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Court rules in favour of New Brunswick First Nations in dispute on carbon tax revenue

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Chiefs of New Brunswick’s six Wolastoqey First Nations are claiming victory following a court decision that will see the province share a portion of carbon tax revenues.

A Court of Queen’s Bench judge ruled Friday the province has an obligation to share with the First Nations carbon tax revenues collected and remitted by on-reserve retailers.

“We’re very happy about the decision. We knew with the tax agreements that we had in place that we were being snubbed of the carbon tax without any consultation,” Tobique Chief Ross Perley said in an interview Monday.

Read more: Mi’gmaq, Wolastoqiyik chiefs calling for Minister of Aboriginal Affairs to resign

For years, the government has had agreements to share a portion of the provincial tax on tobacco, gasoline and other fuels with the First Nations, and the latest agreement was signed in 2017.

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Under that agreement, the province would rebate 95 per cent of the first $8 million collected in provincial sales tax and 70 per cent on amounts above $8 million.

In April 2020, the New Brunswick government introduced a carbon tax but reduced the existing tax rates on gasoline and diesel to offset most of the increase, advising First Nations that would mean a reduction in their share.

At the time, that reduction was estimated to be about $4.85 million.

“It’s typical of the Higgs government,” Perley said. “They want to put on a friendly face when they are in public, but behind the scenes they do whatever they can to dodge obligations to First Nations.”

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The court action was brought by the Wolastoqey communities of Woodstock, Tobique, Madawaska, Oromocto, St. Mary’s and Kingsclear.

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In his 63-page decision, Justice Richard Petrie ruled the agreements with the First Nations include all taxes on gasoline and other fuels, including the carbon tax.

“The agreements do not fix the tax rates, and nor do they guarantee a level of funding,” Petrie wrote.

“However an interpretation that would permit the province to effectively reallocate an existing tax or taxes specifically in a way to avoid its sharing obligation, while maintaining the requirement to collect the same, would seem unreasonable and certainly at odds with the very purpose of these agreements.”

Perley said band officials are now trying to calculate exactly what the communities are owed since last April.

“It’s a big economic boost for our community and vital to the economic health of all our communities that have a tax agreement. It’s also beneficial to the local towns and villages that we support with our revenue,” Perley said, adding that he hopes the province does not appeal the decision.

A spokeswoman for the Department of Finance said officials are reviewing the decision and have no comment at this time.

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