July 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.
Saddle Lake Cree Nation: Clearing the path to a stronger future with property taxation
Profile: Commissioner Bill McCue
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.
FMA institutions host presentation at United Nations
The FNTC, along with the First Nations Financial Management Board (FMB) and the First Nations Finance Authority (FNFA) hosted a side event presentation on May 12, 2016, as part of the 15th session of the United Nations Permanent Forum on Indigenous Issues, held in New York during May 9 to 20, 2016. The side event, “A Successful Model of Indigenous Governance Through an Indigenous-led Institutional Framework,” was an opportunity to share the success of First Nations who supported the development of the First Nations Fiscal Management Act with the international community and to enhance the profile of the regime.
The 90-minute panel discussion focused on three themes:
• The First Nations Fiscal Management Act as a successful model of Indigenous governance.
• Asserting jurisdiction leads to better economic development outcomes and improved social well-being.
• This successful model can be replicated to support Indigenous self-sufficiency and greater self-reliance.
Chief Commissioner Jules, Mr. Harold Calla (Executive Chair, FMB) and Mr. Ernie Daniels (President and CEO, FNFA) each made brief presentations followed by a question and answer session. The event served to position the work of the institutions within the global discourse on Indigenous economic development.
In attendance were a number of Indigenous representatives, as well as the Minister of Indigenous and Northern Affairs Canada, Ms. Carolyn Bennett, and her officials.
Opening the door to real property taxation powers for Ontario First Nations: Historical note
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.
Chippewas of Kettle and Stony Point First Nation: First to exercise FMA property tax jurisdiction in Ontario
The Chippewas of Kettle and Stony Point (CKSP) has recently become the first First Nation in Ontario to establish its property taxation jurisdiction under the FMA. As part of rolling out its property tax regime, the CKSP has also formalized a working relationship with Municipal Property Assessment Corporation of Ontario (MPAC) resulting in contracted assessment services being provided to the First Nation.
The Kettle Point reserve is located in southwestern Ontario along the southeast shore of Lake Huron, 35 kilometres northeast of Sarnia and adjacent to the town of Forest. The Kettle Point reserve is approximately 1,100 hectares and includes 300 cottage leaseholds.
The CKSP has invested many years into the establishment of their property taxation regime. The work included developing their annual laws, registering their tax administrator Stephanie Bressette in Tulo’s First Nation Tax Administrator certificate program and working with FNTC to modify the Tax Administration Software (TAS) to support their tax administration. The software modification was necessary to support a First Nation property tax system in Ontario, as well as to meet CKSP’s specific tax administration and reporting needs. FNTC also facilitated work with the Ontario assessor, MPAC, who agreed to provide assessment services for the new tax system.
CKSP has extensive plans for development of their lands that highlight the need for increased services being requested by leaseholders and member residents. It is clear property taxation under the FMA will lead to more revenue for the CKSP community, provide formal mechanisms to address taxpayer concerns regarding assessed values and lead to increased land values and associated leasehold revenues for the locatee landlords.
CKSP has many local attractions for visitors to enjoy including its famous “kettles,” recreational beach, golf course, shopping plaza, veteran’s memorial, and annual pow wow. Now the First Nations has a property tax system to generate stable local revenues to ensure the provision of quality local services and further infrastructure and community development. The CKSP property tax system, supported by TAS and the authoritative assessment services provided by MPAC, can serve as a model of best practices for other First Nations in Ontario.
A new fiscal relationship for First Nations: Expanded jurisdiction for a nation-to-nation relationship
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.
April 2016
Improvements to the FMA to Support Prosperity in First Nation Communities
OTTAWA, ONTARIO (April 1, 2016) The Minister of Indigenous and Northern Affairs, Carolyn Bennett, along with Chief Commissioner of the First Nations Tax Commission, C.T. (Manny) Jules, Executive Chair of the First Nations Financial Management Board, Harold Calla, and Chief Executive Officer of the First Nations Finance Authority, Ernie Daniels, today announced changes to the First Nations Fiscal Management Act (FNFMA) which will make it simpler for First Nations to access the regime, implement property taxation and lever financing for community economic and social development.
The amendments not only clarify and simplify various processes under the Act, they ultimately make it easier for First Nations to opt-in to the legislation, strengthening the regime and improving the investment climate on-reserve.
These amendments stem from recommendations and consultations with the three First Nations-led institutions established under the legislation – the First Nations Tax Commission (FNTC); the First Nations Financial Management Board (FNFMB); and the First Nations Finance Authority (FNFA) – as well as with First Nations scheduled to the Act, those interested in opting-in, taxpayers and other stakeholders.
