Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada

Search

First Nations Fiscal Management Act (S.C. 2005, c. 9)

Act current to 2020-03-05 and last amended on 2020-03-04. Previous Versions

PART 4First Nations Finance Authority (continued)

Functions and Powers (continued)

Marginal note:Ceasing to be borrowing member

  •  (1) A First Nation that has obtained financing secured by property tax revenues may cease to be a borrowing member only with the consent of all other borrowing members that have obtained financing secured by such revenues.

  • Marginal note:Ceasing to be borrowing member

    (2) A First Nation that has obtained financing secured by other revenues may cease to be a borrowing member only with the consent of all other borrowing members that have obtained financing secured by such other revenues.

  • 2005, c. 9, s. 77
  • 2015, c. 36, s. 195
  • 2018, c. 27, s. 414(E)

Marginal note:Priority

  •  (1) If a First Nation is insolvent, the Authority has priority over all other creditors of the First Nation for any moneys that are authorized to be paid to the Authority under a law made under paragraph 5(1)(b) or (d), under an agreement governing a secured revenues trust account or under the Act, but the priority is only in respect of any debt that arises on or after the date on which the First Nation receives the initial disbursement of the first loan that it obtained from the Authority.

  • Marginal note:Debts to the Crown

    (2) For greater certainty, subsection (1) does not apply to Her Majesty.

  • 2005, c. 9, s. 78
  • 2015, c. 36, s. 196
  • 2018, c. 27, ss. 404(F), 414(E)

Marginal note:Limitations — loans

 The Authority shall not make a long-term loan to a borrowing member for the purpose of financing capital assets for the provision of local services on reserve lands unless the First Nations Tax Commission has approved a law made by the borrowing member under paragraph 5(1)(d).

  • 2005, c. 9, s. 79
  • 2015, c. 36, s. 197
  • 2018, c. 27, s. 405

Marginal note:Restriction

 A borrowing member that has obtained a long-term loan secured by property tax revenues from the Authority shall not subsequently obtain a long-term loan secured by property tax revenues from any other person.

  • 2005, c. 9, s. 80
  • 2015, c. 36, s. 197

Marginal note:Limitations — short-term loans

 The Authority shall not make a short-term loan to a borrowing member for a purpose described in subparagraph 74(a)(iii) unless the loan is made in anticipation of local revenues of the borrowing member set out in a law made under paragraph 5(1)(b).

Marginal note:Sinking fund

  •  (1) The Authority shall establish a sinking fund, or any other system of repayment prescribed by regulation, to fulfil its repayment obligations to the holders of each security issued by the Authority.

  • Marginal note:Separate accounts

    (2) Where a sinking fund is established, a separate sinking fund account shall be kept for each borrowing member participating in a security issued by the Authority.

  • Marginal note:Sinking fund investments

    (3) Funds in a sinking fund may be invested only in

    • (a) securities issued or guaranteed by Canada or a province;

    • (b) securities of a local, municipal or region­al government in Canada;

    • (b.1) securities of the Authority or of a municipal finance authority established by a province, if the day on which they mature is not later than the day on which the security for which the sinking fund is established matures;

    • (c) investments guaranteed by a bank, trust company or credit union; or

    • (d) deposits in a bank or trust company in Canada or non-equity or membership shares in a credit union.

  • 2005, c. 9, s. 82
  • 2015, c. 36, s. 198

Marginal note:Surpluses

  •  (1) The Authority may declare a surplus in a sinking fund and use the surplus, in order of priority, to

    • (a) replenish any amounts paid out of the debt reserve fund; and

    • (b) make a distribution to borrowing members who are participating in that fund.

  • Marginal note:Recovery from sinking fund

    (2) The Authority may recover fees payable by a borrowing member from any surplus to be distributed to that member under paragraph (1)(b).

Marginal note:Debt reserve fund

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

    • (a) a debt reserve fund solely for financing secured by property tax revenues; and

    • (b) a debt reserve fund solely for financing secured by other revenues.

  • Marginal note:Provisioning of fund

    (2) Subject to a regulation that fixes different percentages for the purposes of this subsection, the Authority shall withhold 5% of the amount of any long-term 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, regardless of the length of its term, and deposit that amount in the corresponding debt reserve fund.

  • 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 and the regulations do not fix a different percentage.

  • Marginal note:Separate account

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

  • Marginal note:Investments

    (4) The funds of a 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) If payments from a debt reserve fund reduce its balance

    • (a) by less than 50% of the total amount contributed by borrowing members who have obtained financing for which that debt reserve fund was established, the Authority may, in accordance with the regulations, require those borrowing members to pay without delay amounts sufficient to replenish the debt reserve fund; and

    • (b) by 50% or more of the total amount contributed by borrowing members who have obtained financing for which that debt reserve fund was established, the Authority shall, in accordance with the regulations, require those borrowing members to pay without delay amounts sufficient to replenish the debt reserve fund.

  • Marginal note:Repayment

    (6) Money contributed by a borrowing member to a 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 in respect of which the money was contributed have been satisfied.

  • 2005, c. 9, s. 84
  • 2015, c. 36, s. 199
  • 2018, c. 27, s. 406

Marginal note:Credit enhancement fund

  •  (1) The Authority shall establish a fund for the enhancement of the Authority’s credit rating.

  • Marginal note:Investments

    (2) The funds of the credit enhancement 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:Investment income

    (3) Investment income from the credit enhancement fund may be used

    • (a) to temporarily offset any shortfalls in the debt reserve fund;

    • (b) to defray the Authority’s costs of operation; and

    • (c) for any other purpose prescribed by regulation.

  • Marginal note:Capital

    (4) The capital of the credit enhancement fund may be used

    • (a) to temporarily offset any shortfalls in the debt reserve fund; and

    • (b) for any other purpose prescribed by regulation.

  • Marginal note:Repayment to credit enhancement fund

    (5) Any funds that are paid from the credit enhancement fund to offset a shortfall in the debt reserve fund shall be repaid by that debt reserve fund within 18 months after the day on which the funds are paid or, if more than one payment of funds is made, within 18 months after the day on which the first payment is made. After the expiry of that 18-month period, no further funds shall be paid from the credit enhancement fund to that debt reserve fund unless it has been fully replenished under section 84.

  • 2005, c. 9, s. 85
  • 2015, c. 36, s. 200
 
Date modified: