March 2015
The Impact of Urban Additions-to-Reserves on Municipal Taxes
Urban Additions-to-Reserves (ATRs) represent a powerful tool to help reduce the economic disparity between First Nations and the rest of Canada. Some of the most successful First Nations in Canada have reserves that are located adjacent to municipalities.
In December 2014, the FNTC completed research into the impact of urban ATRs on municipal property tax revenues.
The research was undertaken in response to some comments in reaction to the proposed revisions to the AANDC policy on ATRs and Reserve Creation from local government groups.
The following summarizes the findings in this report:
- The potential for municipalities to lose property tax revenues when a First Nation acquires land within a municipality and converts it to reserve status is either zero or small and where it is small it is more than offset by other fiscal benefits.
- Local governments in Manitoba and Saskatchewan are compensated by their provincial and/or federal governments for any reductions in property tax revenue not made up through service agreements under the TLE framework.
- Local governments in BC can enter into service agreements with the First Nation and receive property tax equivalent payment for the services they are selling and achieve cost savings by not selling services for which the property tax cost is higher.
- Investment on urban ATRs generates significant fiscal and economic benefits for First Nations and local governments. These benefits can be significantly higher than any possible tax loss.
Tax Loss Concerns
This research demonstrates that the more successful the urban ATR the better it is fiscally and economically for local and First Nation governments.
Urban ATR success requires a competitive investment climate, business grade infrastructure, good property rights, a strong tax system, and the legal and administrative framework to support markets.
The FNTC will continue to advance the recommendations it made to improve the urban ATR process, reduce the barriers to economic development on First Nation lands, and offer services to support to First Nations involved in urban ATRS related to property taxation, infrastructure financing, service agreement negotiations and administrative capacity development.
January 2015
Federal Court upholds First Nation Property Taxation Jurisdiction
First Nations’ jurisdiction to enact property taxation laws, and the First Nations Tax Commission’s authority to review and approve these laws has been upheld in a recent decision from Justice Douglas Campbell of the Federal Court.
The case concerns the taxation of lands at a residential/resort community on Buffalo Point First Nation’s reserve at Lake of the Woods, in Manitoba. The Buffalo Point Cottage Owners Association brought the case because they were concerned about the transition from a fee for service arrangement to a system of property taxation.
The case dates back to 2010, when the Buffalo Point First Nation first began exploring the implementation of a tax regime. From 2010 to 2012 the First Nations Tax Commission met with the First Nation and the Cottagers several times to explain what implementing a tax regime entails, to review the procedures set out in the First Nations Fiscal Management Act (FMA), and to discuss potential impacts to the taxpayers. In early 2012 the First Nation passed its taxation laws, and submitted them to the Commission to review and approve. On June 25, 2012 the Commission approved the First Nation’s assessment, taxation, rates and expenditure laws.
The case was the first time the FMA (which came into force in 2006) or the Commission’s processes have been reviewed by a Court. The FMA is legislation designed to clarify and enhance First Nations’ taxation authorities. The Commission was created to support that jurisdiction, to take over the law approval function from the Minister, and to reconcile the interests of taxpayers with the responsibilities of Chiefs and Councils to govern the affairs of the Nation.
Justice Campbell noted that the First Nation had provided the Cottagers with a 48% reduction in their taxes in the 2012 tax year as a way to moderate the transition from a fee for service arrangement to a property taxation regime, and that tax rates going forward would be in line with the Commission’s Standards.
The Court also noted that there had been a high level of consultation and engagement with the Cottagers during the law development stage.
In the result, the Court recognized and respected the Commission’s mandate under the FMA. Justice Campbell dismissed the Cottagers’ arguments and found that the Commission’s decision to approve the First Nations’ laws was “reasonable in all respects.”
The Cottagers have appealed to the Federal Court of Appeal. A date for the hearing of the appeal has not yet been set.
December 2014
Bill C-428 receives Royal Assent
NEWS RELEASE: December 17, 2014
KAMLOOPS, BRITISH COLUMBIA – Bill C-428, “An Act to Amend the Indian Act (Publication of By-laws) and to Provide for its Replacement” received Royal Assent on December 16. The First Nations Gazette has strongly supported this Private Members’ Bill since it was first introduced in 2012 because it provides needed changes to the Indian Act and underscores the importance of the First Nations Gazette (FNG) as a governance tool for First Nations. The FNG is published by the First Nations Tax Commission and the Native Law Centre of Canada, University of Saskatchewan.
