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Results: 1 - 15 of 15
View John Barlow Profile
CPC (AB)
View John Barlow Profile
2015-02-24 10:16
I am one of the newbies, so please bear with me if I'm asking some questions that have been asked in the past.
Mr. Beynon, I found it interesting that in your presentation you said some first nations are exercising the ability to collect property taxes and that there was $200 million in unused borrowing capacity.
Are these first nations collecting property taxes and putting the money aside as a fund to fund businesses, or are there some rules as to how they use that property tax, or how is it being used to help businesses?
Allan Clarke
View Allan Clarke Profile
Allan Clarke
2015-02-24 10:17
It relates to the First Nations Fiscal Management Act regime. I mentioned the three institutions that support that regime.
Essentially what that regime does is it affirms jurisdiction for first nations around such matters as taxation and fiscal management and creates a vehicle akin to what exists in provincial jurisdictions so that communities can take advantage of pooled borrowing.
Essentially, all of these three institutions work together. The Tax Commission approves taxation laws; the Financial Management Board certifies the financial performance of communities, and the strength of these institutions and the support these institutions provide to communities maintains the integrity of the regime.
Based on revenue streams from both taxation and other sources of revenue, there are about $280 million in revenues that can be secured by the First Nations Finance Authority. They issued their first bond last June for about $89 million, which was historic. It was a very good rating—an A3 rating, as Andrew mentioned—at a rate of 3.7% or 3.8%, which is very competitive and much better than they would have had if they had gone to the market themselves.
Richard Saunders
View Richard Saunders Profile
Richard Saunders
2014-05-15 16:20
I think there are a couple of things: resourcing and leadership. I think the point you make about the fact that ministers are not in office particularly long—the average is two years—is important. Let's be realistic. The ministers we have dealt with for the most part, without any partisan consideration, have been people who have been largely wanting to make a change, wanting to do things. You might take issue with one or two, but it wouldn't be a partisan thing. There are ministers of various parties who have held office and have been relatively sympathetic in trying to get problems solved. So you could say, whose fault is it? Is it the bureaucracy? Well, not exactly.
That's part of the problem of accountability for decision-making at senior levels, when you have a minister who on average is in office two years—and the two years dates back to when Chrétien was minister for Indian Affairs, which is a long time ago. There were ministers there who some of us have probably never heard of because they came and went so quickly.
We have some 630-odd bands in Canada, first nations. We have three federal territories. We have scores of Inuit communities, and we have law that since 1982 has been evolving more rapidly, possibly, than any other area of law in Canada, which we need to keep up with. Also, contrary to the impression that the number of treaties might give, there are several hundred treaties in Canada for which the minister is responsible, and there are a couple of dozen land claims agreements in modern times. Then we have several thousand officials, a couple of hundred programs, yet the poor guy or lady in office has two years. Come on.
We've met with quite a few of the ministers—again, this is not a partisan comment—but one of them was Jane Stewart. She wanted us to sum up quickly our big issue at her level. We said, “Minister, you're impotent”. She sort of pulled herself up to her considerable height and said, “Well, I can't speak for my colleagues, but I certainly am not”. She tells that story all the time now apparently. But that was our point. You can have a minister who is really well-intentioned, or one that's not, but the fact of the matter is that in two years they're not going to get the problem by the throat and address it. They simply cannot.
I mean, I'm not telling the Prime Minister how to run his cabinet, but it would be real nice if some minister could stay in office long enough to get his hands on the throat of the problem. It really would.
The other thing is resourcing, and yes, that is an endless problem. We don't know what the answer is. The answer we think might be there is one that's being discussed, and I'm sure you've heard it a million times, about resource revenue sharing.
These first nations in Canada were operating as independent communities, looking after their own affairs, addressing their own needs thousands of years ago. The Crees were in James Bay looking after themselves before my ancestors, the Anglos and the Saxons, got to England. We weren't even in England when these guys were running societies here, and running them very effectively. So the answer, to me, is somewhere around resource revenue sharing, which brings in provincial jurisdiction, of course.
It seems to me that traditional territories supported first nations across this continent for thousands of years. They lived off their traditional territory. In some cases that's still possible, if they get a fair share of resource revenues and direct benefits from the exploitation of resources in their territory. That's not simply from hunting and fishing, because that's something they were doing to a greater extent than they are now, but all of the benefits from logging, mining, tourism, the benefits from all of those things.
You can say that's a nice answer for the Cree, but how does that solve Six Nations' problem and how can we be consistent?
Well, you might start looking at things like the sharing of land transfer tax.
