Municipal leaders fear loss of revenue from property taxes

as Ontario pushes for 1990 treaty settlement

by Jim Moodie

MANITOULIN-Twenty years after it was negotiated and all but passed into law, the 1990 Manitoulin Land Claim Settlement Agreement between the province and six area First Nations is now close to being ratified. And that has some municipal leaders and landowners worried about the impact the final deal might have on tax revenue and property access.

The landmark treaty was passed in the provincial legislature two decades ago, and signed by area chiefs (excepting Wikwemikong Chief Al Shawana) that same year, with the signatories issued payments and promised some land in return for dropping claims on other areas. But the agreement was never proclaimed.

Mike Brown, MPP for Algoma-Manitoulin at the time, as now, recalls having misgivings about the details of the agreement when it came before Queen's Park, then governed by the NDP under Bob Rae. "I spoke for our party during the debate," he said. "And what I said, knowing Manitoulin, was that we needed better descriptions of the properties (that had been identified for transfer to the First Nations). That has been the big hang-up."

Parcels of Crown land as well as unsold properties to which the First Nations had legitimate claim-such as the area around Perch Lake that is considered part of the Sheguiandah First Nation-were outlined in the treaty, but there were errors in the physical descriptions of the lands in question.

Representatives of the Ministry of Aboriginal Affairs (and the secretariat that predated it) have met periodically over the years with the United Chiefs and Councils of Manitoulin (UCCM) to try to settle the outstanding issues, but momentum has built in more recent months to complete the deal once and for all.

"I do know the province is attempting to find a resolution," said Mr. Brown. "Everyone would like to get this issue settled." He said the lingering uncertainty is problematic for both Native communities and their non-Native neighbours, with "interests on both sides being held up" by the process.

"It's been sitting around for 20 years, so the government wants to deal with this as soon as possible and get the treaty proclaimed," said the MPP.

Hazel Recollet, chief executive officer with the UCCM, said staff with her organization have been meeting "on a monthly basis" with provincial negotiators to fine-tune the settlement. "We're working on the final implementation, and just have some details to wrap up," she said. "I'm confident we will reach an agreement and don't foresee any real difficulties to bringing it to closure."

In mid-December, municipal leaders were invited to a session that was hosted by the UCCM, with provincial officials present, so they could be updated on the treaty negotiations. Few details of the discussion are known, however, as the media was barred from attending and those present were discouraged from talking about the matter lest it jeopardize the ongoing talks.

The mood at the meeting was described as positive and respectful, but some concerns obviously exist at the municipal level, as mayors and reeves were slated to meet in Mindemoya this past Monday to discuss issues that could arise from the implementation of the agreement. A request to have a reporter present was denied, with the explanation that the meeting was of an informal nature and items up for discussion were of the type the province had requested remain confidential for now.

It's no secret, however, that municipalities fear a hit to their coffers should the agreement confirm a First Nation's right to tax exemption on land it acquires outside its reserve boundaries. Two municipalities-Northeastern Manitoulin and the Islands and Billings-already count properties of this nature within their borders.

"It's certainly something of a concern for all of us," said Jim Stringer, mayor of the Northeast Town and chair of the Manitoulin Municipal Association (MMA). "We're assuming the province will assure that municipalities are taken care of, but certainly they haven't made any commitment."

To date, the Ontario government has bailed out the Northeast Town and Billings on revenue lost to First Nation-owned parcels in their areas. "The province has paid taxes on those properties for last year, and any arrears," noted Mr. Brown, adding that this is "the second time" the government has picked up the tab for money due.

The issue comes up every few years, said Mr. Stringer, as any land for which payments are outstanding become subject to "a tax sale process," by which the municipality can put the property on the block to pay for the debt. Each time that situation has loomed, the province has stepped in to foot the current bill as well as back taxes.

Whether that will continue to be the case is uncertain, however, and the fear among some municipal representatives is that provincial support will evaporate with the completion of the 1990 treaty, leaving townships to suck up the loss from any tax-exempt land in their purview.

From the perspective of the UCCM communities, tax exemption for properties added to a First Nation's land base is implicit in the 1990 pact. "It's always been there," said Ms. Recollet. Whether affected municipalities are compensated or not is "between them and the province," she said.

While Mr. Brown couldn't specify to what degree, or for how long, the province would reimburse townships for unpaid taxes, he expressed confidence that an equitable solution would be found. "I understand that municipalities are concerned, and don't want their ratepayers to be sideswiped by an unfair agreement," he said. "But I don't think the province has any interest in an agreement that doesn't work for everybody. We'll take their concerns into consideration, and the issues regarding taxation-we'll figure that out."