“The changes to the Indian Act contained within the bill are a positive step forward and long overdue for a 21st century Canadian society,” said FNTC Chief Commissioner C.T. (Manny) Jules, who appeared before the Standing Senate Committee on Aboriginal Peoples on September 30 in support of the bill. “I would like to congratulate MP Rob Clarke, a member of the Muskeg Lake Cree Nation, on seeing the need and advancing these changes through his Private Member’s Bill.”
The mandate of the First Nations Tax Commission includes the approval of property tax laws passed by First Nations pursuant to the First Nations Fiscal Management Act (FMA). It also includes providing advice to the Minister of Aboriginal Affairs on the approval of property tax by-laws passed by First Nations pursuant to section 83 of the Indian Act, with the process clearly articulated in a Memorandum of Understanding between the FNTC and the Minister.
Bill C-428 does not change the requirement for Ministerial approval of section 83 by-laws or the mutual responsibilities within the MOU, However, the bill states that a by-law passed by First Nations pursuant to sections 81 or 85 will come into force on the day it is first published, effectively removing the Minister’s ability to disallow these by-laws. Further, the bill amends section 86 of the Indian Act by adding a new provision to deal with the publication of by-laws. It now includes the FNG as an option for First Nations to publish the by-laws they pass.
“The Gazette has become an indispensable tool for Aboriginal peoples, First Nation governments, non-members resident on-reserve, legal practitioners, all other levels of government, and all others involved with or affected by First Nation legislation,” said Native Law Centre of Canada Director Sakej Henderson. “The First Nations Gazette is ready to assist First Nations in meeting their by-law publication requirements, as we have done since 1997.”
The FNG provides free access to First Nation public notices, FMA laws, Indian Act s.83 by-laws and FNLMA land codes. Close to 200 First Nations currently use the FNG to post their laws, by-laws, and notices. With a searchable database that currently houses close to 3,000 items, the FNG has been supporting the legal voices of First Nations in Canada since 1997.
Notice: December 9 Presentation to the Standing Senate Committee on Aboriginal Peoples
FNTC’s Chief Commissioner will make another presentation to the Standing Senate Committee on Aboriginal Peoples on Tuesday, December 9 from 9:30 – 10:30 am to discuss challenges relating to First Nations infrastructure on reserves.
The meeting will be televised and available to view online at http://senate-senat.ca/webcast-e.asp.
On September 30th 2014, Chief Commissioner Jules appeared before the Standing Senate Committee on Aboriginal Peoples as it continued its hearings on Bill C-428, “An Act to Amend the Indian Act (Publication of By-laws) and to Provide for its Replacement”.
September 2014
Presentation to the Standing Senate Committee on Aboriginal Peoples
Chief Commissioner’s presentation to the Standing Senate Committee on Aboriginal Peoples
On September 30th 2014, Chief Commissioner Jules appeared before the Standing Senate Committee on Aboriginal Peoples as it continued its hearings on Bill C-428, “An Act to Amend the Indian Act (Publication of By-laws) and to Provide for its Replacement”. Highlights of the Chief Commissioner’s presentation include support for the incremental changes to the Indian Act proposed by the bill, as well as the enhanced role the First Nations Gazette may play in the future, assisting First Nations meet the new by-law notification requirements.
To view the video, CLICK HERE and Chief Commissioner Jules’ presentation begins at 1:26:00
Indian Act Amendment Bill to continue: First Nations Gazette an effective and reliable option for First Nations
With the return of Parliament on September 15, the Senate Standing Committee on Aboriginal Peoples is set to begin its hearings on Bill C-428, officially known as “An Act to Amend the Indian Act (Publication of By-laws) and to Provide for its Replacement”. The Private Member’s bill is sponsored by Member of Parliament Rob Clarke (Desnethé-Missinippi-Churchill River), himself a member of the Muskeg Lake First Nation. Mr. Clarke described the changes proposed in his bill as “housekeeping in nature and are designed to remove the underbrush from the (Indian) Act.” Under Bill C-428, section 81 Indian Act by-laws could no longer be disallowed by the Minister of Aboriginal Affairs and Northern Development. Instead, First Nations would have the option of publishing their by-laws in a newspaper, on their own website, or in the First Nations Gazette (FNG). The First Nations Gazette has long been an effective and reliable option for First Nations. Launched on Aboriginal Day in 1997, and published in a partnership between the First Nations Tax Commission and the Native Law Centre, University of Saskatchewan, the Gazette has been recognized as the only national repository of its kind in Canada. The Gazette is available online (www.fng.ca), complete with a searchable database, which is updated daily, and includes a notifi cation component similar to Part I of the Canada Gazette. Today, over 180 First Nations use the Gazette, where more than 2,800 by-laws, laws and land codes are published. The Gazette provides direct access to First Nation citizens, leasehold and other residents living on reserve lands, electors, legal practitioners, and those with commercial and other interests in reserve land. FNG is a service provided by the FNTC. There is no cost for First Nations to use the Gazette. It is anticipated that the Senate hearings will begin at the end of September. Bill C-428 was fi rst introduced in the House of Commons in June 2012.
