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  • FNTC: NEWS

Public Policy Forum – Expanding the Circle

In February 2017, the Public Policy Forum held a one-day conference, “Expanding the Circle: What Reconciliation and Inclusive Economic Growth Can Mean for First Nations and Canada”. With approximately 150 delegates, the conference was co-hosted by the National Aboriginal Economic Development Board, the National Aboriginal Capital Corporation Association and Indigenous and Northern Affairs Canada.

FNTC’s Chief Commissioner C.T. (Manny) Jules appeared on a panel, “Taking Action for Reconciliation and Inclusive Economic Growth”, where he outlined his position for improving the numerous economic development challenges facing First Nations and how they can become part of the national economy.

This includes the creation of an institutional basis for First Nations to move forward. Chief Commissioner Jules discussed some of the initiatives the FNTC is working on with First Nations, including an infrastructure institute, a land title registry and an aboriginal resource tax.

Chief Commissioner Jules also spoke about the commitment by the federal government to create a new fiscal relationship with First Nations. However, he stated the relationship must not be based on program-based financial transfers, as the financial need will never be met. “I don’t want to create a situation where our governments are managing poverty, and that could happen as a result of a new program-based fiscal relationship. Our governments have to be able to manage wealth. They have to be able to set up standards to facilitate economic development growth. We have to own our own lands.”

Chief Commissioner Jules, in keeping with the theme of the segment of ‘taking action for reconciliation and inclusive economic growth’, said this means the work begins with First Nations.
“We, as Indigenous people, have to come up with the solutions. There’s no way that the federal government, provincial governments or indeed the municipal governments can come up with the solutions. This has to come from us.”

The Minister of Indigenous and Northern Affairs, the Honourable Carolyn Bennett, and the National Chief of the Assembly of First Nations, Perry Belgarde, addressed the delegates in separate presentations.

Later in the day, the keynote address was delivered by the Honourable Jody Wilson-Raybould, the Minister of Justice and Attorney General of Canada. Minister Wilson-Raybould outlined the federal government’s plan to review laws and policies related to Indigenous Peoples. A working group of ministers will be responsible for the review and will examine relevant federal laws, policies, and operational practices to help ensure the Crown is meeting its constitutional obligations with respect to Aboriginal and treaty rights; adhering to international human rights standards, including the United Nations Declaration on the Rights of Indigenous Peoples; and supporting the implementation of the Truth and Reconciliation Commission’s Calls to Action.

Minister Wilson-Raybould will chair the working group, which will be comprised of six ministers who have significant responsibilities for the relevant statutes and policies to be reviewed. The working group will first develop a workplan and set of principles, which will reflect an all-government approach that addresses all Indigenous Peoples.  Minister Wilson-Raybould said First Nation-led institutions should play a key role in rebuilding the relationship with First Nations. “As we move forward, in my opinion, we also need to give more consideration to how we support Indigenous-controlled institutions that advance nation rebuilding, so that it is Indigenous peoples that govern these institutions with a vested interest in the outcome of the work they do and the decisions they make… I am also very well aware of the Fiscal Management Act and the importance of the initiatives to strengthen the ability of First Nations to raise revenues as well as borrow monies from the bond market and generally establish sound financial administration systems. The role of the First Nations Finance Authority, the Financial Management Board and the First Nations Tax Commission, are very critical. And in my opinion, there is a need to consider how we can support additional Indigenous institutions that support nation rebuilding.”

The working group will work with Indigenous leaders, youth, and experts on various legal and policy questions relating to Indigenous Peoples. At the conclusion of her remarks, and in keeping with the work of the working group, the Minister offered to meet with the Chairs of the FMA institutions in April.

10 April, 2017|

The Canadian Property Tax Association – Bringing Together Professionals in Taxation

Clearing the Path recently spoke with Brian Dell, executive vice president of the CPTA, and asked him to inform our readers on the work of the CPTA.

I am delighted to have this opportunity to give the readers of Clearing the Path a bit of insight into the Canadian Property Tax Association (CPTA). Our organization has had the privilege of working with the First Nations Tax Commission (FNTC) for the last 10 years, providing commentary and support on FNTC legislative reform and implementation of property tax initiatives. Prior to formation of the FNTC, the CPTA worked closely with the former Indian Taxation Advisory Board.

The CPTA was founded in 1967 and “is a national organization providing a forum for the exchange of ideas and information relating to both commercial and industrial property tax issues arising across Canada”. The CPTA consists of four regional chapters being British Columbia, Ontario, Quebec and Eastern Canada, and Western. A Board of Directors oversees the membership and operations of the CPTA on a national level and provides guidance and support to the four Chapters, with each Chapter having its own Executive Committee. On a regional basis each Chapter brings its expertise to a diversity of issues in the area of property taxation, whether it be commentary on provincial legislative change or more localized assessment practices.

The constitution of the CPTA sets the aims and objectives of the organization as follows: to provide a forum and information exchange in the field of assessment and taxation of property to promote the equitable assessment of property tax purposes along sound and uniform lines to study existing and proposed legislation and make representations to Governments to perform such other functions as are consonant with the foregoing purposes.

