Fiscal Relations

For over 100 years, aboriginal people living on reserves who meet federal requirements as Status Indians have been exempt from most federal and provincial taxes on income and property while public services on reserves are largely funded by the federal government. Aboriginal people on reserves have been subject to the bureaucracy of the Indian Act and legislated restrictions on economic development. As a result of the Nisga’a Final Agreement, the Nisga’a, after a transition period will:

Fiscal Transfer   The Nisga’a will receive $190 million, paid out over a 15-year period, for which Canada will contribute $175.6 million and British Columbia will contribute $14.4 million. Even taking into account B.C. taxpayers’ share of the federal government contributions, British Columbians will pay only 1/5 of the cash amount while other Canadians pay 4/5. The cost to the B.C. government for this share of the capital transfer is less than 1/10 of one per cent of one year’s provincial budget.

Canada and British Columbia will also equally share the cost of an $11.5 million agreement to purchase commercial fishing vessels and licences on the open market to allow the Nisga’a to participate in commercial fishery opportunities.
 

Fiscal Relations

Canada, British Columbia and the Nisga’a will share responsibility for funding public services and programs on Nisga’a Lands at a level generally comparable to services provided by other local and regional governments in northwestern British Columbia

The Final Agreement requires the three parties to negotiate five-year fiscal financing agreements detailing the contributions Canada, British Columbia and the Nisga’a will make to public services on Nisga’a Lands.

  For the first five years, provincial and federal contributions will reflect current annual government funding to the Nisga’a, plus an additional $16.1 million over five years, $100,000 of which is paid by British Columbia. The majority of British Columbia’s share currently goes to health and education.

The Fiscal Financing Agreements and Own Source Revenue Agreements will require that, as the Nisga’a generate more of their own revenue from sources such as resource development, taxes, and interest on capital payments, the Nisga’a will pay a higher proportion of the cost of services, while provincial and federal contributions will decrease.
 

Taxation

Under section 87 of the Indian Act, Status Indians living on reserve and Indian bands are exempt from federal and provincial taxes on property and on income generated on reserve. Under the Final Agreement, this tax exemption will be phased out for Nisga’a citizens -- in eight years for sales taxes and other transaction taxes and after 12 years for all other taxes.

As part of generating revenue for its operations, Nisga’a Government will have the authority to levy direct taxes on Nisga’a citizens residing on Nisga’a Lands. The Nisga’a taxation power will not limit or displace federal or provincial taxation powers.

Nisga’a Government will not be able to tax non-Nisga’a residents on Nisga’a Lands. In the future, the provincial or federal government may decide to delegate the power to tax non-Nisga’a residents of Nisga’a Lands to Nisga’a Government.

British Columbia would not enter into negotiations to delegate tax collection powers unless the Nisga’a guarantee appropriate representation for non-Nisga’a taxpayers and strict non-discrimination provisions.

Nisga’a Government will be exempt from paying the Goods and Services Tax, social services tax, motor fuel tax and income tax on non-profit or government activities. In the case of income tax, Nisga’a Government and its corporation will be treated the same as a municipality.
 

For further information on this or other topics, contact:
 

Ministry of Aboriginal Affairs
Communications Branch
4th Floor, 908 Pandora Avenue
Victoria BC V8W 1X4
Telephone: 1-800-880-1022