“Should it be the wish of Parliament to approve Bill C-428, the First Nations Gazette is ready to assist First Nations in meeting their requirements under this Act, should they choose this vehicle to do so.” – Commissioner Lester Lafond, Chairman of the First Nations Gazette Editorial Board.
Profile: Commissioner Leslie Brochu
FNTC Commissioner Leslie Brochu is the vice-president of marketing at Sun Rivers in a residential development in Tk’emlups te Secwepemc lands, near Kamloops, BC. Commissioner Brochu represents residential taxpayer interests in her role as Commissioner for the FNTC and has an extensive background in housing, land development and leasehold lending primarily on First Nation lands, as well as participating in taxpayer associations and developing relationships between First Nations and their taxpayers.
Clearing the Path recently had the opportunity to sit down with Commissioner Brochu to talk about her experience and involvement with the FNTC.
Sun Rivers is often touted as a successful model of residential development on First Nation lands. Can you explain why?
I think the success really stems back to the time spent in planning and the comprehensive nature of the agreements. One really fundamental piece is that the First Nation and Sun Rivers worked together for several years to develop those agreements. Consultants for Sun Rivers and the First Nation worked in tandem toward a common goal.
Another big part of the success has been the fact that while we don’t have a taxpayer relations law, we have something very similar embedded in the master development and servicing agreement. The lease agreement itself sets out how taxes will be structured. It’s clear, it’s contractual, and it’s public information that every person that buys is privy to. Then at the same time, we have a contracted relationship that outlines when we meet, how we meet, who meets and what’s discussed at the meetings, which happen twice a year between the developer and the First Nation. Then the First Nation meets with the taxpayers at least annually to consult on rates and answer questions.
The relationship works because there is consultation at many levels throughout the year and the agreements are public and shared with purchasers. The First Nation is very good about communicating with taxpayers in terms of what the rates are going to be, how rates are structured and how they spend the money. The expenditure laws are published on the First Nations Gazette so anyone can see how the budgets are being used and managed and that gives taxpayers a lot of comfort.
How is the First Nations Gazette useful for taxpayers?
The First Nations Gazette is an online service that has all of a First Nation’s laws published in very short order after they are approved. If taxpayers ever have any questions about the tax laws of a First Nation, they can visit the FNG website and see similar laws that guide municipalities in terms of how they structure their tax regime. That provides a lot of security and comfort to taxpayers that are thinking about investing on First Nation land. It’s an excellent resource for taxpayers.
What are the main elements of a strong relationship between taxpayers and First Nations? The biggest one is that there is clarity around the relationship – what is the purpose of tax, what are the obligations of tax and how is the tax used? There needs to be transparency and accountability, as well as a plan for communication and how taxpayers are consulted. I really believe if the structure is set up and there is transparency, as well as regularity around communications and consultation, that it sets the stage for a very successful relationship. What are some of the biggest concerns residential taxpayers on First Nation land have? I think the biggest concern is the perception that they may not be treated fairly because they don’t have the right to vote. They want to ensure they have the opportunity to be heard and consulted with on matters that affect them. Taxpayers also want to know there’s adequate protection within legislation around how tax rates are structured. Tk’emlups te Sepwepemc taxes under the FMA, how does that legislation support taxpayer interests? The FMA is designed to serve both First Nations and their taxpayers. The legislation is clear and thorough and provides structure around how taxes are set. There are also regulations around how the relationship between taxpayers and the First Nation will be conducted. Further, laws developed under the FMA set up the consultation and communication structure. How are disputes between taxpayers and First Nations best resolved? The best way is through consultation and discussion and trying to arrive at a mutually-beneficial resolution. First, the parties should be able to talk about issues. If we’ve done a good job from the start in terms of setting out the structure and communicating it, and we’re open and transparent and people understand it, most disputes should be able to be resolved by the parties. When that can’t happen, the next option would be some kind of mediated resolution. The last resort would be arbitration and then going to court.
Tsilhqot’in Decision: Opportunities to expand jurisdiction
This past June, for the first time in Canadian history, the Supreme Court of Canada (SCC) granted a declaration of Aboriginal title to the Tsilhqot’in Nation. After the decision was announced, Mandell Pinder LLP published a comprehensive case summary highlighting key aspects of the decision.
