FEDERAL REG

SOR/2016-154: Regulations Amending the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
June 17, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues First Nations in Canada can levy property taxes on railway rights-of-way running through their reserves under regulations pursuant to either the Indian Act or the First Nations Fiscal Management Act. The First Nations Fiscal Management Act provides First Nations with a range of benefits for modern tax gov... (Click for more)


House

1st Reading 2nd Reading 3rd Reading

Senate

1st Reading 2nd Reading 3rd Reading

Published on June 17, 2016

Bill Summary

SOR/2016-154: Regulations Amending the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the Regulations.) Issues First Nations in Canada can levy property taxes on railway rights-of-way running through their reserves under regulations pursuant to either the Indian Act or the First Nations Fiscal Management Act. The First Nations Fiscal Management Act provides First Nations with a range of benefits for modern tax governance on reserve. In 2008, the Shuswap First Nation was added to the Schedule of the First Nations Fiscal Management Act. The Shuswap First Nation has further requested to be added to the Schedule of the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations (pursuant to the First Nations Fiscal Management Act), which will enable them to tax the Canadian Pacific Railway rights-of-way lands on their reserve pursuant to this legislative framework. Background The Canadian Pacific Railway holds railway rights-of-way through multiple reserves in the interior of British Columbia. A dispute regarding the taxation jurisdiction over these rights-of-way resulted in litigation between the Canadian Pacific Railway and First Nations whose reserves were affected by the rights-of-way. To settle outstanding litigation (see footnote 2) and to facilitate implementation of property taxation on reserve lands, Canada, the Canadian Pacific Railway, the Matsqui First Nation, the Boothroyd Indian Band, the Cook’s Ferry Indian Band, the Seabird Island Indian Band and the Skuppah Indian Band entered into tripartite settlement agreements in 2001. The tripartite settlement agreements provided for the creation of a regulated property taxation regime pursuant to the Indian Act, i.e. the Property Assessment and Taxation (Railway Right-of-Way) Regulations. These Regulations allow First Nations to levy property taxation, on railway companies operating on reserve land, at rates comparable to those that exist under provincial law. Following the signing of the tripartite settlement agreements in 2001, several other First Nations entered into similar tripartite settlement agreements with Canada and the Canadian Pacific Railway. The Shuswap First Nation signed a similar agreement in 2003. The Shuswap First Nation is located directly across the Columbia River from Invermere, British Columbia. As of May 2, 2016, their reserve land base is 1 080.41 hectares and their population is 262. The Shuswap First Nation was not added to the Schedule of the Property Assessment and Taxation (Railway Right-of-Way) Regulations pursuant to the Indian Act and did not gain authority to levy property tax on the specified land, as further confirmation was needed to determine whether the rights-of-way lands were reserve lands. The lands have since been confirmed as reserve lands. In 2006, (see footnote 3) the First Nations Fiscal Management Act came into force. The Act provides First Nations with the authority to design a modern on-reserve taxation system that closely resembles that of off-reserve local governments. The First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations made pursuant to the First Nations Fiscal Management Act provides First Nations with an alternative regime for levying property taxes against railway rights-of-way areas on reserve lands. First Nations who opt into the regime established under the First Nations Fiscal Management Act are better positioned for economic growth and to capitalize on solid business relationships, resulting in a better quality of life for community members. The First Nations Fiscal Management Act enables First Nations to participate more fully in the Canadian economy and foster business-friendly environments while meeting local needs by strengthening First Nations’ real property tax and financial management systems; providing First Nations with increased revenue raising tools, strong standards for accountability and access to capital markets available to other governments; allowing for the borrowing of funds for the development of infrastructure on-reserve through a cooperative, public-style bond issuance; and providing greater representation for First Nation taxpayers. Following a request from the Shuswap First Nation, the Schedule of the First Nations Fiscal Management Act was amended in 2008 to include this First Nation as First Nation participating under the Act. Objectives Addition of the Shuswap First Nation to the Schedule of the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations (pursuant to the First Nations Fiscal Management Act) The addition of the Shuswap First Nation to the Schedule of the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations will fulfill commitments made by Canada pursuant to tripartite settlement agreements signed in 2003. The amendment will provide this First Nation with authority to collect property tax