Urban Reserves

What are urban reserves?

An urban reserve is defined as a reserve within or adjacent to an urban centre.

The majority of urban reserves are created as a result of specific claim and Treaty Land Entitlement settlements, which provide First Nations with cash payments that, may be used to purchase land.

Urban reserves can be found in smaller urban centres such as Portage La Prairie, Manitoba, which has a total population of 13,000 people, or larger cities such as Vancouver, British Columbia, with over 2 million residents living in the greater metropolitan area. There are now more than 120 urban reserves across Canada, that have been established under the Additions to Reserve policy and/or Treaty Land Entitlement agreements.

Building relationships with municipalities

Land set apart as an urban reserve typically involves a number of agreements that have been negotiated between individual First Nations and the municipality. A municipal servicing agreement is particularly important because it provides a fee for services such as water, garbage collection, police and fire protection, in an amount which is generally equivalent to the amount the municipality would have collected through property taxes. Education tax loss and service agreements with affected school divisions may also be negotiated by the First Nation. Such agreements typically include a mechanism for settling disputes.

The same sales tax exemptions that apply to reserves in rural areas also apply to urban reserves. Under current tax law, First Nations businesses located on reserve are required to collect provincial and federal sales tax and are subject to all the applicable taxes outlined by law or the servicing agreement negotiated with the municipality. Only registered Status Indians can take advantage of the sales tax exemption when purchasing goods and services on reserve land. The net effect for those individuals is having slightly more money to spend in the local economy.

Benefits of urban reserves

Many First Nations in Canada are located in rural areas, far from the cities and towns where most wealth and jobs are created. This geographic remoteness can sometimes pose challenges for First Nations trying to increase their economic self-sufficiency. As a result, urban reserves are one of the most successful ways to address the problem of geographic remoteness of First Nations.

Urban reserves offer residents economic opportunities that are generally unavailable in more remote areas. They give First Nation businesses the chance to establish themselves and provide employment and training opportunities. At the same time urban reserves can create jobs for Indigenous and non-Indigenous people and contribute to the revitalization of the host municipality.

They reduce operating costs and provide better access to capital markets and transportation routes, enabling First Nations to diversify their economic base.