By Matt Goerzen
When the water woes of Kashechewan showed up on the national radar a few weeks ago, the federal government’s first act was to provide free plane rides and accommodation to anyone on the reserve who wanted out.
About 1,000 decided to leave, 250 coming into and around Centretown, where they have access to clean water, education and medical care. Some of the evacuees had never even had a checkup.
So is it any wonder there’s talk they might not want to go home?
Kashechewan is latest in a long line of incidents to prompt the multi-million-dollar question: how do we stop this from happening?
Historically, the most common answer is to scrap the reserve system, or put even more money into it. Neither answer has worked for a variety of reasons. A more concrete answer is the creation of urban reserves: municipal reserve areas that allow aboriginal bands to set up a business sector with the tax benefits and federal program assistance of a reserve. They’re taking off in Saskatchewan and could provide an economic lifeline for remote aboriginal communities in Ontario too.
The problems in Kashechewan are now well documented, but they are not new and other communities are in similar straits.
Typically, the federal government responds by throwing cash at the community with the highest media profile. The Innu of Labrador and their social problems are a textbook case.
Images of glue-sniffing children and revelations of astronomical suicide rates resonated with the Canadian public in the late ‘90s. Ottawa built a new settlement for the 680 residents for nearly $200 million. But, three years later, reports show no improvement in the community’s social conditions.
Calls to dismantle the reserve system and encourage aboriginal groups to move to urban centres also face significant deterrents. Reserves and the tax exemption granted to their residents are already guaranteed by treaty. Also, many residents do not want to live in the city, preferring to live off the land.
Eric C. Howe, an aboriginal economics expert at the University of Saskatchewan, says this remoteness causes economic problems by distancing reserves from urban job markets.
“So in Saskatchewan we have created urban reserves as an intermediary,” he explains. Urban reserves do not create a residential area in a city, but instead create a business centre with the tax exemptions and federal grant opportunities typical of a rural reserve.
“It’s an opportunity for reserve residents to get skills and economic development,” says Howe.
The first urban reserve was created by the Muskeg Lake Cree Nation in Saskatoon when the nation bought a 35-acre plot of desolate land after winning a land claim in the late ‘80s.
Precedent-setting policy talks began between Indian and Northern Affairs Canada, the City of Saskatoon and the First Nation. Establishing an urban reserve in Saskatchewan is now routine.
The Muskeg Lake urban reserve took the form of an economic campus that hosts 37 aboriginal owned-and-operated businesses. Today, the McKnight Commercial Centre is worth over $18 million, with more than $4 million in revenue already returned to the parent reserve for infrastructure development.
There are now 30 other urban reserves across Saskatchewan, but they still have their detractors.
Tanis Fiss, the director of the Centre for Aboriginal Policy Change, says tax exemptions and federal grant and loans programs available to businesses on urban reserves provide an unfair advantage. Fiss supports an equal playing field to prevent dependency and to better serve the taxpayer.
Certainly the tax exemptions in rural reserves can be a powerful motivation to stay segregated from mainstream Canadian society, but in the context of an urban reserve, tax exemption acts in an opposite way, creating powerful incentives to create businesses and employ aboriginal people in cities. The price tag attached to federal emergency action for First Nations like the Innu isn’t helping the taxpayer much either.
The economic success of an urban reserve has a twofold benefit for its First Nation. The revenue generated goes a long way in paying for infrastructure costs in the isolated parent reserve and band members interested in leaving the rural reserve for the city have job opportunities and retain income tax-exemption while working on the urban reserve.
Non-aboriginal businesses and municipalities also stand to benefit: investors in aboriginal business can effectively piggyback onto the reserves’ tax-exemptions and grant programs.
The aboriginal business sector is growing two-and-a-half times faster than the Canadian economy, says professor Howe, who does economic forecasting for the Saskatchewan government. “If you’re a municipality, you want a piece of that action.”
Even if the urban reserve’s economy did not take off, a city is unharmed. In Saskatchewan, a First Nation must compensate the municipality and school boards for any lost tax revenue, usually in the form of a servicing agreement for utilities.
If some residents of Kashechewan are serious about staying in Ottawa, an urban reserve would be an economic boon both for those that stay and for the sustainability of those who return.