FACT SHEET #5
The Fiscal Institutions Bill Is Not Really Optional

1. The supporters of the FNFSMA assert that it is “optional”. They say the Bill affects only those First Nations that choose to opt in. Therefore, opponents should get out of the way. The alleged optionality of the Bill is based in large part on the technicality that a First Nation may initially choose to pass a taxation bylaw and/or join the Finance Authority.

2. The reality is that the Bill is only optional on the surface. It affects all First Nations.

3. First Nations with taxation bylaws under sec. 83 of the Indian Act will be automatically swept in. They will be under the control of the Tax Commission and the Management Board.

4. It is almost impossible to opt out of the institutions. The Tax Commission has a veto over any attempt to rescind a property taxation regime. All members of the Finance Authority must consent before a First Nation is permitted to leave.

5. The Statistical Institute has the unilateral authority to collect the most intimate First Nation data from all branches of the federal government. No First Nation consent is required.

6. In practice it is likely that INAC will apply pressure on First Nations to “opt” into the Tax Commission and the Finance Authority. For example, major capital projects may be made conditional on such opting in. The Management Board may be contracted to run the INAC co-management and third party management “business”.

7. The FNFSMA sets the lowest common denominator for fiscal relations and the inherent right on the national level. The focus is on financial management and local taxation, not increased fiscal transfers and the resource revenue sharing. The assumption of the Bill is that the inherent right does not include jurisdiction to pass laws on local financial management, revenue collection, and budgeting. This prejudices all First Nations, whether or not they opt in.