Documents obtained by the Canadian Taxpayers Federation (CTF) through the Right to Information and Protection of Privacy Act show aboriginal businesses in New Brunswick have a special tax deal that allows them to keep almost all of the gas taxes they collect.
The New Brunswick government has signed individual agreements with aboriginal bands allowing aboriginal retail businesses to remit just 5 per cent of all of the provincial taxes they collect on gasoline sold to non-aboriginals. To put that in perspective if the gas price is $1.30, aboriginal on-reserve businesses keep about 21 cents per litre of taxes they charge at the pumps.
“New Brunswickers expect their gas taxes to go to fixing the roads we all drive on. Instead money paid by drivers as ‘taxes’ is going right back into the pockets of the bands to spend as they see fit,” said Kevin Lacey, Atlantic Director with the CTF.
Aboriginal businesses selling gas almost tax-free have an advantage over their non-aboriginal competitors who must remit all the taxes they collect to the government.
“These agreements place non-aboriginal competitors at a significant disadvantage to neighbouring band retailers. In this economy, revenue generating businesses need support from the government not more obstacles,” added Lacey.
Documents provided to the CTF from the Department of Finance encompass “recent” deals with 13 aboriginal bands. The agreements were all signed between 1994 and 2008.
Along with gasoline, the agreements also say that band retail businesses only remit 5 per cent of the taxes they collect on tobacco sold to non-aboriginals. That means they get to keep 95 per cent of the “taxes” collected.
“If the government wants to support aboriginal businesses, they should do so openly rather than siphoning off the gas tax,” said Lacey
The CTF was pleased to see the government announce in the provincial budget plans to review these agreements with aboriginal bands but hopes the government invokes a clause in each agreement that allows the contract to be cancelled with 90 days notice.
“We hope the government is serious about reforming these special deals for band businesses. Consumers deserve more accountability,” concluded Lacey.
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