An Act to amend the First Nations Fiscal Management Act, to make consequential amendments to other Acts, and to make a clarification relating to another Act (S.C. 2023, c. 16)

34 The definitions long-term loan and short-term loan in section 57 of the Act are repealed.

Marginal note:2018, c. 27, s. 403(1)

• 35 (1) Subparagraphs 74(a)(i) to (iii) of the Act are replaced by the following:

  • (i) loans that have terms of one year or longer to finance or refinance capital assets for the provision of local services on reserve lands, or

  • (ii) loans that have terms of less than one year to meet cash-flow requirements for operating or capital purposes or to refinance a short-term debt incurred for capital purposes;

• (2) Paragraph 74(b) of the Act is replaced by the following:

  • (b) secure for its borrowing members, through the use of other revenues prescribed by regulation, loans for any purpose prescribed by regulation;

• (3) Paragraph 74(b) of the Act is replaced by the following:

  • (b) secure for its borrowing members, through the use of other revenues, loans for any purpose that promotes a First Nation’s economic or social development, including loans for

    • (i) capital assets that are to be wholly or partly owned by the First Nation, including capital assets for the provision of services, housing, plants, machinery, roads and buildings,

    • (ii) rolling stock that is to be wholly or partly owned by the First Nation,

    • (iii) land that is to be wholly or partly owned by the First Nation,

    • (iv) shares or any other ownership interest in a corporation whose purpose includes the ownership, operation, management or sale of the products of power generating facilities, waste or wastewater treatment facilities or other public service utilities or facilities, and

    • (v) short-term financing to meet cash flow requirements for capital purposes or to refinance a short-term debt incurred for capital purposes;

• Marginal note:2018, c. 27, par. 414(z.2)(E)

  (4) Paragraph 74(e) of the Act is replaced by the following:

  • (e) provide advice regarding the development of financing mechanisms for First Nations.

Marginal note:2015, c. 36, s. 195; 2018, c. 27, par. 414(z.3)(E)

36 Section 77 of the Act is replaced by the following:

Marginal note:2015, c. 36, s. 196; 2018, c. 27, s. 404(F) and par. 414(z.4)(E)

37 Subsection 78(1) of the Act is replaced by the following:

Marginal note:2018, s. 27, s. 405

• 38 (1) Section 79 of the Act is replaced by the following:

  Marginal note:Limitations — loans

  79 The Authority shall not make a loan to a borrowing member unless the First Nations Tax Commission has approved a law made by the borrowing member under paragraph 5(1)(d) in respect of that loan.

• (2) Section 79 of the Act is replaced by the following:

  Marginal note:Limitations — loans secured by property tax revenues

  • 79 (1) The Authority shall not make a loan secured by property tax revenues to a borrowing member unless the First Nations Tax Commission has approved a law made by the borrowing member under paragraph 5(1)(d) in respect of that loan.

  • Marginal note:Limitations — loans secured by other revenues

    (2) The Authority shall not make a loan secured by other revenues to a borrowing member unless

    • (a) the borrowing member has made a law under paragraph 8.1(1)(a) in respect of that loan and forwarded a copy of it to the Authority;

    • (b) the Authority is satisfied that the borrowing member has the ability to repay the loan;

    • (c) the borrowing member has obtained a certificate respecting financial performance from the First Nations Financial Management Board under subsection 50(3) and forwarded a copy of it to the Authority;

    • (d) the borrowing member and the Authority have established a secured revenues trust account that is

      • (i) managed by a third party approved by the Authority, and

      • (ii) subject to terms that require the third party managing the account to periodically pay to the Authority the amounts required to be paid to it under the borrowing agreement with the borrowing member, at the times set out in that agreement, before paying any remaining amount to the borrowing member; and

    • (e) the borrowing member has required the payers of the other revenues being used to secure the loan to deposit those other revenues into the secured revenues trust account or an intermediate account during the period of the loan.

  Marginal note:Maintenance of registry and publication

  79.1 The Authority shall maintain a registry of every law made under paragraph 8.1(1)(a) that is forwarded to it under paragraph 79(2)(a) and shall publish a copy of each law on an Internet website to be maintained by the Authority within 30 days after the day on which it is received.

Marginal note:2015, c. 36, s. 197

39 Sections 80 and 81 of the Act are replaced by the following:

Marginal note:2015, c. 36, s. 199

• 40 (1) Subsection 84(1) of the Act is replaced by the following:

  Marginal note:Debt reserve fund

  • 84 (1) The Authority shall establish a debt reserve fund to make payments or sinking fund contributions for which insufficient moneys are available from borrowing members.

