In Winnipeg, the debate over urban reserves are creating a great deal of fuss. Why is this so

Urban reserves highlight the illogic of the native reserve system. Like any other reserve, urban reserves are placed by the Indian Act beyond the reach of provincial and municipal real property, school and health taxes. Although native reserves enjoy the benefits of local police and fire protection, municipal water and sewer services, bands cannot be compelled to pay taxes to local governments.

Therefore, the citizens of Winnipeg will have no recourse should a native band operating an urban reserve decide not to pay for services contained within a "municipal service agreement."

Furthermore, not only does the Indian Act tax exemptions cover income tax it also covers sales taxes at both the provincial and federal levels. Native Canadians may also be exempt from other taxes levied on income such as CPP premiums, workplace safety and insurance board premiums and provincial health taxes. Native Canadians are also exempt from paying tobacco tax, hotel tax, and gasoline tax when the products are purchased on reserve.

If you like irony you'll like this. Although native Canadians who purchase goods on reserves are not required to pay GST, they are eligible for the GST rebate credit paid quarterly by government to modest-income Canadians. This same ironic twist is also available on provincial sales tax - if applicable - and on the Child Tax Benefit even though their income is tax exempt.

The tax exemptions provided under the Indian Act also apply to native owned businesses operating on reserves. Reserve businesses are able to purchase their merchandise and supplies tax-tree. As a result these businesses are able to provide goods and services at a lower cost than non-native businesses. Moreover, native owned businesses are eligible for a plethora of taxpayer subsided grants and loans.

The tax exemptions were provided to prevent native Canadians from losing their reserves through the imposition of liens and other levies upon their lands. The exemption to consumer taxes or income taxes could not have been the original intent of the exemptions; since the Indian Act predates the imposition of income tax throughout Canada in 1917. Therefore, it is more than time to amend the Indian Act to remove the tax exemptions for native Canadians.

The CTF has long advocated for lower taxes. Lower taxes should be provided to all Canadians based on income, not based on ethnicity. The tax-free status of reserves and of reserve based businesses distorts the economy by giving an advantage to one group over another.