First Nation Property Taxation Report

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1 First Nation Property Taxation Report First Nations Tax Administrators Association 23rd Annual National Forum September 29 30, 2016 Tzeachten Community Centre, Tzeachten First Nation, BC

2 Overview First Nation Property Tax in 2016 Current Issues and Initiatives Year Ahead

3 2016 Property Tax Highlights 27% or 165 First Nations in Canada have property tax jurisdiction (139) or are developing taxation (26) through either FMA or Indian Act. 197 First Nations on the FMA schedule (5 waiting to be added). 82 First Nations collecting tax under the FMA, generating $50.3M. 43 First Nations collecting property tax under the Indian Act, generating $35.3M. 41 First Nations have replaced section 83 by-laws with FMA laws.

4 FN Property Tax: By Province 139 FIRST NATIONS WITH PROPERTY TAX JURISDICTION AB 14% BC 68% SK 6% ON 4% NL 2% MB 2% PQ 1% NB 2% NS 1%

5 Moving to the FMA 100 First Nations with Property Tax Jurisdiction FMA Section 83

6 Supporting Law Development FNTC Sample Laws Property Taxation and Assessment laws for: BC, AB, SK, MB,ON, NS, NB, PQ Annual Rate and Expenditure Laws Business Activity Tax (BAT) Law (Business Occupancy and Well Drilling) Development Cost Charges Law Property Transfer Tax Law Taxation for the Provision of Services Law Borrowing Agreement Law Long-term Borrowing Law Taxpayer Representation to Council Law Delegation of Authority Law

7 Supporting By-law Development FNTC Sample By-laws Property Taxation and Assessment by-laws for First Nations in: BC, AB, SK, MB,ON, NS, PQ, NB Annual Rate and Expenditure By-laws Business Licensing By-law Financial Administration By-law Local Improvement By-law Telephone Companies Taxation By-law (Ontario, Nfld.)

More First Nations are Choosing Property Tax Jurisdiction The Chippewas of Kettle and Stony Point First Nation enacted the first FMA property tax law in Ontario.

8 More First Nations are Choosing Property Tax Jurisdiction The Chippewas of Kettle and Stony Point First Nation enacted the first FMA property tax law in Ontario. The First Nation property tax will replace their service fee system. Tax revenues are expected to be used to fund local services for their cottage leaseholders, and for future infrastructure improvements. The Elsipogtog First Nation enacted the first FMA property tax laws in New Brunswick. Taxable properties include utility properties and tax revenues are expected to be used to enhance community services.

9 First Nations are Leading the Way in Expanding Revenue Options Property Transfer Tax Law Tsleil Waututh Nation North Vancouver, BC BAT Well Drilling Law O Chiese First Nation Rocky Mountain House, AB

10 Implementing and Expanding Tax Jurisdiction How many FNTAA First Nations are interested in implementing: Property transfer taxes? DCCs? Taxes for the provision of services? Business activity taxes? Fees for services? Aboriginal resource taxation? FNGST? Tobacco Taxation? What are some of the barriers to implementing and expanding tax jurisdiction in your community?

11 Taxation and Aboriginal Title Development of Aboriginal Resource Tax (ART) concept proceeding along four paths: Discussions with First Nations Number of First Nations requesting presentations and provided resolutions of support has grown to over 50 in the last year. Discussion with Industry Concept has been presented to pipeline and mining proponents. Supportive as long as FN tax room is carved from existing fed/prov tax room. Discussion with Governments Concept has been presented to Canada and 3 provincial governments. Recognize the benefits of this approach compared to current methods. Concept Development First Nation proponents of the ART have developed tax proposals associated with mines and pipelines. The FNTC is supporting them in the design of these proposed taxes.

12 Taxation and Aboriginal Title Aboriginal Resource Tax Current Work: Meetings with interested First Nations to discuss the ART and seek resolutions of support. Proposed pipeline tax meeting for October hosted by a proponent First Nation. Continued discussions with industry and governments on implementing and developing the concept. Research and development on different aboriginal resource tax proposals for different types of resources and utilities.

13 Current Initiatives

14 Section 5(1)(a.1) FMA Fee Power The FMA amendments created a new First Nation law-making power to charge fees, as follows: 5.(1) Subject to subsections (2) to (6), sections 4 and 6 and any regulations made under paragraph 36(1)(d), the council of a first nation may make laws (a.1) respecting the charging of fees for the provision of services or the use of facilities on reserve lands, or for a regulatory process, permit, licence or other authorization, in relation to water, sewers, waste management, animal control, recreation and transportation, as well as any other similar services;

15 The Growth in Service Fees in BC

16 Taxes v. Fees v. Charges There is a legal distinction among taxes, fees and charges. Some levies may have elements of taxation and charges or fees; however, generally they are distinguished as follows: A levy to raise revenue for general purposes is a tax. A levy used to finance or constitute a regulatory scheme is a charge. A regulatory charge is normally imposed to defray the costs of a regulatory scheme, or may be designed to proscribe, prohibit or lend preference to a behavior. A levy to pay for the use of services or facilities is a user fee. Fees must have a clear relationship between the amount charged, and the cost to government of providing the service or facility.