Consistent with its objects, the focus of the CPTA is to advocate from the perspective of the taxpayer, keeping in mind recognition that revenues generated from a fair distribution of property tax across the entire assessment base are vital to the public need and good government. In furtherance of its objectives the CPTA draws from its diverse membership which includes in-house and external property tax consultants, assessors, appraisers, legal practitioners, and property tax officers within various public and private organizations.

The CPTA meets its objectives by bringing together various professionals in taxation through an open flow of information and knowledge relating to the property tax industry. Among the tools employed by the CPTA to keep its membership informed of current issues and developments are education seminars and a bi-monthly newsletter, Communication Update. In the fall of each year our members gather at a National Workshop for 3 days of learning seminars, and equally important, the opportunity to network with other experts from across Canada.

In addition, each Chapter organizes its own education seminars, breakfast or luncheon meetings, round table meetings or other functions to keep the membership connected and informed. The CPTA also takes an active role in consultation with government and participates in various adhoc stakeholder committees providing insight from the taxpayer’s point of view.

We at the CPTA understand the challenges associated with working in an environment were there are numerous diverging opinions, whether they are issue specific or of national reach. Elements of regional interests and local economy must often be balanced against global principles. As is often said, there is seldom one single right answer to any question, however through openness, transparency, an appropriate exchange of information, and mutual respect and professionalism, collectively we can strive to achieve the best answer concurrent with the times.

The FNTC has made strong progress towards fostering open, fair and transparent property taxation on first nation lands. The hallmarks of a healthy property tax regime, from a taxpayer’s perspective not only involves transparent legislative and regulatory processes, but also engages full disclosure of how an assessment has been prepared, the existence of an impartial and independent assessment review system, while all leading to the comfort that there exists in any local a fair distribution of tax burden.

The FNTC has made significant inroads in promoting a clear and discernible path for property taxation regimes on first nation lands. We at the CPTA look forward to forging the relationship between our organizations through continued and productive dialogue.

Brian Dell
Executive Vice President, CPTA
26 October, 2016|

Profile: Commissioner Price

Commissioner Randy Price is a chartered accountant and respected natural gas pipeline industry tax professional from British Columbia with 30 years experience in taxation. He has extensive experience with First Nation tax issues as they relate to the interests of non-Aboriginal commercial taxpayers, particularly in his time as Vice President at Westcoast Energy Inc. and Duke Energy Corporation between 1994 to 2003 and is currently consulting, in association with PriceWaterhouseCoopers (PWC). Clearing the Path recently had the opportunity to sit down with Commissioner Price to discuss his experience and involvement with FNTC.
First I’d like to ask a bit about your background in the energy industry? During my years at Westcoast Energy, I acquired a keen interest in aboriginal affairs and was part of the team that developed a number of initiatives to improve the opportunities for First Nations that were in the geographical area of our operations in BC, Ontario and New Brunswick as our pipelines crossed a number of reserves and traditional territories and we had both commercial and utility interests. After retirement, in 2004 I was part of a team working with the Gwich’in Tribal Council of Inuvik, an Inuit tribe, negotiating an access and community benefits agreement with the proponents of the Mackenzie Valley Pipeline. With the help of the ITAB, we supported the Gwich’in and the First Nations south of Inuvik in making the decision that property tax should be a key demand in the negotiations, as getting fiscal powers and the revenues that flow from them make aboriginal governments more politically and economically independent. All successful nations in the world have fiscal powers and levy taxes.
What brought you into the field of property taxation? I had responsibility for property tax in 1990 and for the last 13 years of my employment with Westcoast Energy, which largely corresponded to the commencement of First Nations receiving the right to levy property taxes following the “Kamloops Amendment” to the Indian Act in 1988. I keenly followed First Nations’ acquisition of property taxation powers through the years after first listening to [Chief Commissioner] Manny Jules, then a member of the Kamloops Indian Band Council, at the 1978 Canadian Tax Foundation in Montreal outlining his vision for a First Nations property tax regime; then seeing his vision materialize through the Kamloops Amendment to the Indian Act in 1988, to the creation of the ITAB; and finally through the seven years it took to deliver the FMA in March 2005. As Westcoast Energy’s pipelines ran through seven reserves, some First Nations began to assert jurisdiction for property tax and tax bills began to arrive from new sources.
From your perspective, what is a concern taxpayers may have in respect to First Nation taxation? The biggest concern of large utilities was simple, they bore the highest property taxes levied by both non-aboriginal and aboriginal taxing authorities. Westcoast Energy’s property tax in the 1990s was $60 million dollars which was 12% of its gross revenue. It was the largest property in BC in any industry. Also, it is important that tax rates and the assessment approaches to calculating the taxable/ assessed value be predictable and materially the same for all taxing jurisdictions in BC. The FMA and the FNTC Standards help to harmonize the non-aboriginal and aboriginal tax regimes.
In light of the Tsilhqot’in decision, the FNTC has done extensive research around the concept of an Aboriginal Resource Tax. In your view, how would such a tax help in moving development along? Because of my work in aboriginal affairs at the community level, I was an early believer in what property taxes could do to improve the lives of First Nations peoples living on reserves. The 2014 Tsilhqot’in decision in the Supreme Court of Canada offers First Nations a significant opportunity to reduce poverty on reserves by opening the window to expanding their share of resource revenues beyond the boundaries of the reserve into their traditional territories. The Aboriginal Resource Tax (ART) is a concept the FNTC is working with the Tsilhqot’in and other nations that want to benefit from the Supreme Court Decision. The ART is being structured to carve out a share of the total taxes that a resource investment can deliver. This means that it is not an add-on tax but a sharing of the fiscal tax field between aboriginal and non-aboriginal governments. An important additional benefit is that an investor/developer, by agreeing to pay the tax levied by the First Nation(s) respects the infringement on their aboriginal title and can get on with the resource investment. We believe an ART can avoid lengthy negotiations and court battles which can take decades to settle with their attendant staggering costs and is the best option for all parties in terms of growing economies and creating prosperity for First Nations.
26 October, 2016|

