Once a First Nation has joined the FMA and is operating its property tax system, there are four stages to the local revenue borrowing process.
Preparing to Borrow
1. Once a First Nation has enacted a FAL, they can then apply to FMB for certification.
2. A project plan is required for the approval of the First Nation’s Long term Borrowing Law and for the FNTC to issue a borrowing certificate for the proposed borrowing. Project planning can begin while the financial management requirements are being completed.
3. After the First Nation has obtained a financial performance certification from the FMB, the First Nation can apply to the FNFA to become a borrowing member.
The First Nation will then work with the FNTC to draft a borrowing agreement law, and identify any of the First Nation’s other local revenue laws that require amendments prior to borrowing. The First Nation completes any notice requirements, enacts the borrowing agreement law and any required amendments to other laws, and submits the laws and supporting documents to the FNTC for approval and publication in the First Nations Gazette.
4. Upon completion of its project plan, the First Nation prepares a draft Long Term Borrowing Law and completes the public notification requirements. The First Nation then enacts the long term borrowing law and submits the law and supporting documents to the FNTC for approval and publication in the First Nations Gazette.
After the long term borrowing law has been approved by the FNTC, the FNTC will issue a borrowing certificate and forward a copy to the FNFA.
FNFA pools borrowing requests and when a sufficient amount is assembled, they will issue the debenture then lend the proceeds to each First Nation.
The First Nation then proceeds with construction of the infrastructure project and begins repayments to the FNFA. Repayments to the FNFA are included in the First Nation’s annual local revenue budget in priority to other expenditures, and are included in the First Nation’s annual expenditure law approved by the FNTC.]]>