Quick Facts
- The Act has strong, sustained demand from First Nations wishing to participate in the regime. Currently, 177 First Nations have chosen to opt-in to the Act, with 86 collecting property tax, 62 having received FNFMB financial performance certification, and 52 accepted as FNFA borrowing members.
- First Nations participating in the FNFMA have over $481 million in own source revenues, and have used these revenues to support over $250 million in FNFA loans to build houses, a school, green energy projects, refinance existing debt and to help pay for new capital infrastructure.
- First Nations with property taxation jurisdiction under the FNFMA have collected over $250 million in property tax revenues, supporting vital services and infrastructure.
Quotes
“Ensuring First Nations can exercise core government functions in the area of fiscal management is critical to their participation in the Canadian economy. These changes to the legislation provide a solid foundation for a nation-to-nation relationship in which First Nations can invest in community infrastructure and economic development projects and improve their socio-economic future.”
The Honourable Carolyn Bennett, M.D., P.C., M.P., Minister of Indigenous and Northern Affairs“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. 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.”
C.T. (Manny) Jules, Chief Commissioner of the First Nations Tax Commission“These amendments demonstrate that the FNFMA is a living piece of legislation that is being changed to reflect First Nations interests as the FMB proceeds with implementation across Canada”
Harold Calla, Executive Chair of the First Nations Financial Management Board“The FNFA is extremely happy these important amendments to the FMA are being implemented. We are proud of the work we have done for First Nations borrowing under the FMA in the past four years and look forward to assisting many more First Nations realize economic success over the next decade.”
Ernie Daniels, CEO of the First Nations Finance Authority
Associated Links
First Nations Fiscal Management Act
First Nations Tax Commission
First Nations Financial Management Board
First Nations Finance Authority
First Nations scheduled to the FNFMA
Legislative and regulatory amendments clear the path for First Nations to exercise their jurisdiction and build their economies under the FMA
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.
November 2015
Musqueam Indian Band Board of Review v Musqueam Indian Band
The Court of Appeal framed the key questions as follows: 1. Is there a “restriction” on the use of the Property; and 2. If so, was the restriction “placed by the band”?
Musqueam is currently seeking leave to appeal the decision to the SCC. The Commission is reviewing this decision with First Nation assessors, and considering any implications for the drafting of its sample property assessment laws. First Nations are encouraged to review their property assessment laws or bylaws to ensure they refl ect the First Nation’s intentions in respect of use restrictions included in leasing documents.
UPDATE: On October 29, 2015, the Supreme Court of Canada granted leave to appeal, and will hear the Musqueam Indian Band’s appeal from the decision of the British Columbia Court of Appeal.
October 2015
Ts’elxwéyeqw Tribe First Nations Communities to Tax Jointly-held Reserve
September 2015
The Legacy of Chief Clarence Jules Sr. (January 6, 1926 – September 10, 2015)
Chief Clarence Jules Sr. was born in 1926 on the Kamloops Reserve and was raised on his father’s farm. He attended the Indian Residential School until he reached the ninth grade. While at the school he milked the cows and looked after the horses. When he was 14, he asked his father for a quarter to buy jeans. He was told to go get a job. He left school, worked haying for a rancher, milked cows by hand at a dairy, and spent seven years working at the Palmer Ranch.
In 1952, Chief Jules married Delores Casimir and continued to work on area ranches. They had nine children together. He worked as a range rider for the band, farmed hay and cattle and as stated in his induction to the BC Cowboy Hall of Fame in 2010 “always had a nice string of horses.”
He worked hard for his family. As he said about working on the range “The hours were kind of rough on my wife, though, I often had to get up at two and three in the morning.” Perhaps his most famous quote about working hard was “You can’t fix a flat tire by yelling at it.”
He was more, however, than a hardworking cowboy. As he said in 2010, “I think I was more of a Chief and Councillor than a cowboy.”
Chief Jules led the Kamloops Indian Band (now Tk’emlups te Secwepemc) from 1962-1971. He improved the irrigation system and started a band farm, hosted the founding meeting of the Union of BC Indian Chiefs in 1969 and advocated for First Nation owning their lands.
