Finance Minister Jim FlahertyBrendan McDermid/Reuters
Chief Franklin Paibomsai of the Whitefish River First Nation in Ontario was finishing plans to blockade the highway leading to Manitoulin Island over the May long weekend when the phone rang. It was federal Finance Minister Jim Flaherty.
"You're the hot topic of the day," said Mr. Flaherty, adding that this was the first call he had made since returning from a trip to India.
Their conversation on the afternoon of May 20 lasted only six minutes, but it marked the turning point in a long-running standoff between native leaders and the federal and Ontario governments over the province's new harmonized sales tax. The call led directly to last week's deal giving aboriginals a point-of-sale exemption on the provincial portion of the HST.
The accord was reached after marathon talks among native and government officials against a backdrop of a threatened blockades during this week's G8 and G20 summits, according to interviews with officials at the negotiating table.
The tax break has stirred up fresh controversy, prompting native leaders in British Columbia and Atlantic Canada to demand similar exemptions. Their case is a harder one to argue, though, because unlike Ontario's first nations, they had never obtained an exemption on their provincial sales tax.
Even in Ontario, the agreement has not calmed the waters completely. Residents of Batchewana First Nation, a community of 2,400 near Sault Ste. Marie, Ont., blockaded nearby railway tracks on Monday morning with a 5.5-metre teepee. Chief Dean Sayers said the exemption deal does not "sit well" with his people, because it does not come into effect until two months after the HST is introduced July 1.
The blockade will remain in place indefinitely, Chief Sayers said, forcing Huron Central Railway to reschedule the two daily cargo trains that use the track. He said the federal government has failed to honour many agreements with aboriginals.
"It just seems coincidental that during the G8 and G20, they managed to have most first nations' actions put over until everybody is gone," he said in an interview.
It was Mr. Flaherty's promise to Chief Paibomsai in the May 20 phone call to meet with native leaders that led to the talks. But the first meeting on June 4 ended in frustration for native officials. It quickly became apparent that major hurdles stood in the way of a deal, including determining the amount of lost tax revenues from an exemption to the provincial portion of the HST and who would administer it - Ottawa or the province, the officials said.
At the next meeting on June, 11, federal government officials demonstrated the political will to strike a deal for the first time, said Walter Manitowabi, an aboriginal negotiator. Government officials were told that native leaders were planning to hold their annual meeting in Fort Francis on June 22 and that they would like an announcement before then, he said. Ontario Regional Chief Angus Toulouse issued a bulletin that same day, saying native leaders were prepared to back up their demand for an exemption "with action."
At that point, Mr. Manitowabi said, the federal and provincial officials agreed to meet around-the-clock over the June 12-13 weekend. By June 17, they had a deal.
The leader of Whitefish First Nation, who is known as Chief Shining Turtle, said his tiny community of 1,100 residents can take great pride for ending the stonewalling by the federal government.
Members of his community had inundated Mr. Flaherty's office with more than 2,500 e-mails. But it was the threat of the blockade that was to begin the following morning along a stretch of Highway 6 at Birch Island that finally got his attention, say those involved in the talks. The chief called off the blockade after speaking to Mr. Flaherty.
"Flaherty could have called any one of the bands in Ontario ... but he called the Ojibways of Whitefish River," he said. "We'll always be remembered for that."
With a report from Ann Hui
Karen Howlett