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NOVEMBER 10, 2000

The Supreme Court on Thursday ruled that reserve land in Canada is worth only half as much as other land, finally ending a five-year dispute between the Musqueam First Nation and a group of non-Native leaseholders.

Barely overturning a lower court decision by 5 to 4, the Supreme Court said the leaseholders should pay no more than $10,000 per year to the band.

A total of 73 non-Natives lease some of the most expensive and lucrative property in Vancouver, British Columbia. But since 1966, they have been paying less than $400 per year in rent.

So, when their leases were up for review in 1995, the Musqueam and the federal government wanted to raise the rent to what they considered a fair amount.

Under the conditions of the 99-year lease, that amount was to be six percent of fair market value of the land. Both sides of the dispute agreed each plot of land was worth around $600,000, so the Musqueam had wanted anywhere from $24,000 to $36,000 a year from each tenant.

The leaseholders soon cried foul, claiming they would be driven to bankruptcy if they were forced to pay that amount.

Initially, they prevailed in a lower court, which reasoned that the value of reserve land first had to be discounted by 50 percent. Then, the court subtracted another fee for lack of services on the land, coming to a maximum of $10,000 per tenant.

The Musqueam appealed that decision and won. But the Supreme Court on Thursday sided with the leaseholders and re-instated the $10,000 amount.

The Musqueam surrendered the land, about 40 acres, to the government in 1960 for the purposes of leasing. The leaseholders had been paying rent to the government on behalf of the Musqueam, but in 1980, management was transferred directly to the band.

Get the Decision:
Musqueam Indian Band v. Glass (2000 SCC 52)

The Math:
Rent from 1966 to 1976 = $298
Rent from 1976 to 1986 = $343
Rent from 1986 to 1996 = $375
New Max Rent = 6 Percent of (Fair Market Value / 2)
New Max Rent = 0.06 * ($600,000 / 2) = $18,000
The rent will be re-negotiated in 20 years.

Related Stories:
Supreme Court hears rent dispute (First Nations 06/13)

Relevant Links:
The Supreme Court of Canada - www.lexum.umontreal.ca/csc-scc/en