Community Profile: Tk’emlúps te Secwepemc

The effective management of the Tk’emlúps te Secwépemc (TteS) property tax system provides a snapshot of the possibilities when First Nations successfully implement their tax jurisdiction. As the pioneers of taxation authority, TteS has been able to move forward with clear results such as employment, strengthening community and building infrastructure through property tax implementation.
Tax dollars collected go back into the community to improve services including fire protection, policing services in conjunction with the rural detachment, garbage, recycling, snow removal and City of Kamloops user fees for those properties connected to the city’s sewer. As well, some property tax dollars go toward strategic planning initiatives and cultural incentives such as the Secwepemc museum, heritage park and the pow wow arbour.
The Arbour
While TteS has many accomplishments, the visual crowning glory is undoubtedly the arbour. This magnificent structure seats 2,500 people and is home to one of the largest celebrations of Indigenous culture and heritage in Western Canada: the Kamloopa Pow Wow. Thousands of visitors witness the storytelling, song and dance in traditional regalia in this annual celebration. However, the pow wow holds special significance for Tk’emlúpsemc (Kamloops people). It celebrates their heritage, builds community, and teaches children traditions and values.
The first official Kamloopa Pow Wow in the arbour opened on the site in conjunction as part of the 1993 Canada Games. Canada Games athletes, dignitaries, tourists, locals, other First Nations and TteS community members joined together to celebrate the achievement. For many, it was the first public demonstration of their right to proudly celebrate their culture and heritage in a long time.
The Arbour and Taxation
At that time, the community was already into their second year of collecting tax revenue. While building the arbour was an organizational and construction feat, proper maintenance ensures it stands for many generations. Ongoing dedication from TteS and property tax revenue make this possible. Currently property tax dollars contribute each year to the maintainence and improvement of the arbour and grounds.
Since construction, it is estimated TteS has spent well over $1 million on improvements to the water and sewage systems, landscaping and out buildings, such as washrooms and vendor space. These improvements would not have been possible without property tax. Revenues earned in the community, stay in the community.
The Kamloopa Pow Wow has grown into a major annual event that draws visitors from nearby communities and around the globe. TteS continues to strengthen ties with local businesses and advocates for community fiscal independence. Consequently, the arbour rarely sits idle.
Community members and local residents utilize the spacious grounds for graduations, weddings, funerals, memorials, movies, and trade events, such as RV and boat shows. These continue to generate revenue for TteS and the arbour is now a trusted local venue.
The pride expressed for the arbour goes beyond admiration for a job well-done. It also serves as a reminder of the importance of community and the strength of the Tk’emlúpsemc heritage. The demands of today’s world include managing land and assets properly. Just as their ancestors before them, the Tk’emlúpsemc of today will continue to find innovative ways to persevere and prosper. It is in their best interests to direct property tax dollars where they are needed for a thriving community and future.
Through solid governance, Tk’emlúps te Secwépemc will continue to build education, infrastructure and community services for all. Tax revenue is an important vehicle that provides what they need to ensure the physical, mental, emotional and spiritual well-being of the citizens and community as a whole.
26 October, 2016|

Infrastructure Institution needed to address $25 billion infrastructure deficit among First Nations in Canada

