Current Problems

Government Commitments to Truth and Reconciliation

Higgs’s ‘new partnership’ plan highlights gulf in understanding with First Nations

January 11, 2023

Funding proposal tied to measurable targets, tax surrender at odds with Indigenous vision

Terry Richardson, chief of Pabineau First Nation, says the government’s proposal would take away the flexibility band governments have with the tax revenue. (Jacques Poitras/CBC)

CBC News: To some First Nations chiefs in New Brunswick, the “new partnership” the Higgs government is offering them looks a lot like old-style paternalism

The province’s proposal to replace the existing tax-sharing agreement is another example of the vast philosophical chasm between Premier Blaine Higgs and First Nations. The government wants the bands to surrender any power or ability they have to impose and collect gas and tobacco taxes on reserve.

Instead, they’d receive provincial funding for housing, health care, social assistance and education — but subject to strict timelines for three phases of negotiations, and with “measurable goals” laid out in signed agreements.

Chief Patricia Bernard of the Madawaska Maliseet First Nation said the government’s proposal treats First Nations ‘as if we’re children.’ (Jacques Poitras/CBC)

“That’s very paternalistic and controlling, and it assumes that we don’t know what we’re doing,” Madawaska Maliseet First Nations Chief Patricia Bernard told CBC’s Information Morning Fredericton. “It assumes a sort of ‘wards of the state’ kind of approach. It assumes that we can’t manage our own revenue … It’s going back in time.” 

‘Where do we go from there?’

Six Wolastoqey First Nations will see their lucrative tax-sharing agreements with the province expire at the end of this month. Deals with Mi’kmaq communities end Dec. 31. “The tax agreement has allowed us to grow, but if you’re going to take that away from us, where do we go from there?” said Pabineau First Nation Chief Terry Richardson. “That’s the problem.”

Higgs announced in 2021 that he would terminate the agreements.

They require the province to remit 95 per cent of provincial gas, tobacco and fuel sales tax revenue collected on reserves to the First Nation government. Higgs called the agreements “outdated,” and he and Aboriginal Affairs Minister Arlene Dunn have been promising a more modern initiative since then.

“We’re talking about a new partnership, a new way forward,” Dunn said in the legislature in June 2021. Early on, she floated the idea of signing “resource revenue-sharing agreements for forestry and mining” but she’s no longer talking about that concept.

Shortly after the termination announcement in 2021, Richardson offered the province one-on-one negotiations on a new tax agreement with Pabineau that would cap the amount returned to the band. That went nowhere, he said Tuesday. “Initially in our talks, the premier had said everything was on the table. Then all of a sudden the cap came off the table.” 

Dunn hasn’t been made available for interviews this week but her department provided CBC News a 24-page package with details of the province’s current proposal. 

Pieces of paper with black text.
The draft agreement template says each First Nation is best able to determine its needs but any project must have ‘measurable goals.’ (Jacques Poitras/CBC)

The document includes proposed templates for agreements on social funding, as well as a December letter from Dunn to Wolastoqey chiefs and a table showing the amount of tax transfers to First Nations over the years. In the nine-page letter, Dunn said the province agrees that the federal government, normally responsible for funding on-reserve social services, hasn’t done enough.

The province is “prepared to provide the necessary funds through a new economic partnership” focused on housing, health care, social assistance and education — which she said the chiefs themselves identified as priorities. The blank draft-agreement template said each First Nation “is best able to determine its needs and goals” but stipulates that any projects must be “intended to achieve measurable outcomes” and have “measurable goals.”

Signing away tax revenue

There’s a strict timeline for three phases of negotiations, including space to fill in dates and a commitment that the province and each First Nation will jointly prepare annual reports. The blank sample agreements on housing include lines to be filled in identifying the number of homes, the amount of money, criteria and “milestones.”

In “Schedule D,” each First Nation would agree to require all retailers on reserves to get licences and collect taxes like any off-reserve business would, while agreeing not to sell gasoline or tobacco at lower than local market prices. 

In essence, they’d be signing away the tax revenue they’ve enjoyed for almost three decades.

A woman with glasses and shoulder-length brown hair sits on a yellow couch.
Nicole O’Byrne, an associate law professor at UNB, says reserve tax laws could create exactly the kind of turmoil the sharing agreements were designed to avoid. (Mag Hood/Submitted by Nicole O’Byrne)

University of New Brunswick law professor Nicole O’Byrne, who is spending this academic year researching the legal history of the tax deals, said the province and First Nations “have completely different understandings” of the issue, “and that’s the tension.” 

The province is treating the bands “like another group that needs socioeconomic bolstering, which is not how First Nations see this. They see this as rights-based,” she said. “The right to tax their people and spend the revenue from it is the essence of self-government, and that’s what’s at issue with the cancellation of these tax revenue-sharing agreements. I’m not sure the provincial government understands the full scope of that.”

Richardson said the provincial proposal would take away the flexibility band governments have with the tax revenue, which they can spend where it’s needed most in a given year.  “What limitations are they going to put on it? Because right now we have some leniency where we’re able to move funds around,” he said.

‘It’s as if we’re children’

Bernard, whose reserve adjacent to Edmundston has brought in the most tax revenue of any First Nation in the province, accuses Higgs of not wanting Indigenous communities to succeed and to benefit from that success.

The premier prefers chiefs coming “with hat in hand” to ask for funding, she said. “It’s as if we’re children.” She said that’s why her band decided to draft its own tax laws rather than negotiate with the province. “We didn’t even bother. Why enter into something that they’re going to control?” she said.

O’Byrne said reserve tax laws could undercut off-reserve retailers and create exactly the kind of turmoil the sharing agreements were designed to avoid.

Chief Bernard says she believes Premier Higgs is unable to acknowledge the nature of the Indigenous relationship. (Ed Hunter/CBC)

A spokesperson for Mi’gmawe’l Tplu’taqnn Inc., which represents the nine Mi’kmaq First Nations, said the organization wants the province to sign new deals giving them “greater control over taxation and resource revenues in our territory.” If the province rejects that, “we will be exploring other legal options,” MTI said in a statement.

In her letter to Wolastoqey chiefs, Dunn rejects the idea the province is forcing First Nations into court. “That is your choice and not as a result of any action of the Province,” she wrote.

But Bernard said the stalemate is because of Higgs’s inability to acknowledge the nature of the Indigenous relationship.  “He refuses to see this particular jurisdictional issue from our perspective,” she said.

“The bottom line to it all is he sees this as New Brunswick’s money. We see this as our money. We’re sharing with you, and he sees it as him giving to us. It’s just a paradigm shift he needs to make that he cannot seem to do.” 


Jacques Poitras

Provincial Affairs reporter

Jacques Poitras has been CBC’s provincial affairs reporter in New Brunswick since 2000. He grew up in Moncton and covered Parliament in Ottawa for the New Brunswick Telegraph-Journal. He has reported on every New Brunswick election since 1995 and won awards from the Radio Television Digital News Association, the National Newspaper Awards and Amnesty International. He is also the author of five non-fiction books about New Brunswick politics and history.