First Nations’ jurisdiction to enact property taxation laws, and the First Nations Tax Commission’s authority to review and approve these laws has been upheld in a recent decision from Justice Douglas Campbell of the Federal Court.
The case concerns the taxation of lands at a residential/resort community on Buffalo Point First Nation’s reserve at Lake of the Woods, in Manitoba. The Buffalo Point Cottage Owners Association brought the case because they were concerned about the transition from a fee for service arrangement to a system of property taxation.
The case dates back to 2010, when the Buffalo Point First Nation first began exploring the implementation of a tax regime. From 2010 to 2012 the First Nations Tax Commission met with the First Nation and the Cottagers several times to explain what implementing a tax regime entails, to review the procedures set out in the First Nations Fiscal Management Act (FMA), and to discuss potential impacts to the taxpayers. In early 2012 the First Nation passed its taxation laws, and submitted them to the Commission to review and approve. On June 25, 2012 the Commission approved the First Nation’s assessment, taxation, rates and expenditure laws.
The case was the first time the FMA (which came into force in 2006) or the Commission’s processes have been reviewed by a Court. The FMA is legislation designed to clarify and enhance First Nations’ taxation authorities. The Commission was created to support that jurisdiction, to take over the law approval function from the Minister, and to reconcile the interests of taxpayers with the responsibilities of Chiefs and Councils to govern the affairs of the Nation.
Justice Campbell noted that the First Nation had provided the Cottagers with a 48% reduction in their taxes in the 2012 tax year as a way to moderate the transition from a fee for service arrangement to a property taxation regime, and that tax rates going forward would be in line with the Commission’s Standards.
The Court also noted that there had been a high level of consultation and engagement with the Cottagers during the law development stage.
In the result, the Court recognized and respected the Commission’s mandate under the FMA. Justice Campbell dismissed the Cottagers’ arguments and found that the Commission’s decision to approve the First Nations’ laws was “reasonable in all respects.”
The Cottagers have appealed to the Federal Court of Appeal. A date for the hearing of the appeal has not yet been set.