What's the land producing right now for the crown and for local governments? It's land transfer tax. Every time you buy or sell your home, there's a land transfer tax. That's what's happening on the traditional territory of Six Nations. The crown use of that.... There are all kinds of rights-of-way for hydro, highways, pipelines, railways, and everything else across the traditional territory. Maybe there's something to be talked about there. Acquisition of increased land base on a willing seller basis. There are innocent third parties there that have nothing to do with any treaty violations or anything else. Some are willing to sell. That should occasionally be looked at.
But for the Cree, we're looking primarily at what Quebec would call crown land, and that's, I think, the long-term answer to the reserves thing. The government right now is demanding in negotiations that own-source revenues be there on the table. Okay, let's have a base for those own-source revenues. Bingo games aren't going to raise it all.
I could go on and on, as you can imagine.
View Murray Rankin Profile
NDP (BC)
View Murray Rankin Profile
2013-04-16 9:43
Thank you.
Thank you all for attending this morning.
I'd like to pose my question to Manny Jules, if I could.
Sir, you are chief executive officer of the First Nations Tax Commission and therefore have a pretty sophisticated understanding of tax regimes amongst first nations communities and across Canada.
How do you see the work of the First Nations Tax Commission fitting in to the broader goal of reducing inequality, and what role specifically do property tax regimes have in reducing inequality between first nations communities and the rest of Canada?
C.T. (Manny) Jules
View C.T. (Manny) Jules Profile
C.T. (Manny) Jules
2013-04-16 9:43
It's one of the two fundamental pillars of a sound economy. If you don't have a real property tax system, which is really by most standards the most accountable form of taxation, and a property regime—those are the two pillars—you can't provide infrastructure as a government; you're not going to have businesses, schools, proper roads, etc.
What I've seen in first nations communities over the last 25 years or so is a change in attitude toward taxation. Initially, it was met with a lot of fear. When I first worked on legislative reform related to real property tax, we anticipated that maybe a dozen communities would get involved. Now there are just about 170 communities, and it's generated about a billion dollars, with an additional billion and a half dollars in funds that were made available as a direct result of the tax.
In my view, it's not only real property tax, but when you look at the goods and services sales tax...first nations should be able to participate in the tax structure of the country and therefore be a part of the fiscal makeup of the country. That also has to include the federal government, as well as the provincial governments.
View Mark Adler Profile
CPC (ON)
View Mark Adler Profile
2012-10-29 16:21
Thank you, Mr. Chair, and thank you to the witnesses for being here.
I want to pursue my initial line of questioning with Ms. Leibovici. You mentioned in your submission that the property tax is a 19th century tool, and I would tend to agree with you there. The sort of golden era for Canadian cities I guess lasted up until about 25 years ago. I remember certainly in Toronto where we had garbage pickup twice a week, recycling once a week, and city services were all there, all free—well, paid through the property tax. But for a variety of reasons over the last 20, 25 years or so, cities are finding themselves with less and less cash.
As you know, in Toronto now, within the 416, the land transfer tax is double. They've been able to generate a lot of money through the doubling of the land transfer tax. Cities are having to become more and more creative in ways to raise revenue in order to deliver the services that citizens require. We also hear in Toronto that they're talking about a casino to raise money.
Could you talk a bit about the ways in which cities are going to have to think outside the box in terms of raising revenues to maintain the existing infrastructure, but also to expand the infrastructure they have currently, plus maintain a quality of life that the citizens of each city have been accustomed to? Could you please discuss that a bit?
Karen Leibovici
View Karen Leibovici Profile
Karen Leibovici
2012-10-29 16:23
That's a tall order for however much time we have.
You're right in terms of the property tax base. The ways cities raise revenue is an old model, and there's lots of discussion happening with our provincial governments with regard to different forms of revenue sharing.
With regard to the infrastructure plan, one of the areas that we're looking at is the asset management capabilities of communities across this country. If we can measure and define the condition of assets across the country, then in fact we can start to look at how we deal with the infrastructure deficit that's there. Not all municipalities are doing that now.
However, it's something that is starting and is a good move forward. I think Ms. McLeod mentioned the three Ps. It is not a solution to every way going forward with a project, but it is perhaps one way that can be looked at in terms of moving forward in meeting our infrastructure needs. Obviously, some thinking out of the box and looking at innovative ways to do that will hopefully be part of a new plan as well.
View Linda Duncan Profile
NDP (AB)
I just want some clarification, Mr. Jules. Is this proposal coming from the tax commission or is it yours personally? I would also welcome some information from you, in your role as the head of the tax commission. I'm interested in knowing your experience.
