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First Nation Property Taxation Report First Nations Tax Administrators Association 20th Annual National Forum September 11 – 13, 2013 St. Eugene Mission,

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Presentation on theme: "First Nation Property Taxation Report First Nations Tax Administrators Association 20th Annual National Forum September 11 – 13, 2013 St. Eugene Mission,"— Presentation transcript:

1 First Nation Property Taxation Report First Nations Tax Administrators Association 20th Annual National Forum September 11 – 13, 2013 St. Eugene Mission, St. Mary’s, BC

2 Overview ▶ First Nations Tax Commission ▶ First Nation Property Tax – 2013 ▶ FNTC and FNTAA Relationship ▶ Current Issues and Initiatives ▶ Year Ahead

3 Introduction ▶ First Nations Tax Commission created in 2005 by the First Nations Fiscal Management Act. ▶ Mission: Assist First Nation governments build and maintain fair and efficient property tax regimes, and to ensure those First Nation communities, and their taxpayers alike, receive the maximum benefit from those systems.

4 Introduction ▶ The FNTC became operational on July 1 st, ▶ Shared Governance Commission ▶ There are ten Commissioners: C.T. (Manny) Jules, Chief Commissioner David Paul, Deputy Chief Commissioner Bill McCue Céline Auclair Leslie Brochu Lester Lafond Ken Marsh Terry Nicholas Randy Price Anne Shaw

5 FNTC Mandate ▶ Protect integrity of First Nation tax system; ▶ Safeguard and enhance First Nation tax jurisdiction; ▶ Assist First Nation property taxation capacity development; ▶ Promote the understanding and use of First Nation property taxation; and ▶ Promote First Nation economic development.

6 FNTC Functions and Services ▶ Law Review and Approval ▶ By-law Review and Recommendation for Approval ▶ Policy and Legislative ▶ Education ▶ Registry and Publication of Laws ▶ Dispute Resolution

7 First Nation Property Tax – 2013 ▶ 196 First Nations accessing the FMA or section 83 of the Indian Act. 168 have or developing property tax laws/by-laws* 99 First Nations on the FMA schedule** 62 First Nations are collecting tax under the FMA 26 First Nations have repealed and replaced section 83 by-laws with new FMA laws and 12 First Nations new to taxation enacted FMA property tax laws. Over $76 million collected each year in property taxes. The First Nation property tax system is bigger than that of PEI or any of the three territories. * - Includes 9 First Nations with telephone company/utility by-laws ** - Includes First Nations using the FMA for Other Revenue Securitization.

8 First Nations with Property Tax (FMA & S.83)

9 First Nations added to the FMA Schedule since September 2012 ▶ 15 First Nations added to the Schedule of the FMA since September Order Amending Schedule (December 7, 2012) 4 Order Amending Schedule (March 28, 2013) ▶ 99 First Nations on the Schedule. Represents a 20% increase in FMA participation since last year, and a 65% increase since September ▶ For the second straight year, over 50% of the FMA growth is from regions outside of BC.

10 First Nations Waiting to Be Added to the FMA ▶ Heiltsuk (BC) ▶ Penticton Indian Band (BC)* ▶ Wet’suwet’en First Nation (BC) ▶ Williams Lake Indian Band (BC)* ▶ Mistawasis (SK) ▶ Peter Ballantyne Cree Nation (SK) ▶ Ebb and Flow (MB) ▶ Fisher River (MB) ▶ Norway House Cree Nation (MB) ▶ Peguis (MB) ▶ St. Theresa Point (MB) ▶ Mohawk Council of Akwesasne (ON) * - Currently taxing under section 83.

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

12 FNTC and the FNTAA FNTC continues to maintain a strong FNTAA working relationship with emphasis in 3 areas: ▶ Education and Training FNTAA participation through advisory committee ▶ Technical Assistance Supporting new tax administrators ▶ FNTC standard and policy development FNTAA policy input

13 Current Issues and Initiatives

14 FMA Legislative Review ▶ Section 146 of the FMA calls for a legislative review of the FMA to be presented to Parliament within seven years of the passage of the FMA. ▶ FNTC participated with other institutions and AANDC in the legislative review. ▶ FNTC proposed recommendations aimed at achieving greater efficiencies and expanding FN revenue options. ▶ Minister’s Report was tabled in Parliament on March 2012.

15 FMA Legislative Review ▶ Proposed amendments include: Expanding local revenue definition, section 2(1) Providing for the power to collect costs of enforcement, section 5(1)(a) Increasing flexibility for notification, section 6 Reducing documentation requirements, section 8 Clarifying annual law timing requirements, section 10 Clarifying expenditure law authority, section 13 Delegation to panels, section 36 ▶ Other FN Fiscal institutions proposed additional amendments. ▶ FNTC continues to advocate FMA amendments with Canada.

16 Facilitating Assessment Service Provision to First Nations ▶ Service New Brunswick ▶ Property Valuation Services Corporation (NS) ▶ Municipal Property Assessment Corporation (ON) ▶ Manitoba Provincial Assessment ▶ Saskatchewan Assessment Management Agency ▶ Alberta Linear Assessment ▶ BC Assessment

17 First Nations Gazette ▶ Revamped FNG website with notification facility. ▶ First Nations and FN institutions will be able to provide notice of by-laws/laws and other documentation by submitting a request form and documentation. ▶ Hard copy version of the FNG to be eliminated in 2014; will only be available on-line. ▶ Bill C-428 is at Report Stage in the House of Commons. If passed, it would require publication of by-laws including section 83 by-laws (FNs would have option of Internet, FNG, or newspaper). Also will affect in-force dates of by- laws. ▶ FNTC has supported the publication provisions in C-428 with some drafting changes.

