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

Marginal note:Quorum

64 Two thirds of the directors constitute a quorum at any meeting of the board of directors.

Marginal note:Majority vote

65 Decisions by the board of directors shall be made by a majority vote of the directors present.

Marginal note:Canada Not-for-profit Corporations Act

• 66 (1) The Canada Not-for-profit Corporations Act does not apply to the Authority.

• Marginal note:Canada Business Corporations Act

  (2) The following provisions of the Canada Business Corporations Act apply, with any modifications that the circumstances require, to the Authority and its directors, members, officers and employees as if the Authority were a corporation incorporated under that Act, this Part were its articles of incorporation and its members were its shareholders:

  • (a) subsection 15(1) (capacity of a natural person);

  • (b) section 16 (by-law not required to confer powers on Authority, restriction on powers of Authority, and validity of acts of Authority);

  • (c) subsection 21(1) (access to Authority’s records by members and creditors);

  • (d) section 23 (corporate seal not needed to validate instrument);

  • (e) subsections 103(1) to (4) (powers of directors to make and amend by-laws, member approval of by-laws and effective date of by-laws);

  • (f) subsection 105(1) (qualifications of directors);

  • (g) subsection 108(2) (resignation of director);

  • (h) section 110 (right of director to attend members’ meetings and statements by retiring directors);

  • (i) subsection 114(1) (place of directors’ meetings);

  • (j) section 116 (validity of acts of directors and officers);

  • (k) section 117 (validity of directors’ resolutions not passed at meeting);

  • (l) subsections 119(1) and (4) (liability of directors);

  • (m) section 120 (conflict of interests of directors);

  • (n) section 123 (directors’ dissents);

  • (o) section 124 (directors’ indemnity);

  • (p) section 155 (financial statements);

  • (q) section 158 (approval of financial statements by directors);

  • (r) section 159 (sending financial statements to members before annual meeting);

  • (s) sections 161 and 162 (qualifications and appointment of auditor);

  • (t) section 168 (rights and duties of auditor);

  • (u) section 169 (examination by auditor);

  • (v) section 170 (auditor’s right to information);

  • (w) subsections 171(3) to (9) (duty and administration of audit committee and penalty for failure to comply);

  • (x) section 172 (qualified privilege in defamation for auditor’s statements); and

  • (y) subsections 257(1) and (2) (certificates of Authority as evidence).

Marginal note:Remuneration of directors

67 Directors shall be paid a fee for attend­ance at meetings of the board of directors, as fixed by the by-laws of the Authority.

Marginal note:Duty of care

• 68 (1) The directors and officers of the Authority in exercising their powers and performing their duties shall

  • (a) act honestly and in good faith with a view to the best interests of the Authority; and

  • (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

• Marginal note:Limit of liability

  (2) Directors and officers are not liable for a failure to comply with subsection (1) if they rely in good faith on

  • (a) a written report of the auditor of the Authority or financial statements represented by an officer of the Authority as fairly reflecting the financial condition of the Authority; or

  • (b) a report of a lawyer, notary, accountant, engineer, appraiser or other person whose position or profession lends credibility to a statement made by that person.

Marginal note:President

• 69 (1) The board of directors shall appoint a President to act as the chief executive officer of the Authority.

• Marginal note:Other staff

  (2) The President may employ any other officers and employees that are necessary to conduct the work of the Authority.

Marginal note:Annual general meeting

70 The Authority shall hold an annual general meeting of representatives for the purpose of

• (a) presenting the annual report and audited financial statements of the Authority;

• (b) electing the board of directors; and

• (c) dealing with any other business of the Authority that may be presented by the board of directors.

Marginal note:By-laws

71 The board of directors may make by-laws

• (a) respecting the calling and conduct of meetings of the board, including the holding of meetings by teleconference;

• (b) fixing the fees to be paid to directors for attendance at meetings of the board and the reimbursement of reasonable travel and living expenses to directors;

• (c) respecting the duties and conduct of the directors, officers and employees of the Authority and the terms and conditions of employment and of the termination of employment of officers and employees of the Authority;

• (d) respecting the signing and sealing of securities and interest coupons issued by the Authority; and

• (e) generally for the conduct and management of the affairs of the Authority.

