OVERVIEW SECTION 83 + FMA2023-02-15T12:53:04-08:00
  1. FIRST NATIONS TAX COMMISSION | COMMISSION DE LA FISCALITÉ DES PREMIÈRES NATIONS
  2. »
  3. OVERVIEW SECTION 83 + FMA
  • OVERVIEW: REGULATORY FRAMEWORKS

About the FMA

While all First Nations may pass by-laws related to the taxation of land under the Indian Act, the First Nations Fiscal Management Act (FMA) affirms participating First Nation governments’ enhanced authority over:

  • financial management
  • property taxation and local revenues
  • financing for infrastructure and economic development

Participating First Nation governments are also supported by the First Nations institutions established under the FMA. Property taxation contributes to the well-being, economic and community development and greater self-determination of First Nations.

The First Nations Fiscal and Statistical Management Act came into force on April 1, 2006 and was officially renamed the First Nations Fiscal Management Act (FMA) on April 1, 2013. The FMA enables First Nations to participate more fully in the Canadian economy while meeting local needs by:

  • strengthening First Nations real property tax systems and First Nations financial management systems
  • providing First Nations with increased revenue raising tools, strong standards for accountability, and access to capital markets available to other governments
  • allowing for the borrowing of funds for the development of infrastructure on-reserve through a co-operative, public-style bond issuance
FMA TOOLKIT

About SECTION 83 of The Indian Act

First Nations may pass by-laws related to taxation pursuant to section 83 of the Indian Act. While section 83 affirms powers over individual First Nations’ fiscal management it is limited in scope and jurisdiction. Section 83 by-laws proposed by First Nations require ministerial approval, on the advice of the First Nations Tax Commission.

Under section 83, a First Nation may make by-laws for any or all of the following:

  • Taxation for local purposes of land, or interests in land, in the reserve, including rights to occupy, possess or use land in the reserve
  • The licensing of businesses, callings, trades and occupations
  • The appropriation and expenditure of moneys of the band to defray band expenses
  • The appointment of officials to conduct the business of the council, prescribing their duties
  • Providing for payment of remuneration to Chiefs and Councillors
  • The enforcement of payment of amounts that are payable including arrears and interest
  • The imposition and recovery of interest on amounts that are payable, where those amounts are not paid before they are due, and the calculation of that interest
  • The raising of money from band members to support band projects
  • With respect to any matter arising or ancillary to the exercise of powers under section 83
SECTION 83 TOOLKIT
  • Taxation FAQs
What can be taxed on First Nation lands?2020-03-18T20:39:07-07:00

  • Agriculture permits and leases
  • Oil, gas, timber and resource leases
  • Commercial leases
  • Residential leases
  • Utilities
  • Crown corporations have tax immunity but payments in lieu of tax may be arranged
Why enact a property taxation law or by-law?2020-04-23T19:20:54-07:00

  1. Jurisdiction
    By enacting a property taxation law or by-law, a First Nation establishes jurisdiction over the territory to which the law or by-law applies — the property within the reserve boundaries. Some provincial and municipal governments tax non-member occupiers and businesses located on reserve. In exercising its property tax jurisdiction in these provinces, the First Nation serves notice that it is occupying the field and those provinces that are taxing on reserve lands will vacate accordingly.
  2. Revenue
    Real property taxation provides First Nation communities an independent, stable and flexible source of revenue, which can be reinvested to improve services, respond to priorities, and address deficiencies in economic infrastructure. Improved community infrastructure and the provision of dependable services also attract commercial and residential development.
  3. Establishment of a Regulatory Framework to Support Economic Growth
    Property taxation is a fundamental pillar of financing government and future economic growth. In this regard, First Nations may choose to establish property taxation in anticipation of future growth or to better manage their current economic activity. Having the regulatory framework in place assists with community planning and allows potential investors to know what the rules are before they invest.
Can First Nations with Treaties or Self-Government Agreements collect property tax?2020-05-18T18:43:01-07:00

First Nations that have Treaties or self-government agreements, and are operating outside the Indian Act, can, if they wish, come under the First Nations Fiscal Management Act ( see section 141 of the FMA). This can be done through the development of regulations which can adapt the provisions of the FMA as required for this purpose.

First Nations that are not Indian Act bands may begin the process by providing a resolution from their governing body to the Minister of Crown-Indigenous Relations.

Minister of Crown-Indigenous Relations
21st Floor, 10 Wellington Street
Gatineau, Quebec
K1A 0H4

What is the difference between s. 83 taxation under the Indian Act and taxation under the FMA?2020-04-23T19:26:02-07:00

s. 83 of the Indian Act provides First Nations with by-law making authority for real property taxation on reserve. First Nations exercising taxation under s. 83 must pass the following by-laws: Real Property Taxation By-law, Property Assessment By-law, Expenditure By-law, and an Annual Rates By-law. All by-laws are subject to Ministerial approval.

The FMA provides First Nations with law making authority for real property taxation on First Nation lands. First Nations that wish to exercise real property taxation under the FMA must first request to be added to the FMA schedule. Once added, First Nations can pass local revenue laws for the purposes of taxation, assessment, rate setting, expenditures, and debenture financing. All laws are subject to the review and approval of the First Nations Tax Commission.

Taxation under the FMA has added benefits. These include:

  • Certainty over tax jurisdiction
  • Improved First Nation enforcement and related property tax powers
  • Access to other revenue powers including Property Transfer Tax, Development Cost Charges, Business Activity Tax, Provision of Services, and Fees
  • Improved certainty to stimulate investor confidence
  • Ability to lever property tax revenues to access low cost long term financing through debentures
Why do some First Nations collect property tax and others do not?2020-03-08T17:54:57-07:00

First Nation property taxation is an optional fiscal power.

Over 30% of First Nations have chosen to exercise that power for several reasons: jurisdiction, revenue, or the need to establish a sustainable long term framework to support economic growth.

How do First Nations transfer from s. 83 taxation to taxation under the FMA?2021-01-20T11:18:59-08:00

In order to transition to the FMA from s. 83, you must first pass a Band Council Resolution (BCR) to be added to the schedule of the FMA.

Your existing s. 83 by-laws remain in force, to the extent they are not inconsistent with the FMA, until you develop new laws.