First Nations Tax Commission – Commission de la fiscalitè des premières nations

B.C. Treaty Taxation: The FMA Option

Indian Act or the First Nations Fiscal Management Act (FMA), and the First Nation must thereafter operate its property taxation system in accordance with the terms of the Treaty. Under the current B.C. Treaty model, the Province is given taxing jurisdiction over non-members residing on First Nation lands, while the First Nation has taxing jurisdiction over its members. For property taxation, the practice is for the Province to delegate its jurisdiction to the First Nation under a “Real Property Tax Coordination Agreement.” This agreement sets out the terms and conditions under which the First Nation can levy property taxes on non-members. Although Treaty First Nations can no longer be scheduled to the FMA, they can access the FMA under a section 141 regulation. Section 141 of the FMA allows Canada to make a regulation to enable a First Nation to benefi t from the FMA, or to obtain the services of any body established under the FMA. Since 2009, the Commission, the FMB, the FNFA, Canada and the Province have been working to develop a section 141 regulation to enable existing Treaty First Nations to access the FMA for the purposes of pooled borrowing. To date no regulation has been finalized. More recently, a number of First Nations currently in Treaty negotiations have asked the Commission to explore a new option for Treaty property taxation. The proposal is to give Treaty First Nations the option to use the full scope of the FMA post-Treaty. This would enable a First Nation to levy property taxes under the FMA, to have a financial administration law under the FMA, and to access pooled borrowing with the FNFA. Using the full scope of the FMA post-Treaty offers a number of benefits to taxing First Nations. First Nations would continue to have full taxing jurisdiction on their lands, the full scope of local revenue powers, strong tax enforcement provisions, institutional support from the Commission, the FMB and the FNFA, and access to capital through FNFA pooled borrowing. First Nations that have invested in their property taxation systems could continue to use those systems rather than dismantling their systems and creating new ones. Implementing this option would require agreement and support from the federal and provincial governments and the First Nation. Changes would be required to the current treaty language, particularly in the taxation and fi nancial administration chapters, and government fi scal policy review would be required to ensure the option is fi scally viable. The option would be enabled through either a section 141 regulation or amendments to the FMA itself. The Commission is continuing to explore this option with interested First Nations, and to consider the specific implementation requirements.]]>

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