Canadian project shows how value of indigenous land can be unlocked
The Seńákw development near downtown Vancouver, Canada, won’t quite be a city within the city. But it will be close. The 6000-home mixed-use new development, encircled by Vancouver, will be autonomous.
The five hectares on which Seńákw is being built belongs to Skwxwú7mesh Úxwumixw, the Squamish Nation. They have autonomy and authority over it, from property tax to zoning and beyond.
Vancouver has a terrible housing shortage. The Squamish decided to build.
But no neighbourhood, no matter how autonomous, is an island.
In February, I wrote about the development, and noted that negotiation with Vancouver City had been needed for things like water supply.
I really did not do it justice.
The Seńákw Services Agreement between Vancouver City and Skwxwú7mesh Úxwumixw runs to 250 pages.
It does not just show how the real value of indigenous land can be unlocked when its owners have real autonomy. It also provides a model for hyper-local devolution and contracting for services – and a very sharp contrast to Kiwi assumptions that council amalgamations are the only possible solution for local government services.
The agreement begins with a recognition of their starting points.
Vancouver has no right to tax Seńákw or set user fees on it, but neither does it have any obligation to provide any services at all. If services are to be provided, they must be provided on terms that the autonomous Squamish Nation and the city find to be mutually agreeable.
They set a principle that Vancouver City would provide municipal services to Seńákw on the same basis as it provides services to the city’s residents, and that the Squamish Nation would provide fair and equitable compensation to the city for those services.
How would the Squamish compensate Vancouver City?
First Nations have tax authority on reserves. So they set a property tax on the development to cover the cost of services provided within the development, as well as the cost of services that Seńákw purchases from the city.
Because the Squamish would be handling their own planning and zoning, they would not need to pay Vancouver City for those services. Seńákw includes park areas paid for by property taxes set by the Squamish on the development, but residents would also have access to Vancouver’s parks. So Seńákw would pay Vancouver a rate equivalent to half of what Vancouver residents pay for parks.
It did not make sense for Seńákw to have its own police force, fire service, libraries, or sewage treatment plant. The development will only have 6000 homes.
But providing those services hardly requires amalgamating Seńákw into Vancouver. It’s just worked into the contract. Seńákw pays Vancouver for the services that it makes more sense for the larger city to provide.
There are fairly obvious issues that need to be dealt with if a small autonomous neighbourhood contracts for services with a larger city.
What if something outside of the city’s control means it can’t provide service for a limited time?
What happens at the end of the term of the agreement?
How can we be sure that the water infrastructure within the development is up to scratch?
What if the city has to beef up trunk infrastructure later on to accommodate increased demand from Seńákw? Who pays for it?
Seńákw doesn’t have Vancouver City’s zoning, so how could anyone assess what sorts of property tax rates might be comparable when deciding a basis for payment for services like libraries?
In New Zealand, bureaucrats raise these kinds of questions as though solutions are impossibly difficult.
But the shared services agreement covers these and more – along with a dispute resolution agreement in case of unanticipated issues.
Part of the reason that it can all work is that while Vancouver City cannot set rates on land designated as reserves, the Band Council can. But that was not always the case.
In 1988, chief Manny Jules led an amendment to Canada’s Indian Act enabling First Nations to levy property taxes on land designated as Indian Reserves. Now, he serves as chief commissioner for the First Nations Tax Commission established by the First Nations Fiscal Management Act.
If the Squamish could not levy property taxes at Seńákw, contracting for services from the city would be harder.
Canada is far from perfect. The Indian Act still makes it harder to do business on Reserve land than elsewhere.
But it provides an interesting counterexample.
Councils here do not assess rates on Māori land.
If iwi could set rates on that land, as well as iwi-held land that they might bring under their own jurisdiction, what sorts of services might they be able to provide?
And where New Zealand’s central government has a hard time imagining how small councils can be viable, a 6000-home autonomous development in the middle of Vancouver provides a striking example of what can be possible.
Dr Eric Crampton is chief economist with The New Zealand Initiative, a research group funded by a range of corporates and other organisations.