Statement by Chief Commissioner C.T. (Manny) Jules

Regarding the First Nations Resource Charge

January 30, 2023

Since 2012, the First Nations Tax Commission and interested First Nations have been working on a proposal for a First Nation Resource Charge (FNRC). This proposal supports their fiscal jurisdiction over resource projects on their lands.

Receiving a share of the fiscal benefits from the use of ancestral land and the resources on it has been a priority for First Nations since confederation. Between 1867 and 1930, First Nations were systematically legislated out of the Canadian federation and economy. All First Nation government powers, including the ability to raise revenues to finance those powers, were removed and distributed between the federal and provincial governments. This has caused ongoing First Nation dependency, poverty, and service quality disparity.

Since the 1970s, multiple court decisions have led to the recognition that First Nations have an inherent right to revenue generated by using land and resources in their jurisdiction. However, there is no clarity about how to distribute fiscal benefits among governments and economic benefits among individuals while also paying for environmental costs. As a result, individual negotiations are needed for every project. This process significantly burdens First Nation administrations and makes negotiations costly, laborious, and time-consuming. The FNRC is an important step toward clearly defining First Nation fiscal benefits, which leads to more transparent agreements and successful outcomes.

This First Nation-led initiative will support their governments in receiving direct, secure, and stable fiscal revenues from resource projects on their lands, just like other governments.

We will continue to work with interested First Nations on the design and development of this (the FNRC) proposal. In the coming months, we will convene a meeting of interested First Nations to provide an overview of the proposal, identify legislative requirements for its implementation, develop the next steps, and seek input and support.


It is a First Nation-led proposal that would provide First Nations the option to implement a pre-specified charge regime based on land use and resources in their territory or ancestral lands.  The charge system would be established in First Nation law. There will be distinct charges for each resource project type, which would be standardized throughout a province or possibly the country.  For example, there would be distinct charge rates and bases for mining, pipelines, forestry and other eligible projects.



Between 1867 and 1930, First Nations were systematically legislated out of the Canadian federation and economy. First Nation government powers were removed, and resource extraction proceeded largely without consultation or compensation. First Nation tax collection powers were removed, resulting in a lack of means to pursue their title claims, improve community infrastructure, care for their members and implement their jurisdictions. This has led to First Nation dependency, poverty, and a notable difference in the quality of services received compared to other Canadians.


Almost a century later, in the 1970s, Supreme Court decisions like Calder, Delgamuukw, Haisla, Tsilhqot’in and Robinson-Huron recognized First Nation rights and title within ancestral lands and the duty of other governments to accommodate this. This recognition led to the recent practice of seeking First Nation consent for developments through negotiated arrangements. These agreements were sometimes with resource developers and sometimes with provinces and territories. They often included negotiating various forms of financial compensation in benefit and resource revenue-sharing agreements. This created First Nations fiscal benefits, but it was not an efficient process to implement them.


The FNRC is an important step toward economic reconciliation.  It restores the long-ignored right of First Nations to share the revenues generated by resource development.  It creates revenues that can be used to help First Nations take better advantage of resulting job and business opportunities.  It will provide these revenues under conditions that will free First Nations from funding conditions and that are consistent with the right to self-determination, which is called for by UNDRIP.



The FNRC will practically implement First Nation fiscal jurisdiction on ancestral lands. As a result, it will generate significant and stable revenues for First Nation governments. This means that communities will have more revenue to contribute to self-determination, better infrastructure, public services and the implementation of other jurisdictions. It will reduce the substantial demands that project proposals place on First Nation administrations. It will help raise the quality of First Nation public service and infrastructure to national standards.


It is proposed that if a company pays an FNRC, it will be afforded federal tax relief roughly equivalent in value, either through a tax credit or other mechanism.  In this way, the federal government will cede tax room to First Nations.

The net effect of tax coordination will be:

  1. No First Nation will be disadvantaged by having a higher effective rate of taxation on its lands
  2. No company will face a higher effective rate of taxation as a result of the FNRC

Tax coordination ensures the FNRC will be a government-to-government arrangement to implement rights and title.  It does not simply put that obligation on First Nations and resource companies.

