Current Problems

Business and Reconciliation (92)

Making Inuit liable for mining company debts

September 17, 2021

With the passage of “Bill 55 – An Act to Amend the Property Assessment and Taxation Act”, the Government of Nunavut and the Members of the Legislative Assembly have transferred the burden of paying millions of dollars in property taxes each year from mining companies to Inuit, and make Inuit guarantors for mining companies’ tax arrears, stated the Presidents of:

  • Nunavut Tunngavik Inc. (NTI),
  • Qikiqtani Inuit Association (QIA),
  • Kivalliq Inuit Association (KivIA) and
  • Kitikmeot Inuit Association (KitIA)

collectively with NTI, QIA and KivIA, the “Inuit Organizations”).

Under Bill 55, Inuit are responsible for property taxes on mining developments on subsurface Inuit Owned Lands (IOLs). Article 22 of the Nunavut Agreement provides that Inuit may be responsible for property taxes for the value of IOLs in some limited situations. Inuit were never meant to shoulder the entire tax burden of mining companies. The Bill makes Inuit Organizations liable for unpaid property taxes if a mining company becomes insolvent or fails to pay. That will enable the GN to collect property taxes from Inuit Organizations including by seizing Inuit funds or selling off assets. Since 2018 the Inuit Organizations have advocated that Bill 55 be amended or withdrawn. The GN has refused to address Inuit concerns.

The Bill represents a “lose-lose” situation for Inuit and Nunavut – the mining industry did not ask for it, Inuit Organizations strongly opposed it and the GN will not receive additional revenue as a result. The transfer of tax liability from mining companies to Inuit Organizations is totally unnecessary. The Bill will harm the mining industry in Nunavut by increasing the legal and financial risks for Inuit Organizations.

In the rest of the country, mining companies and not landowners, are responsible for paying property taxes on mining infrastructure. This is so because mining companies own the infrastructure and benefit from the resulting development with the income from their mining projects. Landowners, on the other hand, especially during the early stages of mining projects, earn very little revenue. Bill 55 substantially increases the risk of mining development for landowners by obligating them to pay the outstanding property taxes of mining companies, if a mining company fails to pay or becomes insolvent. The GN is asking Inuit Organizations to collect property taxes from mining companies on the GN’s behalf, thereby forcing Inuit Organizations to be the guarantors for the debts of mining companies. Most mining development in Nunavut currently takes place on IOLs.

The GN failed to adequately consult with Inuit Organizations and ignored their concerns. While the GN consulted with Inuit Organizations on the initial legislative proposal in the fall of 2018, the government went on to make substantial changes and additions to the bill that ignored Inuit concerns.

Further, with Bill 55 the Government of Nunavut has unilaterally amended provisions of the Nunavut Agreement without Inuit consent. The GN has given Inuit Organizations no choice but to challenge the legislation in court.