First Nations to lose out over income tax changes

First Nations were not consulted on reductions to territorial income taxes that will decrease their revenues. The government announced last week amendments to the Income Tax Act that amount to $5.

First Nations were not consulted on reductions to territorial income taxes that will decrease their revenues.

The government announced last week amendments to the Income Tax Act that amount to $5.5 million in lowered taxes or increased benefits to Yukoners.

But for residents of settlement lands, almost all territorial income taxes collected go to the First Nation, regardless of whether or not the resident is a member of that nation.

An official with the Department of Finance confirmed that the estimated combined impact on 11 signed First Nations is $134,000 annually, or an average of about $12,000 per First Nation.

Liberal Leader Sandy Silver and Premier Darrell Pasloski sparred this week over whether or not the government was required to consult with First Nations before announcing the changes.

“First Nation governments are only now finding that their revenues could be impacted by this,” said Silver in the legislature Wednesday.

“Signed Yukon First Nation governments have tax-sharing agreements with the Yukon government. These agreements say the government must discuss any possible changes with First Nation governments before they happen and not after. This did not happen.

“Can the premier explain why there was no consultation beforehand?”

“Of course, if there is an impact to some of the First Nations, we will certainly be willing to sit down and talk to them,” said Pasloski in his response.

He later came out swinging in a Yukon Party press release.

“The Liberal leader either doesn’t understand the issue, hasn’t read the agreement, or is intentionally trying to drive a wedge between the Yukon government and First Nations,” the release states.

The agreements vary between First Nations but have the same general contents.

While consultations between the government and First Nations are mentioned in the agreement, those sections appear to relate to amending the agreements themselves or the administration of them, and not to changes to the tax regime overall.

There is one provision that would require the Yukon government to consult with the First Nation on tax changes if it is also consulting the public. However, in the case at hand no public consultation occurred before the announcement.

Silver stuck to his guns Thursday, insisting that the agreements require consultation with First Nations.

“I will stand by that this government needs to consult with affected First Nations as required by the personal income tax room sharing agreements,” he said in an interview.

Even if a close reading of the agreements finds that no legal obligation to consult exists, the government still should have had a discussion with First Nations who will have their revenues reduced before announcing the change publicly, he said.

“They were finding out about it by our phone calls.”

Contact Jacqueline Ronson at

jronson@yukon-news.com

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