Perhaps his greatest legacy goes back to 1962 when his council passed a by-law to establish the Mount Paul Industrial Park – the first industrial park on First Nation lands. Chief Jules made sure the necessary infrastructure was built, and he personally convinced a number of businesses to invest and lease land on the reserve. His powers of persuasion must have been impressive, because securing a property right on Indian land in the 1960s was difficult. Lessees faced uncertainty about tenure, lease registration, tax liability, and local service provision; moreover, they had plenty of options on non-Indian lands. It is a testament to his vision that the Mount Paul Park has grown from 11 original businesses in 1964 to over 150 today, with annual sales of over $250 million. If there were a hall of fame for business deals, it would include Chief Clarence Jules, Sr.
Chief Clarence Jules Sr. recognized very early that First Nations needed business on their lands and that the Indian Act system was getting in the way. When leasing was just starting on the Mount Paul Industrial Park he said, “We provide the services and the province collects the taxes. We should collect the taxes to pay for better services and infrastructure. Otherwise we can’t compete for business.” He was a very patient but determined man. It took twenty years for the federal government to catch up to him and pass the Kamloops Amendment of the Indian Act (Bill C-115) that gave Tk’emlups the property tax authority, largely due to his hard work and that of his son Manny. This created the modern First Nation tax system. During the White Paper consultations of 1968, he was asked about how the Indian Act should be changed. His answer is still relevant today:
“We feel that we are in a better position to judge the needs of our people than officials of the Department located in Ottawa. We point out that much of the dissatisfaction with the present Act arises from the lack of power and authority to Band Councils. To give just one illustration: We operate an Industrial Subdivision on part of our reserve and lease lots in the Sub-division to various individuals and companies. Before a lease can be granted not only must the Band Council pass its resolution but the lease is then routed through the Kamloops Indian Agency, then to the Vancouver office and finally to Ottawa. The same process is followed on the return trip.
We can document instances where months have gone by before a lease is finally issued. In many cases by the time the lease has been returned the lessee has gone elsewhere because people today require almost instantaneous decisions. These delays cost us money and we don’t like it. There must be a change to grant more power and authority to Indian Band Councils. After all, our Indian people elect us to represent them; they do not elect officials of the Indian Department.” (November 1968, Kelowna, BC)
His ability to build bridges between communities, people and governments created the foundation for over $2 billion in investment in First Nations and over $1 billion in taxes collected by First Nations across Canada. It has led to thousands of jobs and many agreements between First Nations and governments. As he said, “We are here, we should all live together.” In September 2009, he was honoured by the First Nations Tax Administrators Association for his contribution to First Nation taxation. This was a well-deserved honor. Many recognize that without his work, devotion to family and dedication to establishing First Nation jurisdiction there would be no First Nation tax system, no First Nations Tax Administrators Association and no First Nations Fiscal Management Act. His work has made a difference in many people’s lives. He loved people and they loved him because he was coming from a very special place. Nobody could ever forget the twinkle in his eye, and the relish in his chuckle, when he told a particularly good story. But they were never just stories. He treated everyone with honesty and respect and there was always a lesson or a helping hand. Thank you Chief Clarence Jules Sr. You will be dearly missed and never forgotten. Your legacy will live on.
Related to this story (external links):
Audio: Interview with Manny Jules, Jim Harrison Show, Radio NL (September 15, 2015)
Video: Funeral Held for Clarence Jules Senior, CFJC TV (September 16, 2015)
July 2015
AMA Formalizes Support to First Nations for Assessing Linear Property – MOU Signed with FNTC
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.
June 2015
NAEDB: Property Taxation Successful
The FNTC welcomes the National Aboriginal Economic Development Board (NAEDB) report, The Aboriginal Economic Progress Report 2015, released on June 17, 2015. Under Chief Clarence Louie’s guidance, the NAEDB shed important light on the economic and social conditions in Aboriginal communities. While the Report’s findings suggest that First Nations and other governments need to do more to address significant gaps in many socio-economic indicators, we are nonetheless buoyed by the Report’s strong support for First Nation fiscal tools, like property tax.
The Aboriginal Economic Progress Report 2015
The Report notes that “Property taxation provides communities with access to stable revenue streams that can be reinvested into infrastructure and services, and provides communities greater autonomy in spending-related decisions independent of federal government involvement.
…the integrated relationship between good governance and an active property taxation framework is a common component to establishing greater control in financial matters and building economic success and independence.”
Early observations suggest that First Nations that have real property taxation bylaws tend to have better economic outcomes than those that do not. First Nations that have had property tax bylaws for longer periods of time demonstrate significantly higher outcomes than First Nations both with and without property tax bylaws.[/su_box]
There over 150 First Nations exercising property tax authority or approximately 25% of First Nations in Canada. These communities are in all regions of the country and represent the diversity of different First Nation communities. Some have historic Treaties with Canada, others do not. As disparate as they are, there is also a common thread. Collectively, they recognize that taxation is a fundamental pillar of governance, an integral part of the fiscal framework to support economic growth, and more importantly, a means to break the bonds of government transfer dependency.
