First Nations Tax Commission – Commission de la fiscalité des premières nations
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26th Sep 2017 | by: FNTC

This year marks the 20th anniversary of the First Nations Tax Commission or its predecessor, the Indian Taxation Advisory Board (ITAB) submitting a pre-budget submission (PBS) to the House of Commons Standing Committee on Finance (HoCSCF).

Each year, the FNTC submission has promoted policies to improve productivity for First Nations. The FNTC and ITAB have worked with First Nations to bring in over $2 billion in direct investment and revenues to First Nation lands. The FMA institutions have worked to provide tangible results for First Nations under legislation that is not program-based.

The FMA is about creating both fiscal and jurisdictional space for First Nations. It gives First Nations the freedom to exercise some responsibilities without the oversight of other governments, it has a legislative accountability framework and it provides tax authority with which to exercise these responsibilities.

The combination of fiscal and jurisdictional space also describes true “nation-to-nation” relations. It is an important part of what is needed in a new fiscal relationship and it has shown how to make First Nations as productive as the rest of the country.

In this year’s PBS, the FNTC is advocating a series of initiatives that will build upon this successful model. They are intended to amplify the benefits of the FMA to existing members, and extend the potential of the FMA to other First Nations, such as those entering into self-government or modern Treaty.

These initiatives will make the FMA more accessible to First Nations that are not well situated to develop property tax potential. They will create options even for First Nations that choose to not participate in the FMA. These initiatives can also support the conditions needed to help address the uncertainties and difficulties for major resource projects within First Nation territories.

The FNTC’s proposed initiatives include:

First Nations Infrastructure Institute (FNII)

The FMA institutions are requesting an amendment to the FMA to add a First Nations Infrastructure Institute. Numerous studies have shown that First Nation infrastructure is more costly, takes longer, and is less sustainable than other Canadian infrastructure.

FNII will ensure that First Nations get the most out of their investments in infrastructure and it will address the business infrastructure gap, which is a major impediment to development for many First Nations.

Aboriginal Resource Tax (ART)

The FNTC is requesting support for the development of a comprehensive tax regime that interested First Nations would apply to major resource projects taking place on their traditional territories known as ART. The ART is a pre-specified First Nation tax that would be coordinated with other governments through tax reductions.

The ART could replace the present arrangements by which First Nations receive revenues from major resource projects. The ART will simplify the task of negotiating First Nation consent on major projects, it would improve the integrity of the tax system and the ability for First Nations to finance infrastructure.

Expansion of Tax Room

The FNTC recommends the following fiscal powers to be added to the FMA: (a) Tobacco tax; (b) Cannabis tax; (c) Aboriginal Resource Tax; (d) First Nations Goods and Services Tax. First Nations need a fiscal relationship that provides more tax revenue authorities.

Fiscal space is a necessary component of nation status. When First Nations are assigned their own tax revenues they gain a stake in the economic success of their regions, they create a feedback mechanism between good economic policy and tax revenues; they reduce the administrative demands and uncertainty associated with pursuing federal transfers and grants. The FNTC also recommends that the arbitrary cap on FNGST revenues be removed.

Expanded Institutional Support

First Nations need more institutions to implement a nation to nation framework. These institutions need to be created by First Nations to understand the unique challenges facing First Nation communities. They must allow relatively small First Nations to retain the advantage of responsiveness while receiving some of the advantages of large governments.

First Nation institutions need to provide standards and standardized training; access to expertise; policy and legal templates; and support in legal and intergovernmental forums, to list just a few.

Indigenous Land Title Initiative (ILTI)

The FNTC continues to work with proponent First Nations to promote a system of property rights to give First Nation lands clear title to their land. It would also allow them to create a system of on-reserve property rights that allow individuals to earn wealth, borrow money, and invest with confidence. Clear, easily defined, well protected and transferrable property rights are the most fundamental building blocks of a productive market economy.

These proposals provide the land and tax foundation for a nation-to-nation framework with First Nations. They also provide the means to implement this framework through a new fiscal relationship and supportive institutions.

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