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Cottagers sue First nation over tax bills

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By Alexandra Paul

Hundreds of non-native property owners with cottages on reserve land are taking the Buffalo Point First Nation and the reserve’s development corporation to court over new property taxes imposed on them last year.

The suit, filed with the Court of Queen’s Bench Jan. 9, lists 300 cottagers who say in a statement of claim the taxes violate a long-standing lease agreement with cottagers, some of whom have held leases for decades. The First Nation started developing its cottage lots in the 1970s, the statement says.

The group filed its suit under its own corporate name, the Buffalo Point Cottagers Association. That association objects to the application of taxes as well as the tax rate individual cottagers were charged. It’s asking the court to overturn the tax laws and order the taxes to be repaid along with costs of the court challenge.

They’re also petitioning the court to restore the terms of a pre-existing 2008 lease agreement.

Under that agreement, the annual fee for 2011-12 would have been $875.50 per cottager.

The agreement also provides for arbitration to settle disputes but it wasn’t used when the First Nation unilaterally imposed tax hikes, the statement said.

The fees pay for services such as "road maintenance, dust control, infrastructure maintenance, landfill, fire department services, supervision, overhead and similar costs," the statement said.

Everything changed last year for the cottagers after Ottawa approved Buffalo Point’s application to go ahead with economic development under a 2005 law called the First Nations Fiscal and Statistical Management Act.

Hailed as a legal break from archaic restrictions under the Indian Act that governs First Nations in Canada, the new legislation allows pre-approved reserves to kick-start their economic engines through property taxes and other measures. The focus of the new law is to streamline regulations for commercial and industrial land development on First Nations territories.

Ottawa isn’t taking sides -- even if the dispute is over the law they put in place -- because that’s not the minister’s role.

"We have put a regime in place to allow First Nations to enact taxation bylaws on their lands. In the event of disputes, there is a mechanism that allows those to be addressed. That's what has happened here," a spokesman for Aboriginal Affairs Minister John Duncan said.

A statement from Aboriginal Affairs Minister John Duncan in Ottawa Tuesday said there’s nothing wrong with the way Buffalo Point is enacting its tax laws.

"Buffalo Point First Nation is a signatory to the First Nations Fiscal and Statistical Management Act (FSMA) as of September 2011 and is enacting its property tax regime under the authority of the FSMA.

"The First Nations Fiscal and Statistical Management Act enables First Nations to participate more fully in the Canadian economy and promote private investment while meeting local infrastructure needs. The Act greatly expands the opportunity for First Nations to best utilize their property tax and other source revenues to promote First Nation capital investments and facilitate economic growth in their communities," said the statement from Duncan’s office.

"Through the FSMA, the First Nation Tax Commission was established as a shared-governance organization that assumes and streamlines the approval of real property tax laws of participating First Nations and better reconciles community and taxpayer interests. The First Nation Tax Commission also replaces the former Indian Taxation Advisory Board," the statement said.

"We understand that the FNTC has been, and continues to be available to assist both First Nations and taxpayers in finding resolution to their differences," it concludes.

The cottagers' statement of claim says nothing about making an appeal to the First Nations Tax Commission.

The statement makes it clear cottagers believe the way Buffalo Point is using the new law violates their property rights and they prefer to seek help from the courts.

They’ve also filed other legal actions against Buffalo Point over the property taxes, one in Federal Court, and another with the Manitoba Court of Queen’s Bench to appoint an arbitrator as provided under their lease agreement. Neither of those suits has been heard, the statement says.

The Buffalo Point Development Corporation filed a defence to reject the appointment of an arbitrator on the grounds that the new tax laws replace the lease agreement, the statement of claim noted.

Buffalo Point has yet to file a statement of defence for this latest legal action from the cottagers.

The hereditary chief, John Thunder, did not respond to a request for comment, nor did the lawyer for the cottagers.

One cottager said in a brief email exchange that he was not in a position to comment, other than to say the taxes are a lot higher than lease fees used to be.

Unconfirmed reports from members of the Buffalo Point First Nation, who have their own legal problems with the chief, are that cottagers were furious with the imposition of taxes. They said taxes last year ranged from $5,000 to $6,000, five times as high as the lease fees.

The statement of claim notes the higher rates aren’t justified by the level of services they get from Buffalo Point.

Thunder used the Manitoba courts before Christmas to obtain an injunction against band members who’d staged a sit-in that lasted nearly two months over some of the same developments now upsetting the cottagers.

A lawyer for the band members was aware of the cottagers' legal action but declined comment.


Updated on Thursday, January 17, 2013 at 3:31 PM CST: Ottawa isn’t taking any position in the tax dispute with non-native cottagers on the Buffalo Point First Nation. An earlier version of this story erroneously suggested Ottawa was standing by Buffalo Point in principle.

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