First Nations Fiscal Management Act

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:Provisioning of fund

  (2) Subject to the regulations, the Authority shall withhold 5% of the amount of any long-term loan to a borrowing member for financing capital infrastructure for the provision of local services on reserve lands and deposit that amount in the debt reserve fund.

• 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) If payments from the debt reserve fund reduce its balance

  • (a) by less than 50% of the total amount contributed by borrowing members, the Authority may, in accordance with the regulations, require all borrowing members to pay amounts sufficient to replenish the debt reserve fund; and

  • (b) by 50% or more of the total amount contributed by borrowing members,

    • (i) the Authority shall, in accordance with the regulations, require all borrowing members to pay without delay amounts sufficient to replenish the debt reserve fund, and

    • (ii) the borrowing members shall recover those amounts under their property taxation laws.

• Marginal note:Repayment

  (6) Money contributed by a borrowing member to the debt reserve fund and investment income received on it shall be repaid by the Authority to the borrowing member when all obligations in respect of the security in respect of which the money was contributed have been satisfied.