First Nations tax law gains a new Part 3 letting eligible First Nations impose tax on alcohol, fuel, cannabis, vaping and tobacco products

Plain-language summary · AI-assisted · not legal advice

A new Part 3 has been added to the federal First Nations Goods and Services Tax Act, creating a framework that lets qualifying First Nations governing bodies (bands or bodies with equivalent legislative power) enact their own tax laws on specified products — alcohol, fuel, cannabis products, vaping products, and tobacco products — sold or brought onto their lands. The new rules mirror the structure already used in Parts 1 and 2: a First Nation must enter into an administration agreement with the federal Minister of Finance before the tax can come into force, and Canada administers and enforces the tax and pays the First Nation its share of revenue out of the Consolidated Revenue Fund. A new Schedule 3 has been added to list participating First Nations, their governing bodies, lands, and which specified products are covered; the schedule is currently empty and the Minister (not the Governor in Council, as previously required for Schedules 1 and 2) can amend it by order. Several housekeeping changes were also made across existing Parts 1 and 2: gender-neutral language replacing references to 'Her Majesty' with 'His Majesty', updated publication rules (laws may now be published on a website instead of only in the First Nations Gazette), clarified definitions of 'administration agreement', 'governing body' and 'lands' to distinguish Part 1 and Part 3 uses, and a new provision allowing minor administration-agreement amendments without Governor in Council approval. Businesses operating on First Nation lands, and suppliers of alcohol, fuel, cannabis, vaping or tobacco products to customers on those lands, should monitor Schedule 3 for when specific First Nations are added, as their products could become subject to a First Nations tax at that point.

Who this affects: First Nations governing bodies eligible to enact tax laws · businesses operating on First Nation lands · suppliers of alcohol, fuel, cannabis, vaping and tobacco products · GST/HST registrants making taxable supplies on First Nation lands · federal and provincial tax administrators