Through this decision, the SCC confirmed that the terra nullius (no one owned the land prior to Europeans asserting sovereignty) has never applied to Canada, affirmed the territorial nature of Aboriginal title, and reflected the legal test advanced by Canada and the provinces based on “small spots” or site-specific occupation.
The ruling overturned a prior ruling of the Court of Appeal that proof of Aboriginal title requires intensive use of definite tracts of land and it also granted a declaration that British Columbia breached its duty to consult the Tsilhqot’in with regard to its forestry authorizations. This case significantly alters the legal landscape in Canada relating to land and resource entitlements and their governance.
The SCC definitively concluded the trial judge was correct in finding the Tsilqot’in had established title to 1,750 square kilometres of land, located approximately 100 kilometres southwest of Williams Lake.
The Court reaffirmed and clarified the test it had previously established in Delgamuukw for proof of Aboriginal title, underscoring the three criteria of occupation: sufficiency, continuity (where present occupation is relied upon), and exclusivity were established by the evidence in this case.
The Court reasoned that Aboriginal title holders have the ‘right to the benefits associated with the land – to use it, enjoy it and profit from its economic development’ such that ‘the Crown does not retain a beneficial interest in Aboriginal title land.’
Expanding on its reasons in Delgamuukw, the SCC concluded Aboriginal title confers possession and ownership rights including:
- The right to decide how the land will be used,
- The right to the economic benefits of the land; and
- The right to pro-actively use and manage the land.
This case provides First Nations with significantly improved opportunities to advance their Aboriginal title and rights in a manner that reflects their vision, values and perspectives.
The SCC’s decision essentially requires that the Crown and industry meaningfully engage with Aboriginal title holders when proposing to make decisions or conduct business on their territories.”
As a result of this ruling, the FNTC has undertaken research to examine how First Nation taxation jurisdiction under the FMA can be expanded. The research will lead to an examination of how tax jurisdiction under the FMA could be applied off-reserve but within traditional territories.
The Court’s judgment has been described as a game changer and the implications of the decision to ongoing and future work of the FNTC is exciting.
May 2014
In the News: How a B.C. native band went from poverty to propserity
The National Post features the Osoyoos Indian Band, “arguabley the most business-minded First Nation in Canada” and investigates the secret to their success.
The article looks into the various ventures and strategies of the Osoyoose Indian Band, including property taxation. “The band also asserted control over the taxation of non-native companies leasing land on the reserve—taxes formerly scooped by the province. It was a small initiative, but it added $750,000 in annual revenue.”
January 2014
First Nations Expand Fiscal Powers
Two First Nations in British Columbia, Tsawout First Nation and Tk’emlύps te Secwépemc (TteS), have taken bold steps in addressing their capital infrastructure needs by becoming the first communities to develop a property tax borrowing law and development cost charges (DCC) law under the First Nations Fiscal Management Act (FMA).
Situated on Vancouver Island, near the City of Victoria, Tsawout First Nation first established its property tax system in 1994. In October 2013, Tsawout’s long term capital borrowing law was approved by the First Nations Tax Commission (FNTC). The law enables Tsawout to borrow $2.15M through the First Nations Finance Authority (FNFA), allowing for the completion of much needed upgrades to Tsawout’s sewage treatment plant.
According to Tsawout First Nation’s Finance/Comptroller Russell Harder, “using local revenues to support long term borrowing will help establish capacity in our system to meet the requirements of current, as well as future, economic development plans. This is a very important step in helping Tsawout expand the tax base for local revenues, which will create opportunities to complete other infrastructure projects needed by the First Nation.” Under the FMA, First Nations can use a portion of their annual property tax revenue to repay amounts borrowed through the First Nations Finance Authority. The term of the loan to Tsawout First Nation is for 30 years.
While borrowing addresses immediate needs, development cost charges are designed to meet future needs. Tk’emlύps te Secwépemc (formerly the Kamloops Indian Band) is located adjacent to the City of Kamloops. In January 2014, the First Nations Tax Commission approved the Tk’emlύps te Secwépemc Development Cost Charges Law. The Tk’emlύps te Secwépemc law is expected to play an important part in funding capital infrastructure enhancements over the long term. Capital projects include a highway traffic interchange and a water reservoir. Development cost charges laws made under the FMA charge a one-time tax on new developments, and revenue is used for specific projects identified in the community’s long term capital plan. Established in 2005, the FMA offers First Nations access to a greater array of fiscal tools to help spur economic growth through improved capital infrastructure. The laws enacted by Tsawout First Nation and Tk’emlύps te Secwépemc provide concrete examples of how the legislation supports First Nation innovation.
Songhees Wellness Centre: a Community’s Dream Come True
A shining example of how First Nations are learning to prosper with tax jurisdiction.
Thirty years ago the Wellness Centre was a community dream, eight years ago a Songhees Committee started the process of making the dream a reality, and on January 22, 2014, the Songhees Nation celebrated the grand opening of their long-awaited Centre. The Songhees Nation, located on southeastern Vancouver Island near the City of Victoria, had first conceived of building a gym to house after-school and evening activities for the youth.
In 2005 the Songhees Nation and the Government of Canada settled the Rail Spur Claim, and the Songhees Council was able to set aside funds to begin the process of planning for their gym.
At that time, a community committee was formed to research and plan the facility. The committee and the Council collected the ideas with the guideline “if we could have anything we want, what would it look like?”
Songhees has a limited land base and its government was operating out of a number of different buildings. The community wanted a facility where all of the programs and services could be housed in one location. They wanted a gathering place for all community members, from children to elders, as well as the ability to offer sports training, job training and arts and culture programs.
The Community came together and was very proud of the resulting plan. It included all of the aspects they felt the community required to thrive.
Songhees applied for government funding for the facility, and received only $1m out of the $24m required to build. Songhees began to think out of the box and, not wanting to diminish the community’s vision, came up with a strategy to fund the building on their own. Songhees implemented the First Nations Goods and Services Tax (FNGST) and entered into a revenue sharing agreement with Canada. That revenue stream, along with a lease agreement, was enough to securitize a long-term loan.
During this process, Songhees was working with the First Nations Tax Commission on implementing the First Nations Fiscal Management Act (FMA). In 2008, Songhees became the first First Nation in Canada to pass taxation and assessment laws under the FMA (they initially began collecting property tax under the Indian Act in 1995). Songhees is certified by the First Nations Financial Management Board, is a borrowing member of the First Nations Finance Authority as has passed a Financial Administration Law.
The Songhees Nation and its Wellness Centre is a shining example of how First Nations are learning to prosper outside of the Indian Act and government funding. Songhees credits the success to community involvement and support from the First Nation fiscal institutions.
Songhees invites those interested in learning more about the Centre and how they completed this project to contact them: https://www.songheesnation.ca/
Loon River First Nation: Vital Service Delivery to Community and Taxpayers
When contemplating the implementation of property tax jurisdiction, First Nations think about how the community may benefit from the program. Loon River First Nation’s experience represents an example of how the community and taxpayers have both supported and benefited from the additional community services made available through their property tax program. First Nations across the country are looking to see how other First Nation governments are applying their jurisdiction. Loon River First Nation is a leader in this regard.
Loon River First Nation (LRFN) is located 170km north of Slave Lake, Alberta. LRFN is part of Treaty 8 and has a total land base of 21,096.3 hectares spread over three settlements: Loon Lake 235, Little Prairie 237 and Swampy Lake 236. LRFN offers a full range of services to its 540 members including Administration, Economic Development, Daycare, Consultation, Finance, Human Resources, Membership, Education K-12, Emergency Management, Housing, Health, Social Services and Public Works.
Northern Alberta, where LRFN is located, has significant oilfield and gas production, related process facilities and pipelines. A large part of the LRFN tax base is made up of these properties held by various industry companies. The driving force behind wanting to implement property taxation, which LRFN did in 2007, was the need for a reliable water source and associated infrastructure. The tax dollars assisted in delivering this much needed service.
In 2010, a house fire on the reserve demonstrated the unfortunate inadequacies of fire protection services available to LRFN at that time. The home was burnt down and a family required emergency shelter. LRFN Council took immediate steps to look into how they could update their fire protection services and decided to implement this important and life-saving service through property taxation. As part of their financial planning, with assistance from the First Nations Tax Commission, LRFN proposed an additional tax levy for a five-year term to help finance the necessary equipment.
Taxpayers were advised of the dire need and were asked to support the initiative and the additional levy on their tax bill. There was immense support from taxpayers, industry and the community. The taxpayers, who benefitted from the new services, agreed and shouldered the additional costs without any objections to support the First Nation. LRFN Council was proactive and addressed the safety concerns for a safer community. With the additional funding, LRFN built a fire hall, purchased one fire truck and trained seven fire fighters.
In the Spring of 2011, the hot and dry weather sparked devastating forest fires that swept throughout northern Alberta. All available resources were pulled together and organized by the local municipal authorities in an effort to combat the worst fire emergency in decades. Homes in the community were endangered and all oilfield facilities in the outlying areas were at high risk. The Loon River First Nation fire pumper truck was part of the flotillas of equipment that battled the fires.
