New Brunswick's top court has handed another revenue-sharing victory to the Madawaska Maliseet First Nation, just weeks before its retail tax agreement with the province is due to expire.

The province is obligated to hand over to the band government 95 per cent of the profits from video gambling machines at the Grey Rock Casino on the reserve, the ruling says.

The New Brunswick Lotteries and Gaming Corporation argued it had no legal obligation to share the revenue, insisting it was "essentially a policy decision, involving various social and economic factors," that could be made at its discretion.

But the New Brunswick Court of Appeal disagreed in a Jan. 12 ruling written by Justice Raymond French and signed by the two other justices who heard the case, Ernest Drapeau and Charles LeBlond.

"The Gaming Commission does not have the residual discretion it claims, and Madawaska ought to be paid its share of the net profit for the video gaming devices at the casino," the ruling said.

The case involves video lottery revenues from the Grey Rock Entertainment Centre located on the Madawaska Maliseet First Nation in Edmundston. (Submitted by Grey Rock Entertainment Centre)

French wrote that the commission "could not identify what the social and economic factors would include" if it were a discretionary decision.

The commission also claimed the term "video gaming devices" in provincial legislation referred only to Atlantic Lottery Corporation machines that used to be at the casino — not the machines owned by the casino that are there now. 

French rejected that, saying the plain meaning of the phrase "video gaming devices" also covered the gambling machines in place today.

The ruling upholds a Court of King's Bench decision last year that found the band met all the requirements to be covered by the revenue-sharing provisions in the law.

Separate deal

"We said, and courts at both levels accepted, that that meant New Brunswick was required to share its gaming profits from the Grey Rock Casino with Madawaska," said Nick Kennedy, a lawyer who argued the band's case.

"So in our view it was very straightforward." 

Kennedy said because the tax and gambling deals are separate agreements, the video gaming revenue won't be affected by the looming expiry of the tax deals.

According to the court ruling, Madawaska's 95 per cent share of profits from video lottery terminals was $1.8 million in 2015.

But after the casino opened on the reserve that year, the gaming corporation reduced what it was paying. The amount dropped to less than $10,000 in 2018, after the Atlantic Lottery Corporation removed the last of its machines.

The tax deals require the province to remit 95 per cent of tobacco, diesel, gasoline and sales tax revenue from on-reserve retailers to band governments.

New Brunswick Premier Blaine Higgs, speaking of tax revenue-sharing, said last week the province had made offers of alternative funding models, but First Nations chiefs have not come to the bargaining table. (Jacques Poitras/CBC)

The Higgs government announced in 2021 it would terminate those agreements, the same year First Nations successfully argued that carbon tax revenue should be included.

The deals with six Wolastoqey bands, including Madawaska, expire at the end of this month. 

On Monday, Liberal leader Susan Holt criticized Premier Blaine Higgs for what she called a "confrontational, my-way-or-the-highway approach" and said he should return to negotiations to reach tax agreements acceptable to everyone.

Liberals agree with First Nations 

She said her party supports the First Nations position, and Higgs is setting back efforts at reconciliation with Indigenous people.

"We're really concerned about the fact that these tax-sharing agreements are expiring and nothing has been organized in their place," Holt said.

Higgs and Aboriginal Affairs Minister Arlene Dunn should "cancel the cancellation" until new agreements can be struck, she said.

The premier said last week the province has offered new agreements that would have the province fund health, housing, social assistance and education programs on reserves, but that bands have not come to the table.