The first business is set to open on Regina's first urban reserve. Last March, eleven vacant lots at 1101 Angus Street in North Central Regina (coined by MacLean's as "Canada's Worst Neighbourhood") became the reserve land of Piapot First Nation. But what is obviously good news for Piapot is bad news for non-Aboriginal businesses, and, to a lesser extent, residents in the area.

Reserve status has its advantages, namely that no taxes are paid for products and services delivered to the land or for income earned on that land. It's why owning the land on the same basis as any other business or individual wasn't good enough for Piapot. Even though the land was theirs as early as January 2007 (when hopes for an urban reserve came to light), the lots sat vacant until March 14th this year when the federal government finally granted reserve status.

It's true a municipal service agreement with the City of Regina means that the city will, in most respects, recoup its tax dollars lost. However, school taxes are a different matter. Because Piapot pursued Specific Claims Land and not a Treaty Land Entitlement, it was under no obligation to compensate school boards for lost tax dollars.

The result All school property taxes on the land are forever forfeited, a staggering gain for Piapot and loss for local school boards. Comparisons with properties across the street suggest that after Piapot fully develops its new land with a gas bar, grocery store, pharmacy, and other ventures planned, the public school board would lose more than $40,000 in education taxes each year.

Status Indians earning income on reserves don't have to pay income tax or Canada Pension Plan deductions. Under these conditions, aSaskatchewan wage earner working all year for $9.25 an hour would pay $2,576 less income tax and $952 less in CPP. After EI deductions, a Status Indian would have $18,907 in his pocket. Someone across the street with the same wage would take home just $15,379. With less pressure to increase wages, and no employer contributions for CPP, Piapot is a happy employer indeed.

Moreover, reserve businesses are exempt from paying sales taxes for goods and supplies delivered to reserve land, including utilities. Less overhead means products can be resold at a lower price. It also facilitates the bizarre loophole that allows any status card holder to buy a car tax-free by exchanging keys with the dealer on reserve land.

The tax-free gas bar means that every competitor has effectively lost the Aboriginal market. Tobacco and gasoline are heavily taxed products, but again, not for Status Indians who buy their products on reserve. It's not hard to see where Regina's 17,000 aboriginals -- nine per cent of the population -- will be lining up.

Piapot has been in third-party management since the mid-1990s. This step is only taken by the federal government as a last resort because the band has not dispersed tax dollars for their intended purpose. However, land claim settlements and reserve businesses are outside of such arrangements. Owners can use the profits however they see fit.

This casts doubt on the oft-touted claim that reserve businesses are a step towards self-sufficiency. There is no correlation between reserve business income and federal transfers, meaning that Piapot, a band of 2,027 members, will likely receive another $5.6 million in tax dollars this year, regardless of how much their reserve businesses earn.

Canadian courts have continually confirmed that no treaty ever included perpetual tax exemption as part of its terms. Instead, our current race-based tax policy is a by-product of the flawed Indian Act. If Aboriginal and non-Aboriginal Canadians are to walk together in the 21st Century, fair treatment and equitable taxation are a necessary foundation.