Due to the financial planning and subsequent emergency preparedness planning from the previous year, the community and by extension the taxpayers, were protected from the wild fires. The new fire protection services contained and prevented the spread of the fire to community and industry assets. Since the fires in 2011, LRFN has increased trained firefighters to twelve and has added more equipment including a sewer truck, a grader, skid-steer, garbage truck and a backhoe.
The experience with the fire and LRFN response has strengthened the relationship and trust between Loon River and its taxpayers. The taxpayers are happy with the level the service and are open to improvements in service deliveries. In addition to the fire protection service, the community has plans for using taxation revenue to help play for installing a piped water line from a reliable source. This important water source will open the door for future developments such as a new recreation centre, a skate park, a ball diamond, expansion of the fire hall and an additional fire truck. Visit the Loon River First Nation website for more information: www.loonriver.net
October 2012
FNTAA’s Vision to Promote First Nation Tax Profession
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The First Nations Tax Administrators Association (FNTAA) is holding its National Forum and Annual General Meeting at Osoyoos First Nation on Sept. 26-28, 2012.
The association will be calling for a special resolution to amend their by-laws and constitution, which will include proposed changes to their membership rules.
One of the main proposed changes is to provide special designation to graduates of the Tulo Centre of Indigenous Economics, which provides academic programs for First Nations tax administration and economic development through a working relationship with FNTC and the Thompson Rivers University.
As one of the first graduates of the program, FNTAA President Ernest Jack says his educational experience has inspired him and other graduates to build better networks in the wider business community.
“Most communities don’t realize that First Nations tax administrators have a new way of looking at economic development,” says Mr. Jack on the Tulo program.
“A tax administrator can help to develop the basic legal and administrative framework that will allow First Nations to tap into those resources to make economic growth come alive.”
He says he hopes FNTAA will also attract professionals in fields other than tax administration.
“The specialized knowledge we get from Tulo does not just apply to tax administrators but also other professionals working for First Nations as economic development officers and land managers.”
The proposed criteria for FNTAA membership includes the following:
- Completion of Tulo Centre of Indigenous Economics Certificate in First Nations Tax Administration. May be waived with two letters of reference and, until June 2013, ten years of experience in the field
- Membership in the First Nations Tax Administrators Association
- Minimum of five years experience in First Nations tax administration
- Complete application form with resumé and sponsorship letter
- Commitment to First Nation Tax Administrator Code of Ethics
For more information about the proposed changes and FNTAA, please visit their website at www.fntaa.ca.
July 2012
First Nations Take Major Steps Toward Debenture Financing
In February 2012, the FNTC approved Borrowing Agreement Laws for the Tzeachten First Nation, Songhees Nation, and Osoyoos Indian Band.
The Borrowing Agreement Law authorizes a First Nation to enter into a borrowing member agreement with the First Nations Finance Authority, and is a prerequisite to accessing debenture financing through the First Nations Fiscal and Statistical Management Act (FSMA).
The approval of these laws follows each First Nation’s recent Financial Management Certification from the First Nations Financial Management Board. This Certification is important as it instills confidence in the First Nation financial management and reporting systems that ultimately support economic and community development.
Over the course of the next few months, it is expected that these First Nations will begin work on their borrowing laws to finance capital infrastructure with their property tax revenue. Pooling their borrowing needs with other First Nations waiting to be certified, they will form the initial First Nation bond.
Long-term Vision for Tzeachten First Nation’s Future Taking Shape
Now that it has progressed from the stages of property taxation to debenture financing, Tzeachten First Nation is closer to achieving its economic goals.
“It’s just the calm before the next storm, yet we’re ready to jump in and make our goals a reality,” says Ms. Sheila Schmidt, General Manager of Tzeachten First Nation, of the past three years since the First Nation joined the First Nations Fiscal and Statistical Management Act (FSMA) through the First Nations Tax Commission (FNTC).
“We may have new responsibilities and requirements to meet, yet we’re excited about how our plans are coming together in a tangible way,” adds Ms. Schmidt.
Located in the Upper Fraser Valley within the city of Chilliwack, Tzeachten First Nation owns its own commercial development, including the Vedder Crossing Plaza, which houses a grocery store, bank, restaurant, medical clinic and several retail stores.
Ms. Schmidt first began leading Tzeachten First Nation’s management team in 2002 and oversaw their transfer from implementing property taxation under the Indian Act to creating their own laws through the FSMA.
Having taken advantage of the services offered by each of the FSMA fiscal institutions, Tzeachten First Nation has become one of three First Nations in Canada to receive certification from the First Nations Financial Management Board (FMB), which will provide them with the requirements to become borrowing members through the First Nations Finance Authority (FNFA).
