Transcript FNTAA National Forum 2012: First Nation Property Taxation

First Nation
Property Taxation Report
First Nation Tax Administrators Association
19th Annual National Forum
September 26 – 28, 2012
Spirit Ridge, Osoyoos, BC
Overview
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First Nations Tax Commission
First Nation Property Tax – 2012
• National Overview
FNTC and FNTAA Relationship
Current FNTC Initiatives
Property Tax Policy Issues
Year Ahead
Introduction
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First Nations Tax Commission created in 2005 by the
First Nations Fiscal and Statistical Management Act.
Builds on the work of the Indian Taxation Advisory
Board.
Mission: The mission of the FNTC is to help 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.
Introduction
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The FNTC became operational on July 1st, 2007.
Shared Governance Commission
There are ten FNTC Commissioners
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C.T. (Manny) Jules, Chief Commissioner
David Paul, Deputy Chief Commissioner
Céline Auclair
Leslie Brochu
Lester Lafond
Ken Marsh
Terry Nicholas
Randy Price
(currently 2 vacancies)
FNTC Mandate
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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.
FNTC Functions and Services
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Law Review and Approval - Review and approval of
FSMA laws.
By-law Review – MOU with AANDC
Policy – Development of policy supporting the First
Nation property tax framework: legislation,
regulations, Commission Standards, policies, and
sample laws/by-laws.
Education - Accredited training at the Tulo Centre.
Registry and Publication of Laws – First Nations
Gazette.
Dispute Resolution – Informal and formal
mechanisms.
Annual Report
First Nation Property Tax – 2012
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183 First Nations accessing the FSMA or section 83 of
the Indian Act.
• 154 have or developing property tax laws/by-laws*
• 84 First Nations on FSMA schedule
• 60 First Nations are collecting tax under the FSMA
• 22 First Nations have repealed and replaced section 83 by-laws with new
FSMA laws and 12 First Nations new to taxation enacted FSMA property
tax laws.
• Over $70 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 by-laws, and several First
Nations using the FSMA for Other Revenue Securitization.
First Nations Property Tax (FSMA & S.83)
FSMA Participation is Increasing
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25 First Nations added to the Schedule of the FSMA
since September 2011.
• 5 Order Amending Schedule (September 30, 2011)
• 10 Order Amending Schedule (March 2, 2012)
• 10 Order Amending Schedule (June 8, 2012)
Represents a 40% increase in FSMA participation.
Over 50% from regions outside of BC.
First Nations Requesting to Participate
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Cheam (BC)
Douglas Indian Band (BC)
Gitga’at First Nation (BC)
Lil’wat Nation (Mount Currie Indian Band) (BC)
Onion Lake Cree Nation (SK)
Cross Lake First Nation (MB)
Chippewas of the Thames (ON)
Conseil de la Première Nation Abitibiwinni (QC)
Timiskaming First Nation (QC)
Madawaska Maliseet First Nation (NB)
Oromocto First Nation (NB)
FNTC Sample Laws
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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
FNTC Relationship with FNTAA
FNTC continues to maintain a strong FNTAA
working relationship with emphasis in 3 areas:
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Education and Training
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FNTAA participation through advisory committee
Technical Assistance
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Supporting new tax administrators
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Tax Administrator Mentors
FNTC standard and policy development
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FNTAA policy input
Current FNTC Initiatives
Pre-Budget Submission for 2013 Budget
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13th FNTC Pre-Budget Submission made to Canada’s Standing
Committee on Finance.
Standing Committee advises on spending priorities.
FNTC makes five proposals:
1. Enact First Nations Property Ownership legislation.
2. Support a FN Infrastructure program that utilizes the FSMA
local revenue account.
3. Repeal section 83 of the Indian Act.
4. Support Bill C-428 & expanded role of the FN Gazette.
5. Support the Tulo Centre of Indigenous Economics.
FSMA Legislative Review
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Section 146 of the FSMA calls for a legislative review
of the FSMA to be presented to Parliament within
seven years.
FNTC participated with other institutions and AANDC in
the legislative review.
FNTC proposed recommendations at achieving greater
efficiencies and expanding FN revenue options.
Minister’s Report tabled in March 2012
FSMA Legislative Review
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Long standing issue for First Nations tax system
Proposed amendments include:
• Expanding local revenue definition, section 2(1)
• Providing for the power to collect costs of enforcement,
section 5(1)(a)
• Reducing notification requirements, 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
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Other FN Fiscal institutions proposed additional
amendments.
