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1998 Legislative Session: 3rd Session, 36th Parliament

THIRD READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

Certified correct as passed Third Reading on the 22nd day of April, 1999

Ian D. Izard, Law Clerk

BILL 51: NIS G A'A FINAL AGREEMENT ACT –

SCHEDULE

CHAPTER 15 OF 22

CHAPTER 15

FISCAL RELATIONS

DEFINITIONS

1. In this

Chapter and in the Taxation Chapter:

"capital transfer" means an amount paid by Canada

or British Columbia under the Capital Transfer and Negotiation Loan Repayment Chapter;

"Income Tax Act" means the Income Tax Act ,

S.C. 1985 (5th Supp.) c. 1;

"Income Tax Act (British Columbia)" means the Income

Tax Act , RSBC 1996, c. 215;

"Nis g a'a capital" means all land, cash, and

other assets transferred to, or recognized as owned by, the Nis g a'a Nation or a Nis g a'a

Village under this Agreement, except land added to Nis g a'a Lands under paragraph 9

or 11 of the Lands Chapter;

"Nis g a'a capital finance authority" means an

authority for the benefit of the Nis g a'a Nation and all Nis g a'a Villages,

established in accordance with a fiscal financing agreement, to enable the financing of

capital projects of the Nis g a'a Nation or a Nis g a'a Village on Nis g a'a

Lands, and operated in accordance with the most recent fiscal financing agreement;

"Nis g a'a exempt corporation" means a

corporation, other than a Nis g a'a government corporation, in which the Nis g a'a

Nation or a Nis g a'a Village has a direct or indirect interest as a shareholder,

that is exempt from tax on its taxable income under laws of Canada or British Columbia;

"Nis g a'a government corporation" means any

corporation, commission or association, all of the shares (except directors' qualifying

shares) or capital of which belong to the Nis g a'a Nation, a Nis g a'a Village,

or a Nis g a'a settlement trust, or any combination thereof, and for this purpose

where, at any time, any shares or capital of a corporation, commission or association

belong, or are deemed by this paragraph to belong, to another corporation, a partnership,

or a trust that is not a Nis g a'a settlement trust, ("intermediary"),

those shares or that capital will be deemed to belong to each shareholder, partner or

beneficiary, as the case may be, of the intermediary, proportionate to the relative fair

market values of their respective interests in that intermediary;

"Nis g a'a settlement trust" means any trust

having the following characteristics:

a. the trust is resident in Canada,

b. the beneficiaries of the trust are limited to the Nis g a'a

Nation, any Nis g a'a Village, another Nis g a'a settlement trust, all Nis g a'a

citizens, all Nis g a'a citizens in any Nis g a'a Village, or any registered

charity or non-profit organization, within the meaning of the Income Tax Act , that

in the reasonable opinion of the trustees directly or indirectly benefits one or more Nis g a'a

citizens, or any combination of those entities and persons,

c. the investment of the funds of the trust is restricted to:

i. investment instruments that are described as qualified

investments for a trust governed by a registered retirement savings plan within the

meaning of

section 146 of the Income Tax Act or in any other investments that may

be agreed upon from time to time by the Nis g a'a Nation, Canada and British

Columbia,

ii. loans to a Nis g a'a citizen, the Nis g a'a Nation,

a Nis g a'a Village, or a Nis g a'a government corporation at a rate of interest

equal to the rate prescribed under regulation 4301 (

c) of the Income Tax Act in

effect at the time the loan was made or last renewed,

iii. investments in a share of a Nis g a'a government

corporation where the average annual rate of dividends on that share over any five year

period cannot exceed the rate prescribed under regulation 4301 (

c) of the Income

Tax Act at the beginning of that period, and if the amount receivable on redemption of

the share or on liquidation of the corporation is limited to the amount of the

consideration for which the share was originally issued, and

iv. low interest or interest free loans to a Nis g a'a

citizen, or a partnership or trust in which Nis g a'a citizens hold all the interests

as partners or beneficiaries, where the purpose of the loan is to assist the borrower to:

A. acquire, construct or renovate a residential property for their own

habitation in British Columbia,

B. attend courses to further their own education, technical or

vocational skills, or attend courses in native studies, culture or language programs, or

C. acquire funding for purposes of carrying on a business on Nis g a'a

Lands or Nis g a'a Fee Simple Lands, where the borrower is unable to borrow from

ordinary commercial lenders at normal commercial rates,

where, at the time the loan was made, bona fide

arrangements were made for repayment of the loan within a reasonable period of time,

d. the trust is not permitted to carry on a business as a proprietor

or member of a partnership, or acquire any beneficial interest in a trust engaged in a

business where one or more of the Nis g a'a Nation, a Nis g a'a Village, a Nis g a'a

government corporation, a Nis g a'a settlement trust or a Nis g a'a citizen,

either alone or in combination, holds more than 10% of all of the beneficial interests in

the trust,

e. the trust does not borrow money except as required to finance the

acquisition of qualified investments or to carry out its operations,

f. contributions to the trust are limited to contributions received

from the Nis g a'a Nation of capital transfer payments received by it under the

Capital Transfer and Negotiation Loan Repayment

Chapter or amounts received from another

Nis g a'a settlement trust where substantially all of the funds of that contributing

trust reasonably can be considered to have been derived from a contribution to a Nis g a'a

settlement trust by the Nis g a'a Nation of capital transfer payments received by it

under the Financial Transfers

Chapter and income and gains derived therefrom, and

g. the trust is not permitted to make any distributions other than to

one or more beneficiaries in accordance with the trust, or to another Nis g a'a

settlement trust; and

"person" includes an individual, a partnership, a

corporation, a trust, an unincorporated association or other entity or government or any

agency or political subdivision thereof, and their heirs, executors, administrators and

other legal representatives.

INTERPRETATION

2. If a principle in paragraph 16, or in an own source revenue

agreement, applies in respect of a Nis g a'a exempt corporation, the own source

revenue capacity that results:

a. will be reduced proportionately to fully account for the direct or

indirect ownership interests in the corporation of persons other than the Nis g a'a

Nation, the Nis g a'a Villages, Nis g a'a government corporations, and Nis g a'a

settlement trusts; and

b. if the Nis g a'a Nation or a Nis g a'a Village, or any

combination of them, cannot cause a distribution by the corporation, will be taken into

account only at the time, and to the extent, that a distribution is made to the Nis g a'a

Nation, a Nis g a'a Village, or a Nis g a'a government corporation.

FISCAL FINANCING AGREEMENTS

3. Every five years, or at other intervals if the Parties

agree, the Parties will negotiate and attempt to reach agreement on a fiscal financing

agreement by which funding will be provided to the Nis g a'a Nation to enable the

provision of agreed-upon public programs and services to Nis g a'a citizens and,

where applicable, non-Nis g a'a occupants of Nis g a'a Lands, at levels

reasonably comparable to those generally prevailing in northwest British Columbia.

4. A fiscal financing agreement is not intended to be a treaty

or land claims agreement, and is not intended to recognize or affirm aboriginal or treaty

rights, within the meaning of sections 25 and 35 of the Constitution Act, 1982.

5. The recognition of the legislative authority of Nis g a'a

Lisims Government and Nis g a'a Village Governments does not create or imply any

funding or financial obligation for Canada, British Columbia, the Nis g a'a Nation,

or a Nis g a'a Village.

6. Nis g a'a citizens are eligible to participate in

programs established by Canada or British Columbia and to receive public services from

Canada or British Columbia, in accordance with general criteria established for those

programs or services from time to time, to the extent that the Nis g a'a Nation has

not assumed responsibility for those programs or public services under a fiscal financing

agreement.

7. The Parties will negotiate and attempt to reach agreements

in respect of grants, between them, in lieu of property taxes.

8. The funding for the Nis g a'a Nation and Nis g a'a

Villages is a shared responsibility of the Parties and it is the shared objective of the

Parties that, where feasible, the reliance of the Nis g a'a Nation and Nis g a'a

Villages on transfers will be reduced over time.

9. In negotiating fiscal financing agreements, the Parties will

take into account, among other things:

a. costs necessary to establish and operate Nis g a'a Lisims

Government and Nis g a'a Village Governments, and agreed-upon Nis g a'a Public

Institutions and the Nis g a'a Court;

b. efficiency and effectiveness in the provision of public programs

and services;

d. population and demographic characteristics of persons receiving

agreed-upon public programs and services;

e. other funding or support in respect of agreed-upon public programs

or services provided to the Nis g a'a Nation or a Nis g a'a Village by Canada or

British Columbia;

f. the level, type and condition of agreed-upon public works and

utilities within Nis g a'a Lands;

g. major maintenance and replacement of assets identified in and

funded according to

Schedule C to the first fiscal financing agreement, or other

agreed-upon community or health capital assets;

h. necessary training requirements for agreed-upon public programs

and services;

i. the desirability of reasonably stable, predictable and flexible

funding arrangements;

j. the jurisdictions, authorities and obligations of Nis g a'a

Lisims Government and the Nis g a'a Village Governments;

k. the authorities and obligations of, and the public programs and

services for which responsibility is assumed or is to be assumed by, the Nis g a'a

Nation or a Nis g a'a Village;

l. prevailing fiscal policies of Canada and British Columbia;

m. Nis g a'a cultural values; and

n. Nis g a'a Nation own source revenue capacity as determined

under an own source revenue agreement or, in the absence of an own source revenue

agreement, under this Chapter.

10. The Parties will address the following, among other things,

in fiscal financing agreements:

a. procedures for negotiating the next fiscal financing agreement;

b. procedures for assuming or transferring responsibility for the

provision of agreed -upon programs and services;

c. procedures for funding, and assuming or transferring

responsibility for, the provision of additional programs and services during the term of

the fiscal financing agreement;

d. costs of emergencies and of fire suppression;

e. payment procedures;

f. dispute resolution; and

g. information exchange.

11. Unless the Parties otherwise agree, the first fiscal

financing agreement will come into effect on the effective date.

12. If the Parties do not reach a further fiscal financing

agreement by the expiry date of a fiscal financing agreement, the fiscal financing

agreement will continue in effect for two years from its original expiry date, or for any

other period that the Parties may agree while they attempt to reach a further fiscal

financing agreement.

13. Any amounts required for the purposes of a fiscal financing

agreement will be paid out of appropriations as may be made by the Parliament of Canada or

the Legislature of British Columbia for those purposes.

OWN SOURCE REVENUE AGREEMENTS

14. Every 10 years, or at other intervals if the Parties agree,

the Parties will negotiate and attempt to reach agreement on an own source revenue

agreement under which Nis g a'a Nation own source revenue capacity, and the manner

and extent to which that capacity will be taken into account under fiscal financing

agreements, will be determined.

15. An own source revenue agreement is not intended to be a

treaty or land claims agreement, and is not intended to recognize or affirm aboriginal or

treaty rights, within the meaning of sections 25 and 35 of the Constitution Act, 1982.

16. In determining Nis g a'a Nation own source revenue

capacity, the Parties will apply the following principles:

a. the own source revenue capacity in respect of any source will not

be taken into account so as to unreasonably reduce the incentive for the Nis g a'a

Nation or a Nis g a'a Village to raise revenues from that source or to occupy any tax

room that other Canadian governments may have made available by agreement with the Nis g a'a

Nation;

b. there should be a fair basis of comparison between the own source

revenue capacity in respect of a Nis g a'a settlement trust and the additional tax

revenue that Canadian governments would have received if the income and capital gains, net

of losses, of the trust were earned or realized in equal shares by all Nis g a'a

citizens, instead of by the trust, and if all Nis g a'a citizens were resident in

British Columbia;

c. the own source revenue capacity in respect of each tax will not

exceed the sum of:

i. the value of any tax room made available in respect of the tax

by Canada or British Columbia under an agreement referred to in subparagraph 3 (

b) of

the Taxation Chapter, or other agreement with the Nis g a'a Nation, and

ii. where the tax is similar to a tax generally imposed by local

authorities in British Columbia:

A. if the Nis g a'a Nation or a Nis g a'a Village is taxing

only Nis g a'a citizens, the amount by which the revenues derived by the Nis g a'a

Nation or the Nis g a'a Village from the tax exceed the amount, if any, included in

subparagraph 16 (c) (i), or

B. if there is a delegated taxation authority in respect of the tax,

under an agreement referred to in subparagraph 3 (

a) of the Taxation Chapter, the

amount by which the tax capacity in respect of all persons over which Nis g a'a

Government has taxation power or authority exceeds the amount included in subparagraph

16 (c) (i), and for this purpose, tax capacity will be determined on a fair and

reasonable basis, taking into account the circumstances in Nis g a'a communities and

in similar communities in northwest British Columbia;

d. the own source revenue capacity in respect of commercial and

investment activities, including exploitation of a natural resource, of the Nis g a'a

Nation, the Nis g a'a Villages, Nis g a'a government corporations, Nis g a'a

exempt corporations, and corporations without share capital established and operated for

the benefit of the Nis g a'a Nation or a Nis g a'a Village, or any combination

of them, will be reasonably comparable to, and not exceed, the additional revenues that

other Canadian governments would have from taxation of those entities if:

i. they were Canadian private enterprises subject to taxation

under federal and provincial laws of general application,

ii. the commercial and investment activities were their only

activities,

iii. their only properties were properties related to the

activities, and

iv. those properties were owned by them as private persons and not

as governments; and

e. to the extent that a base is used in the calculation of a tax paid

or payable by the Nis g a'a Nation, a Nis g a'a Village, a Nis g a'a

government corporation, a Nis g a'a settlement trust, or a Nis g a'a exempt

corporation, it will not be used as a base in the calculation of Nis g a'a Nation own

source revenue capacity in place of that tax.

17. Nis g a'a Nation own source revenue capacity in

respect of any source not referred to in paragraph 16 will be taken into account in a

manner that does not unreasonably reduce the incentive for the Nis g a'a Nation or a

Nis g a'a Village to raise revenues from that source.

18. There is no Nis g a'a Nation own source revenue

capacity in respect of:

a. proceeds from the sale of Nis g a'a Lands or Nis g a'a

Fee Simple Lands;

b. a capital transfer;

c. the capital of a Nis g a'a settlement trust, except to the

extent that a capital gain results in own source revenue capacity in accordance with the

principle in subparagraph 16 (b);

d. a distribution of capital from a Nis g a'a settlement trust,

except to the extent that a distribution to a Nis g a'a citizen results in a tax that

is included in the determination of own source revenue capacity in accordance with the

principle in subparagraph 16 (c);

e. the Nis g a'a capital finance authority, including any

income, gains or property of the authority, and any distribution by the authority, except

to the extent that a distribution is included as own source revenue capacity in respect of

a commercial activity of the recipient of the distribution; and

f. a transfer by a corporation to the Nis g a'a Nation or a Nis g a'a

Village, to the extent that the transfer represents a distribution out of income that has

already been taken into account in determining Nis g a'a Nation own source revenue

capacity.

19. Nis g a'a Nation own source revenue capacity will be

phased in over a 12 year period as provided in the own source revenue agreement.

20. Unless the Parties otherwise agree, the first own source

revenue agreement will come into effect on the effective date.

OWN SOURCE REVENUE ADMINISTRATION

21. Nis g a'a Lisims Government may make laws that impose

an obligation on the Nis g a'a Nation, Nis g a'a Villages, Nis g a'a

settlement trusts, or Nis g a'a government corporations, in respect of the

determination, adjustment, payment, or collection of amounts, to enable the Nis g a'a

Nation to recover from those entities amounts in respect of Nis g a'a Nation own

source revenue capacity.

22. In the event of a conflict between a Nis g a'a law

under paragraph 21 and a federal or provincial law of general application, the federal or

provincial law will prevail to the extent of the conflict.

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