A cheque for $69: Yukon First Nations seek better resource royalty deal

The chief of the Tr’ondek Hwech’in First Nation says the Yukon needs to update its current resource revenue sharing arrangement with First Nations, which saw TH receive just $69 in royalties this year.

The chief of the Tr’ondek Hwech’in First Nation says the Yukon needs to update its current resource revenue sharing arrangement with First Nations, which saw TH receive just $69 in royalties this year.

Roberta Joseph’s comments came in response to a keynote address from Ken Coates, a professor of public policy at the University of Saskatchewan, during the Yukon Geoscience Forum & Trade Show on Saturday.

“The resource sector is the front line of reconciliation,” Coates said during his speech.

Coates claimed that the Yukon is becoming the “gold standard” for relationships with First Nations “on an almost global scale.” But he and keynote speaker Phil Fontaine, former national chief of the Assembly of First Nations, both said the territory can do better at sharing resource revenue with Yukon First Nations.

The Yukon laid out a resource revenue sharing arrangement with First Nations in the Umbrella Final Agreement. But calls to update that arrangement in recent years have largely come to nothing.

Joseph said the Yukon needs a revenue sharing agreement that is fair for all Yukon First Nations.

“We have a really high number of (mining) claims in TH traditional territory, and when we receive a cheque for $69, that is very insulting,” she said. “And that’s what we received this year.”

She said the First Nation received even less last year — about $36.

There are likely a couple of reasons those figures are so small. The first is that Yukon’s royalty rates for placer mines are vanishingly low. Currently, a royalty of just 37.5 cents an ounce is levied on all placer gold leaving the Yukon. That amount is based on a gold price of $15 an ounce — even though today’s gold price is closer to US$1,200 an ounce.

The other reason has to do with the way revenue sharing was set out in the Umbrella Final Agreement.

Self-governing Yukon First Nations receive all the royalties from any development on Category A settlement land. Joseph said that $69 cheque came from placer mining on Tr’ondek Hwech’in Category A land.

But the rules are different for development on Crown land. According to the Umbrella Final Agreement, the Yukon government will share the resource royalties it receives with all self-governing First Nations, but only if it makes more than the total amount of royalties received by First Nations from their Category A land.

For the last several years, however, that hasn’t been the case. Since the Minto mine went into production on Selkirk First Nation Category A land in 2007, all the royalties from that project have gone to the First Nation. Those royalties have ranged from about $216,000 in 2013 to nearly $6 million in 2009.

That means the Selkirk First Nation has been making more in royalties than the Yukon government for the last few years. As a result, the government doesn’t have to share its royalties with any other First Nation in the territory — including the royalties it receives from placer mines on Tr’ondek Hwech’in traditional territory. In 2014-15, Yukon government placer mining royalties totalled about $22,600.

Under the existing arrangement, therefore, a single First Nation is unintentionally preventing all other Yukon First Nations from sharing the government’s resource revenue.

“There are hundreds of millions of dollars being extracted every single year out of TH traditional territory and we’re actually not benefitting from it,” Joseph said. “We need to be able to work with government to have a resource sharing agreement that is going to be beneficial to all of us First Nations.”

Currently, Yukon First Nations can receive 50 per cent of the first $2 million by which government royalties exceed First Nation royalties from Category A land, and 10 per cent of any amount beyond that.

In 2012, the Yukon Party government offered First Nations a new deal that could have increased their share of resource revenue. But several First Nations refused to sign on, arguing the deal wasn’t sweet enough.

They compared it unfavourably to the revenue-sharing agreement in the Northwest Territories, which transfers up to 25 per cent of all resource revenue to Indigenous groups. To date, no new arrangement has materialized in the Yukon.

“(Governments don’t) recognize that the people they’re dealing with are like them in terms of powers and authority,” Fontaine told the News. “There’s no recognition, real recognition, that First Nation governments ought to be treated the same way that the territorial government here treats provincial governments or the federal government when they’re at the table.”

Still, Fontaine said he’s “heard good things about the incoming (Yukon Liberal) government and their commitment to engage with the Indigenous nations here on an equal footing.”

The Liberals have promised to meet with all Yukon First Nation chiefs within 30 days of forming government. But the Liberal platform does not explicitly mention resource revenue sharing with First Nations.

Contact Maura Forrest at maura.forrest@yukon-news.com

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