The Yukon government and self-governing Yukon First Nations have signed an agreement laying out a implementation of resource royalty sharing, settling a long-standing dispute on how to interpret a chapter of the Umbrella Final Agreement (UFA).
Simply titled the “Chapter 23 Implementation Agreement,” the document, which officially took effect March 29, will ensure that in most years, self-governing Yukon First Nations get a larger portion of shared resource royalties.
Yukon Premier Sandy Silver and Council of Yukon First Nations Grand Chief Peter Johnston made the announcement at a press conference following the Yukon Forum in Whitehorse May 7.
“(This agreement) advances reconciliation between our government and helps to ensure First Nations benefit from development that takes place in the Yukon,” Silver said.
Speaking more generally, Johnston thanked the Yukon government and the Yukon First Nation delegation “for the commitment to the process and the engagement that they have put forward.”
Reviewing and changing the Yukon’s resource royalty regime was one of several commitments highlighted in a joint action plan created at the Yukon Forum in September 2017.
The interpretation of the UFA’s Chapter 23 has long been a point of contention for self-governing Yukon First Nations. At its core, the issue came down to how two types of resource royalties, collected for work on two categories of settlement lands, impacted one another.
Under the Umbrella Final Agreement (UFA), self-governing Yukon First Nations own all the subsurface rights to Category A settlement land. During UFA negotiations, it was agreed that mines or claims that already existed on Category A settlement land would be allowed to continue operations. These operations were dubbed “encumbering rights,” and the First Nations to which the land belonged to would receive 100 per cent of royalties. Under the old interpretation of Chapter 23, royalties from encumbering rights were designated as the Yukon First Nation Royalty.
On Category B settlement land, the Yukon government retains subsurface rights and collects the royalties. Chapter 23 states that a percentage of those royalties — designated the Crown Royalty — are shared with self-governing Yukon First Nations, to be prorated based on schedule laid out in the UFA. However, this royalty-sharing only occurs when the Crown Royalty is larger than the Yukon First Nation Royalty.
The problem with designating encumbering rights as Yukon First Nation Royalty, self-governing Yukon First Nations argued, was when one First Nation had a massively profitable encumbering right on its Category A settlement land — the Minto mine, for example — it would greatly, if not completely, close the gap between Yukon First Nation Royalty and Crown Royalty. That meant that a smaller amount of money — or none at all — would be paid to First Nations for work on Category B settlement land.
The Chapter 23 Implementation Agreement addresses this by removing encumbering rights from the Yukon First Nation Royalty designation. This means that one massive encumbering right will no longer be able to wipe out the Crown Royalty payment for all self-governing Yukon First Nations.
The agreement is retroactive to the 2014-2015 fiscal year, with self-governing Yukon First Nations set to receive $24,688.32 more in royalties from then to the 2016-2017 fiscal year.
The agreement also states that the Yukon government will give self-governing Yukon First Nations a one-time payment of $600,000 as a show of goodwill and acknowledgement of the time and effort they put into negotiations. That money will come from the 2017-2018 budget.
In a statement May 8, Yukon Chamber of Mines (YCM) president Sue Craig said the YCM was “pleased” to hear about the deal.
“The Yukon Chamber of Mines has been lobbying/advocating for revenue royalty sharing with First Nations since 2014,” Craig said. “Resource royalty revenue sharing is another avenue in which First Nations can participate in the economic benefits of mineral exploration within their traditional territories.”
Contact Jackie Hong at email@example.com