CBC News has learned the provincial government is cancelling a tax and gaming revenue-sharing agreement with First Nations across New Brunswick.

The agreement allocates funding and determines tax rebates, but the province says it unevenly distributes government resources, when considering factors such as population, location and social and economic conditions.

Joe Sacobie

The Chief of Oromocto First Nation says his community will lose out if a tax and revenue sharing agreement with the provincial government is cancelled. (CBC)

It plans to bring in a new formula that will see some First Nations get more money back from the government, while others get less.

"It's almost like it will divide us when we're trying to come together as a community," said Chief Joe Sacobie of Oromocto First Nation.

Sacobie said members of his community have recently been coming together more often to celebrate their growth and prosperity.

He said their livelihood could now be in jeopardy.

"It's becoming pretty strong lately. But with the taxation situation, it's kind of like a hit below the belt," said Sacobie.

Oromocto First Nation

Oromocto First Nation has recently prospered under the existing tax and gaming revenue sharing deal with the provincial government. (CBC)

The provincial government gave First Nations, such as Oromocto, 90 days notice, that the deal in place is to be terminated in November, but said there would be no immediate impact on revenue streams, and the changes would be introduced gradually over a period of five years.

The government makes the case that a new deal would be benefit businesses off reserve.

Blaine Higgs

Finance Minister Blaine Higgs says the tax and revenue sharing agreements are being cancelled because they unfairly distribute government resources. (CBC)

"This issue is looking at fairness in terms of other businesses that are either associated with or in the proximity of First Nations communities and saying they pay tax and the other business that's on the First Nation community gets it refunded," said Finance Minister Blaine Higgs.

Sacobie said the province should abandon the plan.

St. Mary's First Nation is also against the cancellation of the deal.

"I'm hoping we can sit down and have negotiations and talks go all well and something will be resolved before Nov. 9," Sacobie said.

The government said change is necessary and the plan will be carried through if the Progressive Conservatives are still in office after the election.