The Canada Revenue Agency has backed down from an effort to collect more than $2 million it is owed by the Elsipogtog First Nation.
Court documents state Elsipogtog owes Revenue Canada $1,173,265.16 in for employee remittances that were not paid from fiscal years 2010 through 2013. Aboriginal Affairs and Northern Development Canada had also served notice that it intended to withhold 15 per cent of Elsipogtog's targeted program funding from Nov. 1, 2013 through March 31, 2014, for a total of $848,366.
Also at issue is $716,858.85 Elispogtog maintains it is owed by the federal government for completing reports that trigger the payment of federal funds for targeted programming in aboriginal communities.
Elsipogtog filed in court on Oct. 3 for an injunction to block the financial seizure, stating CRA's actions would cause it "irreparable harm, which cannot by compensated for in damages."
In an affidavit, Chief Aaron Sock said such an action would force Elsipogtog into bankruptcy and hundreds of people would be affected as its social programs would no longer be viable.
For example, Sock's affidavit states Elsipogtog provides social assistance of $80 a week to 1,300 members, for a gross weekly payment of $104,000. The band also pays the rent and electricity bills for social assistance recipients
Sock states if funding is withheld "the Band will be unable to make social assistance payments to those who are most in need.
"If the Band is unable to pay social assistance to its Band members and pay rent and hydro expenses, it is likely that landlords will evict their tenants and NB Power will cut off all electricity, leaving band members without a place to live."
The Canada Revenue Agency relented on its attempts to collect after the band filed for the injunction. The agency won't say why it changed its position.
Elsipogtog's lawyer, T. J. Burke, says it is "no secret that the band has been in financial trouble" and is in a co-management of its financial affairs with Rodney Doyle of Teed Saunders Doyle & Co. Chartered Accountants.
"That is not uncommon for bands across the province, for bands across the country," said Burke. "They have very limited opportunity to develop what they call own-source revenue because of their locations, because of the history between particular communities, because of skill sets, because of a variety of things."
Burke said Elsipogtog is exploring ways to create own-source revenue through a parcel of land it owns near Moncton that can be developed for band purposes as possible site for a restaurant, commercial rental properties, or "by creating gaming opportunities."
"There are a host of opportunities that the band can engage themselves in but they need co-operation from the province," said Burke. "And right now, they're not getting a tremendous amount of co-operation from the province."