First Nations across the country deal with aging or decrepit infrastructure every day with little hope for improvements due to lack of funds or investment. A recent study by the Canadian Council for Public-Private Partnerships states that experts estimate the infrastructure deficit across First Nations in Canada to be at least $25 billion and even higher than $30 billion.These infrastructure investments need to be sustainable. They need to meet the needs of the present without compromising the needs of future generations.
They need to support the development of employment opportunities for First Nation communities. Research has to be done to ensure all costs over the entire life cycle have been considered to ensure there will be sufficient funds to cover those costs.
Financing gaps occur because many First Nations don’t use all available fiscal tools or don’t have sufficient fiscal capacity. Examples of fiscal tools include annual property tax and other local revenues, long-term debentures, development cost charges and service taxes, public-private partnerships and transfers from other governments. Transfer funds from other governments are not stable enough for debenture financing as the amount of transfer funds is determined by the current elected government and would likely change with the election of a new government.
The FMA was designed to provide expanded tools to finance infrastructure and help facilitate the fiscal tools identified above. The FMA provides scheduled First Nations with expanded authority to make taxation laws that include property taxes, services taxes, development cost charges, business activity taxes and user fees.
Project Management gaps occur where there is insufficient experience or expertise to efficiently and cost effectively manage and build infrastructure projects. There is little experience within First Nation administrations to manage all elements of an infrastructure project. Also, few First Nation government administrations have the administrative framework in place to support either private or public investment. This includes missing statistical information and certified administrative capacity.
The FNTC is supporting First Nation proponents of a First Nations Infrastructure Institution (FNII) to be created under the FMA. The FNII could help close capacity gaps and provide higher value for money for the significant impending First Nation infrastructure investments by providing assistance to First Nations through:

  • Implementing standards and laws required to support infrastructure projects and improve investment climates;
  • Assessing infrastructure project readiness and developing an infrastructure development plan;
  • Developing integrated infrastructure planning;
  • Creating administrative capacity to assess appropriate costs for infrastructure projects;
  • Creating capacity to efficiently project manage and build infrastructure projects;
  • Creating certified training and systems for First Nation administrations to support the operation of sustainable infrastructure systems;
  • Advocating for the development of new FMA revenue streams within an improved fiscal framework to finance infrastructure projects; and
  • Assessing infrastructure risks and developing risk management strategies.

The proposed FNII could help fill the infrastructure capacity gaps faced by many First Nation governments in Canada. By filling the planning, financing, project management, and legal gaps, the new FMA institution can support First Nations in the development of economically and fiscally sustainable infrastructure projects.

26 October, 2016|

Payments in lieu of taxation (PILTs): An important step to expanding FMA taxation revenues

In April of this year, an amendment to the First Nations Fiscal Management Act (FMA) came into force which added “payments in lieu of taxation” (PILTs) to the definition of local revenues under the FMA. This is an important step in expanding First Nations tax-related revenues. The amendment ensures these revenues can now be included as a part of the First Nation’s local revenue account, and perhaps more importantly, it may assist in encouraging provinces to change current policies to enable these types of payments to First Nations.

Each year over $1.7 billion is paid by governments or government organizations to other governments in lieu of property tax. For the federal government, over $500 million in PILTs, are made by the Public Works Canada or Crown corporations to provinces, local governments and taxing First Nations for federally-owned properties (e.g., RCMP buildings, border facilities, Canada Post, CMHC). First Nations who have property tax laws and federal property on their lands are eligible to receive PILTs; but must complete an application each year for the PILT (for more information visit the PILT website at http://www.tpsgc-pwgsc.gc.ca/biens-property/peri-pilt/index-eng.html).

In the case of provinces, similar payments are made by the province or provincial Crown organizations to local governments for provincially-owned properties (e.g., provincial office buildings, SaskPower, BC Ferries, LCBO, Manitoba Hydro). These provincial payments are often termed “grants in lieu of taxation” (GILTs).

PILTs and GILTs evolved because of the “Crown immunity” reflected in section 125 of the Constitution. Section 125 provides an intergovernmental immunity from taxation on “…lands or property belonging to Canada or any province…”. PILTs and GILTs therefore enable the federal and provincial governments to contribute to the cost of local services while ensuring section 125 is not contravened. Most PILTs and GILTs are based on legislation (e.g., the federal Payments in Lieu of Taxation Act or Ontario’s Electricity Act), but in some cases are based on provincial policy.
While the vast majority of local governments receive PILTs and GILTs for federally-owned and provincially-owned properties situated in their jurisdictions, only a small fraction of the Canada’s First Nations receive these payments (currently four First Nations receive federal PILTs, despite the fact that there are over 100 federal properties on reserve across the country.).Though there are several reasons for this disparity (e.g., not all First Nations have tax regimes, and the amount of federal and provincial property on reserve is less than off- reserve), the most noteworthy reason is nearly all provincial governments and their Crown corporations have not extended PILTs to First Nation governments. For example, legislation supporting BC Hydro empowers the company to pay GILTs to BC cities and towns, but not to First Nation governments in BC. The same is true for SaskPower, NB Power, SaskTel, and Manitoba Hydro. All of these provincial Crown corporations occupy interests on reserve, but do not pay GILTs to First Nations.

To get a better appreciation of the PILT and GILT revenue loss experienced by First Nations, the FNTC recently commissioned economic research on federal and provincial PILT and GILT programs. This research, along with recent changes to the FMA, will greatly assist the FNTC in increasing awareness, and supporting First Nations who are taking their case for fairness to provincial policy-makers. Provincial governments will need to change their current approach to GILTs so First Nation governments are treated equally in the application of GILT programs.

