The Province has initiated consultation with First Nations in BC in regards to the co-development of a new fiscal framework, with an initial focus on forestry revenue sharing. The Province recently released a Discussion Paper to initiate the engagement and development process with First Nations in BC.

In March 2022, the Province released its Declaration on the Rights of Indigenous Peoples Action Plan. This plan included the following two action items to be completed between 2022 and 2027:

  • Co-develop with Indigenous Peoples a new distinctions-based fiscal relationship and framework that supports the operation of Indigenous governments, whether through modern treaties, self-government agreements or advancing the right to self-government through other mechanisms. This work will include collaboration with the government of Canada.
  • Co-develop and implement new distinctions-based policy frameworks for resource revenue-sharing and other fiscal mechanisms with Indigenous Peoples.

The implementation of these two action items began recently when the Province released a discussion paper to outline its approach to implementation and plan for engagement with First Nations. The initial focus for implementation will be on the forestry industry.

Below are some highlights of the Province’s approach to implementation included in the discussion paper:

Fiscal Framework

  • Tools or mechanisms that are being considered for the new framework include:
    • revenue-sharing;
    • taxation;
    • economic rents/royalties;
    • transfers from other orders of government;
    • access to land and resources;
    • the promotion of private sector investment and economic development; and
    • potential new mechanisms that may not yet exist.
  • The development of the framework will include a comprehensive examination of the economic components of land and resources that are used by governments to create wealth.
  • A key consideration in creating the new fiscal framework will be the unique rights, needs and roles of First Nations.
  • The goal is that the new fiscal framework will be envisioned and developed by 2027.

Revenue Sharing

  • Initially focusing on revenue sharing for forestry.
  • A forestry revenue sharing arrangement already exists under the Forest Consultation and Revenue Sharing Agreement program, however the intention is that the program will be remodelled so that revenue sharing is co-developed and informed by First Nations and amounts shared are increased.
  • A revenue sharing arrangement is also already in place for the gaming industry, however forestry will be the first resource revenue sharing arrangement of the natural resource sectors under the new fiscal framework.
  • The new forestry revenue sharing model is intended to be implemented by April 2024.

The fiscal framework is intended to be co-developed with Indigenous Peoples. Accordingly, the Province’s approach highlighted above may change once engagement is concluded.

It will be interesting to see if such engagement results in the express inclusion of funding or guarantees for equity participation in the fiscal framework, which is noticeably absent from the discussion paper.

The Province is beginning its engagement with First Nations in BC. There will be a number of forums available for First Nations to participate until the end of January, 2023.

It is expected that industry stakeholders, and the public will have the opportunity to provide feedback to the Province beginning in the spring of 2023.