September 24, 2018
Proposed Standards for First Nations Property Tax Laws, 2016
Standards established by the First Nations Tax Commission (FNTC) reflect best practices in property taxation, and are designed to support First Nation economic growth, First Nation jurisdiction, property tax harmonization, and the interests of all stakeholders in the First Nation property tax system.
Under the First Nations Fiscal Management Act (FMA or the “Act”), the FNTC reviews and approves laws. Section 35(1)(a) of the Act gives the FNTC the authority to establish standards, not inconsistent with the regulations, respecting the form and content of local revenue laws. The standards established by the FNTC are additional requirements and, together with the Act and its associated regulations, form the regulatory framework governing First Nation taxation under the Act.
As a matter of policy, the FNTC seeks public input prior to introducing or significantly amending its standards. This input is critical in developing standards that are acceptable and effective for participating First Nations and their taxpayers.
The Standards for First Nations Property Tax Laws, 2016 set out the minimum requirements that must be met for First Nation property taxation laws enacted under paragraphs 5(1)(a) and (e) of the FMA. These standards include standards for permitted exemptions from taxation.
The FNTC has long enabled the use of property tax exemptions for First Nation corporations in First Nation property tax laws and by-laws. This approach is reflected in the FNTC’s sample property tax laws and by-laws.
In September 2018, the First Nations Tax Commission approved proposed changes to existing property taxation standards regarding exemptions for interests in land held by First Nation corporations.
The proposed changes would expand and modify the permitted exemptions by replacing the definition of “First Nation Corporation” in the Standards with a definition that:
– includes corporations and partnerships;
– enables the direct holding of shares in the corporation/partnership by the First Nation; and
– clarifies that the at least 50% of the corporation’s issued and outstanding shares must be beneficially owned by the First Nation, and that the partnership must be at least 50% beneficially owned by the First Nation.
These changes would recognize that First Nations are increasingly utilizing partnerships with the private sector for development projects, in addition to corporations. The changes would also recognize that First Nations may hold interests in partnerships or corporations directly, and not only in trust.
The FNTC is seeking public input in respect of these proposed Standards. For more information, please contact the FNTC at firstname.lastname@example.org or by telephone at (250) 828-9857. Electronic versions of the proposed Standards are available at www.fntc.ca or by clicking the link below:
Please direct your written comments on or before November 2, 2018 to:
First Nations Tax Commission
321-345 Chief Alex Thomas Way
Kamloops BC V2H 1H1
Telephone: (250) 828-9857
Fax: (250) 828-9858