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 

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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.

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.”