Marginal note:Head office

72 The head office of the Authority shall be on reserve lands at a location determined by the board of directors.

Marginal note:Annual budget

73 At the beginning of every year, the President shall prepare an annual budget of the Authority and present it to the board of directors for approval.

Purposes

Marginal note:Mandate

74 The purposes of the Authority are to

• (a) secure for its borrowing members, through the use of property tax revenues,

  • (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;

  • (iii) [Repealed, 2023, c. 16, s. 35]

• (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;

• (c) secure the best possible credit terms for its borrowing members;

• (d) provide investment services to First Nations and entities referred to in any of paragraphs 50.1(1)(a) to (e); and

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

Functions and Powers

Marginal note:Powers of board of directors

• 75 (1) For the purposes of this Part, the board of directors may by resolution

  • (a) borrow money in an amount authorized by the resolution;

  • (b) issue securities of the Authority;

  • (c) lend securities to generate income, if the loan is fully secured;

  • (d) enter into agreements for risk management purposes, including swaps; and

  • (e) provide for

    • (i) payments related to the issuance of securities,

    • (ii) the registration, transfer, management and redemption of securities,

    • (iii) the re-issuance, reinstatement or other disposition of lost, stolen, destroyed or damaged securities or interest coupons,

    • (iv) the examination, cancellation or destruction of securities and of materials used in their production, or

    • (v) the timing of the issuance of securities.

• Marginal note:Security issuance requirements

  (2) A resolution respecting the issuance of securities shall set out

  • (a) the rate of interest;

  • (b) the time and place of repayment of principal and interest; and

  • (c) the currency in which repayment of principal and interest will be made.

• Marginal note:Security issuance resolutions

  (3) A resolution respecting the issuance of securities may provide that

  • (a) the securities are to be redeemable in advance of maturity at a time and price set out in the resolution;

  • (b) all or any part of the securities may be paid, refunded or renewed;

  • (c) the securities are to be issued in an amount sufficient to realize the amount of any securities called in and paid before maturity, for a term not longer than the remainder of the term of the securities called in and paid; or

  • (d) the securities and any interest coupons attached to them are to be in the form set out in the resolution, and are to be exchangeable for other securities of the same issue on any terms and conditions set out in the resolution.

• Marginal note:Amount of issue

  (4) The Authority may issue securities the principal amounts of which, after payment of any discount and the costs of issue and sale, will realize the net amount authorized by the board of directors in a resolution made under paragraph (1)(a).

• Marginal note:Declaration conclusive

  (5) A declaration in a resolution authorizing the issuance of securities that it is necessary to issue securities in the principal amount authorized in order to realize the net amount authorized is conclusive evidence of that fact.

• Marginal note:Sale price

  (6) The board of directors may sell securities at their par value or at other than par value.

• Marginal note:Delegation

  (7) The board of directors may delegate its powers under this section to a committee of directors and officers of the Authority, subject to any limitations that the board of directors may impose.

Marginal note:Application to become borrowing member

• 76 (1) A First Nation may apply to the Authority to become a borrowing member.

• Marginal note:Criteria

  (2) The Authority shall accept a First Nation as a borrowing member only if the First Nations Financial Management Board has issued to the First Nation a certificate in respect of their financial performance under subsection 50(3) and has not subsequently revoked it.

Marginal note:Ceasing to be borrowing member

77 A borrowing member that has obtained a loan from the Authority may cease to be a borrowing member only with the consent of all other borrowing members.

Marginal note:Priority

• 78 (1) If a borrowing member is insolvent, the Authority has priority over all other creditors of the borrowing member for all moneys that are authorized or obligated to be paid to the Authority under a law made by the borrowing member, under this Act, including under the regulations, or under an agreement relating to borrowing from the Authority, but the priority is only in respect of any debt that arises on or after the day on which the borrowing member 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.

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.