- OVERVIEW: REGULATORY FRAMEWORKS
- Taxation FAQs
- Agriculture permits and leases
- Oil, gas, timber and resource leases
- Commercial leases
- Residential leases
- Crown corporations have tax immunity but payments in lieu of tax may be arranged
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.
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.
- 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.
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
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
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.
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.
Once on the schedule, you must develop new property tax and assessment laws to replace existing s. 83 by-laws. Until you develop new laws, your existing s. 83 by-laws remain in force, to the extent they are not inconsistent with the FMA.