Victoria-area band starts collecting GST; courts big-box stores

[url=http://www.theglobeandmail.com/servlet/story/LAC.20070201.BCGST01/TPStor... first Indian band in a Canadian province to receive GST revenue wants its $130,000 monthly cheque to balloon, so the Tsawout First Nation has put out the welcome mat for tax-generating businesses.

Negotiations with big-box stores Costco and Wal-Mart have Tsawout Chief Allan Claxton feeling bullish.

He expects a deal to be struck with one of them some time this year.
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On Tsawout territory, the GST is called the First Nations Goods and Services Tax (FNGST). Paid by everyone, including status Indians, the FNGST is set at 6 per cent....

The 240-hectare Tsawout reserve on the busy Pat Bay Highway is 15 minutes north of downtown Victoria. Victoria International Airport is minutes away from the reserve and the B.C. ferry terminal is a 10-minute drive north.

It's a great location for commercial business, Mr. Claxton believes. Another plus is that it's next to the Municipality of Central Saanich, two-thirds of which is protected by the Agricultural Land Reserve.

Central Saanich Mayor Jack Mar, 66, a farmer for 46 years, said very few hectares are left for large developments.

Costco approached Central Saanich about two years ago. But strong public opposition and the municipality's rural-focused community plan shut the lid on the big box. ...

If development unfolds as predicted, Mr. Claxton said that his band will need to buy more land. The band has been eyeing the 305-hectare Vantreight Farms, North America's second largest daffodil grower.

Land purchases will be financed with FNGST funds.

"As long as the government has the GST, we'll keep getting it," Mr. Claxton said. "It's money that stays in the community. Positive things come from it. Otherwise, it goes to Ottawa into a big, black hole."

Canada's first FNGST agreement was finalized in 2004 with a Yukon band. Later this year, native communities in Eastern Canada and Yukon should have agreements. And four more B.C. bands have expressed interest in the FNGST, according to the Department of Finance.

Under the agreements, the bands agree to give up their GST-free status in exchange for a share of the revenue. ...

Financial self-sufficiency makes it easier for bands to opt out of the federal Indian Act and run their reserves like a municipality without federal input.

Mr. Claxton says self-government will allow the band to create more jobs and reduce dependency.

"We know our needs. We want to get off welfare. Welfare was never something our people believed in," said the chief, who in previous careers managed a grocery store in nearby Sidney, and worked as a long-term-care nurse. ...

For the 2005-06 fiscal year, the Tsawout received $3.2-million in federal funds.

Several non-Tsawout businesses -- including motels, gas stations, restaurants and offices -- continue to send their collected FNGST to the Canada Revenue Agency.

The Department of Finance determines how much is returned to the Tsawout.

Based on an estimate of the net GST collected in B.C. for one year, the government calculates the Tsawout's share of the FNGST using a formula based on the number of band members aged 15 and up, and their income.

The band has about 500 members living on the urban reserve, at least 60 per cent of them under the age of 30.

About 1,500 non-natives also live on the reserve, lease land and pay property taxes. They also figure into FNGST calculations.

If new businesses materialize, the FNGST returned to the Tsawout will increase. But the estimated value of the goods and services tax paid by the Tsawout when they are away from the reserve is deducted from that.

The end result of the formula is that the net FNGST returned to the Tsawout will be lower than the total collected by FNGST-paying businesses on the reserve.

The 130-seat White Spot family restaurant pays about $8,000 a month to lease property on the reserve.

A manager wasn't aware that some of the roughly $10,000 per month of FNGST collected at the eatery will go back to the Tsawout.

"I didn't know they could do that," said Jenny Paiva, 28. "Sometimes it seems like they benefit more. When does it stop? When will everyone be equal?"

However, Sandy Mackay, the manager of the 51-unit Super 8 Motel, was aware of the new regime. Procedurally, nothing has changed for her.

"They [the federal government] still grab our taxes by the 15th of each month," said Ms. Mackay, 56.

She thinks it's wonderful that the Tsawout are receiving tax money.

"If the money goes to the right hands and they do as they say, hats off to them."

Mr. Claxton has plans.

The priority is a $5-million sports facility for Tsawout youth. Work will begin this spring on a gym/community hall, state-of-the-art lacrosse box and year-round soccer field.

The FNGST revenue may also be used to subsidize postsecondary education for band members.

And the Tsawout's two-year-old health and community-care centre will benefit.

The FNGST will also fund research and lawyers for the Tsawout's bid to prove that their traditional lands were taken and should be returned. ...

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[ 01 February 2007: Message edited by: obscurantist ]