My understanding is that the role of your commission is to provide information to people about leaseholds and opportunities for taxation of leasehold properties. I'm just wondering if you could also take the time here as the chair of the tax commission to share some of that experience with us about how first nation communities are benefiting from those mechanisms.
Clarence T. Jules
View Clarence T. Jules Profile
Clarence T. Jules
2012-04-03 16:57
Sure. I'll give you a little bit of a history lesson.
My dad started to deal with the tax issue in 1965. It was to snowplow some of the lands on our Mt. Paul industrial park, which you created in 1961. You went to the provincial government. The province said, “Well, you're an Indian reserve, so talk to the Department of Indian Affairs”. We ended up having discussions for over 20 years.
When I was a claim chief in 1984, I wrote a letter to all of the communities in Canada asking them to support Kamloops to amend the Indian Act. During the time previous to that, we worked with a lot of communities to try to have tax jurisdiction under the Indian Act. Then it was announced in the 1986 federal budget that there would be an amendment so we could tax on reserve lands, and by 1988 the legislation was passed.
I had to get the provincial government to vacate the tax field. There were three communities that came forward—Kamloops, Westbank, and Musqueam. They were the first communities after the provincial government had an orderly vacating of the lands. Now there are about 140 communities involved in real property tax. They collect about $100 million on an annual basis, and we're nearing $1 billion in revenue since I started to do this work.
View Dan Albas Profile
CPC (BC)
So you believe the case they make that they are underfunded by property taxes is more due to the political decisions they've made rather than to a legitimate argument?
Paul Moist
View Paul Moist Profile
Paul Moist
2011-10-17 16:42
Thank you very much for the question.
First of all, as the Federation of Canadian Municipalities has said, about a quarter of CUPE's membership, about 150,000 to 160,000 members, are municipal employees. For the eight years I have been in this job, I have attended all of the conventions and events held by the Federation of Canadian Municipalities. Mayors and councillors from across Canada cannot meet their infrastructure and public transit needs off the property tax base. Many communities have had responsibilities put onto the property tax base for which it was never intended. They respectfully speak—and the meetings are always respectful—to all political parties. The four major parties, including the Green Party of Canada, are invited every year to the Federation of Canadian Municipalities meeting, and public transit has been a big part of their overall infrastructure submissions. They said here a week ago, in your presence, that the gas tax has been welcomed and it has been embedded by the current government as an ongoing fix of revenue, but there is no escalator clause built into it, and that's needed.
With regard to the space created by the cuts in the GST, it has been said notionally by some federal spokesmen that that's available for junior levels of government. Well, municipalities do not have the authority.... As the chairperson notes--he and I come from the same province--65% of the population in Manitoba lives in one community, Winnipeg. Well, the mayor of Winnipeg wants a 1% increase in the sales tax but he has no authority to make that happen.
Nothing really happens in Canada without the federal, provincial, and, I would argue strongly, the municipal governments having a seat at the table to talk about stabilizing funding. I could live with the Canadian Urban Transit Association's submission that one cent of the two cents the current government has cut off the GST be dedicated to public transit. That is one of the options.
Brock Carlton
View Brock Carlton Profile
Brock Carlton
2011-10-03 15:33
Great. Thank you.
Of course we're always interested in anything related to infrastructure, so we really appreciate being invited here today.
I should say that our president, Berry Vrbanovic, a councillor from Kitchener, was not able to be here today. He has a council meeting about some important issues, and local democracy is really important to him and to our folks.
FCM has been the voice of municipal government since 1901. Our members represent 90% of the Canadian population. We have approximately 2,000 members across the country.
Public transit is key to a strong economy, and must be part of a new federal long-term infrastructure plan. To compete globally and protect our quality of life, Canada will need cities and communities with fast, efficient transportation networks that connect companies to customers, workers to jobs, and communities to markets.
In a country that needs to increase its economic productivity, traffic gridlock is choking the economy, slowing the movements of goods, services, and people to a standstill.
A recent Statistics Canada report indicates that Canadians spend approximately 32 days per year on the road, commuting to and from work. That amounts to an average of over 75 minutes per day in Canada's biggest cities. In Toronto, going to and from work takes an average of 81 minutes.
Every hour Canadians spend on the road is an hour not spent at home, at work or at school.
The Canadian Chamber of Commerce estimates that road congestion costs the greater Toronto area's economy $5 billion a year in lost productivity. Nationally, that number is much higher.
During these difficult economic times, lost productivity undermines investments made by all governments to help Canada emerge from the recession and improve our economic competitiveness. Gridlock is on the rise in our cities because of Canada's municipal infrastructure deficit. Repairs and construction on our communities' most fundamental asset are being pushed back.
