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.

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:

1. 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.
2. 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.
3. 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.
4. 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.

Click Here to Read the Full Report

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.