NORTHWEST TERRITORIES
Dene National Chief Bill Erasmus is accusing the territorial government of lying to the federal government about the funding of a health program that has been in place since the 1970s.

Dene National Chief Bill Erasmus holds a letter from Health Canada which he says proves the GNWT is lying about a funding agreement between the Dene Nation and the federal government. Erasmus also says that the GNWT owes the Dene Nation more than $1 million in funding that it has withheld for the past eight years. He says the withheld money has put the Dene Nation in a financial crunch. Erasmus brought the issue to the public's attention at a news conference on April 21. - John McFadden/NNSL photo

Erasmus said the Dene Nation officially signed a health framework agreement with the federal government in 1988 that provided the Dene Nation with about $165,000 a year for the salary, office and travel expenses for the Dene Nation's director of health. He said the position still exists but the Dene Nation has had to fund it out of its own pocket for the past eight years.

He said that the original deal called for the GNWT to actually administer the funding but that the territorial government has been withholding the money since 2008, arguing that the Dene Nation owes the GNWT back payments in payroll taxes.

Erasmus said when he appealled to Ottawa he was told by a Health Canada official that the GNWT was claiming the withheld money was not related to a health transfer but in fact had been provided historically as core funding. Erasmus said somebody within the territorial government has misrepresented the facts in the original agreement and that has led to the funding impasse.

"The territorial government has to provide these funds to the Dene Nation," Erasmus stated in a news release.

"These are Indian monies from the Treasury Board to Health Canada are intended wholly to benefit our Dene communities. The GNWT is penalizing our people who rely on the Dene national office to work with them. The territorial government is trying to bully the Dene Nation and we are now calling their bluff. The GNWT does not have legislative authority over the Dene."

Erasmus said he believes the GNWT is withholding the funds because it wants the Dene Nation to comply with its payroll tax system, however, in 1995 the Dene Nation took the territorial government to court on the payroll tax issue and later agreed to an out-of-court settlement that stipulated that the Dene Nation did not have to pay the payroll tax.

Nonetheless, the GNWT has been withholding the federal funds for health since 2008.

"This affects us on a daily basis. We're behind in rent. We're behind in a whole number of areas. A million dollars is a lot of money," said Erasmus at a press conference April 21.

He said constitutionally, the territorial government cannot impose a tax on the Dene Nation unless its leadership agrees to it. Erasmus said the GNWT simply does not have jurisdiction on this issue.

Fund going toward debt: GNWT

Not surprisingly, the territorial government does not share the Dene Nation's interpretation and understanding of the issue.

Bill Merklinger, comptroller general for the GNWT, said the government has a different understanding of the issue and does not agree that it is withholding funding.

"Dene Nation owes the GNWT $352,179.89 (as of April 22) and the reason for that is Dene Nation is in arrears with respect of a payroll tax," said Merklinger.

"The funds from Health Canada . are being applied to (Dene Nation's) outstanding debt."

Merklinger said the Dene Nation was not given a free pass on payroll tax collection in the 1995 out-of-court settlement as Erasmus claims.

"The findings of that case were that the Dene Nation did have to deduct a payroll tax from employees' salaries and did have to remit it to the GNWT," said Merklinger.

He added he is not aware of any legal finding that precludes the GNWT from collecting a payroll tax from the Dene Nation and said the territorial government does have jurisdiction to impose the tax. Merklnger said he is hopeful a resolution can be found but if not, the GNWT is ready and willing to defend its position in court if it comes to that.