From the Fraser Institute

By John Ibbitson

According to Pierre Poilievre, a Conservative government would permit First Nations to directly receive tax revenues from resource development on their ancestral territories. Political leaders of all parties should commit to such direct taxation. Because time is short.

Faced with the prospect of tariffs and other hostile American actions, Canada must build new energy infrastructure, mine critical minerals and diversify trade.

First Nations participation is critical to these plans. But too often, proposed infrastructure and resource projects on their territories become mired in lengthy negotiations that benefit only bureaucrats and lawyers. The First Nations Resource Charge (FNRC), a brainchild of the First Nations Tax Commission, could help cut through some of that red tape.

Currently, First Nations, the federal government and businesses negotiate agreements through a variety of mechanisms that establish the financial, environmental and cultural terms for a proposed development. As part of any agreement, Ottawa collects tax revenue from the project, then remits a portion of that revenue to the First Nation. The process is bureaucratic, time-consuming and paternalistic.

Under one version of the proposed charge, the First Nation would directly collect a portion of the federal corporate tax from the developer. The federal government, in turn, would issue the corporation an equivalent tax credit.

In effect, Ottawa would transfer tax points to First Nations.

“The Resource Charge doesn’t mean we won’t say no to bad projects where the costs to us are too high,” said Chief Darren Blaney of B.C’s Homalco First Nation, when the Conservatives first laid out the proposal last year. “It could mean, however, that good projects happen faster. This is what we all want.”

Poilievre referenced the proposed tax transfer in his Feb. 15 rally when he vowed to remove regulatory obstacles to fast-track resource development projects.

“We will incentivize Indigenous leaders to support these projects by letting companies pay a share of their federal corporate taxes to local First Nations,” he declared. “I want the First Nations people of Canada to be the richest people in the world.”

The First Nations Tax Commission first came up with the idea. Poilievre’s federal Conservatives are the first political party to embrace it. But there’s no reason why support for resource charges could not be bipartisan.

Mark Carney, the frontrunning candidate to succeed Justin Trudeau as Liberal Leader and prime minister, has vowed to use “all of the powers of the federal government… to accelerate the major projects that we need.” Supporting the FNRC would further that goal.

That said, resistance has already emerged.

“Most Indigenous leaders would see right through (what Poilievre said) because we’ve been around that corner a few times,” Dawn Martin-Hill, professor emeritus of Indigenous Studies at McMaster University, told the Canadian Press. “Selling your soul to have what other Canadians have, which is access to clean drinking water coming out of your tap, is highly problematic.”

But Prof. Martin-Hill inadvertently makes the case for the FNRC. Municipal governments raise funds by taxing the property of individuals and businesses and using the revenue to, among other things, provide clean drinking water. A First Nation that taxed a business operating on its territory, and used the revenue to provide clean drinking water for people on reserve, would simply be doing what governments are supposed to do.

Existing agreements, though cumbersome, have brought major new revenues to some reserves. The FNRC could increase revenues and First Nations autonomy.

Given the complexities of the tax code, and the limited administrative capacity of some First Nations, some agreements might see the federal government continuing to collect taxes and then remitting the First Nation’s portion to that government. The goal would be to ensure that revenues streams are transparent, predictable and support the greatest possible autonomy for each First Nation.

Any government committed to implementing the FNRC should convene a working group of First Nations leaders, private-sector executives and government officials to work out a framework agreement.

If the Conservatives win the next election, the working group could be part of a task force on tax reform that Poilievre said he intends to establish.

The FNRC would be voluntary. Communities could opt in or opt out. Provincial governments might also participate, sharing a portion of their taxes with First Nations.

If it works, a First Nations Resource Charge could speed the approval of lumber, mining, pipelines and other resource-related projects on the traditional lands of First Nations. It could provide reserves with stable and autonomous funding.

It’s an idea worth trying, regardless of which party forms the next government.

John Ibbitson

For years, oil pipelines have been a political fault line in Canada, with battles over environmental policies, economic development and national energy security. The Liberal government under Prime Minister Justin Trudeau, has sent mixed signals – championing climate goals while approving some energy projects like the Trans Mountain Expansion. But now, with a trade war looming over Canada, a surprising shift has occurred: a consensus across the political spectrum in favour of building new pipelines.

And it’s all due to one man: United States President Donald Trump.

Trump’s threat to impose a 10 percent tariff on Canadian energy and 25 percent on other Canadian exports has woken up Ottawa. Previously, Trudeau’s government made decisions that killed off big pipeline projects like Energy East. Bill C-69 was blamed for creating an uncertain regulatory environment that discouraged investment in pipelines.

But now, Liberal ministers are talking about revisiting those projects.

On February 6, Energy Minister Jonathan Wilkinson, a long-time climate crusader, surprised many when he said Canada is too dependent on the U.S. as an oil buyer and suggested Ottawa should consider a pipeline to Eastern Canada to diversify energy exports. He’d made similar comments in September and October 2024 when he said oil demand had peaked and pipelines were unnecessary.

The next day, it was reported that Industry Minister François-Philippe Champagne followed Wilkinson’s lead, saying Canada must reassess its energy infrastructure given Trump’s threat. He even suggested Quebec, which has long opposed pipelines, might be open to reconsidering Energy East.

Shortly after, Alberta Premier Danielle Smith seized the moment, urging Ottawa to restart talks on national energy infrastructure.

And then on February 9, Champagne again said Quebecers might have a different view on pipelines now that their economic security is at stake.

This is a stunning reversal. Just months ago Wilkinson and other Liberal officials were saying oil demand was declining and Canada should focus on renewables and electrification.

However, is this a real policy shift?

While some senior Liberals are suddenly in favour of pipelines, one key figure has been silent: Mark Carney, the front runner in the Liberal leadership race.

Carney has made climate action a central plank of his campaign, but says he supports the “concept” of an east-west pipeline.

His silence raises a big question: Are the Liberals really in favour of oil pipelines or is this just a reaction to Trump?

Despite Carney, Wilkinson and Champagne’s comments, big industry players remain skeptical. Pipeline projects take years of regulatory approval, billions of investment and political will at both the federal and provincial level. The Trudeau government’s track record has been one of obstacles, not encouragement, for big energy projects.

And some experts say pipeline companies may not be keen to jump back into the fray. TC Energy, the former proponent of Energy East, divested its oil pipeline business in 2023. Would a new pipeline proponent be willing to navigate the regulatory and political minefield that Ottawa itself created?

The political fallout could be immense.

If the Liberals go for pipelines, it will be one of the biggest policy reversals in Canadian energy history. It will also expose deep divisions within the party. Environmental groups and Liberal voters in urban centres will likely rage against such a shift while oil-producing provinces like Alberta and Saskatchewan will remain skeptical of Ottawa’s new enthusiasm.

Meanwhile the Conservative Party, the only federal party that has always been in favour of pipelines, will find itself in an unusual position—watching the Liberals adopt its policies as their own.

In the next few weeks all eyes will be on Carney and the Liberal leadership race. If Carney keeps hedging on pipelines, it will be unclear if this new consensus is real or just political expediency in the face of Trump’s tariffs.

For now Canada’s pipeline debate is no longer about energy or the environment—it’s about sovereignty, trade and survival in an uncertain global economy. Will this consensus last beyond the immediate crisis?