First Nations feel they’re being punished for success with cancellation of N.B. tax agreement

Click to play video: 'Controversy around premier’s comments on tax sharing agreement with First Nations'
Controversy around premier’s comments on tax sharing agreement with First Nations
WATCH: (April 13, 2021) New Brunswick has given notice that an existing tax agreement dating back to the 1990s will not be renewed. The announcement unleashed a firestorm of criticism from Indigenous leaders who say they were blindsided. It's the hurdle in what has been a difficult relationship between the province and First Nations. Silas Brown has more – Apr 14, 2021

Indigenous leaders in New Brunswick say the government’s decision to pull out of a longstanding tax-sharing agreement effectively punishes First Nations communities for their success.

Chiefs of the Mi’kmaq and Wolastoqey nations swiftly denounced the move on Tuesday, saying the revenue-sharing agreement is critical to the services provided in First Nations communities.

The current agreement allows First Nations to keep 95 per cent of the gas and motive fuel tax, the provincial portion of the harmonized sales tax (HST) and tobacco taxes collected on-reserve for the first $8 million and 70 per cent after that threshold. In 1994, the first year it was introduced, the agreement was worth $28,000.

“It seems as though us First Nations are stereotyped as waiting to get government handouts and funding, but as soon as we start becoming successful, as soon we start taking those steps towards self-sustainability … they just throw us right back in it,” said Metepenagiag Chief Bill Ward.

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“Once we start trying to work our way out of it and become successful they just chop us down at the knees and take us right back down and keep us stuck in this system.”

Premier Blaine Higgs has claimed the decision is an issue of tax fairness, to ensure that the province can provide all New Brunswickers with the services they depend on.

This year, the agreement saw $44 million go to First Nations and the government projects that number will grown to $75 million over the next decade.

In response to a question about the possibility of instituting a wealth-tax to raise revenues from the “super-wealthy” during a Wednesday appearance on the Fredericton-area CBC morning show, Higgs responded that one “could apply that logic right here in this situation.”

“This model does create super wealthy that’s not shared with other populations,” he told Information Morning Fredericton.

“In this case it’s created through tax revenue and tax refunds that are made to the communities.”

Higgs was not made available for an interview but his communications director said his comments were in reference to disparities between different First Nations.

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“When you listen to the entire interview, it is clear that Premier Higgs was speaking to the financial disparities between First Nation communities. When he referenced in the interview to “super wealthy” and “the other population”, he was referring in both cases to First Nation communities,” said Nicolle Carlin in an email.

Higgs has repeated that the tax-sharing agreement is unfair even among First Nations communities.

During a technical briefing for journalists prior to Tuesday’s announcement, the amount that each First Nation received in 2019-2020 was highlighted.

According to the province, 40 per cent of collected revenues last year went to the Madawaska First Nation, which accounts for 2 per cent of the First Nations population in the province.

“The current practice is not one that has seen fairness amongst the First Nation communities,” Higgs said.

Madawaska Chief Patricia Bernard says she feels unfairly singled out by the provincial government and says her community’s success in capturing traffic from the Trans Canada Highway shouldn’t jeopardize the revenue for others.

“I find it very disheartening to think that other communities would have to suffer because one community is being successful,” Bernard said.

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“That makes no sense.”

Saint Mary’s Chief Alan Polchies said Higgs’ comments are an attempt to divide First Nations.

“We’ve got communities in this country that don’t even have clean drinking water and yet we have the premier of this province being concerned that Indigenous communities are going to get rich off,” he said.

Polchies said the original 1994 agreement gave First Nations a way to start collecting revenue and has spurred economic growth as reserves have looked to take advantage of it.

“You should be standing proud with the other leaders of this country saying, ‘Wow, I come from a province where we have something very unique,'” he said.

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