5 July, 2016|
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  • CLEARING THE PATH: NEWS & SUCCESS STORIES

Public Policy Forum – Expanding the Circle

In February 2017, the Public Policy Forum held a one-day conference, “Expanding the Circle: What Reconciliation and Inclusive Economic Growth Can Mean for First Nations and Canada”. With approximately 150 delegates, the conference was co-hosted by the National Aboriginal Economic Development Board, the National Aboriginal Capital Corporation Association and Indigenous and Northern Affairs Canada.

FNTC’s Chief Commissioner C.T. (Manny) Jules appeared on a panel, “Taking Action for Reconciliation and Inclusive Economic Growth”, where he outlined his position for improving the numerous economic development challenges facing First Nations and how they can become part of the national economy.

This includes the creation of an institutional basis for First Nations to move forward. Chief Commissioner Jules discussed some of the initiatives the FNTC is working on with First Nations, including an infrastructure institute, a land title registry and an aboriginal resource tax.

Chief Commissioner Jules also spoke about the commitment by the federal government to create a new fiscal relationship with First Nations. However, he stated the relationship must not be based on program-based financial transfers, as the financial need will never be met. “I don’t want to create a situation where our governments are managing poverty, and that could happen as a result of a new program-based fiscal relationship. Our governments have to be able to manage wealth. They have to be able to set up standards to facilitate economic development growth. We have to own our own lands.”

Chief Commissioner Jules, in keeping with the theme of the segment of ‘taking action for reconciliation and inclusive economic growth’, said this means the work begins with First Nations.
“We, as Indigenous people, have to come up with the solutions. There’s no way that the federal government, provincial governments or indeed the municipal governments can come up with the solutions. This has to come from us.”

The Minister of Indigenous and Northern Affairs, the Honourable Carolyn Bennett, and the National Chief of the Assembly of First Nations, Perry Belgarde, addressed the delegates in separate presentations.

Later in the day, the keynote address was delivered by the Honourable Jody Wilson-Raybould, the Minister of Justice and Attorney General of Canada. Minister Wilson-Raybould outlined the federal government’s plan to review laws and policies related to Indigenous Peoples. A working group of ministers will be responsible for the review and will examine relevant federal laws, policies, and operational practices to help ensure the Crown is meeting its constitutional obligations with respect to Aboriginal and treaty rights; adhering to international human rights standards, including the United Nations Declaration on the Rights of Indigenous Peoples; and supporting the implementation of the Truth and Reconciliation Commission’s Calls to Action.

Minister Wilson-Raybould will chair the working group, which will be comprised of six ministers who have significant responsibilities for the relevant statutes and policies to be reviewed. The working group will first develop a workplan and set of principles, which will reflect an all-government approach that addresses all Indigenous Peoples.  Minister Wilson-Raybould said First Nation-led institutions should play a key role in rebuilding the relationship with First Nations. “As we move forward, in my opinion, we also need to give more consideration to how we support Indigenous-controlled institutions that advance nation rebuilding, so that it is Indigenous peoples that govern these institutions with a vested interest in the outcome of the work they do and the decisions they make… I am also very well aware of the Fiscal Management Act and the importance of the initiatives to strengthen the ability of First Nations to raise revenues as well as borrow monies from the bond market and generally establish sound financial administration systems. The role of the First Nations Finance Authority, the Financial Management Board and the First Nations Tax Commission, are very critical. And in my opinion, there is a need to consider how we can support additional Indigenous institutions that support nation rebuilding.”

The working group will work with Indigenous leaders, youth, and experts on various legal and policy questions relating to Indigenous Peoples. At the conclusion of her remarks, and in keeping with the work of the working group, the Minister offered to meet with the Chairs of the FMA institutions in April.

10 April, 2017|

The Canadian Property Tax Association – Bringing Together Professionals in Taxation

Clearing the Path recently spoke with Brian Dell, executive vice president of the CPTA, and asked him to inform our readers on the work of the CPTA.

I am delighted to have this opportunity to give the readers of Clearing the Path a bit of insight into the Canadian Property Tax Association (CPTA). Our organization has had the privilege of working with the First Nations Tax Commission (FNTC) for the last 10 years, providing commentary and support on FNTC legislative reform and implementation of property tax initiatives. Prior to formation of the FNTC, the CPTA worked closely with the former Indian Taxation Advisory Board.

The CPTA was founded in 1967 and “is a national organization providing a forum for the exchange of ideas and information relating to both commercial and industrial property tax issues arising across Canada”. The CPTA consists of four regional chapters being British Columbia, Ontario, Quebec and Eastern Canada, and Western. A Board of Directors oversees the membership and operations of the CPTA on a national level and provides guidance and support to the four Chapters, with each Chapter having its own Executive Committee. On a regional basis each Chapter brings its expertise to a diversity of issues in the area of property taxation, whether it be commentary on provincial legislative change or more localized assessment practices.

The constitution of the CPTA sets the aims and objectives of the organization as follows: to provide a forum and information exchange in the field of assessment and taxation of property to promote the equitable assessment of property tax purposes along sound and uniform lines to study existing and proposed legislation and make representations to Governments to perform such other functions as are consonant with the foregoing purposes.

