First Nation Property Taxation Report -...
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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
Transcript of First Nation Property Taxation Report -...
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
Overview
First Nation Property
Tax in 2016
Current Issues and Initiatives
Year Ahead
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.
FN Property Tax: By Province
NL
2%
NS
1%
NB
2%
PQ
1%
ON
4%
MB
2%
SK
6%
AB
14%
BC
68%
139 FIRST NATIONS WITH PROPERTY TAX JURISDICTION
Moving to the FMA
45
73
83
89
67
61
5350
0
10
20
30
40
50
60
70
80
90
100
2011 2013 2015 2016
First Nations with Property Tax Jurisdiction
FMA Section 83
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
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. 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.
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
• 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?
Implementing and Expanding Tax
Jurisdiction
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.
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.
Current Initiatives
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;
The Growth in Service Fees in BC
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.
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.
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.
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?
• 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.
FMA Amendments – Proposed
Amendments for 2017
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 rate-setting.
• Clarifying reference jurisdictions.
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
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
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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
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
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