Policy Forum: In Defence of the First Nations Fiscal Management Act

The debate with respect to the recognition of Indigenous rights, title, and jurisdiction has largely been won. It has now moved to how best to implement those rights, title, and inherent jurisdictions. For Indigenous taxation jurisdiction, implementation must address challenges related to taxpayer representation, concurrent jurisdiction, service agreements with other governments, administrative capacity, financial management, and access to public debt capital at competitive rates. In this article, the author argues that the First Nations Fiscal Management Act (FMA) has been successful in overcoming these challenges. The FMA has protected and expanded Indigenous tax jurisdiction through standards and institutional support. As a result, it represents an effective path for interested Indigenous governments "to exercise [their] inherently governmental power of taxation" affirmed by the Supreme Court of Canada in <i>Matsqui Indian Band</i>, and to expand their use of that power.

Policy Forum: Implementing the Chippewas of Georgina Island First Nation Property Tax System—Opportunities, Challenges, and Lessons Learned

In 2018, the Chippewas of Georgina Island First Nation (GIFN) implemented a First Nation property tax system under the First Nations Fiscal Management Act (FMA)—one of the earliest First Nations in Ontario to do so. Implementation of a property tax system gave GIFN an opportunity to improve funding for and expand local services, and provide a more equitable sharing of local service costs between cottagers leasing First Nation land and the First Nation. Key challenges encountered when implementing the property tax system were building consensus around the need for a tax system, building an appropriate administrative infrastructure, carrying out property assessments, and professionals lacking knowledge of First Nation property tax. These challenges, however, presented opportunities to create a knowledge base around property taxation within GIFN, among cottage leaseholders, and in the wider community. Key lessons learned were (1) start as soon as possible; (2) First Nations Tax Commission support and standards are important; (3) staff training is important; (4) communicate early and often; (5) hold open houses; (6) local services are more than garbage collection; (7) property taxes do not harm lease rates or cottage sales; (8) educate lawyers, real estate agents, and other professionals; (9) startup costs were significant; (10) coordinate laws and standards with provincial variations; (11) modernize systems; and (12) utilize other parts of the FMA.

Policy Forum : Analyse critique de l'impôt foncier sous le régime de la Loi sur la gestion financière des premières nations comme outil d'autonomie gouvernementale

La Loi sur la gestion financière des premières nations (LGFPN) délègue aux conseils de bande le pouvoir de prélever l'impôt foncier. Le présent article décrit et analyse l'efficacité de la délégation de pouvoir comme outil d'autonomie gouvernementale. L'article 5(1) de la LGFPN permet aux conseils de bande de prélever l'impôt foncier afin d'améliorer leur situation économique — en leur fournissant une source de revenus — et d'améliorer leur autonomie gouvernementale. Toutefois, il comporte de nombreuses restrictions. Celles-ci incluent l'obligation de se conformer aux normes de gestions financières prévues par la Loi, ainsi que l'homologation des lois concernant l'impôt foncier par la Commission sur la fiscalité des premières nations (CFPN) (dont la majorité des membres sont nommés par le gouvernement fédéral). L'impôt foncier doit également respecter les règlements pris par le gouverneur en conseil en vertu de la Loi, qui concernent présentement l'évaluation des propriétés (incluant les appels concernant celle-ci), les intérêts et pénalités ainsi que l'inspection des propriétés. Les contribuables ont déposé à deux reprises des demandes en contrôle judiciaire visant à faire invalider les décisions de la CFPN. Considérant que ces deux tentatives se sont soldées par un échec, il importe de mitiger les critiques liées aux restrictions à l'autonomie gouvernementale qui semblent être imposées par le texte de la LGFPN. Il n'en demeure pas moins que le gouvernement fédéral conserve un contrôle important sur le processus législatif des Premières Nations en ce qui concerne l'impôt foncier. Lorsqu'il prend la forme de règlement, ce contrôle est direct, mais le gouvernement conserve également un contrôle indirect de par la présence de la CFPN. Une réforme s'impose : les pouvoirs doivent être véritablement délégués afin d'atteindre l'objectif d'améliorer de façon significative l'autonomie gouvernementale des Premières Nations participantes. Le pouvoir de prélever l'impôt foncier est délégué aux conseils de bande depuis la Loi sur les indiens de 1951. Il est temps que les Premières Nations puissent exercer ce droit sans ingérence fédérale. Une protection constitutionnelle de l'autonomie gouvernementale doit être l'objectif ultime.

Income Tax Complexity Faced by Multinational Corporations: A Comparative Study of Canada, the United States, and Other Selected OECD Countries

This study examines the complexity of Canada's corporate income tax system from the perspective of multinational corporations and compares it with the complexity of the US system, also taking into account measures of complexity for 19 other member countries of the Organisation for Economic Co-operation and Development (OECD). The author finds that with regard to the Canadian tax code, the most complex laws are those on corporate reorganization, transfer pricing, and controlled foreign corporations, and with regard to the Canadian tax framework, the most complex areas are tax audits, tax-law enactment, and tax guidance. In comparison with other OECD countries, Canada is remarkably similar to the United States. Both countries have a medium level of overall complexity, and both have a more complex tax code but a less complex tax framework than other countries. However, a closer examination of the Canadian and US tax codes and tax frameworks reveals some significant differences in complexity levels, particularly in respect of certain tax laws.

Policy Forum: First Nation Property Taxation and Governance in British Columbia

In this article, I ask, "What is the relationship between rules governing band council elections and property taxation across First Nations in British Columbia?" I outline the three major categories of First Nation electoral rules: default Indian Act elections, First Nations Elections Act rules, and custom election codes. I contend that First Nations who use custom election codes are more likely to exhibit stable governance than those who do not. This mechanism can be helpful in introducing property taxation. It can also reduce property tax uncertainty—a feature known to depress on-reserve property values. I also present some suggestions for First Nations wishing to improve perceptions of taxation in their communities.

Finances of the Nation: The Evolution of Health Expenditures in Canada, 1926-2019

In this article, Livio Di Matteo provides an overview of expenditures on health care in Canada over the long term. He examines changes in the size, relative importance, growth, and composition of health expenditures, with an additional focus on provincial-territorial government spending since the 1970s. Di Matteo links the evolution of health-care spending to factors affecting the demand for and supply of health services, including income, demographic changes, technological development, cost, policy, and public finances.

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

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.

International Tax Planning: China's New Regime for Taxing Expatriate Income: Tightening the Screws or Vintage Wine in a New Bottle?

Expatriates have been fundamental to China's economic growth, contributing to the country's socioeconomic development and modernization. The second-largest group of expatriates in China are North Americans. Personal income taxation concessions for expatriate workers have been an important instrument to attract and retain skilled foreign labour since China opened its doors to foreign investment and an income tax was adopted four decades ago. A recent overhaul of the law on individual income tax introduced a number of changes to expatriate income taxation, including the winding back of some preferential concessions previously offered only to expatriates. A literal reading of these changes suggests that the new regime has led to harsher tax treatment of expatriates and increased their tax liability. This article considers whether this view holds up, by closely analyzing the new system's major features relating to individual income tax as they affect expatriates. The authors challenge the literal reading of the law and argue that the recent changes have not fundamentally altered the underlying policy on expatriate income taxation. Further, an economically stronger China has not observed any diminishment of the role of personal income taxation as an instrument of government policy, despite the recent changes. A generous interpretation of the legal terms and rules, and of the application of concessions under the amended system, may encourage more lenient treatment of Canadians and other expatriates working and living in China.