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

FMA Amendments

On December 13, 2018, a number of amendments to the FMA came into force. These amendments include proposals advanced by the Commission, the First Nations Financial Management Board and the First Nations Finance Authority over the last 3 years, as well as “bijural” amendments to ensure that the FMA is fully operational in Canada’s common law and civil law jurisdictions.

The amendments are aimed at clarifying certain aspects of the legislation, addressing gaps in the legislation, increasing the flexibility of the legislation and expanding access to the legislation.

Amendments that will be of particular interest to taxing First Nations include the deletion of subsection 5(6) of the FMA; correcting a drafting inconsistency in section 7 by including reference to fee laws made under paragraph 5(1)(a.1); correcting a drafting inconsistency between section 6 and subsection 31(2) in respect of written representations made to the Commission; and new standard-making powers for the approval of delegation laws and taxation laws related to joint reserves.

Taxing First Nations will also be impacted by certain “bijural” amendments, in particular the new definitions that are now included in the FMA for “interest” and “right”.   The Commission will be updating all of its standards and sample laws to incorporate the new definitions, and First Nations are encouraged to consider making corresponding updates to their taxation laws.

Key amendments that were advanced by the First Nations Financial Management Board include amendments to section 53 to clarify the Board’s role in third party management; and a new section 50.1 to enable the Board to provide law review services, and financial performance and management review services, to First Nations that are not scheduled to the FMA and other entities.

Key amendments that were advanced by the First Nations Finance Authority include an amendment to section 61 to limit its board to borrowing member representatives; an amendment to section 74(d) to enable the Authority to provide investment services to a broad range of entities; amendments to section 84 for internal consistency and to enable First Nations to recover amounts owing to the Authority under a property taxation law or using other revenue sources; and a number of amendments to clarify that the Authority can finance capital assets, which includes capital infrastructure.

The amendments also include two new regulatory powers.  A new section 141.1 to enable the Governor in Council to make regulations to expand access to financing from the Authority to specified non-First Nation entities, and to enable the Board to provide services to those entities; and a new section 141.2 to enable regulations in respect of joint reserve taxation.

In addition to amendments advanced by the fiscal Institutions, the FMA now includes a new Part V that enables FMA First Nations to request that Canada pay to the First Nation all moneys held for the use and benefit of the First Nation, including moneys to be collected or received by Her Majesty in the future. Part V sets out a process for a First Nation to make this request, and includes a requirement for an approved financial administration law and approval of members through a community vote.

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