Policy Forum: A Critical Analysis of Property Taxation Under the First Nations Fiscal Management Act as a Self-Government Tool

Audrey Boissonneault ()
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Audrey Boissonneault: Mallette LLP, Chicoutimi, Quebec

Canadian Tax Journal, 2021, vol. 69, issue 3, 799-812

Abstract: The First Nations Fiscal Management Act (FMA) delegates the power to levy property taxes to band councils. The purpose of this article is to describe and analyze the effectiveness of the legislation as a self-government tool. Section 5(1) of the FMA allows band councils to levy property taxes both to increase their economic capacity—providing them with a source of income—and to improve self-government. However, this grant of power is subject to numerous conditions. These include compliance with the financial management requirements set out in the act, as well as approval of property tax laws by the First Nations Tax Commission (FNTC) (the majority of the members of which are appointed by the federal government). Also, the taxes imposed must comply with regulations set by the governor in council, which currently cover the property assessment process (including an appeal process), interest and penalties, and inspection of property. There have been two attempts by property taxpayers to overturn the decisions of the FNTC by way of judicial review. The fact that both were unsuccessful has somewhat mitigated criticism of the constraints on First Nation self-government imposed by the FMA. Overall, the federal government maintains significant control over the law-making process by which First Nations levy property taxes, both directly through regulations and indirectly through its dominant presence on the FNTC. Reform is needed: real powers need to be delegated to meet the stated objective of creating meaningful self-government for participating First Nations. The power to impose property taxes was first delegated to band councils by the Indian Act in 1951. Therefore, it is high time that First Nations be granted the right to exercise that power without federal intervention. Constitutional protection of the right to self-government must be the ultimate goal.

Keywords: First Nations; property taxes; self-government; fiscal policy; governance; financial management (search for similar items in EconPapers)
Date: 2021
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DOI: 10.32721/ctj.2021.69.3.pf.boissonneault.e

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