Commissioner Bill McCue is a councillor and former Chief of the Chippewas of Georgina Island First Nation, and served as South East Regional Grand Chief for the Union of Ontario Indians from 1994 to 2003. He was also previously member of FNTC’s predecessor, the Indian Taxation Advisory Board (ITAB) from 1997 to 2007, when he became a Commissioner for the FNTC. As Chief, Commissioner McCue was an original signatory to the Framework Agreement on First Nations Lands Management (FNLM) and his community ratified the first Land Code in 1997. He is currently on the FNLMI board of directors, as well as the finance committee for the Lands Advisory Board. Commissioner McCue has also served as president of the Ogemawahj Tribal Council and chairman of their economic development board.

Commissioner McCue is a firm believer in the importance of local economic development. He has helped his community develop a large number of cottage leases and improve local services and infrastructure. He was also chairman of the Casino Rama Revenue Sharing Committee, which developed a revenue-sharing formula to share gaming revenues with all Ontario First Nations. Last year, the Chippewas of Georgina Island First Nation also opened a new business plaza and restaurant across from their marina. There are now approximately 75 new on-reserve jobs, with half being filled by members and half by people from the surrounding area. This is creating a significant impact in a community of approximately 200 residents.

Clearing the Path recently had the opportunity to sit down with Commissioner McCue to talk about his experience and involvement with the FNTC and his thoughts on property taxation in Ontario.

What has your experience as a Commissioner for the FNTC been like and how has it changed since your role with FNTC’s predecessor ITAB? One of the biggest changes for the Commissioners has been the responsibility for approving First Nation laws directly rather than recommending them to the Minister for approval as we did with ITAB. Another change has been having taxpayers on the Commission, which brings additional perspectives to our discussions. I feel privileged to have helped First Nations exercise their tax jurisdiction. I’m deeply honoured to be part of such a diverse and knowledgeable group of people. I especially want to acknowledge the leadership and vision of Chief Commissioner Jules, without him this would not have happened.

Recently the federal government has emphasized nation-to- nation relationships. How does taxation fit into the emphasis on this relationship? Revenue jurisdictions such as taxation are key to a nation-to-nation relationship. Although the federal government will always have core funding obligations, First Nations need to have their own revenue sources to be equal partners in confederation.

In BC, approximately 50% of First Nations have implemented property taxation. What are your thoughts on the traction of property taxation in Ontario? What do you see as the difference? There are fewer First Nations with residential and commercial leaseholders on Ontario reserves. There also hasn’t been the history of local governments collecting taxes on reserve lands without providing services as has happened elsewhere. Where there have been on-reserve residents, in many cases the First Nation implemented service fees rather than property tax. In our community we have utility taxation and service fees for cottagers.

Recently the Chippewas of Kettle and Stony Point First Nation (CKSP) became the first First Nation in Ontario to adopt FMA property taxation. In your view, what impacts or affects will this have for other First Nations in the province? CKSP’s property tax law will be a good example for other First Nations in Ontario. It will help reduce the subsidization of local services to leaseholders and reduce collection issues. I think it will show taxing non- member interests on First Nation lands doesn’t infringe on treaty rights. Hopefully it dispels the misnomer that property taxation is tied to PST exemptions. It also demonstrates leadership and good communications can overcome fear of taxation among community members.

Looking back to the early days of ITAB, what were your expectations of property taxation at that time? How has your view changed now with the current state of property taxation? In the early days, people thought very few First Nations would participate in property tax — maybe 20 across Canada. However, as First Nation property tax was implemented, it soon became apparent that many more First Nations had taxable property on their reserves, including utility properties and railway properties. With the FMA, First Nation property tax now includes a more complete range of local revenue options such as Development Cost Charges and local revenues can be leveraged to finance local infrastructure. There are now 177 FMA First Nations across Canada generating millions of dollars for their local economies each year.

As the Chippewas of Kettle and Stoney Point First Nation move forward as the first First Nation in Ontario to implement FMA property taxation, the Commission also looks back on the evolution of real property taxation powers for Ontario First Nations to better understand the history of First Nation property tax in that province.

Prior to the 1970s, municipalities in Ontario could and did tax leasehold properties on reserve. At that time, the Ontario Assessment Act (R.S.O. 1960) exempted “property held in trust for a tribe or body of Indians, but not if occupied by a person who is not a member of a band or body of Indians”. In other words, the Ontario assessment legislation of the day provided for the assessment for taxation purpose of non-Indian lessees of reserve lands in the same way as if the land was owned and held by any other person. Consequently, municipalities collected property taxes from reserves, but in almost all cases, delivered very little, if any, services within the reserves in return.

In 1968 and 1969, Chiefs of the Curve Lake, Christian Island, Walpole Island, Chippewas of Sarnia, Kettle and Stony Point and Georgina Island formed an “Indian Taxation Grievance Committee” (ITGC) and met with officials of the Ontario Ministry of Municipal Affairs. The Chiefs’ position was that while they could not commit all First Nations in Ontario to support an initiative to remove the reserve taxation provisions, the removal of reserve lands from municipal taxation could be made optional and with this change, the taxes previously paid to municipalities by the lessees on reserve lands could go to the First Nations in order to ensure that the necessary services previously lacking on reserve are provided.

These discussions led the Ontario government to review its taxation practices and eventually decide to stop the assessment, and thereby the taxation, of real property interests located on reserve. Bill 107, An Act to Amend the Assessment Act was passed by the Ontario legislature and became law on May 18, 1973. Bill 107, in effect, repealed municipal taxation powers in relation to First Nation lands and left the property taxation field open for First Nations to exercise their jurisdiction pursuant to the Indian Act.

Last year, the FNTC commissioned a report to examine the circumstances under which the province of Ontario decided to forego tax jurisdiction on reserve lands. One aspect of the report was to consider “whether the reasons behind that decision bear on the reluctance of some Ontario First Nations to engage in real property taxation today.” The report’s author Paul Salembier is a former general counsel with the federal Department of Justice who provided advice on legislative and regulatory issues affecting First Nations.

The report found the fundamental issue in 1973 in Ontario was the disconnection between the collection of property taxes from the non-status holders of interests in Indian reserve lands and the non- provision of local services by the municipalities/province to those non-status taxpayers.

While the report didn’t directly connect the 1973 changes to any ongoing reluctance by Ontario First Nations in regard to property taxation, clearly the First Nations who formed the ITGC in 1968 were opposed to municipalities collecting taxes on reserve lands and not providing services.

First Nations today simply do not have enough funding or power to solve the numerous difficult issues they are plagued with every day. Many First Nations across Canada are struggling to deliver the most basic services to their community members with meagre resources and little capacity. However, these First Nations want to provide more than just the basics to their communities. They aspire to lift their people out of poverty and provide opportunities for individual and community prosperity. Many First Nations are also looking to the future and want to lay the groundwork for the success of future generations.

As First Nations strive to find new and innovative ways to fix these issues, they are faced with many obstacles that can leave many frustrated and asking questions about why the system works the way it does. Why does economic development work differently on reserve? What is the difference between the funding a First Nation receives and the funding a municipality receives? Why do some communities seem to grow while others seem stuck?

The First Nations Tax Commission (FNTC) has been researching, applying and working toward improved solutions to these complex economic issues for over 25 years. However, many First Nations do not understand how the FNTC supports the governance and jurisdiction of First Nation governments and strives to see them flourish.

The current model of federal government programming provides First Nations with funding. While there are many great programs and opportunities for First Nations, especially when the federal government has specific mandates directed at improving life on reserve, relying on these programs means funds are always limited and will change with the federal government’s mandate and objectives.

This means two things for First Nations:
1. There is never enough funding to make a difference and
2. First Nation cannot make decisions or set directions independent from the federal government.

First Nations have also been working for decades toward solutions to these issues. One solution is for First Nation governments to raise their own revenues, independent from government programs, transfers and royalties. Almost 200 First Nation across Canada are implementing property taxation on reserve, with the support of the FNTC. This jurisdiction leads to First Nations collecting approximately $80 million per year. That is $80 million dollars spent on improving local services and building community infrastructure in First Nations across Canada. That is $80 million dollars that First Nation leaders have added to their budgets with the power to decide where each dollar goes based on their own laws and strategic plans.

This trend is exciting and the increased capacity and strength is visibly evident in First Nation communities that have implemented property taxation. However, is it enough? Can we be satisfied with this glass ceiling and not seek more jurisdiction, more autonomy, and more independent revenue? Can a true nation-to-nation relationship be achieved when one government is dependent on transfers from another?

A new fiscal relationship between First Nations and the Government of Canada should be based on more than federal transfers and unpredictable agreements. First Nations funding should not be determined by a line in the federal budget. The new fiscal relationship should include full tax powers for First Nations, just as other governments have the ability to share portions of the tax revenue collected locally, provincially and federally. Different levels of government have the ability to operate and provide quality services to their citizens through this arrangement. Why are First Nations excluded from that relationship?

