The Aboriginal Resource Tax: Closing The Infrastructure Gap (2015)
- Max Loukidelis
- Jun 23
- 1 min read
Published in Canadian Federalism and Infrastructure, the Institute of Intergovernmental Relations. 2015.
This chapter, adapted from a report completed by Greg Richard for the First Nations Tax Commission (FNTC), outlines a proposed Aboriginal Resource Tax (ART), now the proposed First Nations Resource Tax (FNRT). The FNRT is a tax proposed in part to assist First Nations in closing their on-reserve infrastructure deficit, which this paper examines at length.
As this chapter outlines, the FNRT has a unique feature: it generates funds, in part, by improving the investment climate on reserves, and in traditional territories, and so it does not necessarily compete for infrastructure funding with other governments. Instead, it helps all governments. By standardizing the taxation of resource projects by participating First Nations, the opt-in FNRT framework will improve investor certainty and offer a range of benefits to First Nations. The FNRT would not seek to reduce the environmental and ethical scrutiny which projects receive, but would reduce the administrative burden of the current process by replacing the need for repeated negotiations with a pre-specified tax regime. It would create certainty and transparency by ensuring that tax rates are pre-specified and published. It is intended that the FNRT would be implemented in a revenue-neutral manner. It is expected that a coordination agreement would be worked out whereby other governments would vacate revenue room roughly equivalent to the revenue potential of the FNRT. First Nations that implement the FNRT would not seek royalty sharing or pursue additional revenue agreements with companies undertaking projects on their territory.
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