• Marginal note:2015, c. 36, s. 199

  (2) Subsection 84(2) of the Act is replaced by the following:

  • Marginal note:Provisioning of fund

    (2) Subject to a regulation that fixes different percentages for the purposes of this subsection, the Authority shall withhold — and deposit in the corresponding debt reserve fund — 5% of the amount of any loan to a borrowing member that is secured by property tax revenues and of any loan to a borrowing member that is secured by other revenues.

• (3) Subsections 84(2) to (6) of the Act are replaced by the following:

  • Marginal note:Provisioning of fund

    (2) The Authority shall withhold — and deposit in the debt reserve fund — 5% of the amount of any loan.

  • Marginal note:Percentage withheld may be reduced by board

    (2.1) However, the board of directors may, by resolution, reduce the percentage to be withheld from a loan under subsection (2) to a percentage that is not less than 1%, if the board of directors is satisfied that doing so would not have a negative impact on the Authority’s credit rating.

  • Marginal note:Separate account

    (3) A separate account shall be kept for each security issued and for each borrowing member contributing to the debt reserve fund.

  • Marginal note:Investments

    (4) The funds of the debt reserve fund may be invested only in securities, investments or deposits referred to in paragraph 82(3)(a), (c) or (d) that mature or are callable within five years, 25% of which must be callable within 90 days.

  • Marginal note:Liability for shortfall

    (5) The following rules apply if payments from the debt reserve fund reduce its balance:

    • (a) if the balance is reduced by less than 50% of an amount determined in any manner prescribed by regulation, the Authority may, in accordance with the regulations, require borrowing members with unpaid loans to pay without delay amounts sufficient to replenish the debt reserve fund; and

    • (b) if the balance is reduced by 50% or more of an amount determined in any manner prescribed by regulation, the Authority shall, in accordance with the regulations, require borrowing members with unpaid loans to pay without delay amounts sufficient to replenish the debt reserve fund.

  • Marginal note:Repayment

    (6) Money contributed by a borrowing member to the debt reserve fund, and any investment income received on it, that has not already been repaid to the borrowing member by the Authority shall be repaid when all obligations in respect of the security for which the money was contributed have been satisfied.

• 41 (1) Subsection 86(3) of the Act is replaced by the following:

  • Marginal note:Report

    (3) On receipt of a notice referred to in paragraph (1)(b) in respect of a failure related to an obligation other than payment, the First Nations Financial Management Board shall advise the Authority in writing of its opinion on the reasons for the failure and recommend any intervention under section 52 or 53, in the case of an obligation relating to a loan secured by local revenues, or under section 52.1 or 53.1, in the case of an obligation relating to a loan secured by other revenues, that it considers appropriate. The Board must provide a copy of the report including its opinion and any recommendations to the First Nations Tax Commission.

• Marginal note:2018, c.27, par. 414(z.5)(E)

  (2) Subsection 86(4) of the Act is replaced by the following:

  • Marginal note:Required intervention

    (4) The Authority may, by notice in writing, require the First Nations Financial Management Board to either — at the Board’s discretion — impose a co-management arrangement on a borrowing member in respect of its local revenues or assume third-party management of its local revenues

    • (a) if, with respect to a loan secured by local revenues, the borrowing member fails to make a payment to the Authority under a borrowing agreement with the Authority, or to pay a charge imposed by the Authority under this Part; or

    • (b) if, with respect to a loan secured by local revenues, the Authority receives a report of the Board under subsection (3) in respect of the borrowing member.

• (3) Section 86 of the Act is amended by adding the following after subsection (4):

  • Marginal note:Required intervention

    (5) The Authority may, by notice in writing, require the First Nations Financial Management Board to either — at the Board’s discretion — impose a co-management arrangement on a borrowing member in respect of its other revenues or assume third-party management of its other revenues

    • (a) if, with respect to a loan secured by other revenues, the borrowing member fails to make a payment to the Authority under a borrowing agreement with the Authority, or to pay a charge imposed by the Authority under this Part; or

    • (b) if, with respect to a loan secured by other revenues, the Authority receives a report of the Board under subsection (3) in respect of the borrowing member.

  • Marginal note:Copy to Commission

    (6) The Authority must provide a copy of the notices referred to in subsections (4) and (5) to the First Nations Tax Commission.

Marginal note:2015, c. 36, s. 201

42 Paragraphs 89(a) and (b) of the Act are replaced by the following: