Transcript FNTAA National Forum 2013: First Nation Property Taxation

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
Overview
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First Nations Tax Commission
First Nation Property Tax – 2013
FNTC and FNTAA Relationship
Current Issues and Initiatives
Year Ahead
Introduction
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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.
Introduction
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The FNTC became operational on July 1st, 2007.
Shared Governance Commission
There are ten Commissioners:
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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
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
By-law Review and Recommendation for Approval
Policy and Legislative
Education
Registry and Publication of Laws
Dispute Resolution
First Nation Property Tax – 2013
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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• 26 First Nations have repealed and replaced section 83 by-laws with new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.
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** - Includes First Nations using the FMA for Other Revenue Securitization.
First Nations with Property Tax (FMA & S.83)
First Nations added to the FMA Schedule
since September 2012
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15 First Nations added to the Schedule of the FMA
since September 2012.
• 11 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 2011.
For the second straight year, over 50% of the FMA growth
is from regions outside of BC.
First Nations Waiting to Be Added to the FMA
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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.
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 (Business Occupancy
and Well Drilling)
FNTC and the 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
FNTC standard and policy development
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FNTAA policy input
Current Issues and Initiatives
FMA Legislative Review
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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.
FMA Legislative Review
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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
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Other FN Fiscal institutions proposed additional
amendments.
FNTC continues to advocate FMA amendments with
Canada.
Facilitating Assessment Service Provision
to First Nations
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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
First Nations Gazette
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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 bylaws.
FNTC has supported the publication provisions in C-428
with some drafting changes.
Property Transfer Tax Law
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FNTC approved a Tzeachten First Nation Property Transfer
Tax Law (PTT) in June 2013.
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.
Property Transfer Tax Law Standards
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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.
First Nation Tax Jurisdiction Challenged
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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).
Federal Own Source Revenue Policy
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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 selfgovernment.
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.
New, Amended, and Proposed Standards
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New Standards for 2013
• Annual Expenditure Law Standards
• Interim budget
• Contingency reserves
• BAT Standards
• Well Drilling Tax Laws (Alberta First Nations)
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Planned Amended Standards for 2013
• Assessment and Annual Rates Standards
• Assessment for Agricultural Properties in Saskatchewan
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• Taxpayer Representation to Council Standards
Standards in Development
• Property Transfer Tax Law Standards
• Amended Annual Expenditure Law Standards
FMA Regulatory Initiatives
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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
Grants/Payments in Lieu (GILTs/PILTs)
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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.
Jointly Held Reserves
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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.
FN Accommodation Tax
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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.
BC Carbon Tax Impacts on FN Property Tax
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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.
The Year Ahead
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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.
The Year Ahead
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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.
Thank You
www.fntc.ca
(250) 828-9857 (Head Office)
(613) 789-5000 (NCR Office)