It’s another revenue source but not necessarily a huge windfall for playing host to two large malls.
Since May 1 of this year, the Tsawwassen First Nation has been getting a share of the GST generated by the Tsawwassen Mills and Tsawwassen Commons shopping centres under a tax revenue sharing scheme with the federal government.
The TFN, meanwhile, is still negotiating with the province for a cut of PST generated on Tsawwassen lands.
Under the tax sharing deal with Ottawa, the feds collect and enforce the tax, then a portion of that revenue is distributed to the First Nation as part of the First Nations Goods and Services Tax Administration Agreement.
However, instead of getting a cut of every pair of shoes or winter tires sold, the TFN only collects on goods and services consumed on Tsawwassen lands. So, dine-in meals and fuel purchases count but, according to the TFN, given that so much of what is bought at the malls isn’t consumed on site, the tax attributable pool is far smaller than most would expect.
The TFN share of federal tax revenue is expected to be about $750,000 this year.
The TFN receives a set portion up to a certain threshold, half that amount to the next threshold and a small portion once the second threshold has been passed. The balance of the tax collected remains with Canada.
“The federal tax revenue-sharing agreement certainly isn’t a giant windfall, so to speak,” a TFN official told the Optimist. “The vast majority of GST raised on Tsawwassen lands continues to go to Canada.”
“Based on projections of economic activity on Tsawwassen lands, preliminary estimates suggest that roughly $27 million in federal tax revenue will be associated with Tsawwassen lands this fiscal year. If these projections turn out to be accurate, that would put TFN’s share of federal tax revenue at approximately three per cent,” the official said.
The TFN is engaged in discussions between Canada and self-governing First Nations about revisiting finance models, including an improved tax-sharing agreement.