There is no question First Nations should have this same fiscal relationship. To receive tax revenue first hand, instead of down the line after administration costs and outside mandates are added on. This new fiscal relationship would provide First Nations the ability to generate revenues to protect their interests. First Nations are the best care-takers of their own people, lands and resources. First Nations should have the financial jurisdiction and power to choose.

The future of our communities depends on the decisions we make today. The opportunity for our leadership to create this change is here now.

KAMLOOPS, BRITISH COLUMBIA (April 1, 2016) Long awaited changes to the First Nations Fiscal Management Act (FMA) and its regulations came into effect today. With these First Nation-led amendments, it is expected that participation in the FMA (currently at 177 First Nations) and local revenues raised (nearly $50M annually) should significantly increase in the coming years.
The amendments help clarify and simplify various processes under the Act, including streamlining access to the FMA, thereby making it easier for First Nations to opt-in to the legislation. Other changes will reduce the administrative burden on participating First Nations, and strengthen investor and capital market confidence in the FMA.

“Today’s announcement will mean even greater numbers of First Nations participating in the FMA, and perhaps more importantly, a greater number of First Nations systematically unshackling themselves from generations of government dependency,” said Chief Commissioner Jules. “Whether judged by uptake, revenue-raised, or improved fiscal accountability, the FMA has been a complete game-changer for participating First Nation governments and their economies.”

Enacted by Parliament in 2005 with all-party support, the FMA provides 177 participating First Nations with revenue raising powers like property taxation, improved financial management, and access to low-cost long term financing for community needs and economic growth. This has translated into over $220 million raised in property tax, over 50 new financial management systems, and a $90 million debenture.

The First Nations Tax Commission, along with the First Nations Finance Authority and the First Nations Financial Management Board, have been seeking changes to the FMA since 2009. Key stakeholder groups like the First Nations Tax Administrators Association, the Canadian Property Tax Association and the Canadian Energy Pipeline Association have endorsed the much needed improvements to the FMA proposed by the Commission.

The FNTC is a shared governance organization established in 2005 under the FMA. The FNTC provides direct regulatory oversight for First Nation property taxation under the FMA, and an advisory function for First Nation property taxation under the Indian Act. Its principal functions include: working with First Nations to develop their property tax jurisdiction, reviewing and approving First Nation laws made under the FMA, and reviewing and recommending for Ministerial approval First Nation by-laws made under section 83 of the Indian Act.

Improving First Nation Property Taxation

Access to the FMA
• The Minister of Indigenous and Northern Affairs, rather than Governor in Council, can amend the Schedule for First Nation participation. This will significantly reduce delays associated with adding new First Nations to the FMA Schedule.

Notification of FN Laws
• Shorter minimum period of notification of First Nation laws or amendments to laws (from 60 to 30 days).
• Elimination of the mandatory mail out requirement of notice to all members and taxpayers. First Nations can still choose a mail out or decide to use an alternative form of notification.
• Newspaper publication requirement eliminated. Replaced with notification in the First Nations Gazette (www.fng.ca).
• Gives FNTC the ability to develop standards for notification.

Submission of Laws for FNTC
• Representations to FN Council on proposed laws no longer need to be sent to FNTC.

Property Taxation
• Local revenue includes payments in lieu of taxation. Payments in lieu of taxation are typically made by federal and provincial governments or government entities like Crown Corporations.
• New fiscal power for collecting fees for water, sewer, waste management, animal control, recreation, and transportation, and other similar services.
• Clarifies that the recovery of costs for enforcement (including the costs of the seizure and sale of taxable property) are affirmed.

Annual Laws (Annual Rates and Expenditure Laws)
• Clarifies when annual laws need to be made by First Nations.
• Gives FNTC the ability to develop standards to facilitate the different timing requirements for First Nations when they are making annual laws.
• Clarifies the legislative authority for expenditure laws.

Local Revenue Account Management
• Clarifies that local revenues must be placed in local revenue account with a financial institution, and separate from other moneys of the First Nation.
• Provides that certain First Nations may opt for segment reporting on the local revenue account instead of conducting a separate audit.
In addition to the changes to the FMA, several regulations supporting First Nation property assessment and taxation have been amended. Developed in consultation with all stakeholders, these changes result in regulations that create efficiencies in the process, are smarter, and more responsive to First Nations and their taxpayers. Amendments of particular significance to tax administrators include:

Amendments to the Assessment Appeal Regulations
• Clarifies that non-practicing members of a law society can sit on the assessment appeal board.
• Eliminates the requirement that the assessor’s address be included in the assessment law.
• Reduces the period for a reconsideration of an assessment notice from 30 days to 21 days.
• Reduces the appeal timeline from 60 days to 45 days, the notice of hearing from 30 days to 10 days, and the commencement of a hearing from 90 days to 45 days.
• Provides for the Chair to provide documents to all parties in an appeal.
• Enables First Nations to set a timeframe for assessment review board decisions, provided the time is not less than 90 days from the hearing date.
• Clarifies the right to appeal a decision of the assessment review board, within 30 days of the board’s decision.

