Skip to main content
Open this photo in gallery:

The New Brunswick Legislature stands in Fredericton on Feb. 4, 2021.Stephen MacGillivray/The Canadian Press

New Brunswick First Nations say the province’s announcement Tuesday that existing tax collection agreements will not be renewed is an insult and a crushing attack on their economic viability.

“The decision to tear up these tax agreements is unfair and offensive when the premier has yet to show First Nations any morsel of fairness throughout his tenure as leader of this province,” Madawaska Chief Patricia Bernard said in a statement on behalf of the Wolastoqey Nation in New Brunswick.

She said the government’s only interest is to see “how much more money it can leech from our resources, be it natural or financial.”

The decision to end the agreements follows a court ruling last month that said the province has an obligation to share with First Nations carbon tax revenues collected and remitted by on-reserve retailers.

Premier Blaine Higgs said Tuesday the province won’t appeal that ruling but added the current tax agreements are outdated and have proven to be unfair.

“The existing tax agreements are independent of Aboriginal and treaty rights and were developed before (Harmonized Sales Tax) and carbon tax,” Higgs said at a news conference in Fredericton. “No other province in Canada has tax agreements, and this is completely unique to New Brunswick.”

The agreements date back to 1994 and were intended to provide tax fairness for businesses on and off reserve. Before that, businesses on First Nations land were not collecting taxes from non-Indigenous customers.

Under the agreements, the province would rebate 95 per cent of the first $8-million collected in provincial sales tax on tobacco, gasoline and other fuels, and 70 per cent on amounts above $8-million.

In the late 1990s, the agreements were refunding approximately $28,000 annually, but they have grown at a rapid rate, hitting a peak of $47-million in 2019-20.

Higgs said about $44-million will be refunded to First Nations communities this year, but it is not spread equally among them. The premier said nearly 40 per cent of that money will go to just two per cent of the 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. “Our existing arrangement is clearly unsustainable, and our province cannot afford to ignore it any longer.”

Some of the agreements will expire in 90 days and others end next year, and Aboriginal Affairs Minister Arlene Dunn said the government is committed to working with First Nations on what she called modern economic partnerships.

She said that might include revenue sharing from natural resources or partnerships on issues such as housing and economic development.

Dunn admitted the method of informing all the chiefs of the decision was not ideal. “I’m hoping they’ll come to the table and pick up the phone and call me,” Dunn said.

The chiefs say they need to discuss the situation and decide how to proceed. But they were not impressed by how the news was delivered.

Mi’kmaq leaders said the government has hit a new low in its relationship with Indigenous people in the province.

A statement from Mi’gmawe’l Tplu’taqnn Inc., which represents the province’s nine Mi’kmaq communities, said media were briefed on the news before Finance Minister Ernie Steeves held a brief phone call with the chiefs.

“Minister Steeves read a statement, refused to take questions and hung up on the chiefs,” their statement said. One chief, George Ginnish of Natoaganeg, called the treatment by the government “completely disrespectful.”

Green Leader David Coon says Higgs should have addressed concerns through a renegotiation of the tax agreements.

“The premier is rejecting them, just as he rejected the need for an inquiry into systemic racism, or the need to write Indigenous rights into the Crown Lands and Forests Act,” said Coon. “Under this government, any hope for reconciliation has evaporated.”

Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe