This article originally appeared in the Calgary Herald.
By Stephen Buffalo, February 21, 2023
The relationship between Canada and First Nations has been an uneven one, with our people constantly getting the short end of the stick. One of the very few treaty benefits that have stuck over the years is a tax exemption: an acknowledgement that on our reserves at least, we did not owe other governments anything. But in the case of the carbon tax, we’re not even getting that.
Its creators may call it a “levy” or “pricing,” but the carbon tax is just that — a tax. As such, from a First Nations perspective, it clearly violates the spirit and intent of the treaty tax exemption, which was provided in exchange for our sharing of the land. And it explicitly violates Section 57 of the Indian Act, which exempts personal property on reserve from taxation.
So obvious is the principle that First Nations should be exempt from a carbon tax, from both an ethical and treaty perspective, that the NDP in British Columbia instituted such an exemption in its carbon tax. The NDP in Alberta did the same when it implemented its own provincial carbon tax from 2017 to 2019, but that was revoked when Alberta was put under the federal pricing system. It’s incomprehensible that the federal government did not follow their lead and put in its own carbon pricing exemption for First Nations.
The federal government claims that the average household gets more back in the carbon rebate than they pay in the tax. Whether that’s true or not — and the Parliamentary Budget Officer has concluded it is not — it is definitely not true for First Nations people.
As the chiefs of Ontario pointed out in their open letter to the prime minister last month, in order to receive the rebate (known as the “climate action incentive”), you need to file an annual tax return. But most people living on reserve don’t do so, because they are exempt from paying income taxes. And many First Nations people living off reserve are low-income; they don’t want or need to file a tax return either. The result is that those who can least afford to pay the carbon tax are most likely to be excluded from the rebate.
Most First Nations are located in rural areas, and many are remote or northern. Running any kind of errand or getting a service that most Canadians can access within a few blocks — be it a medical appointment, trip to the grocery store or work meeting — is often a half day’s drive or more away.
Driving conditions to and within reserves are often poor, usually on gravel roads that require large all-wheel-drive vehicles to be safe, if you can afford one. There are no EV charging stations, and almost none of our communities are served by public transportation. So, unlike for most Canadians, a carbon tax cannot incentivize us to switch to other methods of transportation, because we don’t have that option. All the tax does is make it more expensive to access those basic services.
Electricity and heating have also gotten eye-wateringly expensive. Most housing on reserve is already in poor shape, with drafty windows and inefficient appliances. We have no control over whether our energy comes from diesel or natural gas or coal-fired plants. Bills have doubled or even tripled for some. And when individuals can’t pay their utilities, which is often the case, the band must cover the debt, which puts further financial strain on First Nations governments.
These facts are not in dispute. In an April 2022 report, the Office of the Auditor General concluded that Indigenous groups are “disproportionately burdened” by carbon pricing. And that was before you factor in the harsh impacts of inflation that are disproportionately felt in remote communities.
Many of those who live on reserve are on fixed incomes, which keeps them below the poverty line. As the rising cost of food, gas, vehicles and construction materials creates increasing desperation, the carbon tax is translating into missed bill payments, missed medical appointments, missed education and work opportunities — because we simply can’t afford to get to them.
It is time for the government of Canada to become aligned with the more progressive provincial policies and implement an on-reserve exemption for carbon pricing. Our people can’t afford another winter like this one.
Stephen Buffalo is president and CEO of the Indian Resource Council, and a senior fellow at the Macdonald-Laurier Institute.