It's looking more likely that an urban reserve is in the City of Winnipeg's very near future, now that the Roseau River First Nation has made a $300,000 down payment for the former Canada Packers site.

Once the land is purchased by the Indian band, the band could have the land registered as a reserve by the federal government. By doing such, the land would then be subject to all the provisions of the Indian Act, including tax exemptions.

Urban reserves create two problems.

Unfair competition is the first. True, Native bands negotiate an agreement with municipalities to pay fees for services - such as sidewalk and road maintenance - in lieu of the regular property taxes. However, in addition to sidewalk and road maintenance property taxes pay for civic development projects, which the Native bands would be exempt from paying.

Native Canadians working on urban reserves do not pay income tax, so businesses can pay lower wages without the workers losing any take-home pay. Furthermore, a Native-owned business would not have to pay taxes for goods and supplies delivered to their shop located on reserve land.

Native-owned businesses, Native workers and businesses operating in partnership with urban reserves have a clear and unreasonable advantage over the competition. This unfair competitive advantage may in fact cause existing Winnipeg businesses to become bankrupt.

Obviously, the tax breaks would help a Native owned business operating on an urban reserve. But most of us realize there is no such thing as a free lunch, someone has to pay the bill.

In fact, the citizens of Winnipeg and the province will have to pick up the tab for lost property tax revenue currently generated from the land which would compile the urban reserve. And, let's not forget the tax revenues lost due to tax breaks on labour and merchandise.

The second problem of urban reserves is once land is designated as an urban reserve land, it can no longer be disposed of without a majority band vote. Similar to other reserve land, it can only be transferred to the Crown. In the future, this restriction could be tough to swallow for a band investing in the fluid urban land market.

The tax exemption now provided for Native Canadians living and working on reserves and Native owned businesses operating on reserves are a provision contained within the Indian Act not the Canadian Constitution. It is time to phase out the freedom from taxation the Indian Act provides.

For years the Canadian Taxpayers Federation has advocated for lower taxes as a way to spur economic growth. But, the CTF is opposed to tax reductions or exemptions which are applied only to one group, at the expense of other Canadians. It is time to stop treating Canadians differently. To ensure equality for individuals and businesses, tax exemptions must be based on income, not ethnicity.

It is very important Native Canadians enter the mainstream of Canada's economy. Viable business ventures are one way to achieve this. In a free market system, all players must be on an equal footing. Unfair competitive advantages, such as tax breaks, disrupt the system by off-loading the tax burden to other citizens and businesses.

Mayor Katz was not given a mandate to create an Indian reserve in the last election. To allow an equal say by all people, a civic plebiscite must be held on the issue of establishing a reserve in the City of Winnipeg.

- Tanis Fiss, Director, Centre for Aboriginal Policy Change

- Adrienne Batra, Manitoba Director