The story of First Nations property tax jurisdiction is well known. When First Nations assumed permanent property tax jurisdiction over their own lands, it started a process of economic renewal. It attracted investment and land values rose. The value of the taxes collected from those lands grew quickly. There were substantial improvements in opportunities and services for members. Many First Nations became major contributors to their regional economies.
This story is used to explain the Commission’s perspective: permanent First Nation tax room and First Nation control of services makes everyone better off. Much of our economic disadvantage is a result of the failure of other governments to properly acknowledge First Nation tax jurisdiction since confederation. In fact, in the 1920s, the ability to raise any revenues was taken away. As a result, First Nations became dependent on other governments. With no money and no power, the decisions that affected the daily lives of First Nations were often made in Ottawa or regional offices.
First Nation assumption of property tax and other tax jurisdictions started to correct this historic injustice. However, it was only a start. First Nation tax jurisdiction has been constrained to reserve lands. These are small in size relative to our historic territories, and many are poorly sited. As a result, not all First Nations have been able to take advantage of their tax jurisdiction.
However, because of the Commission’s experience with property tax we see the path forward. Tax jurisdiction had let the economy work for First Nations. It provided First Nations with the capacity to participate in the economy and to share directly in the benefits when business succeeds. Once First Nations were able to generate their own revenues it began to free them from having revenues determined by some arbitrary standard that is unrelated to national standards.
Tax jurisdiction allows First Nations to move away from a world where their priorities are dictated by other governments. It also provides a measure of protection. When times are hard, transfers to other governments are always the first things to be cut. As is well known, for many years, First Nations have lost progress on transfers and funding levels compared to services in other jurisdictions.
The way forward to correct this is by expanding First Nation tax jurisdiction. The FNTC is exploring how this could be achieved through an Aboriginal Resource Tax (ART). The ART would allow First Nations to establish tax jurisdiction over their whole traditional territory and generate revenues from new projects on their territory.
The development of an ART makes good economic, fiscal and political sense for both First Nations and Canada. It would signal in a very real way Canada’s commitment to correcting a historical injustice and instituting true nation to nation relations. It would provide more stable revenues to support a new fiscal relationship. It would improve the investment climate. First Nations could develop more self-sustaining economies and governments and move towards greater independence.
The FNTC has been working with interested First Nations to discuss and advance the ART. For more information on the ART, or to schedule a presentation on this important initiative, please contact the FNTC at email@example.com.