Consistent with its objects, the focus of the CPTA is to advocate from the perspective of the taxpayer, keeping in mind recognition that revenues generated from a fair distribution of property tax across the entire assessment base are vital to the public need and good government. In furtherance of its objectives the CPTA draws from its diverse membership which includes in-house and external property tax consultants, assessors, appraisers, legal practitioners, and property tax officers within various public and private organizations.

The CPTA meets its objectives by bringing together various professionals in taxation through an open flow of information and knowledge relating to the property tax industry. Among the tools employed by the CPTA to keep its membership informed of current issues and developments are education seminars and a bi-monthly newsletter, Communication Update. In the fall of each year our members gather at a National Workshop for 3 days of learning seminars, and equally important, the opportunity to network with other experts from across Canada.

In addition, each Chapter organizes its own education seminars, breakfast or luncheon meetings, round table meetings or other functions to keep the membership connected and informed. The CPTA also takes an active role in consultation with government and participates in various adhoc stakeholder committees providing insight from the taxpayer’s point of view.

We at the CPTA understand the challenges associated with working in an environment were there are numerous diverging opinions, whether they are issue specific or of national reach. Elements of regional interests and local economy must often be balanced against global principles. As is often said, there is seldom one single right answer to any question, however through openness, transparency, an appropriate exchange of information, and mutual respect and professionalism, collectively we can strive to achieve the best answer concurrent with the times.

The FNTC has made strong progress towards fostering open, fair and transparent property taxation on first nation lands. The hallmarks of a healthy property tax regime, from a taxpayer’s perspective not only involves transparent legislative and regulatory processes, but also engages full disclosure of how an assessment has been prepared, the existence of an impartial and independent assessment review system, while all leading to the comfort that there exists in any local a fair distribution of tax burden.

The FNTC has made significant inroads in promoting a clear and discernible path for property taxation regimes on first nation lands. We at the CPTA look forward to forging the relationship between our organizations through continued and productive dialogue.

Brian Dell
Executive Vice President, CPTA
26 October, 2016|

Profile: Commissioner Price

Commissioner Randy Price is a chartered accountant and respected natural gas pipeline industry tax professional from British Columbia with 30 years experience in taxation. He has extensive experience with First Nation tax issues as they relate to the interests of non-Aboriginal commercial taxpayers, particularly in his time as Vice President at Westcoast Energy Inc. and Duke Energy Corporation between 1994 to 2003 and is currently consulting, in association with PriceWaterhouseCoopers (PWC). Clearing the Path recently had the opportunity to sit down with Commissioner Price to discuss his experience and involvement with FNTC.
First I’d like to ask a bit about your background in the energy industry? During my years at Westcoast Energy, I acquired a keen interest in aboriginal affairs and was part of the team that developed a number of initiatives to improve the opportunities for First Nations that were in the geographical area of our operations in BC, Ontario and New Brunswick as our pipelines crossed a number of reserves and traditional territories and we had both commercial and utility interests. After retirement, in 2004 I was part of a team working with the Gwich’in Tribal Council of Inuvik, an Inuit tribe, negotiating an access and community benefits agreement with the proponents of the Mackenzie Valley Pipeline. With the help of the ITAB, we supported the Gwich’in and the First Nations south of Inuvik in making the decision that property tax should be a key demand in the negotiations, as getting fiscal powers and the revenues that flow from them make aboriginal governments more politically and economically independent. All successful nations in the world have fiscal powers and levy taxes.
What brought you into the field of property taxation? I had responsibility for property tax in 1990 and for the last 13 years of my employment with Westcoast Energy, which largely corresponded to the commencement of First Nations receiving the right to levy property taxes following the “Kamloops Amendment” to the Indian Act in 1988. I keenly followed First Nations’ acquisition of property taxation powers through the years after first listening to [Chief Commissioner] Manny Jules, then a member of the Kamloops Indian Band Council, at the 1978 Canadian Tax Foundation in Montreal outlining his vision for a First Nations property tax regime; then seeing his vision materialize through the Kamloops Amendment to the Indian Act in 1988, to the creation of the ITAB; and finally through the seven years it took to deliver the FMA in March 2005. As Westcoast Energy’s pipelines ran through seven reserves, some First Nations began to assert jurisdiction for property tax and tax bills began to arrive from new sources.
From your perspective, what is a concern taxpayers may have in respect to First Nation taxation? The biggest concern of large utilities was simple, they bore the highest property taxes levied by both non-aboriginal and aboriginal taxing authorities. Westcoast Energy’s property tax in the 1990s was $60 million dollars which was 12% of its gross revenue. It was the largest property in BC in any industry. Also, it is important that tax rates and the assessment approaches to calculating the taxable/ assessed value be predictable and materially the same for all taxing jurisdictions in BC. The FMA and the FNTC Standards help to harmonize the non-aboriginal and aboriginal tax regimes.
In light of the Tsilhqot’in decision, the FNTC has done extensive research around the concept of an Aboriginal Resource Tax. In your view, how would such a tax help in moving development along? Because of my work in aboriginal affairs at the community level, I was an early believer in what property taxes could do to improve the lives of First Nations peoples living on reserves. The 2014 Tsilhqot’in decision in the Supreme Court of Canada offers First Nations a significant opportunity to reduce poverty on reserves by opening the window to expanding their share of resource revenues beyond the boundaries of the reserve into their traditional territories. The Aboriginal Resource Tax (ART) is a concept the FNTC is working with the Tsilhqot’in and other nations that want to benefit from the Supreme Court Decision. The ART is being structured to carve out a share of the total taxes that a resource investment can deliver. This means that it is not an add-on tax but a sharing of the fiscal tax field between aboriginal and non-aboriginal governments. An important additional benefit is that an investor/developer, by agreeing to pay the tax levied by the First Nation(s) respects the infringement on their aboriginal title and can get on with the resource investment. We believe an ART can avoid lengthy negotiations and court battles which can take decades to settle with their attendant staggering costs and is the best option for all parties in terms of growing economies and creating prosperity for First Nations.
26 October, 2016|