For 25 years Canadians watched the symptoms of infrastructure deficit grow: rusting bridges, crumbling roads, crowded buses and subways, and health warnings to boil local drinking water. However, after decades of underinvestment, Canada has started to confront its municipal infrastructure deficit. Recent investments by federal, provincial-territorial, and municipal governments have helped Canada fight the global recession and rebuild thousands of aging roads, bridges, water systems, and other essential infrastructure.
Ottawa's growing collaboration with municipalities has produced policies and programs that deliver better value for Canadians. The Building Canada plan and the permanent gas tax fund are examples of long-term funding tools the country needs to properly maintain infrastructure over 30-year, 50-year, even 70-year lifespans.
We must protect and build on recent investments to build a country that can support families and businesses. The long-term infrastructure plan promised in the last federal budget is critical to repairing our aging infrastructure. It must include transit investment and solutions to fight gridlock, cut commute times, and connect communities to growing markets and new opportunities.
The permanent federal gas tax invests in public transit, but the high cost of building modern transportation systems requires dedicated funding. Canada's only national source of dedicated transit funding, the Public Transit Capital Trust, expired in 2010. Canadian cities do not have the tools to build and repair modern transit systems on their own while also building roads and bridges, providing policing and fire protection, and carrying out new responsibilities, including many downloaded by other governments.
Without a share of the income and the sales taxes generated by new growth, communities have been forced to raise property taxes, cut core services, and, most often, put off infrastructure repairs. The resulting infrastructure deficit is bad for families, business, and our economy.
A quick tour around the world--New York, London, Singapore--shows that cities with great transit systems aren't forced to rely on property taxes to build them.
All governments must work together, as well as with the private sector, to identify the challenges facing Canada's infrastructure. They must make investments immediately to build the quality roads, water systems, community facilities and public transit that Canada needs to support families, businesses and our future economic growth.
Moving people efficiently requires commonsense cooperation among all governments. In the end, ensuring that Canadians have the capacity and opportunity to move efficiently in our cities and communities will help us address all of our objectives in the service of Canadians.
We'd like to thank you again for taking the time to invite us and for listening to the comments I've just made. We're prepared, Mr. Chair, to answer any questions. I might add, just before doing that, that with me is Adam Thompson, who is a policy analyst in our shop and focused on these issues, so he's also here to help with any questions you may have.
Brock Carlton
View Brock Carlton Profile
Brock Carlton
2011-10-03 15:43
I can't give you an order of magnitude in terms of a figure. What I can say is that in the particular case of urban transit, exactly because of the scenario you're painting, dedicated transit funding is essential. Municipalities simply can't live on the gas tax and the property tax.
Part of your question was on what other avenues there are to span that gap between the gas tax and the needs, and the property tax is the most significant one.
In comparison globally, Canadian municipalities rely on the property tax for significantly more than other OECD countries. In Canada the property tax makes up roughly 60% of municipal revenues. In the United States, for example, it's about 20% to 25%, and in OECD countries the standard is closer to 30%. We rely heavily on the property tax; it is the other major source of revenue. So the only option is to increase the property tax, which increases the tax burden on Canadians on where they live.
We think that if there's dedicated transit funding in the context of a longer-term infrastructure plan, you're going to complement the gas tax with the kinds of resources over the long term that will be needed for these kinds of challenges.
View Pierre Poilievre Profile
CPC (ON)
I'm curious how that's possible. You mentioned just roads and policing. Fair enough. But roads and policing existed in 1985, so you had to pay for them then. I'm not sure why policing is more expensive today than it was in 1985. Why are roads more expensive today, other than inflation, which is accounted for by property tax increases? All of the infrastructure you've just mentioned had to be financed in 1985. So why do you say there's an inordinate increase in the cost?
Brock Carlton
View Brock Carlton Profile
Brock Carlton
2011-10-03 15:59
Adam will answer part of that, but I would say that it is not fair to say that costs have increased on roads, etc., at around inflation rate and property tax has increased by inflation. The demand on the property tax has increased more than inflation, because more things have been downloaded onto municipalities as their responsibility. So the property tax is now serving a lot more services and expectations of the citizen than was the case when it was originally conceived or was the case in 1985.
For example, if you take a look at a report we did a year or so ago about the social safety net in Canada, you'll see there are a lot of issues in that report that are about municipalities delivering services that are now part of the social safety net, which were never conceived of to be part of the property tax base. So there is an expanding demand on the property tax base.
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