Tax Autonomy Key to Unlocking Indigenous Innovation

Manny Jules wants to move Indigenous people from dependence to independence to significant innovators and contributors to Canada’s wealth and prosperity.

It starts with First Nation Title rights and taxation.

“There are 110 Indigenous communities that collect property tax across the country,” he says. “They generate collectively about $70 million. Federal and provincial governments collect $730 million on the same property.”

Clarence (Manny) Jules is Chief Commissioner of the First Nations Tax Commission.

Clarence (Manny) Jules, Chief Commissioner of the First Nations Tax Commission

Clarence (Manny) Jules is Chief Commissioner of the First Nations Tax Commission. A member and former Chief of the Kamloops Indian Band, he is the recipient of numerous accolades and awards received over his more than 45-year career, including the Order of British Columbia and two honorary doctorates.

One of his most notable achievements had humble beginnings: his dad, then chief, was trying to get someone to pay for clearing winter snow from the reserve’s roads. The band went to the local MLA, who told them they were a federal responsibility. When they approached the feds, they were told the relevant taxes are gathered by the province and therefore municipal services like snow clearing were up to the province.

“This dog-chasing-the-tail went on for another 20, 30 years before it was finally resolved, and that took an amendment to the Indian Act,” Jules says, adding it was the first Indigenous-led amendment to the Act since its inception in 1876.

The Kamloops Amendment, passed in 1988, enabled the band to collect property tax on the reserve. Jules, who had by this time been elected Chief, set up the Indian Taxation Advisory Board along with Indigenous leaders such as Ray Ahenakew from Ahtahkakoop First Nation and Lester Lafond from Muskeg Lake Cree Nation, to provide guidance in using the new powers.

It’s hard to overstate the impact of property tax and private property on the ability to build generational wealth. Consider: when a non-Indigenous person buys a house, they acquire an asset. The value of the land and structure is collateral they can use to borrow money to start a business and to get that business bonded.

Jules explains that title to reserve land is held in trust by the Crown. While any structures on the land might be privately owned, Section 89 of the Indian Act states any such property cannot be used as collateral with non-Indigenous institutions.

“What that has led to is that a lot of our entrepreneurs cannot be bonded on reserve lands,” Jules says. “If you can’t be bonded, that means you can’t get into a small business.”

Typically, on-reserve housing is built with federal government funding. Without private ownership and property taxes, houses become liabilities. Maintenance and upkeep, which would be handled by homeowners looking after their valuable assets, become expenses that must be paid by the band—again with federal dollars.

This acts as a disincentive for the federal government to invest in First Nations housing. With Indigenous communities having the youngest and fastest growing populations in Canada, the result is overcrowding and public health problems. These include high rates of diseases such as tuberculosis and now, the ominous shadow of COVID-19.

The urgency of the pandemic has shone a spotlight on how public health programs are delivered—or hindered—by reliance on Ottawa. Jules argues that provincial and federal governments collect taxes from First Nations lands that are far in excess of the cost of services delivered. It would be better to provide at least some of these funds to First Nations, who are closer to and more invested in the health of their communities.

“One of the things I’ve been advocating during this pandemic is that First Nations should have access to more of the revenues that the federal and provincial governments are collecting off of our lands so we can provide the same level of good government,” he says. “We would be prepared too, as there will be other waves or other epidemics in the future.”

Property taxes traditionally pay for services such as policing and community infrastructure such as roads, sidewalks, community centres, high-speed Internet, sewer and water. Indigenous police forces have had greater success serving their communities, even though they are woefully underfunded. In contrast, lack of safe drinking water and boil water advisories are a national embarrassment that the federal government has had little success in addressing.

Again, the root of the problem is dependency: it’s not enough to build a new water plant if the expertise for day-to-day operations and maintenance is hundreds of kilometres away. With property tax powers, First Nations would have the funding available to train and pay people in the community to build and maintain infrastructure. This process would develop skills and expertise that can be applied anywhere, supporting First Nations entrepreneurship.

As the federal government cautiously guides Canada’s economy through the COVID-19 crisis, Jules sees a golden opportunity.

“We’ve got one of the youngest segments of the population. We have to be a part of the rebuilding process. The federal government needs First Nations and First Nations innovation, First Nations workers, more than they ever have before.”

“Now is the time to truly begin—to get rid of systemic racism as it applies to First Nations (through the Indian Act). Allow us to be innovative, because we are.”