Winnipeg Mayor Glen Murray says that urban aboriginal reserves are “the best hope we have” of reversing native poverty in Winnipeg, but already opposition is brewing. Murray dismissed charges that urban reserves amount to a “city-within-a-city” that don’t pay taxes or follow city rules.

“Reserve is such a loaded term. The image is a poor northern reserve with few resources,” said Murray. “What we’re talking about is commercial property investment.”

Urban reserves are one of 15 ideas floated in the city’s draft urban aboriginal strategy, which will be circulated among native leaders and councillors for comment later this summer.

Urban reserves, common in Saskatchewan, are formed through the Treaty Land Entitlement process, where the federal government makes good on land promises made to first nations in old treaties. Instead of expanding rural reserves, which have few options for economic development, bands can use federal cash to buy land in town to set up commercial ventures.

Murray said that could mean everything from training centres, artists’ studios, student housing, health clinics, eco-tourism offices or small businesses.

Several Manitoba bands are exploring the possibility of setting up an urban reserve, but negotiations are still in the backroom stages.

The same rules set out in the federal Indian Act that apply to rural reserves also apply to urban reserves, including tax exemption.

The reserve and whatever development goes on it must conform to city zoning but doesn’t technically pay property taxes to the city. Instead, the band pays a fee to the city for water, police and other services. The fee amounts to what a private landowner would pay in property taxes.

Because most status Indians living or working on reserves are immune from sales and income taxes, critics such as the Canadian Taxpayers Federation fear aboriginal-run commercial ventures would have an unfair advantage over non-aboriginal businesses.

“It’s another form of race-based taxation, and it creates a non-level playing field,” said CTF Manitoba director Adrienne Batra. “We believe aboriginals must be included in the economy and the only way to do that is for everyone to be treated equally.”

But, Dennis White Bird, grand chief of the Assembly of Manitoba Chiefs, said aboriginals have been condemned to the margins of the economy for decades, and he dismissed the notion that tax exemptions guaranteed in treaties and legislation are unjust.

If an urban reserve Is created, White Bird would like to see the many tribal and first nation government offices consolidated there, especially if aboriginals take on more responsibility for social services and health.