Randy Price is a chartered accountant and respected natural gas pipeline industry tax professional from British Columbia with
30 years experience in taxation. He has extensive experience with First Nation tax issues as they relate to the interests
of non-Aboriginal commercial taxpayers, particularly in his time as Vice President at Westcoast Energy Inc. and Duke Energy Corporation between 1994 to 2003 and is currently consulting, in association with PriceWaterhouseCoopers (PWC).
Clearing the Path recently had the opportunity to sit down with Commissioner Price to discuss his experience and involvement with FNTC.
First I’d like to ask a bit about your background in the energy industry?
During my years at Westcoast Energy, I acquired a keen interest in aboriginal affairs and was part of the team that developed a number of initiatives to improve the opportunities for First Nations that were in the geographical area of our operations in BC, Ontario and New Brunswick as our pipelines crossed a number of reserves and traditional territories and we had both commercial and utility interests.
After retirement, in 2004 I was part of a team working with the Gwich’in Tribal Council of Inuvik, an Inuit tribe, negotiating an access and community benefits agreement with the proponents of the Mackenzie Valley Pipeline. With the help of the ITAB, we supported the Gwich’in and the First Nations south of Inuvik in making the decision that property tax should be a key demand in the negotiations, as getting fiscal powers and the revenues that flow from them make aboriginal governments more politically and economically independent. All successful nations in the world have fiscal powers and levy taxes.
What brought you into the field of property taxation?
I had responsibility for property tax in 1990 and for the last 13 years of my employment with Westcoast Energy, which largely corresponded to the commencement of First Nations receiving the right to levy property taxes following the “Kamloops Amendment” to the Indian Act in 1988.
I keenly followed First Nations’ acquisition of property taxation powers through the years after first listening to [Chief Commissioner] Manny Jules, then a member of the Kamloops Indian Band Council, at the 1978 Canadian Tax Foundation in Montreal outlining his vision for a First Nations property tax regime; then seeing his vision materialize through the Kamloops Amendment to the Indian Act in 1988, to the creation of the ITAB; and finally through the seven years it took to deliver the FMA in March 2005.
As Westcoast Energy’s pipelines ran through seven reserves, some First Nations began to assert jurisdiction for property tax and tax bills began to arrive from new sources.
From your perspective, what is a concern taxpayers may have in respect to First Nation taxation?
The biggest concern of large utilities was simple, they bore the highest property taxes levied by both non-aboriginal and aboriginal taxing authorities. Westcoast Energy’s property tax in the 1990s was $60 million dollars which was 12% of its gross revenue. It was the largest property in BC in any industry. Also, it is important that tax rates and the assessment approaches to calculating the taxable/ assessed value be predictable and materially the same for all taxing jurisdictions in BC. The FMA and the FNTC Standards help to harmonize the non-aboriginal and aboriginal tax regimes.
In light of the Tsilhqot’in decision, the FNTC has done extensive research around the concept of an Aboriginal Resource Tax. In your view, how would such a tax help in moving development along?
Because of my work in aboriginal affairs at the community level, I was an early believer in what property taxes could do to improve the lives of First Nations peoples living on reserves. The 2014 Tsilhqot’in decision in the Supreme Court of Canada offers First Nations a significant opportunity to reduce poverty on reserves by opening the window to expanding their share of resource revenues beyond
the boundaries of the reserve into their traditional territories. The Aboriginal Resource Tax (ART) is a concept the FNTC is working with the Tsilhqot’in and other nations that want to benefit from the Supreme Court Decision.
The ART is being structured to carve out a share of the total taxes that a resource investment can deliver. This means that it is not an add-on tax but a sharing of the fiscal tax field between aboriginal and non-aboriginal governments. An important additional benefit is that an investor/developer, by agreeing to pay the tax levied by the First Nation(s) respects the infringement on their aboriginal title and can get on with the resource investment. We believe an ART can avoid lengthy negotiations and court battles which can take decades to settle with their attendant staggering costs and is the best option for all parties in terms of growing economies and creating prosperity for First Nations.