First Nations resource tax proposal gets nod from Poilievre

Written By Fran Yanor

A proposal allowing First Nations to collect a portion of the resource development taxes paid by industry got a credibility boost this week when Conservative Party of Canada Leader Pierre Poilievre endorsed the unprecedented tax-sharing change, which he dubbed “a First Nations-led solution to a made-in-Ottawa problem.”

“This is a historic change in how First Nations governments fund their operations by allowing them to collect directly the revenues from resource projects that happen on their lands and having the federal government cede tax room for them to do it,” Poilievre told a small gathering of First Nations leaders last Thursday in Vancouver. 

Speaking at the First Nations Tax Commission-sponsored event to a select group of chiefs, councillors and elders drawn together in support of the First Nations Resource Charge (FNRC), Poilievre pledged a Conservative federal government under his leadership would implement the proposed changes essentially allowing First Nations to collect federal corporate taxes. 

The proposed resource charge would support nations’ “fiscal jurisdiction” over resource projects occurring on their territory, said Chief Commissioner Manny Jules, who has led the more than a decade-long development of the resource charge by the commission.

In a separate statement, Jules called the FNRC “an important step toward clearly defining First Nation fiscal benefits.”

Under the tax-sharing proposal, businesses would pay tax directly to First Nations in exchange for a 50 per cent refundable tax credit; it would respect existing treaties and uphold the constitutional duty-to-consult, and could either replace or supplement the financial aspect of an Impact Benefits Agreement, Poilievre said.

It will simplify negotiations between industry and First Nations, “so that we don’t have to waste years and years and years on new negotiations reinventing the wheel every single time there’s a new [industry] proposal,” he said.

Resource charge could replace ‘piecemeal negotiations’

Over the last 50 years, several court decisions have recognized the inherent right to revenue for First Nations on resources developed in their jurisdiction, but there’s no clarity on how to implement that while also covering environmental costs, Jules said. 

The proposed resource charge will support First Nations governments in receiving “direct, secure, and stable fiscal revenues from resource projects on their lands, just like other governments.”

Currently, individual negotiations are needed for every project, which significantly burdens First Nation administrations and makes negotiations on both sides costly and time-consuming.

“If we had this in place we wouldn’t have to keep going back to the table,” Simpcw First Nation chief George Lampreau told Northern Beat. 

“It would speed up business for industry and we wouldn’t have to piecemeal negotiations with the province on revenue sharing. Save a lot of time and effort.”

As the largest employer and investor in Simpcw’s 7 million hectares of claimed territory, the nation is a crucial part of the regional economy, Lampreau said. 

Simpcw chief George Lampreau (L) said the First Nations Resource Charge would go to local and regional development within the nation’s territory. He is pictured with Conservative Party of Canada Leader Pierre Poilievre last week. [Photo supplied]

The chief has signed MOUs with area mayors within Simpcw territory, committing to work together on trade, commerce and resource development. So, the FNRC would help not just Simpcw, but all residents in the region to retain more dollars for local development, he told the gathering last week.

“It fosters regional economic growth, providing opportunities for everyone.”

Closing the infrastructure gap

The resource charge would also help close the gap in infrastructure, servicing, and programming, said Tzeachten First Nation chief Derek Epp, whose community owns about 900 acres of land in the municipality of Chilliwack.

According to a March 2023 report by the Assembly of First Nations and Indigenous Services Canada, an estimated $350 billion infrastructure gap exists in indigenous communities, which the federal government has pledged to close by 2030.

“But I think part of what Canada wants to hear is that this resource charge will stimulate our economies [and] … we’ll be able to actually invest in our local economies.”

Thirty years ago, Tzeachten was 95 per cent dependent on federal government funding. Thanks to “creative leadership,” including investment in the construction of a new shopping centre in the 1990’s, the nation is now about 95 per cent independent, and five per cent reliant on federal funding. 

“Today, we generate about $65 million in sales in that shopping centre. Its asset is worth in excess of $45 to $50 million. We own it, we operate it, we generate wealth from it, but we had to get creative.”

Epp sees the new resource charge as a progression of what his community began 30 years ago. 

“We want to be treated like governments, which means we want to have access to the same level of funding, economies, taxes, tax regimes, that any level of government can.”

The resource charge would allow Tzeachten to continue working with the Chilliwack municipality on public infrastructure projects.

“Public schools, public sports facilities, you name it, we want to be a part of that,” he said. “But we need these revenue streams. We need these economies. We need these resource charges.”

Building relationships and certainty

Representing Doig River First Nation in northeast B.C., chief Trevor Makadahay said major investment projects are needed, but the regulatory process is ineffective, inefficient and very expensive for the industry and First Nation. 

“We’re frustrated. We want to do business and participate in the economy,” he said.  

“The issue is that instead of formulizing our rights to revenues from our historic Treaty 8 and territory, governments have denied or minimize them. This forces First Nations and companies to negotiate costly time-consuming financial arrangements for each project causing billions in investment to leave Canada every year.”

The First Nations Resource Charge would reduce administration and save time, allowing Doig to focus on building positive relations with industry, create certainty for all, and preserve our lands and treaty rights through sustainable resource development, said Makadahay. 

“We will still reject bad projects and require meaningful consultation with proponents and government even with the resource charge. But Canada and northeast B.C. won’t lose good projects for the wrong reasons anymore.” 

‘Our money stays local’

Some people think Canada can’t afford to share revenue with First Nations. but Lampreau said the opposite is true – not sharing will cost more and hinder business. 

“Our money stays local, our money stays regional and we bolster those economies. That’s the direction we like going. This is where the First Nation Resource Charge is taking us,” he said.

“The simple truth is our future prosperity depends on making everyone prosperous in our region.”

Addressing the group last week, Makadahay said, the resource charge would provide “an avenue for sustainable resource development,” with a “true connection” for First Nations to achieve balance between the environment and industry, but it must be collaborative to work.

“Let’s get it done,” he said.