Government considering legislative options.
Supporting Assessment Service Provision
to First Nations
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Service New Brunswick
• Commitment from the Premier
Property Valuation Services Corporation
Municipal Property Assessment Corporation
Manitoba Provincial Assessment
Saskatchewan Assessment Management Agency
• Reviewing service contract with First Nations
Alberta Linear Assessment
BC Assessment
• Working group
FN Gazette On-Line Notification
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First Nations tax authorities using the FNG for notification
of annual rates laws
FNTC revamping FNG website to provide notification
service
First Nations and their institutions will be able to provide
notice of by-laws/laws and other documentation by
submitting a request form and documentation.
Similar to Part I of the Canada Gazette and notification
components in other Gazettes such as the London
Gazette.
Some fees and charges will apply.
FNG notice service to be launched in Spring 2013.
Support to Borrowing First Nations
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Approved three First Nations borrowing agreement laws.
Clarified the ability of First Nation to use local revenue to
refinance existing capital projects.
Borrowing member workshop planned for the fall 2012.
FSMA Regulatory Initiatives
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Regulation Development:
• Tsawwassen First Nation
• Westbank First Nation
Policy Issues
New, Amended, and Proposed Standards
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New Standards for 2012
• BAT Standards
• Business Occupancy for Manitoba First Nations
• Future Application (Accommodation Tax and Well Drilling Tax)
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• DAL Standards
Amended Standards for 2012
• Borrowing Law Standards
• Meeting market requirements
• Clarity for Refinancing Projects
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Proposed Standards
• Annual Expenditure Standards
• Interim Budget
Implementing FSMA Revenue Options
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Expanding the tax revenue base critical for First Nations
FSMA offers expanded First Nation revenue options
• Taxation for the Provision of Services
• Development Cost Charges
• Taxation of Business Activities
FNTC developed 4 sample laws and is exploring others
(e.g., accommodation and well drilling).
Initial interest from several First Nations, but law
development is moving very slowly.
Need to identify implementation barriers.
Contingency Reserve Funds
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Contingency reserves are used by local governments for
emergency purposes and cyclical downturns in revenue.
Several First Nations have established these reserve funds
under section 83 of the Indian Act.
Current FNTC Standards do not adequately accommodate
the use of these types of reserves.
FNTC considering policy options to enable First Nations to
utilize these funds for their benefit of their communities.
BC Carbon Tax Impacts on FN Property Tax
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BC introduced tax relief for some BC taxpayers
adversely affected by the BC Carbon Tax. Formal
announcements made in Jan 2011. BC introduced:
• Northern and Rural Homeowner benefit of up to $200 for
homeowners outside of the Capital Regional District,
Greater Vancouver Regional District and Fraser Valley
Regional District starting in the 2011 tax year.
• Industrial Property Tax Credit of 50% of school property
taxes payable by light and major industrial businesses
starting in the 2009 tax year and rising to 60% in 2011.
• School property taxes for farm land cut by 50% starting in
2011.
BC Carbon Tax Impacts on FN Property Tax
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Measures not available for any of these taxpayers
situated on FN lands. Approximately 8,000 taxpayers
from 35 taxing First Nations affected.
FNTC and FN tax authorities (e.g., Westbank First
Nation) continue to express concerns.
In 2012, BC announced review of carbon tax. Seeking
input from British Columbians. FNTC and other
stakeholders have made submissions.
FNTC provincial revenue sharing with impacted First
Nations so that they can provide similar relief to their
taxpayers.
The Year Ahead
• Potential FSMA legislative amendments.
• Examining transitional issues for emerging FN tax
jurisdictions.
• BC Carbon Tax and FN Accommodation Tax.
• Working with assessment service providers.
• Examining expenditure standards to accommodate interim
budgets and contingency reserve funds
• Research on private placement debentures, service
agreements, property tax loss, and well drilling tax.
• Consulting with FNTAA and FN tax administrators on
improving the laws/by-laws policy and procedures.
• Continue to work with the Institutions and First Nations to
support borrowing and revenue options.
Thank You
www.fntc.ca
(250) 828-9857 (Head Office)
(613) 789-5000 (NCR Office)