Ms. Schmidt says she is proud of their progress since they first started to head in this direction three years ago.
“The first trigger for us was going under the FSMA,” recalls Ms. Schmidt. “That was when we realized that not only would we improve our jurisdiction and regulations through FNTC, we would improve our financial practices through the FMB certification process, and that would take us to another level of sophistication, which would ultimately result in this end benefit: debenture financing through the FNFA.”
It’s a natural next step for the First Nation, which has already experienced the benefits of First Nations property taxation. With a membership of 500 members, half of whom live on-reserve, Tzeachten First Nation has already witnessed significant economic growth, resulting in an exponential increase in administrative staff.
To address the shortage of office space, Ms. Schmidt oversaw the expansion of their administrative building, a $430,000 construction project, the type of initiative that could have been financed through FNFA debenture financing.
Not slowing down anytime soon, two shovel-ready projects are ready to proceed to construction. The groundwork for a seven-unit townhouse complex has been laid out, which will provide housing for Tzeachten membership. This will be the third residential development for membership. In addition, there are approximately 1,500 non-member residents residing in seven on-reserve residential developments that form part of their taxation folio.
Their other project is the construction of a multi-purpose building to be used for public sporting events and private community gatherings. Aside from the construction costs of the 3,500 sq.ft. building, they are budgeting for extra costs including: infrastructure services, storm water drainage systems, paved parking and lighting, a $1.3-million project they plan on financing with FNFA debenture funds.
Ms. Schmidt says that building the legal and administrative framework has been critical in their success.
“All the pieces of the puzzle have been coming together,” she says. “FNTC has been great — they have sample laws, which have been a valuable resource for us because it meant we didn’t have to reinvent the wheel.”
Now that they are a borrowing member of FNFA, Ms. Schmidt hopes to take advantage of the new revenue options, which will address their outstanding debt.
“Between our two loan payments, we’re paying about $10,000 a month in debt servicing because of aggressive repayment terms with our current lender. But if we refinance under the FNFA, we will save approximately $5,500 a month in debt servicing alone, and the same amount we’re paying right now to finance $1-million could actually leverage about $3-million.”
Having experienced first-hand the benefits of First Nation property taxation, Ms. Schmidt says she’s eager to share the successes of Tzeachten First Nation with other First Nations who may be considering joining the FSMA.
“The support we’ve received has been phenomenal — I would tell people to pick up the phone and call FNTC, or go to their website and look at the resource material there,” encourages Ms. Schmidt. “And even though it may seem overwhelming, I’d tell them you won’t have to work through it yourself – you’ll find support from the FNTC staff and plenty of us willing to share our own experiences.”
July 2008
Press Release: Commission Recognizes New Brunswick Chiefs
The First Nations Tax Commission (FNTC) honoured a number of Chiefs from New Brunswick First Nations at a ceremony during its quarterly meeting held in Fredericton, New Brunswick. The meeting marked the start of the FNTC’s second year of operations.
Mr. C.T. (Manny) Jules, Chief Commissioner of the FNTC, praised the Chiefs for their leadership. “The Chiefs of New Brunswick, through the Atlantic Policy Congress, have demonstrated unwavering support for the work of the Commission and the Indian Taxation Advisory Board (ITAB). In particular, their resolutions of support for the First Nations Fiscal and Statistical Management Act (FSMA) provided us with the momentum necessary to ensure all-party support in Parliament.”Those honoured included Chief Noah Augustine (Metepenagiag Mi’kmaq Nation), who recently negotiated a sales tax agreement for his community with the government of New Brunswick, and Chief Ken Barlow from Indian Island First Nation, who recently requested that Indian Island be added to the FSMA schedule. Also recognized were Chief Jesse Simon (Elsipogtog First Nation), Chief Everett Martin (Eel River Bar First Nation), Chief Paul Tomah (Kingsclear First Nation) and Chief proxy Alan Polchis, Jr. (St. Mary’s First Nation).
The event focused on facilitating private investment on First Nation lands. Keynote speaker, Mr. Ron Derrickson, former Chief of the Westbank First Nation in British Columbia, shared his experiences as Chief, as a land developer and as a successful international entrepreneur. Mr. Derrickson recognized the importance of leadership and challenged First Nation Chiefs to set out a clear economic vision and work with their councils to make decisions that will build investment friendly First Nation economies. He noted the role played by Chief Commissioner Jules in helping to build First Nation economies and reduce dependency.