17 Scope of the Fee Power The fee power is broad, but not unlimited. The key elements are: The fees must be for the provision of a service or the use of facilities on reserve lands, or The fees must be for a regulatory process, permit, licence or other authorization. The fees must be in relation to water, sewers, waste management, animal control, recreation and transportation, or any other similar services. The fee power provides opportunity to supplement tax revenues, and to charge fees to non-taxpayers for use of services or facilities.

18 Anticipated Areas for FN Fees The Fee Law power opens up a broad range of possibilities for First Nations, including - Fees for hard services, including water, sewer, and waste collection. - Fees for licensing and permitting regimes related to local services, such as pet licensing & business licensing. - Fees for facility use, such as recreation facilities.

19 Reasons Why the Fee Power is Important 1. First Nations need the same revenue options available to other governments providing local services. 2. Fees can provide a more equitable allocation of costs to taxpayers and others. 3. Having the power to charge fees enables more options for service agreements. 4. Provides the legal authority for First Nations who currently collect fees outside of FNLMA. Q. How many FNTAA First Nations are interested in collecting fees? Q. What fees would you like to collect?

20 FMA Amendments Proposed Amendments for 2017 FNTC working with FNFA, FMB, and INAC on additional FMA amendment proposals. Proposals build on recommendations made by First Nations and fiscal institutions and reflected in 2012 Ministerial Report concerning the FMA. FNTC is advancing an amendment to subsection 2(3), dealing with removing a First Nation from the Schedule. Amendment would limit removal from the Schedule to situations where the First Nation does not have local revenue laws under the FMA and has not borrowed from the FNFA, except where the First Nation is entering Treaty or self-government. This amendment will bring greater certainty in the First Nation tax system for First Nations and their taxpayers. The FNTC is also advancing amendments to clarify the delegation of law-making powers, and taxation on joint reserves. Continue to advise the FNTAA and taxing First Nations on the progress.

21 Amended Standards for 2016 Property Taxation Law Transition provisions for FNs moving from service fees to property tax. Use of tax districts. Annual Rates Law Clarifying section 7 justification requirements. Simplifying average tax bill calculation (representative median taxpayer) Enabling the use of reference jurisdiction ratesetting. Clarifying reference jurisdictions.

22 Proposed Standards Business Activity Tax Quarry Tax (BC) Criteria for the Approval of Borrowing Laws Changes to the unutilized borrowing capacity formula PILTs Service Taxes

23 FMA Regulatory Initiatives FMA Borrowing for Treaty and Self-Governing First Nations FMA Access for Treaty and Self-Governing First Nations Property tax jurisdiction using the FMA instead of provincial legislation Education support

24 First Nations Gazette (FNG) Services

25 First Nations Gazette (FNG)

First Nations Gazette (FNG) Services available from www.

public notices, or submit your own notice for posting e.

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material on First Nation law, including digitized

up official and variant First Nation band names User

26 First Nations Gazette (FNG) Services available from Public Notification Legislation Database View public notices, or submit your own notice for posting e.g. proposed laws, elections, public consultations, land requirements Submit enacted laws, by-laws, and codes for publication Search database of FMA laws, Indian Act by-laws (s.81, 83, 85.1), land codes Reference Documents View and download sample laws and by-laws, standards, policies, and procedures Digital Archive Search and view archived material on First Nation law, including digitized versions of the printed FNG Official Name Look Up Look up official and variant First Nation band names User Accounts Register for an account and upload notices for publication Elections View information on upcoming First Nation elections

27 First Nations Gazette (FNG) Why use the FNG? Services easily accessed online anytime and anywher e A single point of reference for law-making and notific ation Affordable cost-free services Services currently used by over 200 First Nations Legislation database currently houses over 3,000 ite ms Powerful search and filtering tools

28 The Year Ahead Developing New Standards and Working with First Nations in Updating their Laws Developing Improved Regulations and Standards Aboriginal Resource Taxation New Tulo Centre Cohort begins the week of November 14, 2016

29 Workshops Maximizing the Community Benefits from Treaty Land Entitlements and Additions to Reserve November 8, 2016 Saskatoon, SK Restoring First Nation Tax Jurisdiction through the FMA March 2, 2017 Rama, Ontario

30 Stay in Touch Subscribe to the Clearing the Path Newsletter published quarterly Download the FNTC app Visit the website for the most current news and information

31 Thank you

First Nations Taxation National Overview. 52 nd Annual CPTA National Workshop Fairmont Empress Hotel, Victoria, BC October 1, 2018

First Nations Taxation National Overview 52 nd Annual CPTA National Workshop Fairmont Empress Hotel, Victoria, BC October 1, 2018 Overview C115 30 Years Functions and Services Legal Framework Proposed