Supreme Court of Canada –  3 S.C.R. 746
This decision confirms that Band Councils have the power to adopt property tax by-laws on expropriated reserve land, unless the Crown has stated in a clear and plain way its intention of extinguishing the aboriginal title.
As the Crown’s fiduciary duty is to protect the use and enjoyment of the Indian interest in expropriated lands to the greatest extent practicable, the duty includes the general obligation, wherever appropriate, to protect a sufficient Indian interest in expropriated land in order to preserve the taxation jurisdiction of the band over the land, thus ensuring a continued ability to earn income from the land. (para. 55 of the decision)
Can an Indian band assess and impose a property tax on expropriated land located within the limits of its reserve?
Yes – despite expropriation, the Band maintained an interest on these lands since the Crown could not extinguish the interest without stating its intention to do so in a plain and clear manner ( 5 judges against 4).
Between: Osoyoos Indian Band
And: The Town of Oliver and the Crown of British Columbia
Interveners: Canada and the Squamish Indian Band
The Osoyoos Indian Reserve is situated near the Town of Oliver in the Okanagan Valley of British Columbia. In 1925, an irrigation canal was built on a tract of land that cut across the Osoyoos Reserve. In 1957, Order-in-Council 1957-577 was passed by the federal government in accordance with sect. 35 of the Indian Act granting the property of the canal lands to the Province of British Columbia instead of using the expropriation power of the Minister of Agriculture. A right-of-way was given to the Osoyoos Band.
In 1961, the canal lands were registered as per certificate of indefeasible title in the name of the province. The Town of Oliver manages and maintains the canal.
In 1994, Osoyoos Band Council adopted by-laws with regard to property assessment and property taxation according to sect. 83 of the Indian Act applicable to land in the reserve. In 1995, a resolution was adopted by the Band Council asking the provincial Assessment Authority to evaluate the canal lands and include them on the Band’s 1996 assessment roll. The Town of Oliver opposed the appraisal of the said lands by the Band and intervened before the Osoyoos Band Council Review Board.
The Board decided to state the case before the British Columbia Supreme Court.
The Band: Section 35 of the Indian Act does not substantiate a plain and clear intention to extinguish a band’s interest in the reserve. Consequently, the band’s right to assess and tax the land is maintained. The Crown’s fiduciary duty raised a minimum impairment obligation, which restricted its decision to transfer the land to the province.
The Town of Oliver: Section 35 of the Indian Act permits the expropriation of fee simple interests in the reserve lands. Hence, the Order-in-Council extinguished the interest of the band in question.
British Columbia Supreme Court (1997): Two questions were raised by the Board of Review: whether the canal lands can be considered as of interest to the Band within the meaning of sect. 83 (1) (a) of the Indian Act and whether the Order-in-Council removed their reserve status. The trial judge concluded as to their expropriation from the reserve and outside the Band’s jurisdiction.
British Columbia Court of Appeal (1999): The decision is maintained.
McLachlin, Iacobucci, Binnie, Arbour, LeBel
Aboriginal rights in reserve lands cannot be assessed by conventional common law principles with regard to property. In fact, Aboriginal land contains an important cultural component that has to be considered when assessing its value. If the Crown wishes to extinguish the Band’s interest in part of its reserve, its fiduciary duty is applied and it must express a clear and plain intention to do so, minimizing the infringement on aboriginal rights as much as possible in order to ensure that they can enjoy the lands.
Band councils are entrusted with the power to tax any interest or use of reserve lands. The Crown should uphold and protect that interest in land to the utmost of its capacity to ensure the band’s continued ability to earn revenues from its land.
In this case, the Court determined that Order-in-Council 1957-577 did not evince a clear and plain intention to remove the entirety of the Band’s interest in the reserve land. Ambiguity could be interpreted in favour of the Indians. The assessment concerning the canal lands is valid.
In 2007, the minister of Indian Affairs recognized the need for a fair and efficient property tax regime and established the First Nations Tax Commission (FNTC). The FNTC assists First Nations that adopted by-laws under section 83 of the Indian Act in developing a regime to maximize the advantages for both communities and their taxpayers (FNTC, 2010).
In 2010, ninety-nine First Nations, the majority of which were located in Alberta and British Columbia, had adopted by-laws on property tax.
In British Columbia, BC Assessment, a provincial Crown corporation which is responsible for all property assessment in the province, helps First Nations to establish their taxation system. Its principal responsibilities, if contracted by the First Nation, are to develop the assessment roll and to act as its assessor. The collected data will help in preparing the individual tax notices (BC Assessment, 2010).
St. Mary’s Indian Band v. Cranbrook (City),  2 S.C.R. 678
Wewaykum Indian Band v. Canada,  4 R.C.S. 245
BC Assessment. 2010. Assessment Services for First Nations. On-line. http://www.bcassessment. bc.ca/products/loc_first_nations.asp. Retrieved on June 1, 2010.
First Nations Tax Commission. 2010. First Nations with S. 83 By-laws. On-line. http://www.fntc.ca/ en/taxing-under-s-83-of-the-indian-act/first-nations-with-s-83-bylaws. Retrieved on May 4, 2010.
Olthuis John, Kleer Nancy and Roger Townshend. 2008. Aboriginal Law Handbook, 3rd edition. Carswell: Toronto.