Ladies and gentlemen of the standing committee and fellow witnesses, we've brought these issues forward today on our own behalf as non-first nations developers partnering with first nations.
We want to exemplify the onerous burden placed upon many developments on first nations leased land. Why would anyone risk developing on this land if the status quo and rules are different from those on provincially leased land or on fee simple land? These issues go against the grain of the Canadian Charter of Rights and Freedoms, democracy, economic law, and the growth of entrepreneurialism. Canada is all about being treated fairly, equitably, and respectfully in all facets of law, government, and economic policies.
The following three key issues were brought up in the brief that I provided.
First is the GST/HST on multi-family residential developments completed on first nations leased land. These brand new condominiums that are being built are treated as rental properties as a result of the leased land, because of the federal regulations rather than the provincial regulations.
Basically, what happens is that any developer who builds on first nations land that is federally regulated has to prepay, or is assessed, 100% of the GST and the GST rebate at the time the building is substantially complete, regardless of whether the units have been sold. In effect, the taxes are collected on non-revenue: the revenue hasn't come to fruition yet.
For us and many other developers, this kind of burden is very difficult to handle, moving forward in any future developments.
On this issue, I have a suggested resolution in the brief, which is that there seems to be a missing definition in the Excise Tax Act, in subsection 123(1). It seems that first nations federally leased land is completely omitted from the law; there is no definition of it. The act simply has a definition of provincially leased land or fee simple land. What happens is that the CRA and anybody involved can assess it. We're basically at the mercy of the interpretation taken by any auditor who comes through. What has happened is that the development has been treated as a MURB, which is a multi-use residential development. This deems it to be a landlord, so there is a prepayment. We feel that this is undermining any development moving forward with first nations land, for any outside developers. This would be a very large burden for them.
My second notation is about the B.C. First-Time New Home Buyers' Bonus. What has happened is that the Province of B.C. has assessed this bonus incentive on any individuals who purchased new condominiums in this particular development on first nations leased land. They have assessed them as second-hand units, because we had prepaid the GST or were assessed the GST.