revenue against railway rights-of-way areas on reserve lands under the First Nations Fiscal Management Act. The First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations provide the ability to levy taxation at rates comparable to those that exist under provincial law. This fosters harmony between taxation by First Nations and taxation by other authorities and ensures compliance with the principles of equity and fairness. The addition of the Shuswap First Nation will provide the community with additional property tax revenue, as it previously did not collect property tax revenue from Canadian Pacific Railway rights-of-way lands. The addition of the Shuswap First Nation will ensure that property tax payable by the Canadian Pacific Railway, which otherwise would have been collected by the province or applicable regional or municipal taxation authority, will be collected by the First Nation, as per the terms of the tripartite settlement agreement. Description Addition of the Shuswap First Nation to the Schedule of the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations (pursuant to the First Nations Fiscal Management Act) The amendment of the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations will bring the parcel of land into the scope of the Shuswap First Nation’s taxation jurisdiction in accordance with the Regulations. The lands are legally described as In the Province of British Columbia In Kootenay District All those lands within Shuswap Indian Reserve shown as the Kootenay Central Railway Right-of-Way on Plan RR1469 recorded in the Canada Lands Surveys Records in Ottawa. A copy of that plan is deposited in the Land Title Office at Nelson under number 1203. Containing about 9.20 hectares (22.75 acres). “One-for-One” Rule The “One-for-One” Rule does not apply to these amendments, as they do not result in any administrative costs to businesses. Small business lens The small business lens does not apply to these amendments, as there are no costs to small business. Consultation The addition of the Shuswap First Nation to the Schedule of the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations (pursuant to the First Nations Fiscal Management Act) is further to the signing of a tripartite settlement agreement in 2003. The Shuswap First Nation ratified the agreement and, in so doing, consulted its membership. A requirement of the 2003 tripartite settlement agreement was consultation with the Province of British Columbia. In 2003, the First Nation met with the Canadian Pacific Railway and the Province of British Columbia, facilitated by the (then) Indian Taxation Advisory Board. The First Nation, at that time, advised the Province of the tripartite settlement agreement and Canadian Pacific Railway’s change in status as a property taxpayer. The Canadian Pacific Railway and the Province of British Columbia were consulted in 2016 and have no issues or concerns regarding the regulatory changes. Rationale In addition to providing the Shuswap First Nation with the administrative capacity to levy property taxes on rights-of-way lands on their reserves, amending the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations (pursuant to the First Nations Fiscal Management Act), completes the remaining legalities required of the Government of Canada pursuant to the tripartite settlement agreement (2003) to formalize in regulation the First Nation taxation authority on the rights-of-way lands. The Shuswap First Nation has not been administering property taxation under the Property Assessment and Taxation (Railway Rights-of-Way) Regulations (pursuant to the Indian Act), due to uncertainty, that has since been resolved, with regard to the reserve status of the rights-of-way lands. Therefore, amending the First Nations Property Assessment and Taxation (Railway Rights-of-Way) Regulations (pursuant to the First Nations Fiscal Management Act) provides the Shuswap First Nation with new tax revenue and the Province of British Columbia will forego receipt of such revenue. Using 2015 taxation rates, the revenue generated from the land will be approximately $13,000 annually. These revenues generated from property taxation on reserve will be ongoing and will contribute to economic development and self-reliance. Implementation, enforcement and service standards The Shuswap First Nation will have the authority to tax the Canadian Pacific Railway on the identified railway rights-of-way lands upon completion of these regulatory amendments. Prior to levying taxation however, the First Nation must enact a bylaw, which then must be reviewed by the First Nations Taxation Commission. There are no enforcement or service standards associated with these regulatory changes. Contact For enquiries in English and French: Neil Burnett Acting Director Policy, Research and Legislative Initiatives Lands and Economic Development Indigenous and Northern Affairs Canada 10 Wellington Street, 17 th Floor, Room 082 Gatineau, Quebec K1A 0H4 Telephone: 819-994-7311 Fax: 819-994-5697 Email: [email protected] Footnote a S.C. 2005, c. 9; S.C. 2012, c. 19, s. 658 Footnote 1 SOR/2007-277 Footnote 2 Federal Court of Appeal: Canadian Pacific Ltd. v. Matsqui Indian Band (1999), which is cited in the Dominion Law Reports at: 176 D.L.R. (4th) 35. Footnote 3 Prior to 2006, the only option was to levy property taxes under the Indian Act.

This Bill does not amend any statutes.

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