The Chief Commissioner also recognized the contribution made by Deputy Chief Commissioner, David Paul. Mr. Paul’s efforts were instrumental in earning the support of Atlantic First Nations and federal government officials for the FSMA. Mr. Paul has also maintained a positive working relationship with the provincial government officials of the Atlantic Provinces.Honourable T.J. Burke, Minister of Justice and Consumer Affairs and Attorney General of New Brunswick, Honourable Victor Boudreau, Minister of Finance, and Deputy Minister of the Aboriginal Affairs Secretariat, Mr. Patrick Francis were also in attendance at the dinner ceremony.
Another highlight of the Commission meeting was a presentation made by Mr. Todd Hoskin of the Ulnooweg Development Group Inc. The organization recently completed an Atlantic First Nation Market Demand Study. The report studied innovative approaches for financing First Nation community infrastructure and other developments. The findings and study recommendations were accepted by the APC in January 2008.
December 2007
Press Release: Thirty Three First Nations Collect Property Tax Under the FSMA
Thitry-three First Nations collect property tax under the First Nations Fiscal and Statistical Management Act (FSMA), following the publication of the FSMA schedule under new regulations in the Canada Gazette on December 26, 2007.
Mr. C.T. (Manny) Jules, Chief Commissioner of the First Nations Tax Commission, recognized the decision by these First Nations to participate in the FSMA as an historic milestone in the development of First Nation economies. “These communities have made clear their desire to move beyond the Indian Act and create greater certainty for their taxpayers while using their property tax system to build the infrastructure necessary to attract investment, create jobs and fully participate in the economy. ”
For the participating First Nations, property taxation under the FSMA means stronger enforcement powers, mechanisms to improve property taxpayer relations, and access to the full range of fiscal benefits offered through the legislation. “By choosing to exercise property tax jurisdiction under the First Nations Fiscal and Statistical Management Act, these First Nations will be better positioned to promote economic growth, strengthen their accountability and foster a better quality of life for their members,” said Chuck Strahl, Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians.
The FSMA came into force on April 1, 2006. Participating First Nations under the First Nations Fiscal and Statistical Management Act, beginning January 1, 2008:
- Adams Lake Indian Band
- ?Akisq’nuk First Nation
- Alexander First Nation
- Chehalis Indian Band
- Chemainus First Nation
- Chippewas of Georgina Island First Nation
- Chippewas of Kettle and Stony Point First Nation
- Kamloops Indian Band
- Kitselas First Nation
- Lequ’á:mel First Nation
- Lower Kootenay Indian Band
- Lower Nicola Indian Band
- Metepenagiag Mi’kmaq Nation
- Moricetown Indian Band
- Muskeg Lake Cree Nation
- Nanoose First Nation
- Osoyoos Indian Band
- Seabird Island Band
- Shuswap First Nation
- Shxwhá:y Village First Nation
- Simpcw First Nation
- Skeetchestn Indian Band
- Sliammon First Nation
- Songhees First Nation
- St. Mary’s First Nation
- Tla-o-qui-aht First Nations
- Tobacco Plains Indian Band
- Tobique First Nation
- Tsawout First Nation
- Tsawwassen First Nation
- Tzeachten First Nation
- We Wai Kai Nation
- White Bear First Nation
June 2007
Press Release: Inauguration Of The First Nations Tax Commission
KAMLOOPS, BRITISH COLUMBIA (June 18, 2007) – The First Nations Tax Commission (FNTC) celebrated its inauguration today on the Kamloops Indian reserve. The 10-member FNTC is one of the four institutions created as a result of the passage of the First Nations Fiscal and Statistical Management Act (FSMA) which received Royal Assent in March 2005. It is the successor organization to the Indian Taxation Advisory Board.
The event began with the appointment of the tenth Commissioner, Ms. Terry Nicholas, by Sakej Henderson, Director of the Native Law Centre at the University of Saskatchewan. The appointment, a unique feature of shared governance institutions, was made pursuant to a regulation under the FSMA.
“This is a truly historic moment. With the final appointment in place, the Commission can now begin the work of fulfilling its mandate to help First Nations build stronger economies.” said C.T. (Manny) Jules, FNTC Chief Commissioner.
The traditional ceremony that followed featured an honour song, prayer and smudge ceremony. Each Commissioner was then called forward to take the oath of office.“Kamloops is the cradle of First Nations property taxation” said Jules, as he traced the origins of the Commission. The Kamloops Indian Band led the successful 1988 amendment to the Indian Act (Bill C-115), which gave First Nation communities the right to levy property taxes on First Nations land. Kamloops is now the location of the head office of the FNTC.
Over the next two days, the new Commissioners will attend an extensive orientation session, to better prepare themselves for the FNTC’s workload.
The Indian Taxation Advisory Board will continue its services until the Commission becomes fully operational on July 1st, 2007.