18 Property Transfer Tax Law ▶ FNTC approved a Tzeachten First Nation Property Transfer Tax Law (PTT) in June ▶ Similar to the BC Property Transfer Tax, the Tzeachten First Nation PTT is a non-recurrent tax paid on the transfer of residential interests on reserve. The tax is 1% on the first $200,000 of fair market value and 2% thereafter on the remaining fair market value. ▶ The Tzeachten PTT contains numerous exemptions, and a phase-in.

19 Property Transfer Tax Law Standards ▶ FNTC is developing Standards and a Sample Law to support and provide consistency for FN PTT laws. ▶ Standards will reflect best practices and be consistent with FNTC policy objectives, including: Transparency; Supporting economic growth; Harmonization; Administrative efficiency; and Reconciling the interests of First Nation governments with the interests of taxpayers.

20 First Nation Tax Jurisdiction Challenged ▶ Buffalo Point Cottage Owners Association Inc., (Applicant) ▶ Buffalo Point First Nation and Buffalo Point Development Corporation Ltd (Respondents) ▶ First Nations Tax Commission (Intervenor) ▶ Applicant requested JR of FNTC’s decision to approve BPFN’s 2012 laws. ▶ Scheduled to be heard on Nov 19-20, 2013 (Winnipeg).

21 Federal Own Source Revenue Policy ▶ The federal government is beginning to implement its OSR policy with self governing First Nations. Canada proposed to include property tax as OSR in discussions concerning self- government. ▶ The FNTC is working with Canada and FNs to ensure that property tax and all local revenues are excluded from OSR. ▶ An important element of the strategy to protect local revenues from OSR is to build a strong connection between local revenues and local service expenditures. ▶ FNTC is proposing to develop a strategy paper to share with the FNTAA on this matter.

22 New, Amended, and Proposed Standards ▶ New Standards for 2013 Annual Expenditure Law Standards Interim budget Contingency reserves BAT Standards Well Drilling Tax Laws (Alberta First Nations) ▶ Planned Amended Standards for 2013 Assessment and Annual Rates Standards Assessment for Agricultural Properties in Saskatchewan Taxpayer Representation to Council Standards ▶ Standards in Development Property Transfer Tax Law Standards Amended Annual Expenditure Law Standards

23 FMA Regulatory Initiatives ▶ FMA Borrowing and Treaty and Self-Governing First Nations ▶ Enabling FN Property Taxation and Assessment through Regulation ▶ FMA Access for Treaty and Self-Governing First Nations Property tax jurisdiction using the FMA instead of provincial legislation Education support

24 Grants/Payments in Lieu (GILTs/PILTs) ▶ GILTs/PILTs compensate for tax loss to local governments, while preserving Crown immunity. Some taxing FNs receive PILTs from Canada for property situated on their lands. ▶ PILTs/GILTs are done legislatively but some set by policy. ▶ Provincial Crowns pay GILTs to local governments but do not provide GILTs to FNs. (BC Arrangement for CNR properties, Hydro One and BC Hydro provide some payment but not GILTs). ▶ FNTC developing policy paper on GILTs/PILTs. Fiscal impact on First Nations to be assessed.

25 Jointly Held Reserves ▶ FNs wish to assert tax jurisdiction on jointly held reserves. Requires unanimity in law making and administration. Taxation Agreement is critical. ▶ Delegation of Authority Law (DAL) power designed to provide certainty and framework for taxation on these reserves. ▶ FNTC developing policy to support joint reserve taxation. Key issues are expenditures, services to taxpayers, continuity of services in the event of repeal, how revenues are allocated among First Nations.

26 FN Accommodation Tax ▶ Several FNs wish to establish a BAT (Accommodation) tax. ▶ As of 2013, BC applies the PST on the purchase of short term accommodation. If a municipality or regional district establishes a Municipal Regional District Tax (MRDT), a further 2% is applied. Municipalities/RDs retain the 2%. ▶ Both the PST and MRDT (where applicable) apply on reserve, however Status Indians are exempt. ▶ FNTC is continuing its work with law development. Seeking provincial cooperation in the withdrawal of the MRDT and PST on hotel accommodation on reserve, in favour of FN taxation. ▶ FNTC encourages First Nations, especially those with hotel properties, to urge the provincial government to provide tax room.

27 BC Carbon Tax Impacts on FN Property Tax ▶ In 2012, BC government announced review of carbon tax. Sought input from citizens. FNTC and other stakeholders made submissions. In the 2013 Budget, BC announced no changes to carbon tax relief measures. ▶ FNTC will continue to raise the issue with BC and seek revenue sharing arrangements with affected First Nations so that they can provide similar tax relief to their taxpayers. ▶ Westbank First Nation and other First Nations have raised their concerns to the Province. Other affected First Nations should join WFN in influencing a policy change.

28 The Year Ahead ▶ FMA Legislative Amendments. ▶ Expansion of the First Nations Gazette, on line only. ▶ Discussions with BC concerning Carbon Tax and FN Accommodation Tax, and GILTs. ▶ Research on private placement debentures, service agreements, and grants in lieu to First Nations. ▶ Working with Tulo in holding a series of regional workshops on establishing property tax jurisdiction.

29 The Year Ahead ▶ Facilitating tax jurisdiction on jointly held reserves. ▶ OSR discussion paper. ▶ Consulting with FNTAA and FN tax administrators on improving the laws/by-laws policy and procedures. ▶ Continue to work with the FMA institutions and communities to support First Nations borrowing and expanded revenue options.

30 Thank You (250) (Head Office) (613) (NCR Office)


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