Mr. Stringer trusts this will be the case. "I can't imagine there is an intent to disadvantage municipalities in the process of finalizing this," he said. But municipal leaders are still scratching their heads over how, exactly, the tax-free land situation will play out.

Equally murky is the future management and use of the 66-foot allowances that rim shorelines across Manitoulin as well as stitch its interior in the form of undeveloped roads. Mr. Brown noted that the main impetus for the 1990 treaty was to "clear up the status of unopened road allowances so municipalities could make decisions about development."

From a First Nation perspective, the waterfront buffers qualify as unsold Crown land, and cannot be sold by a municipality, as a previous edition of the Northeast Town council controversially proposed. "At the time of the 1990 treaty, the idea was that the shorelines remain in the public domain," said Ms. Recollet. "And that's where we're coming from now."

As for the unopened road allowances that run inland, Ms. Recollet said "we're still in discussion regarding those areas, and haven't really come to a final conclusion on that part."

In Mr. Stringer's view, the 1990 agreement clearly identified road allowances as municipal property, although he referred to "a little technicality" that could allow First Nations to assert claim to these routes.

Still, he doesn't anticipate a huge battle on this front, noting that his own municipality has sold a portion of a road allowance in recent years (to the Rolston quarry in Sheguiandah), and didn't encounter First Nation opposition. "It hasn't been an issue, and it's clear that this is ours to deal with," he said.

At least one landowner, however, is bracing himself for a possible headache in how he accesses his land. Roy Bayer utilizes an unopened road allowance "to reach bush and pastureland" that he owns near Sheguiandah, and worries that a First Nation claim on this corridor will mean "I'll be cut off and will need to get permission from the band" to continue to use the route, which he has always maintained himself, as his father did before him.

Mr. Bayer said he's "never had any trouble" with members of the Sheguiandah First Nation, to which his 900-acre property abuts, but "with this thing coming up, I fear for it, because I could be landlocked."

He anticipates road allowances adjacent to a reserve will be annexed as additional First Nation property once the claim agreement is finalized. He worries that access will be granted "through a permit issued a year at a time," which doesn't provide much in the way of long-term reassurance. "If I pass this land on to my four kids, I don't want them to be cut off either," he said.

Should road allowances become an issue of ownership between a municipality and First Nation that border one another, Mr. Bayer feels that the fair thing to do would be to split the allowance down the middle. "I don't think they (the First Nation) should get the whole width," he said. "If there's 33 feet, I can still travel that."

Ken Noland, reeve of Burpee-Mills, also has concerns about the looming completion of the treaty process, particularly in regard to the tax-exempt status afforded to properties purchased by bands. But he was unwilling to discuss this in detail, since the issue had yet to be addressed by his council.

"We have a council meeting this week, and will hammer out our position," he said. "I'm not sure what we're saying yet, but we'll make that position known."

Franklin Paibomsai, chief of the Whitefish River First Nation and UCCM tribal chair, feels a settlement of the treaty is long overdue, and hopes it can be finalized soon in a manner that is acceptable to all parties.

"We're hopeful," he said. "We met with the municipalities, and we're working as hard as we can to ratify this."

But while the will and impetus seem to be there, the task of completing the agreement remains a challenge, if only because of the years that have gone by since the treaty's original drafting. "There's such a lag time on this," noted Chief Paibomsai. "The whole thing actually started in 1986, so we're trying to implement something that occurred over 20 years ago, and there are different councils at every level from then."

When the treaty was introduced as a bill in provincial parliament, Bud Wildman was the minister responsible, as such matters then fell under the Natural Resources portfolio. Mr. Brown, then a member of the opposition, was present for the signing of the deal, which occurred "on a nice summer day in AOK," he recalled.

The political scene in Ontario has gone through several permutations since. The Harris Tories took over from the NDP, and complicated matters by putting First Nation-owned properties acquired outside reserves back on the tax rolls. The Liberals, who set the groundwork for the Mantioulin Treaty in the late 1980s, and regained the provincial reigns under Dalton McGuinty in 2003, have had to figure out a way to deal with the moves made by the interim administrations, and in some ways are back to square one.

Mr. Brown, however, feels a constructive push is now on to finally complete the deal his own party first tried to strike with Island bands in the 1980s, and he believes Chris Bentley, the province's attorney general and newly appointed minister of Aboriginal affairs, "is a good fit of this portfolio" and will help to broker a satisfactory result.

Ms. Recollet of the UCCM is "optimistic this will be settled in six months, or sooner." She noted that, in her seven-year tenure as head of the First Nation organization, "there have been changes in negotiators, and in the technicians working on both sides," but she feels there is some consistency now and the parties are finally "wrapping it up."