The Liard First Nation owes nearly $71,000 in property taxes to Watson Lake.
This means the First Nation has the unsightly distinction of being Watson Lake’s number-two tax deadbeat, according to a list of property owners in arrears published this week.
It’s second only to South Yukon Forest Corporation, which owes $184,136 for taxes on a lot parcel found at kilometre 1,022.5 of the Alaska Highway. The company was the owner and operator of a short-lived sawmill, which opened in 1998, only to shutter in 2000.
But it’s the First Nation’s arrears that will prove most interesting to many, because the properties in question are tied up in a controversy that involves three hotels, one cabinet minister and almost $3 million in federal funds.
The Liard First Nation bought the Belvedere Motor Hotel, Watson Lake Hotel and Gateway Motor Inn in June of 2007. The First Nation financed the purchase with its $2.83-million share of the federal Northern Housing Trust, with the promise that it would convert part of one hotel into affordable housing, according to the First Nation’s consolidated financial statements.
But more than two and a half years later, no affordable housing is available at the hotels. The Watson Lake Hotel is shut, its windows boarded up or smashed by vandals.
Chief Liard McMillan insists the federal housing money was never used to buy the hotels. He expects the public to take his word – he won’t release documents to substantiate his claim.
Plans to build affordable housing in part of the Watson Lake Hotel had to be put on hold because of the economic downturn, he has said. But nine houses have been built with the housing money and three more are on the way, according to him.
The Yukon government administered the funds, but released the money with few reporting requirements. With so few rules in place, Auditor General Sheila Fraser said there would be little for her to investigate.
Neither McMillan nor Alex Morrison, CEO of the First Nation’s development corporation, responded to calls about the tax arrears before press time.
The First Nation’s name doesn’t grace Watson Lake’s list of tax deadbeats because the properties are registered under a numbered company that is controlled by the First Nation’s development corporation.
An advertisement taken out by Watson Lake warns that those in arrears have two months to pay up before legal action is taken. But, in practice, the town prefers diplomacy over legal strong-arm tactics, said Jerry Bruce, Watson Lake’s acting chief administrative officer.
Some title holders have sat on Watson Lake’s arrears list for a decade, so it’s unlikely that the hotel doors will be padlocked any time soon.
Liard First Nation is also fighting the taxman in federal court. In July of 2009, the court ordered Yukon’s sheriffs to seize property from the First Nation’s development corporation for $43,404.12 owed in income taxes.
It remains unclear how this dispute ended. The sheriff’s office won’t say. Nor will officials at Revenue Canada, because of concerns of client confidentiality.
But the First Nation’s consolidated financial statements for 2007 describe how, since March of that year, Revenue Canada has pursued the First Nation for more than $2.2 million in payroll taxes deducted from employees from 1999 to 2003. The First Nation maintains that Ottawa had granted it a “moratorium” on paying taxes. The disputed status of this tax ban is one of many reasons why the First Nation is suing the federal government, according to the financial statements.
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