Talks on what will replace tax-sharing agreements in New Brunswick have hit a wall, according to a Mi’kmaq chief.
“I was at the table with the Prime Minister, there was no negotiation. It was: ‘This is what you are going to do and this is what you are going to get,'” said Terry Richardson , Chief of the Pabineau First Nation.
“Well, it’s not bargaining. How can we find something that is acceptable to both parties? »
A series of tax agreements have been signed with First Nations in New Brunswick over the past 30 years, allowing First Nations to retain 95% of provincial tax revenues collected from businesses in their communities. Revenue sharing agreements were first created to ensure that First Nations businesses would charge provincial taxes, creating a level playing field for businesses on and off reserve.
Premier Blaine Higgs announced that the province would cancel these agreements in April 2021, fearing that the agreements could deviate far from the original intention.
Higgs said the agreements reduce provincial revenues and are not shared equitably among different communities. Approximately 40% of revenues collected in 2019-2020 went to communities comprising approximately 2% of the total First Nations population.
“It’s 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 current arrangement is clearly unsustainable, and our province can no longer afford to ignore it.”
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Asked about the agreements in a year-end interview, Higgs agreed that as governments, First Nations should be able to collect some kind of revenue, but said the fiscal agreements are unique in that meaning that the money collected comes mainly from outside these communities. who end up collecting taxes.
“You have to understand that this revenue is generated by people traveling and using the highways,” he said.
“It’s not just about the people who live on a First Nation reserve, it’s supported by the traveling public who use our roads and networks.
After the agreements were signed, some First Nations began building gas stations or other businesses to attract travelers or people from adjacent communities. Two of the communities that have benefited the most from the agreements are the Madawaska and Sitansisk First Nations. The former built gas stations near the Trans-Canada Highway near Edmundston, while the latter is surrounded by the city of Fredericton and built popular businesses to attract people from off-reserve.
Richardson says he agrees with the Prime Minister that the agreements are not sustainable in the long term, but communities currently depend on these revenues to provide services not covered by other sources of government funding federal.
“The current agreement gives communities the opportunity to fill a large part of the gap in other funding,” he said.
“In my community, we have a lot of seniors who survive solely 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 current grocery situation in the world.
Revenues from tax deals allow Pabineau to pay allowances to elders, build housing, and provide First Nations security and policing.
In the short term, Richardson proposed keeping the deals, but capping them. This would allow communities to continue to provide the services they need while seeking to develop their economy and generate other sources of revenue.
He says Higgs rejected that suggestion, while offering another deal where the province would provide money based on the need for a list of services.
“The Prime Minister has developed this paternalistic approach of, ‘I give you money, but you tell me where you spend it and you show me where you spend it,'” he said.
“As I said to the Prime Minister, does the federal government tell you where to spend your money? You pretty much have the freedom to spend that where needed, so give us the same opportunity.
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The prime minister sees the conflict differently, saying the focus on current deals is preventing progress on an alternative revenue-sharing deal that could be based on a cut in natural resource revenues.
“They said, ‘Well, we just want the tax deals.’ So it was like, let’s settle the tax deals and then let’s talk about these other things and we said, ‘Well, you said those are your priorities. So let’s figure out what standards you want to achieve and here’s the money to get there,” Higgs said.
“But that discussion never came to fruition because it always came back to, OK, keeping the tax deals.”
The Mi’kmaq have until the end of next year to negotiate a new revenue-sharing agreement, while the Wolastoqey will see theirs expire at the end of next month.
Richardson said the prospect of not having something to replace old offerings is frightening.
“If these agreements disappear, I don’t know what will happen in my community. I’m worried, I’m worried,” he said.
“When my elders get to a point where I can’t give them that money anymore and they’re starving and they have to go to food banks, it’s the Prime Minister who has to be held accountable.”
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