First Nations Fiscal Management

Empowering First Nations governments to charge service fees and taxes enables them to build revenue for infrastructure and community projects. To this end, the First Nations Management Act enables indigenous governments to secure investments and raise capital through service charges and property taxation.

First Nations Management Act

Enacted in 2006, the act establishes a Finance Authority and Financial Management Board and enables indigenous communities to charge fees and establish a property tax system to aid the provision of services. Under the act, First Nations governments are authorized to levy development cost charges, tax business activities, collect tax revenues, set rates for taxation, and enact laws that allow for the assessment of land value.

First Nations Tax Commission

The tax commission has a number of duties, rights, and powers such as to borrow, invest, and raise capital, enter into contractual obligations, and dispose, hold, and acquire property and right or interest in real estate. The main tasks of the commission are to ensure transparent taxation, facilitate sustainable development, build tax system capacity, and create training programs for administrators. The commission is also authorized to set standards with regard to law approval, enforcement procedures, and the content and form of taxation laws. It is within the powers of the commission to set procedures for dispute resolution, representation of taxpayers’ interests, and approval and submission of laws.

First Nations Financial Help – Smart Borrowing

First Nations Financial Management Board

The board consists of a Vice-Chairperson, Chairperson, and between 9 and 13 directors and is authorized to sue, borrow, invest, and raise money, hold, acquire, and dispose of real estate, and enter into contacts. Its functions and tasks include the provision of third-party and co-management services, financial monitoring services, and certification and assessment services. The board also assists the government with the development of financial relationships with business partners and funding bodies. It is within its responsibilities to set standards, provide training, and certify First Nations. The board offers workshops, training, and advice to enable participants to manage their finances. The Financial Management System Certificate provides good government practices that benefit business partners, lenders, and community members. The certification process involves several steps, including on-site testing of finance and government practices, interviewing staff and Council members, and reviewing documents and policies. Sample policies that councils can implement to become certified include human resources, information management, and governance policies. The latter include procedures regarding reporting of remuneration and expenses, external audits, appointment of officers, audit and finance committees, and delegation of responsibilities. Finance policies that First Nations can adopt focus on:

  • System improvement
  • Operational reporting
  • Cash and account management
  • Spending
  • Procurement
  • Borrowing money
  • Capital projects
  • Capital assets
  • Budgets
  • Financial planning
  • Risk management
  • Strategic and integrated planning

Policies governing local revenues address issues such as investment, reporting, spending, tax rates and property assessment, and tax administration. To become certified, First Nations need to adopt human resource policies on compliance and misconduct, training plans and performance evaluation, and hiring and dismissals. Finally, information management policies focus on information and records privacy and information technology. For the purpose of certification, this data management involves distribution, sorting, and gathering of information from one or multiple sources.