Community Profile: Tk’emlúps te Secwepemc

The effective management of the Tk’emlúps te Secwépemc (TteS) property tax system provides a snapshot of the possibilities when First Nations successfully implement their tax jurisdiction. As the pioneers of taxation authority, TteS has been able to move forward with clear results such as employment, strengthening community and building infrastructure through property tax implementation.
Tax dollars collected go back into the community to improve services including fire protection, policing services in conjunction with the rural detachment, garbage, recycling, snow removal and City of Kamloops user fees for those properties connected to the city’s sewer. As well, some property tax dollars go toward strategic planning initiatives and cultural incentives such as the Secwepemc museum, heritage park and the pow wow arbour.
The Arbour
While TteS has many accomplishments, the visual crowning glory is undoubtedly the arbour. This magnificent structure seats 2,500 people and is home to one of the largest celebrations of Indigenous culture and heritage in Western Canada: the Kamloopa Pow Wow. Thousands of visitors witness the storytelling, song and dance in traditional regalia in this annual celebration. However, the pow wow holds special significance for Tk’emlúpsemc (Kamloops people). It celebrates their heritage, builds community, and teaches children traditions and values.
The first official Kamloopa Pow Wow in the arbour opened on the site in conjunction as part of the 1993 Canada Games. Canada Games athletes, dignitaries, tourists, locals, other First Nations and TteS community members joined together to celebrate the achievement. For many, it was the first public demonstration of their right to proudly celebrate their culture and heritage in a long time.
The Arbour and Taxation
At that time, the community was already into their second year of collecting tax revenue. While building the arbour was an organizational and construction feat, proper maintenance ensures it stands for many generations. Ongoing dedication from TteS and property tax revenue make this possible. Currently property tax dollars contribute each year to the maintainence and improvement of the arbour and grounds.
Since construction, it is estimated TteS has spent well over $1 million on improvements to the water and sewage systems, landscaping and out buildings, such as washrooms and vendor space. These improvements would not have been possible without property tax. Revenues earned in the community, stay in the community.
The Kamloopa Pow Wow has grown into a major annual event that draws visitors from nearby communities and around the globe. TteS continues to strengthen ties with local businesses and advocates for community fiscal independence. Consequently, the arbour rarely sits idle.
Community members and local residents utilize the spacious grounds for graduations, weddings, funerals, memorials, movies, and trade events, such as RV and boat shows. These continue to generate revenue for TteS and the arbour is now a trusted local venue.
The pride expressed for the arbour goes beyond admiration for a job well-done. It also serves as a reminder of the importance of community and the strength of the Tk’emlúpsemc heritage. The demands of today’s world include managing land and assets properly. Just as their ancestors before them, the Tk’emlúpsemc of today will continue to find innovative ways to persevere and prosper. It is in their best interests to direct property tax dollars where they are needed for a thriving community and future.
Through solid governance, Tk’emlúps te Secwépemc will continue to build education, infrastructure and community services for all. Tax revenue is an important vehicle that provides what they need to ensure the physical, mental, emotional and spiritual well-being of the citizens and community as a whole.
26 October, 2016|

Infrastructure Institution needed to address $25 billion infrastructure deficit among First Nations in Canada