This linkage between property tax jurisdiction and economic well-being is something the First Nations Tax Commission has long understood and documented. We have witnessed transformations in First Nation economies. Property tax revenue helps build infrastructure and improve services which leads to greater economic investment, and in turn to more property tax revenue. To the extent that property tax jurisdiction can lead to greater economic opportunities for First Nations and their citizens, we believe we are on the right track, and are pleased that the NAEDB Report draws the same conclusion.
Taiwan Council of Indigenous Peoples Meets with Commission
Besides officially recognizing tribes, the Council promotes the use and revitalization of Taiwan’s aboriginal languages, supports legislation that would grant autonomous land to indigenous peoples, strengthens relations between Taiwan’s indigenous groups and those in other countries, and raises awareness of aboriginal cultures.
May 2015
AANDC Press Release: Amendments to FMA
OTTAWA, May 7, 2015 – Today in the House of Commons, the Harper Government introduced Bill C-59, which includes amendments to the First Nations Fiscal Management Act. The Act proposes amendments that would reduce red tape, better align the regime with provincial standards, streamline internal operations and enhance investor confidence. Amendments would clarify and simplify various processes under the Act, ultimately making it easier for First Nations to opt-in to the Act, strengthening the regime and creating a more certain business environment for investors. The introduction of these amendments stems from recommendations and consultations with the three First Nations-led institutions established under the legislation – the First Nations Tax Commission (FNTC); the First Nations Financial Management Board (FNFMB); and the First Nations Finance Authority (FNFA) – as well as with First Nations scheduled to the Act and those interested in opting-in. The First Nations Fiscal Management Act has been very successful in improving economic opportunities and promoting greater self-sufficiency in First Nations communities who have opted-in and these amendments will contribute towards its continued success.
Quick Facts
- The First Nations Fiscal Management Act (FNFMA) came into force on April 1, 2006 and is opt-in legislation. It allows communities to securitize their property tax and other source of revenues for long-term borrowing, provides an alternative to federal funding for financing infrastructure and economic development on reserve.
- First Nations that opt-in to the Act have access to the tools and services offered by the three First Nations-led institutions established under the legislation, namely; the First Nations Tax Commission (FNTC) which implements an on reserve real property tax regime; the First Nations Financial Management Board (FNFMB) who provides financial certification to First Nations; and the First Nations Finance Authority (FNFA), which provides First Nations access to long-term pooled borrowing on a basis similar to other governments in Canada.
- The Act has been very successful, with strong and sustained demand from First Nations to participate in the regime. Currently, 158 First Nations have chosen to opt-in to the Act, with 82 collecting property tax, 52 having received financial performance certification, and 44 accepted as borrowing members.
- To participate in the First Nations Fiscal Management Act, a First Nation must first request that it be added to the Schedule of the Act through a Band Council Resolution.
Quotes
“Our Government is committed to helping enable First Nations to take full advantage of Canada’s economic prosperity—this is why I am so pleased that we are moving forward with amendments to the First Nations Fiscal Management Act. The proposed amendments for the opt-in legislation would reduce red tape, foster a strong and healthy investor’s climate and strengthen the regime. This is a clear demonstration of our Government’s commitment to working with First Nations to create the conditions that lead to jobs and economic development opportunities in Canada.” – Bernard Valcourt, Minister of Aboriginal Affairs and Northern Development
“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.” – C.T. (Manny) Jules, Chief Commissioner of the First Nations Tax Commission
“These amendments are an important step on the part of the Government of Canada to support the desire of First Nations to have the tools that enable better access to capital and improved accountability, and that improve the jurisdiction to raise revenues to create sustainable economies that benefit all Canadians.” – Harold Calla, Executive Chair of the First Nations Financial Management Board
“On behalf of FNFA‘s board of directors and the borrowing members we are extremely happy that these important amendments to FNFMA are being considered by this Government. We are also pleased with the assistance they provided throughout the process.” – Ernie Daniels, CEO of the First Nations Finance Authority
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April 2015
PRESS RELEASE: FNTC Applauds Announcement in Budget 2015 for Amendments to the FMA
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.
