as municipal governments and their citizens. The urban reserve is currently home to 60 First Nation and non-First Nation businesses and their 700 employees. In 2020, the urban reserve contributed $465,662 to the city of Saskatoon in service fee payments. However, before this economic potential could be realized, property taxation presented a sizable barrier in the path of taking Asimakiniseekan Askiy from an innovative idea to a successful reality. Establishing an urban reserve has significant property tax implications, since the process requires the transfer of property from the taxing authority of a municipal jurisdiction to the tax jurisdiction of a First Nation government. Agreements providing for the transfer of tax authority also include negotiations relating to the continued provision of services to the urban reserve by the municipality. This article first provides a summary of the statutory environment surrounding the formation and taxation of an urban reserve. A case study of the establishment and 33 years of operation of Asimakiniseekan Askiy is then provided, to illustrate the property tax implications and municipal service agreement process necessary for Canadian communities to achieve the economic benefits of urban reserves. The authors identify property tax challenges inherent in the establishment of an urban reserve and offer recommendations to improve access to urban reserves as an innovative economic development tool.

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