The development of the FNRC will also:

  • Streamline consent negotiations
  • Ensure greater transparency for stakeholders the public
  • Provide a platform for improving the economic and environmental components of agreements
  • Reduce the requirements for ongoing contract management by companies


Negotiating individual fiscal arrangements for each First Nation on each project is too uncertain, takes too long, costs too much, and results in a series of one-off agreements that undermine tax integrity. As a result, it is costing the Canadian economy billions in lost investment and costing Canadian governments billions in lost tax revenue.

The proposed FNRC will simplify and standardize the resource project investment process to encourage more successful investment and bring greater integrity to tax systems. It would address overlapping land claim concerns as well as economic reconciliation. Improved First Nation economies support self-determination.


The FNRC proposal would improve Canada’s resource investment climate and promote economic reconciliation. The FNRC would replace individual negotiation processes on the fiscal components of consent agreements between First Nations, resource developers and provincial governments through a standardized charge system.

These draft principles are for discussion purposes to inform the development of a policy framework for the First Nations Resource Charge.

  • The FNRC will always be optional for First Nations.
  • First Nations have an inherent right to the fiscal benefits generated by the use of their land and resources as recognized by various court judgements.
  • The FNRC is a part of new fiscal relationship that supports the implementation of First Nation jurisdictions.
  • The FNRC would be based in First Nation law.
  • The design and implementation of the FNRC will continue to be led by interested First Nations and supported by the FMA institutions. The institutions would support implementing the FNRC in the same way they support other FMA fiscal powers.

  • The FNRC must be supported by tax coordination with other governments so that it does not impose additional costs.
  • The FNRC could replace other mechanisms for pricing the use of First Nation land and resources.
  • Participating First Nations would apply standardized rates to a standardized base for all resource project types of the same kind. This consistency could be throughout a province or possibly the country.
  • The FNRC would not imply First Nation project consent. Participating First Nations would still have to assess proposed economic benefits and environmental impacts.


Do First Nations have to use the FNRC in resource project negotiations?2023-02-03T18:47:52-08:00

No. The FNRC will always be optional for interested First Nations.


Does the FNRC imply consent for a project?2023-02-08T10:12:16-08:00

Adopting the FNRC does not mean a First Nation provides consent for a project. It means that if the First Nation consents, they will apply the scheduled rates and meet other terms and conditions, such as not imposing additional charges. These conditions will ensure that the FNRC lowers administration costs for all parties and ensures that First Nation-supported projects do not fail.

What will be required to implement the FNRC?2023-02-08T10:25:19-08:00

The proposed FNRC requires continued First Nation leadership and support to advance the necessary legislative framework. We anticipate that FNRC will be implemented by First Nation FNRC laws.  The FNRC should be accommodated by other governments so that participating First Nations are not disadvantaged. The FNRC should be accompanied by appropriate institutional support to ensure an efficient process for interested First Nations and provide confidence to all parties.

When would the FNRC revenues get paid?2023-02-03T19:07:22-08:00

Unlike federal and provincial governments, First Nations usually do not receive fiscal benefits from resource developments until late in the project lifecycle and often years after they start.

It is proposed the FNRC should be paid at the earliest stages of resource development projects.  This would be a small charge reflecting land use and would be coordinated with the federal government to ensure it does not disadvantage relatively small developers such as junior mining companies. Providing a fiscal benefit to First Nations early in a resource project lifecycle means that communities can improve their services and infrastructure earlier.

How will the FNRC help address overlapping territories?2023-02-03T18:50:48-08:00

The FNRC objective is to reach a state of one charge per project.  Under the proposal participating First Nations would determine how to apportion the FNRC revenues when territories overlap. These solutions could include revenue-sharing formulas or developing comprehensive expenditure plans. The FMA institutions could help First Nations reach such agreements.  Future work in this area will be done in consultation with First Nations.

What lands could the FNRC apply to?2023-02-03T18:51:22-08:00

For First Nations that opt into the FNRC, it would be applied to eligible projects occurring on ancestral lands, not just reserves.

What types of projects would be subject to an FNRC?2023-02-03T18:51:47-08:00

Project eligibility should be based on the use of land and resources specific to each project. This should include (at least) forestry, mines, oil and gas extraction and transportation, hydro production, and transmission. Eligibility criteria would need further development to determine if projects not listed could be eligible.

