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Proposed Standards for First Nation Expenditure Laws, 2017

Category: relating to consultations and public input
Organization: First Nations Tax Commission
Date: September 06, 2017

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September 5, 2017


 Proposed Standards for First Nation Expenditure Laws, 2017


Standards established by the First Nations Tax Commission (FNTC) reflect best practices in property taxation, and are designed to support First Nation economic growth, First Nation jurisdiction, property tax harmonization, and the interests of all stakeholders in the First Nation property tax system.  

 Under the First Nations Fiscal Management Act (FMA or the “Act”), the FNTC reviews and approves laws. Section 35(1)(a) of the Act gives the FNTC the authority to establish standards, not inconsistent with the regulations, respecting the form and content of local revenue laws. The standards established by the FNTC are additional requirements and, together with the Act and its associated regulations, form the regulatory framework governing First Nation taxation under the Act.  

 As a matter of policy, the FNTC seeks public input prior to introducing or significantly amending its standards. This input is critical in developing standards that are acceptable and effective for participating First Nations and their taxpayers.

 The Proposed Standards for First Nation Expenditure Laws, 2017 would revoke and replace the existing Standards, and would add new requirements in three areas of the expenditure law:


  1. a requirement for separate budgets for certain laws;
  2. excluding certain revenue in calculating contingency amounts, and
  3. the use of reserve funds.

 The changes are intended to reflect best practices in budgeting and local revenue account management.

 Separate Budgets for DCC Laws, Service Tax Laws, and Fee Laws

 Under section 2.2, if a First Nation has a DCC law, service tax law, or fee law, the budget attached to the annual expenditure law must segregate and set out separately the revenue and expenditures for each of those laws. In addition, where a fee law charges fees for more than one service, revenue and expenditures would be shown separately for each service.   

 Budget segregation for these types of local revenue laws, each of which have specific expenditure commitments, will improve clarity in financial reporting.

 Exclusion of Certain Revenues from Contingency Amount

 Section 2.6 revises what revenue is to be excluded from the calculation of the required contingency amount. The proposed change adds three new exclusions: 

  • any amounts transferred from a capital reserve fund or a development cost charge reserve fund into the current year’s revenues;
  • any revenues from a service tax law; and
  • any proceeds of borrowing from the First Nations Finance Authority.

 These changes reflect that each of these types of revenue can only be expended for a specific purpose, and therefore cannot be used to meet contingency requirements.

 Reserve Funds

 Section 5.1 adds service tax law purposes and fee law purposes as additional purposes for which a reserve fund can be established.  Section 5.2 limits the establishment of DCC reserve funds to reserve funds for each DCC class established in the First Nation’s DCC law. This ensures that only those DCC reserve funds required by the First Nation will be established and used.

 Proposed changes to section 6 (Contingency Reserve Funds) reflect that local revenue in the context of contingency reserve funds, means “current year local revenue”, and that revenue which can only be used for specific purposes, (i.e., revenue from service taxes, fees, DCCs, and FNFA borrowing proceeds) is not included in the definition.

 Changes to section 7 and 8 would enable these provisions to apply to all expenditure laws, and eliminate the need for specific provisions for property taxation by-laws transitioned into the FMA through section 145.

 Section 9 requires that where a First Nation enacts a fee law or service tax law, it must establish a reserve fund and show transfers into the reserve fund for all revenue generated by the law and not expended in the current budget year. Section 9.3 restricts transfers and borrowing from these reserve funds, with the exception of when the FNFMB has assumed third party management and must borrow to meet the financial obligations of the First Nation. These changes ensure that revenues from fee laws and service tax laws are used only for the purposes for which they were levied.

 Local Service Expenditure Category: Taxes Collected for Other Governments

 The proposed Standards remove category 9 (Taxes Collected for Other Governments) as a budget category in the Schedule. This category is more analogous to a type of transfer to other governments, than it is a local service expenditure.   


The FNTC is seeking public input in respect of these proposed Standards. For more information, please contact the FNTC at or by telephone at (250) 828-9857.  Electronic versions of the proposed Standards are available at or by clicking the link below:

 Proposed Standards for First Nation Expenditure Laws, 2017


Please direct your written comments on or before November 3, 2017 to:

 First Nations Tax Commission

321-345 Chief Alex Thomas Way

Kamloops BC
V2H 1H1

Telephone: (250) 828-9857

Fax: (250) 828-9858




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More information on band names and band name changes can be obtained from Indigenous and Northern Affairs Canada.


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