As the Chippewas of Kettle and Stoney Point First Nation move forward as the first First Nation in Ontario to implement FMA property taxation, the Commission also looks back on the evolution of real property taxation powers for Ontario First Nations to better understand the history of First Nation property tax in that province.

Prior to the 1970s, municipalities in Ontario could and did tax leasehold properties on reserve. At that time, the Ontario Assessment Act (R.S.O. 1960) exempted “property held in trust for a tribe or body of Indians, but not if occupied by a person who is not a member of a band or body of Indians”. In other words, the Ontario assessment legislation of the day provided for the assessment for taxation purpose of non-Indian lessees of reserve lands in the same way as if the land was owned and held by any other person. Consequently, municipalities collected property taxes from reserves, but in almost all cases, delivered very little, if any, services within the reserves in return.

In 1968 and 1969, Chiefs of the Curve Lake, Christian Island, Walpole Island, Chippewas of Sarnia, Kettle and Stony Point and Georgina Island formed an “Indian Taxation Grievance Committee” (ITGC) and met with officials of the Ontario Ministry of Municipal Affairs. The Chiefs’ position was that while they could not commit all First Nations in Ontario to support an initiative to remove the reserve taxation provisions, the removal of reserve lands from municipal taxation could be made optional and with this change, the taxes previously paid to municipalities by the lessees on reserve lands could go to the First Nations in order to ensure that the necessary services previously lacking on reserve are provided.

These discussions led the Ontario government to review its taxation practices and eventually decide to stop the assessment, and thereby the taxation, of real property interests located on reserve. Bill 107, An Act to Amend the Assessment Act was passed by the Ontario legislature and became law on May 18, 1973. Bill 107, in effect, repealed municipal taxation powers in relation to First Nation lands and left the property taxation field open for First Nations to exercise their jurisdiction pursuant to the Indian Act.

Last year, the FNTC commissioned a report to examine the circumstances under which the province of Ontario decided to forego tax jurisdiction on reserve lands. One aspect of the report was to consider “whether the reasons behind that decision bear on the reluctance of some Ontario First Nations to engage in real property taxation today.” The report’s author Paul Salembier is a former general counsel with the federal Department of Justice who provided advice on legislative and regulatory issues affecting First Nations.

The report found the fundamental issue in 1973 in Ontario was the disconnection between the collection of property taxes from the non-status holders of interests in Indian reserve lands and the non- provision of local services by the municipalities/province to those non-status taxpayers.

While the report didn’t directly connect the 1973 changes to any ongoing reluctance by Ontario First Nations in regard to property taxation, clearly the First Nations who formed the ITGC in 1968 were opposed to municipalities collecting taxes on reserve lands and not providing services.