March 2015
FNTC Commissioner Profile – Céline Auclair
FNTC Commissioner Céline Auclair is the founder of the First Peoples Innovation Center, a non‑profit Aboriginal organization that assists the development of social innovation for the First People communities in Quebec. Commissioner Auclair’s extensive background includes working, both domestically and abroad, in international development, micro-finance development, First Nation taxation, property rights, human rights issues and good governance practices.
Clearing the Path recently had the opportunity to sit down with Commissioner Auclair to talk about her experience and involvement with the FNTC.
Prior to becoming an FNTC Commissioner, you were involved with FNTC’s predecessor, the Indian Taxation Advisory Board (ITAB). Can you tell us about that experience?
After I completed my PhD, I began working for ITAB on the very first property taxation framework under section 83 of the Indian Act. A few months later, I started working with the team to create the First Nations Gazette. When I first joined ITAB, the Gazette was a concept. ITAB was in the trial stage of developing the legal framework for First Nations laws to provide them with the legal stature that other laws in Canada had. It was rewarding to see that First Nations leaders were recognizing the importance of developing the legal structure for First Nations laws as part of their governance architecture. Since then, the First Nations Gazette has grown substantially and the economic stature of First Nations has changed drastically.
At that time, the Chief Commissioner was working hard to convince First Nations that taxation was a building block of First Nation economies. While I was working toward my PhD in Geneva, we were taught that to become a recognized government, three things were needed: to have people recognize the government’s authority, to have territory from which to base that authority, and to have the capacity to exercise jurisdiction. While it was theoretical at the time, we’ve since seen what taxation does for a government. It provides independence and is a tool to build an economy. It is a tool for the future. Taxation provides stable, predictable revenue that allows for multi-year planning. Understanding the power of taxation was the biggest lesson I learned at ITAB.
Throughout your career, you’ve had extensive international experience. How does that experience relate to your work as a Commissioner?
The Forum of Federations, an international governance organization promoting intergovernmental learning on governance challenges in multi-level democracies that I co-founded. During my 10 years there, I learned about the power of a federal state. There are only 26 countries around the world that have a federal charter, which allows different components of the country to have their own jurisdiction or constitutional power. In some countries, there is a two-level constitutional competency, while others have three orders of governments and governmental powers, such as monetary or foreign policy, which can be exclusive or shared between the levels of government. Many countries are innovating the way powers are shared and that can really sophisticate the way a country can govern.
I’ve applied what I’ve learned to my work with the FNTC by bringing that knowledge to the Commission so we can fully understand the advantage of a federal constitution and the flexibility it can bring for governments to exercise their jurisdiction independent from other governments. Canada’s constitution, as it is written, provides First Nations with governmental powers that are exclusive from other governments in the country. Taxation is a good example of that constitutional power. For decades, First Nations were not exercising powers on their lands, resulting in other governments doing so, which is still the case in some provinces today. By First Nations exercising their jurisdiction, they are also asserting their power under the constitution.
You also serve on FNTC’s International Relations Committee. Can you tell us more about the work that committee does?
We formed an international advisory committee with First Nations from other countries, including the United States, Australia and New Zealand, that have dealt with the same taxation issues we face in Canada to learn from them. We met a number of times to discuss challenges and listen to experts from those countries discuss the successes and difficulties they encountered with taxation. Those meetings were conducted over a three-year period and were incredibly useful to us.
We also consulting with emerging First Nation governments in Brazil and Mexico and found those meetings to be very interesting as well. To see new leaders with fresh eyes looking at yet the same problem faced by First Nations around the world was a valuable learning experience.
Our committee also had a good working session with world-renowned economist Hernando De Soto from the Institute of Liberty and Democracy. Mr. De Soto is a Peruvian economist who wrote a book called “The Mystery of Capital”, which detailed how lack of legal title to property hinders economic development. In our session, we discussed how formalizing property rights contributed to economic growth in Peru of 280 per cent and how other countries that have formalized property rights have experienced similar economic success. This demonstrated the power of property rights and underscored the important work the FNTC is doing on the First Nations Property Ownership Initiative here in Canada. While jurisdiction and taxation are the building blocks for First Nation economies, property rights are also at the heart of the economy. If you can’t own your own land, it can be very difficult to plan for the future. Property ownership can be controversial but the FNTC has worked hard to learn from the successes and difficulties encountered by First Nations in other countries to create a viable property ownership system for First Nations in Canada.
I pay tribute to the Chief Commissioner for being a visionary and leading the work of the FNTC. I encourage more First Nations to work with us to develop independent, stable governments that are able to assert their constitutional competencies. It is uplifting to see the dynamism of First Nations around the country and I am very optimistic for the future.