Is the FNRC the same as resource revenue-sharing?2023-02-08T10:31:14-08:00

Revenue-sharing refers to the practice of a government sharing resource taxes or a company sharing an after-tax revenue stream with a First Nation. The FNRC may sound similar, but it is different in several ways:

  1. The FNRC is based on the notion that unextinguished Treaty and Title rights constitute a First Nation jurisdiction or ownership position. This entitles a First Nation to a share of the revenues generated from the land and resources. Revenue sharing does not confirm this jurisdiction. In the case of a resource tax, it is based on a provincial right to tax.
  2. The FNRC protects First Nations from tax changes made by provincial governments. Under revenue sharing, the “price” of the First Nation resources is determined by provincial governments. They set the rates and base of the resource taxes. They could decide not to charge the tax as an incentive for development. In this case, the First Nations’ revenues would be zero.
  3. In the case of revenue sharing with companies, the FNRC will protect First Nations from the risk of companies applying treatments to the shared revenue stream to avoid making payments to a First Nation.
  4. The FNRC can be applied to projects that are not currently subject to a provincial resource tax.
What is the difference between economic benefits and fiscal benefits?2023-02-08T10:31:36-08:00

There is a distinction between fiscal benefits and economic benefits, and it is an important one. Consent negotiations are about determining how a project can improve two distinct benefits (economic and fiscal) and reduce one specific cost (environmental).

Economic benefits flow mainly to individuals and private-sector corporations in the form of jobs, wages, business opportunities and profits. The FNRC produces fiscal benefits and not economic benefits.  It does not remove the need to negotiate economic benefits.

Fiscal benefits are those revenues that projects generate for governments through taxation, charges and the sale of land use rights or resources. These revenues are directed to public services, programs, and infrastructure and can benefit everyone in a community.  These are the benefits needed for self-determination and the generation of independent revenues.

Environmental costs are the impacts on land, water, and air caused by resource development.  Projects can significantly affect wildlife, fisheries, water quality and other environmental amenities, health, and traditional ways of living. FNRC revenues may help to support First Nations in their ongoing participation in managing environmental impacts.

What does it mean for a government to ‘cede tax room’?2023-02-08T10:24:13-08:00

To understand what this means it is important to note that currently two governments, federal and provincial, collect almost all the fiscal benefits (taxes) from resource projects. Ceding federal tax room means that the federal government will reduce its taxes so that First Nation governments can introduce the FNRC without putting the territory at a tax disadvantage.

What is the role of the FNTC?2023-02-08T10:52:57-08:00

The First Nation Fiscal Management Act offers an institutional framework for FNRC implementation and is supported by First Nations Institutions: First Nations Tax Commission, First Nations Finance Authority, and First Nations Financial Management Board. The FMA institutions have been successful in implementing and expanding jurisdiction for participating First Nations.

The FNTC is committed to the principle that revenue powers will improve First Nations self-determination and help them overcome disparities.  To get the maximum benefit from revenue powers, the FNTC works with First Nations to reduce the barriers to economic development on First Nation lands, improve investor certainty, and create fiscal arrangements that empower First Nations allowing them to be vital members of their regional economies. The FNTC works to fill the institutional vacuum that has prevented First Nations from participating in the market economy and ensure their regulatory frameworks enhance the Canadian economy.

To this end, FNTC is working with interested First Nations, other FMA institutions and governments to advance the FNRC proposal.

Who has expressed interest in the FNRC?2023-02-08T10:21:14-08:00

There has been growing interest in the FNRC from First Nation, industry, and provincial and federal governments. Some First Nations in the Atlantic, Ontario, Manitoba and British Columbia have expressed support and begun to work on specific FNRC proposals related to mining, pipelines, and forestry. Resource developers have expressed interest and support, as have some provincial governments and the federal government.

What are the next steps to advance the FNRC?2023-02-08T10:26:45-08:00

In the next month, supportive First Nations could work with the FNTC to secure a federal commitment in the federal budget for the FNRC. Supportive First Nations should also advance the FNRC in discussions with the provincial governments and resource companies.  Demonstrations of support could include letters, BCRs and FNRC proposals for specific resource projects of interest.

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