Premier Blaine Higgs says little progress has been made on an agreement to replace tax-sharing deals with Wolastoqey First Nations that expired Tuesday.
“There haven’t been meaningful discussions around an new economic model, we’ve been wanting to do that for a year and a half now,” Higgs told reporters.
The agreements date back to the 1990s and saw the provincial government remit 95 per cent of provincial taxes collected at businesses on reserve to First Nations, up to $8 million and 70 per cent beyond that. Higgs announced the province would cancel the tax-sharing agreements in 2021, arguing that they were impacting provincial tax revenues and that the money wasn’t equitably distributed across First Nations in the province.
First Nations around the province received $47 million from the agreements in 2019-2020. When Higgs announced the province would end the deals he estimated that would grow to $75 million by the end of the decade.
The province says 40 per cent of that money goes to just two per cent of the First Nations’ population.
As a replacement source of funding, the province wanted to identify priority areas like housing and economic development and sign funding agreements to address those.
“We want to see the revenues used like taxation revenues are supposed to be used to help people throughout the province,” he said.
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“And so in this case, it’s to help people in every First Nations community to allow the chiefs in every community to look at the residents and help them have a better lifestyle, a better outcome.”
Madawaska Chief Patricia Bernard says the government’s proposal doesn’t cut it. She says the tax agreements helped to fuel economic success in her community, allowing it to raise revenues to pay for the services it provides.
She says the premier doesn’t see First Nations as independent governments that need to provide services just like the province.
“I believe that the premier feels that we are a business. We’re a government and governments have to raise revenues at some point to provide the services that are required,” she said.
“The province taxes so that they can fix the roads, provide health care, education. Well, those things are not provided to First Nations. When our children have to go to school we have to pay the province. They don’t, the province doesn’t come in and fix our roads, doesn’t plow our roads.”
Bernard says Madawaska will move to implement a cannabis and tobacco licensing and regulation system, before doing the same with gasoline and eventually looking to implement its own sales tax by the end of the year.
Higgs didn’t detail how the province would respond to First Nations refusing to collect and remit provincial taxes.
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