Province to Meet Legal Obligation to First Nations

ABORIGINAL AFFAIRS--Province to Meet Legal Obligation to First Nations

The Nova Scotia government will honour its obligation under the Indian Act and provide fuel-tax refunds to First Nations communities throughout the province, starting with the Eskasoni band in Cape Breton.

The provincial government has been collecting fuel tax from status Indians who purchased fuel at stations located on reserves, contrary to Section 87 of the Indian Act. The courts have confirmed that the act applies to fuel sales on Indian reserves.

In response, the province is working with the Mi'kmaq to implement a point-of-sale tax exemption and will refund the tax collected in past years. The tax exemption for fuel sales on reserves is expected to be implemented later this year.

"The province and the Eskasoni band have worked together to develop an approach for providing refunds for everyone who is entitled," said Michael Baker, Minister responsible for Aboriginal Affairs. "This approach will form the basis for discussions with other bands for refunds in their communities."

In the case of Eskasoni, a service station has operated on the reserve since 1948. The province has been negotiating a refund with the band's leadership since December 2001. A tentative agreement to provide the band and its members with refunds totalling $16 million was reached in July and implementation will begin immediately.

Discussions with other bands will take place when the Eskasoni case is settled.

The fuel tax rebates have no impact on the province's current financial position because the funds to settle this legal obligation have already been set aside.