Amendments to the Assessment Inspection Regulations
• Enables First Nations to use assessment inspection processes that are used in the province, instead of the processes set out in the Assessment Inspection Regulations.

Amendments to the Taxation Enforcement Regulations
• Clarifies the content of the Tax Arrears Certificate, and when a Tax Arrears Certificate is required.

EDMONTON, ALBERTA (July 14, 2015) The First Nations Tax Commission (FNTC) and the Alberta Ministry of Municipal Affairs (MA) signed a memorandum of understanding (MOU) to share information used to prepare assessments with First Nations in Alberta.

The MOU serves to provide a framework for understanding and cooperation in formalizing the approach to share information with First Nations who are implementing property taxation in Alberta. Specifically, the FNTC and the MA have agreed on a process for providing linear property information to First Nations for preparing property assessments on reserve lands. Linear properties include wells, pipelines and other utility properties such as power lines.

This MOU is an important step forward for First Nations who require access to information to administer their taxation system. MA collects information from a variety of sources to prepare assessments for off-reserve linear property. Under this framework MA will share relevant information with First Nations to assist First Nations in preparing their own assessments of linear property.

Accurate assessments and standards are a cornerstone of property taxation systems, where accurate assessments are based on the best available information. The information provided by MA will help First Nations produce linear property assessments consistent with off-reserve linear properties in Alberta. This MOU benefits First Nations in Alberta and their taxpayers. It will mean better information, transparency and administration for taxpayers and First Nation members. This means an improved investment climate on First Nation lands and potentially more employment for First Nation members and other Albertans and revenues for First Nation governments.

The First Nations Tax Commission is a Commission established under the First Nations Fiscal Management Act with a mandate, among other things; assist First Nations in the exercise of their jurisdiction with respect to property assessment and taxation on reserve lands and to build capacity in First Nations to administer their taxation systems.

The Ministry of Alberta Municipal Affairs’ responsibilities include assisting municipalities in the provision of local government in part by providing programs and services that help ensure Albertans are served by accountable and effective local governments and live in strong and safe communities.

KAMLOOPS, BRITISH COLUMBIA (April 22, 2015)  The First Nations Tax Commission welcomes the announcement in the federal Budget 2015  that the federal government will be moving forward with amendments to the First Nations Fiscal Management Act (FMA). Enacted in 2005 by Parliament with all-party support, the FMA provides 147 participating First Nations with revenue raising powers like property taxation, improved financial management, and access to low-cost long term financing for community needs and economic growth.  This has translated into over $220 million raised in property tax, over 50 new financial management systems, and a $90 million debenture.  The amendments are intended to address inefficiencies, streamline First Nation access to the FMA so that more First Nations can participate, and improve investor confidence in the legislation.

The First Nations Tax Commission, along with the First Nations Finance Authority and the First Nations Financial Management Board, have been seeking amendments to the legislation since 2009. The need for change was reflected in the Minister of Aboriginal Affairs and Northern Development’s Report to Parliament on the Legislative Review of the First Nations Fiscal and Statistical Management Act – March 2012. Key stakeholder groups like the First Nations Tax Administrators Association, the Canadian Property Tax Association and the Canadian Energy Pipeline Association have endorsed the much needed improvements to the FMA proposed by the Commission.

FNTC Chief Commissioner C.T. (Manny) Jules welcomed the government’s announcement.  “Over the last ten years, we have witnessed more and more First Nations moving away from the transfer dependency model that has stagnated First Nation communities and economies. We fully expect that the legislative improvements will mean we can provide better services to more First Nations who are achieving greater self-sufficiency, improving accountability, and attracting private investment for their economies.”

The First Nations Tax Commission is a shared governance organization established in 2005 under the First Nations Fiscal Management Act (FMA). Based in Kamloops, BC, the FNTC provides direct regulatory oversight for First Nation property taxation under the FMA, and an advisory function for First Nation property taxation under the Indian Act.  Its principal functions include: working with First Nations to develop their property tax jurisdiction, reviewing and approving First Nation laws made under the FMA, and reviewing and recommending for Ministerial approval First Nation by-laws made under section 83 of the Indian Act.