First Nations across the country deal with aging or decrepit infrastructure every day with little hope for improvements due to lack of funds or investment. A recent study by the Canadian Council for Public-Private Partnerships states that experts estimate the infrastructure deficit across First Nations in Canada to be at least $25 billion and even higher than $30 billion.These infrastructure investments need to be sustainable. They need to meet the needs of the present without compromising the needs of future generations.
They need to support the development of employment opportunities for First Nation communities. Research has to be done to ensure all costs over the entire life cycle have been considered to ensure there will be sufficient funds to cover those costs.
Financing gaps occur because many First Nations don’t use all available fiscal tools or don’t have sufficient fiscal capacity. Examples of fiscal tools include annual property tax and other local revenues, long-term debentures, development cost charges and service taxes, public-private partnerships and transfers from other governments. Transfer funds from other governments are not stable enough for debenture financing as the amount of transfer funds is determined by the current elected government and would likely change with the election of a new government.
The FMA was designed to provide expanded tools to finance infrastructure and help facilitate the fiscal tools identified above. The FMA provides scheduled First Nations with expanded authority to make taxation laws that include property taxes, services taxes, development cost charges, business activity taxes and user fees.
Project Management gaps occur where there is insufficient experience or expertise to efficiently and cost effectively manage and build infrastructure projects. There is little experience within First Nation administrations to manage all elements of an infrastructure project. Also, few First Nation government administrations have the administrative framework in place to support either private or public investment. This includes missing statistical information and certified administrative capacity.
The FNTC is supporting First Nation proponents of a First Nations Infrastructure Institution (FNII) to be created under the FMA. The FNII could help close capacity gaps and provide higher value for money for the significant impending First Nation infrastructure investments by providing assistance to First Nations through:

  • Implementing standards and laws required to support infrastructure projects and improve investment climates;
  • Assessing infrastructure project readiness and developing an infrastructure development plan;
  • Developing integrated infrastructure planning;
  • Creating administrative capacity to assess appropriate costs for infrastructure projects;
  • Creating capacity to efficiently project manage and build infrastructure projects;
  • Creating certified training and systems for First Nation administrations to support the operation of sustainable infrastructure systems;
  • Advocating for the development of new FMA revenue streams within an improved fiscal framework to finance infrastructure projects; and
  • Assessing infrastructure risks and developing risk management strategies.

The proposed FNII could help fill the infrastructure capacity gaps faced by many First Nation governments in Canada. By filling the planning, financing, project management, and legal gaps, the new FMA institution can support First Nations in the development of economically and fiscally sustainable infrastructure projects.

26 October, 2016|

Payments in lieu of taxation (PILTs): An important step to expanding FMA taxation revenues

In April of this year, an amendment to the First Nations Fiscal Management Act (FMA) came into force which added “payments in lieu of taxation” (PILTs) to the definition of local revenues under the FMA. This is an important step in expanding First Nations tax-related revenues. The amendment ensures these revenues can now be included as a part of the First Nation’s local revenue account, and perhaps more importantly, it may assist in encouraging provinces to change current policies to enable these types of payments to First Nations.

Each year over $1.7 billion is paid by governments or government organizations to other governments in lieu of property tax. For the federal government, over $500 million in PILTs, are made by the Public Works Canada or Crown corporations to provinces, local governments and taxing First Nations for federally-owned properties (e.g., RCMP buildings, border facilities, Canada Post, CMHC). First Nations who have property tax laws and federal property on their lands are eligible to receive PILTs; but must complete an application each year for the PILT (for more information visit the PILT website at http://www.tpsgc-pwgsc.gc.ca/biens-property/peri-pilt/index-eng.html).

In the case of provinces, similar payments are made by the province or provincial Crown organizations to local governments for provincially-owned properties (e.g., provincial office buildings, SaskPower, BC Ferries, LCBO, Manitoba Hydro). These provincial payments are often termed “grants in lieu of taxation” (GILTs).

PILTs and GILTs evolved because of the “Crown immunity” reflected in section 125 of the Constitution. Section 125 provides an intergovernmental immunity from taxation on “…lands or property belonging to Canada or any province…”. PILTs and GILTs therefore enable the federal and provincial governments to contribute to the cost of local services while ensuring section 125 is not contravened. Most PILTs and GILTs are based on legislation (e.g., the federal Payments in Lieu of Taxation Act or Ontario’s Electricity Act), but in some cases are based on provincial policy.
While the vast majority of local governments receive PILTs and GILTs for federally-owned and provincially-owned properties situated in their jurisdictions, only a small fraction of the Canada’s First Nations receive these payments (currently four First Nations receive federal PILTs, despite the fact that there are over 100 federal properties on reserve across the country.).Though there are several reasons for this disparity (e.g., not all First Nations have tax regimes, and the amount of federal and provincial property on reserve is less than off- reserve), the most noteworthy reason is nearly all provincial governments and their Crown corporations have not extended PILTs to First Nation governments. For example, legislation supporting BC Hydro empowers the company to pay GILTs to BC cities and towns, but not to First Nation governments in BC. The same is true for SaskPower, NB Power, SaskTel, and Manitoba Hydro. All of these provincial Crown corporations occupy interests on reserve, but do not pay GILTs to First Nations.

To get a better appreciation of the PILT and GILT revenue loss experienced by First Nations, the FNTC recently commissioned economic research on federal and provincial PILT and GILT programs. This research, along with recent changes to the FMA, will greatly assist the FNTC in increasing awareness, and supporting First Nations who are taking their case for fairness to provincial policy-makers. Provincial governments will need to change their current approach to GILTs so First Nation governments are treated equally in the application of GILT programs.

5 July, 2016|
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