• FMA TOOLKIT: CAPITAL INFRASTRUCTURE TOOLS

These FMA law options are available for First Nation governments to help pay for needed infrastructure.

  • Development Cost Charges:
    A DCC is a unique local revenue. It is a one-time charge collected from developers of reserve land at the time of building or development approval. DCCs are used to offset some of the infrastructure and land costs directly or indirectly attributable to development.
  • Services Taxes:
    The Service Tax law power provides First Nations with the power to levy taxes that are used to pay for the costs of providing services to reserve lands.
  • Borrowing Laws:
    First Nations have the ability to use their tax revenue to access long term debt financing for capital infrastructure projects.

The FNTC has established Standards for the Form and Content of Capital Infrastructure Laws. You can find the standards, guides and samples on right sidebar: or below on small screens:

  • Development Cost Charges Law

First Nations may enact a Development Cost Charges (DCC) Law under the FMA.

DCCs are one-time fees that are collected from developers working on reserve lands to offset some of the capital infrastructure costs required to service the needs arising from the new development. DCCs are generally payable by the developer at the time of the building permit, subdivision or development approval or, where subdivision approval is not required.

These levies may only be collected for capital costs that are required in order to service, directly or indirectly, the development for which the charge is being imposed.

DCCs can only be used to help pay the capital costs associated with one or more of the following:

  • Providing, constructing, altering or expanding sewage, water, stormwater drainage and transportation facilities
  • Providing and improving park and recreation land

Prior to law development, a First Nation must undertake a number of capital planning steps to determine the types of services that will be required, the scope of the projects, and the appropriate DCC charge for each DCC class of service. This information will inform the law development process.

The capital costs used to determine the DCC’s to be levied must comply with all statutory requirements, any regulations made under the FMA and applicable FNTC standards and be supported by a long-term capital plan, a local government regional growth strategy, official community plan, or other regional development plan, or a service agreement with a local government.

The FNTC has established Standards for First Nation Development Cost Charges Laws.

If your First Nation is considering developing a DCC Law:

  1. Contact the FNTC to discuss the process Email FNTC Toll Free: 1-855-682-3682
  2. Request a FNTC presentation to your Chief & Council and senior staff

If your First Nation has decided to proceed with DCC Law Development:

  1. Ask FNTC about the Law Development Grant
  2. Develop a law development work plan in conjunction with the FNTC
  3. Download the Standards for First Nations DCC Laws and sample Law

Notification Requirements:

  1. Download and review Understanding the FMA Notice Requirements
  2. Provide a section 6 (s. 6) notice period of at least 45 days
  3. If there are taxpayers on reserve, the s. 6 notice must be published in at least one of the recommended ways
  4. There are also specific requirements that must appear in the notice
  5. The long-term capital plan, service agreement or other planning document used to support the charges must be made available to the public and posted in a prominent place on the First Nation’s website
  6. View Webinar: Notification and Public Input Under the FMA

Submission:

  1. Download and review Standards for the Submission of Information Required Under s. 8 of the FMA (Submission Standards)

Information required includes:

  1. Confirmation the First Nation provided the necessary additional information in its s. 6 notice and on its website
  2. Copies of the long-term capital plan, service agreement or other planning document used to support the charges
  3. Evidence that the law was duly made
  4. Sample s. 8 notification letter DCC (can’t find this one!)

  • Service Tax Law

First Nations may enact a Service Tax Law under the FMA.

Unlike property taxes, which provide local revenues that may be expended in a number of areas, service taxes are collected to fund a specific service being provided by or on behalf of the First Nation.

All revenues and interest collected from a service tax must be spent only on the specific service for which they are collected.

Service taxes are often levied to fund a specific capital improvement, and are levied for a fixed number of years to pay for the cost of the improvement.

Capital improvement projects that may be funded by a service tax include:

  • Transportation infrastructure
  • Sewer and water systems
  • Park acquisitions and improvements

The cost of the work undertaken as a provision of services is usually paid up front by the First Nation then recovered from property owners through the service tax. Service taxes may apply to the entire reserve, or only to a defined area.

Service tax laws enacted under the FMA must comply with all statutory requirements and regulations made under the FMA, along with applicable FNTC standards. The FNTC has established Standards for First Nation Service Tax Laws, and can be found on right sidebar: or below on small screens:

If your First Nation is considering a Service Tax Law:

  1. Contact the FNTC to discuss the process Email FNTC Toll Free: 1-855-682-3682
  2. Request a FNTC presentation to your Chief & Council and senior staff

If your First Nation has decided to proceed with a Service Tax Law:

  1. Ask FNTC about the Law Development Grant
  2. Develop a law development work plan in conjunction with the FNTC
  3. Download and review the Standards for First Nations Service Tax Laws and sample law

Notification Requirements:

  1. Download and review Understanding the FMA Notice Requirements
  2. Provide a s. 6 notice period of at least 45 days. If there are taxpayers on the reserve, publish the s. 6 notice in at least one of the recommended ways before the first day of the s. 6 notice period
  3. View Webinar: Notification and Public Input Under the FMA

Submission:

  1. Download and review Standards for the Submission of Information Required Under s. 8 of the FMA (Submission Standards)

Information required includes:

  1. Evidence that the law was duly made

  • Borrowing Laws

First Nation governments have the ability to use their tax revenues to access long term debt financing for capital infrastructure projects or to refinance existing capital projects.

Under the FMA, First Nation governments can participate in the debenture financing system and borrow money based on the certainty of collecting property tax each year. Local revenue debt financing principally involves the FNTC, the First Nations Financial Management Board (FNFMB) and the First Nations Finance Authority (FNFA).

Under the system, participating First Nations pool their financing requirements and the FNFA sells the collective debt in the form of an investment grade fixed income security (i.e., a debenture or bond). First Nations repay their loans over a long period (usually between 15 and 25 years) by using a portion of their annual property tax revenues.

In order to participate in this system, First Nations must be certified by FNFMB and borrowing members of the FNFA, and make a borrowing agreement law.

In addition, each loan from the FNFA must be authorized through a borrowing law made by the First Nation.

The Annual Expenditure Law sets out how the First Nation:

  • Intends to spend the property tax revenues it will collect
  • Authorizes grant amounts
  • Establishes reserve funds

If your First Nation is considering a Borrowing Law development:

  1. Contact the FNTC to discuss the process Email FNTC Toll Free: 1-855-682-3682
  2. Request a FNTC presentation to your Chief & Council and senior staff

If your First Nation has decided to proceed with Borrowing Law development:

  1. Ask FNTC about the Law Development Grant
  2. Develop a law development work plan in conjunction with the FNTC

Long-term Capital Borrowing Law:

  1. Download the CBL standards and sample laws and sample letters

Long-term Capital Refinancing Law:

  1. Download the CRL standards (CAN’T FIND CRL Stds) and CRL sample laws and sample letters

Notification Requirements:

  1. Download and review Understanding the FMA Notice Requirements
  2. View Webinar: Notification and Public Input Under the FMA

Submission:

  1. Download and review Standards for the Submission of Information Required Under s. 8 of the FMA (Submission Standards)

Information required includes:

  1. Evidence that the law was duly made

  • FMA TOOLKIT: ADDITIONAL LOCAL REVENUE LAWS AND RESOURCES