Actions 1.04 and 1.05 guide the Province’s work to co-develop a new fiscal relationship and framework with Indigenous Peoples. The Province is consulting and co-operating on both actions through a single engagement process.
Highlights
The release of the ‘New Fiscal Framework’s ‘What We Heard’ report in April 2023 highlights the significant time and effort that First Nations and the Province invested in co-developing a new fiscal framework. The report summarizes the variety of perspectives and ideas raised by First Nations. It also underscores the complexity of the work and the transformational changes required to achieve a principled new fiscal framework between the Crown and First Nations governments. Going forward, the ‘What We Heard’ report provides a foundation to identify shared principles that reflect feedback from First Nations and apply the principles to the development of new fiscal tools and arrangements.
A key theme of the ‘What We Heard’ report is the strong interest among many First Nations to move beyond current revenue sharing approaches, which are seen as transactional. In response to this feedback, in March 2024 the Province implemented a new approach to accommodation in the Forest Consultation and Revenue Sharing Agreement (FCRSA) program. Under this new approach, the requirement for First Nations to agree that FCRSA funds are an accommodation will be removed from the agreement template. The Province will continue to consider the funds provided through FCRSA agreements as recognition of First Nation’s economic interests and as such, as a contribution to accommodation. However, First Nations are no longer required to contractually agree as a condition for receiving the revenue.
As co-development of a new fiscal framework continues, the Province will also maintain the increase to FCRSA revenue sharing rates announced in April 2022. Under these increased rates, the Province is expected to share about $162 million in forestry revenues with First Nations in fiscal year 2023/24.
Budget 2024 announced that the Province is taking action to support First Nations and the B.C. business sector in developing strong economic development partnerships through the development of a provincial First Nations Equity Financing Framework. This framework will establish tools to support equity financing opportunities for First Nations. This framework includes equity loan guarantees and potentially other supports that begin to address the systemic barriers many First Nations face in gaining meaningful representation in projects where there is shared interest and readiness with the Province.
How are we working together?
Specific consultation and co-operation activities undertaken to date include: a discussion paper released in November 2022, followed by a virtual engagement opportunity; participation at the First Nations Leaders’ Gathering in November 2022; province-wide engagement during the fall of 2022 and winter 2023, including bilateral government-to-government meetings with First Nations and participation at regional meetings hosted by the First Nations Forestry Council; and the release of a ‘What We Heard’ report in April 2023.
Given the broad scope of the new fiscal framework, engagement with First Nations across the province will be required over the five-year span of the Declaration Act Action Plan and beyond. To date, this engagement has focused on co-developing principles for a new fiscal framework and on co-developing a new approach to forestry revenue sharing. Engagement with key stakeholders in the forest sector and elsewhere is also ongoing.
The Province is continuing to work with Modern Treaty Nations as part of the collaborative fiscal process on fiscal policy and taxation to implement Action 1.04 and the Shared Priorities Framework.
Are there challenges?
The scale of the work and the variety of perspectives involved pose a capacity and project management risk to the implementation of this action. The Province will need to ensure that its approach to co-development honours the time and expertise of First Nations governments and leaves space for the diverse interests, priorities and needs of First Nations to be incorporated.
The variety of perspectives raised during the engagement process to date have underscored the complexity of co-developing a new fiscal framework. The Province understands that the new fiscal framework cannot be a ‘one-size-fits-all’ model. First Nations have different values and worldviews, as well as resources in their territories. As a result of this complexity, current timelines have not matched what was anticipated in the discussion paper. On forestry revenue sharing, the Province will be re-engaging with First Nations to continue co-developing options for a new model to replace FCRSA program.
The Province and First Nations must be confident that co-developed options will support the shared objectives of recognizing and implementing rights, advancing self-governance and self-determination, and supporting the broader economy for all British Columbians.