First Nation tax agreement negotiations with New Brunswick at a standstill: chief

Talks over what will replace tax revenue-sharing agreements in New Brunswick have hit a wall, according to one Mi’kmaq chief.

“I was at the table with the premier, there was no negotiating. It was, ‘This is what you’re going to do and this is what you’re going to get,’” said Terry Richardson, the chief of Pabineau First Nation.

“Well, that’s not negotiating. How can we come up with something that’s acceptable for both sides?”

A series of tax agreements were signed with First Nations across New Brunswick over the previous 30 years, allowing First Nations to keep 95 per cent of provincial tax revenue collected at businesses in their communities. The revenue-sharing agreements were first created to ensure that businesses in First Nations would charge provincial tax, creating a level playing field for businesses on and off reserve.

Premier Blaine Higgs announced the province would cancel those agreements in April of 2021 over concerns that the agreements had strayed far from the original intention.

Higgs claimed that the agreements are cutting into provincial revenues and aren’t shared fairly across different communities. About 40 per cent of the revenues collected in 2019-20 went to communities with about two per cent of the total First Nation population.

“This is money that would have gone to support hospitals, schools, social programs and roads to benefit all New Brunswickers, including First Nations,” Higgs said at the time. “Our existing arrangement is clearly unsustainable, and our province cannot afford to ignore it any longer.”

When asked about the agreements during a year-end interview, Higgs agreed that as governments, First Nations should be able to collect some sort of revenue, but says the tax agreements are unique in that the money being collected primarily comes from outside of those communities that ultimately receive the taxes.

“You have to understand that this revenue is generated from people travelling and using highways,” he said.

“This isn’t just about the people that are living on a First Nation’s reserve, this is supported by the travelling public who are using our roads and our systems.”

After the agreements were signed, some First Nations began building gas stations or other businesses meant to attract travellers or people from adjacent communities. Two of the communities that have seen the most benefit from the agreements are the Madawaska and Sitansisk First Nations. The former has built gas stations in close proximity to the TransCanada highway near Edmundston, while the latter is enveloped by the city of Fredericton and has built popular businesses to attract people from off-reserve.

Richardson says he agrees with the premier that the agreements aren’t sustainable over the long term, but communities currently rely on that revenue to provide services not covered under other funding streams from the federal government.

“The current agreement gives communities the opportunity to address a lot of the shortfall in other funding,” he said.

“In my community, we have a lot of elderly people who survive just on Old Age Security. I don’t know if you know what a person gets for old age, but you’re not going to live with the present grocery situation in the world.”

The revenue from the tax agreements allows Pabineau to provide stipends for elders, as well as build housing and provide First Nation-run security and policing.

In the near term, Richardson has proposed keeping the agreements, but capping them. That would allow communities to continue to provide those needed services while they look to develop their economies and bring in other sources of revenue.

He claims that Higgs rejected that suggestion, while pitching an alternate agreement where the province would provide money based on the need for a list of services.

“The premier has come up with this paternalistic approach of, ‘I’ll give you money but you tell me where you spend it and you show me where you spend it,’” he said.

“As I told the premier, does the federal government tell you where to spend your money? You pretty well have some liberty to spend that where it’s needed, so give us the same opportunity.”

The premier sees the conflict differently, claiming that a focus on the current agreements is preventing progress on an alternative revenue-sharing agreement that could be based on a cut of natural resource revenues.

“They said, ‘Well, we just want the tax agreements.’ So it was like, let’s settle tax agreements and then let’s talk about this other stuff and we said, ‘Well, you said these are your priorities. So let’s figure out what standards you want to achieve and here’s the money to achieve that,’” Higgs said.

“But that discussion never got anywhere because it always went back to, OK, maintain the tax agreements.”

The Mi’kmaq have until the end of next year to negotiate a new revenue-sharing agreement, while the Wolastoqey will see theirs end at the end of next month.

Richardson said the prospect of not having something to replace the old deals is a scary one.

“If those agreements are gone I don’t know what’s going to happen in my community. I’m concerned, I’m worried,” he said.

“When my elders reach that point where I can’t give them that money anymore and they’re starving and they’re having to go to the food banks, it’s the premier that’s going to have to be held accountable for that.”

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