WHEREAS:
The Déline Final Self-Government Agreement was brought into effect by the Déline Final Self-Government Agreement Act, S.C. 2015, c. 24, and the Déline Final Self-Government Agreement Act, S.N.W.T. 2015, c. 3;
Section 22.2.1 of the taxation chapter of the Déline Final Self-Government Agreement states that the DGG has jurisdiction in relation to direct taxation of DFN Citizens within Déline Lands;
Section 22.2.2 of the taxation chapter of the Déline Final Self-Government Agreement states that, from time to time, Canada and the Government of the Northwest Territories, together or separately, may negotiate an agreement with the DGG respecting the (a) extent to which the jurisdiction under section 22.2.1 may be extended to apply to persons other than DFN Citizens, within Déline Lands; and (b) coordination of the DGG tax system with federal or Northwest Territories tax systems;
This Agreement is an agreement referred to in section 22.2.2 of the taxation chapter of the Déline Final Self-Government Agreement;
The DGG desires to exercise its power of direct taxation under the Déline Final Self-Government Agreement;
The DGG wishes to enter into a tax administration agreement with Canada, pursuant to which Canada will administer and enforce the Délînê Got’înê Government Personal Income Tax Act, 2016 and collect Income Tax payable under the act and will make payments to the DGG in respect thereof, in accordance with the terms and conditions of this tax administration agreement;
The Federal-Provincial Fiscal Arrangements Act, R.S.C., 1985, c. F-8, provides that where an aboriginal government imposes a tax, the Minister of Finance, with the approval of the Governor in Council, may enter into a tax administration agreement with the aboriginal government, on behalf of Canada;
The ?ekw’ahtidé has the approval of the DGG to enter into this Agreement;
The Minister of Finance has the approval of the Governor in Council to enter into this Agreement;
NOW THEREFORE, in consideration of the terms, covenants and conditions contained in this Agreement, the Parties agree as follows:
Interpretation
1.(1) The following definitions apply in this Agreement:
- “?ekw’ahtidé” means the ?ekw’ahtidé in accordance with the Déline Final Self-Government Agreement;
- “Assessment” includes reassessment;
- “Déline Final Self-Government Agreement” means the Déline Final Self-Government Agreement among the Déline First Nation Band, the Déline Land Corporation, the Government of Canada and the Government of the Northwest Territories, signed on February 18, 2015, including any amendments made to it;
- “Déline Lands” means the Déline Lands in accordance with the Déline Final Self-Government Agreement;
- “Designated Percentage” for a Year is 95%;
- “DFN Citizen” means a DFN Citizen in accordance with the Déline Final Self-Government Agreement;
- “DGG Act” means the Délînê Got’înê Government Personal Income Tax Act, 2016;
- “Effective Date” means the effective date of this Agreement as set out in clause 28;
- “Federal Act” means the Income Tax Act, R.S.C., 1985, c. 1 (5th supp.);
- “Federal Tax” means the amount that, but for section 120 of the Federal Act, would be the tax payable by an Individual under Part I of that Act for the Year in respect of which the expression is being applied, computed as if the Individual were not entitled to any deduction under section 126, 127, 127.2, 127.4 or 127.41 of that Act;
- “Financial Administration Act” means the Financial Administration Act, R.S.C., 1985, c. F-11;
- “Income Earned in the Year in the NWT” means the amount determined in respect of the Northwest Territories in accordance with subsection 120(4) of the Federal Act;
- “Income for the Year” means the amount determined in accordance with subsection 120(3) of the Federal Act;
- “Income Tax” means the tax imposed under the DGG Act;
- “Individual” means a person other than a corporation and includes a trust or estate for the purposes of Part I of the Federal Act;
- “Interpretation Act” means the Interpretation Act, R.S.C., 1985, c. I-21;
- “Minister” means the Minister of Finance and includes, where circumstances require, the Deputy Minister or any officer or class of officer authorized by the Minister of Finance;
- “Minister of National Revenue” means the Minister responsible for the Canada Revenue Agency and includes, where circumstances require, the Commissioner of the Canada Revenue Agency or any officer or class of officer authorized by the Minister responsible for the Canada Revenue Agency or the Commissioner of the Canada Revenue Agency;
- “Term” means the term as set out in clause 30;
- “Working Day” means a day that is not a Saturday or a holiday; and
- “Year” means a taxation year or, if the Term of this Agreement covers only a portion of a taxation year, that portion of the taxation year.
(2) Words and expressions not specifically defined in this Agreement will, where they are defined in the Federal Act, have the meaning given to them therein.
(3) The Interpretation Act applies, with such modifications as the circumstances require, to this Agreement as if it were an enactment.
(4) Where a reference is made in this Agreement to an Act of Parliament or the DGG Act, or to regulations made under those acts, the reference is deemed to be a reference to that act or those regulations, as amended from time to time.
Covenants by Canada
2. Canada agrees that:
- (a) the tax power of the DGG in section 22.2.1 of the taxation chapter of the Déline Final Self-Government Agreement is extended to apply to Individuals other than DFN Citizens, within Déline Lands, in accordance with section 22.2.2 of the taxation chapter of the Déline Final Self-Government Agreement to the extent necessary for the DGG to enact the DGG Act;
- (b) the tax power of the DGG applies in respect of Income Tax and other amounts imposed under the DGG Act while this Agreement is in effect and in respect of amounts, other than Income Tax, imposed under the DGG Act after this Agreement ceases to have effect that relate to amounts imposed while this Agreement was in effect; and
- (c) the DGG has the power to enact the provisions of the DGG Act that address, directly or indirectly, fines or terms of imprisonment and other matters related to enforcement, appeals and adjudication in respect of the DGG Act.
3.(1) Canada will act as the agent for the DGG in respect of the administration and enforcement of the DGG Act, and collect the Income Tax and other amounts imposed under the DGG Act while this Agreement is in effect and amounts, other than Income Tax, imposed under the DGG Act after this Agreement ceases to have effect that relate to amounts imposed while this Agreement was in effect.
(2) Subject to subclause 13(5), Canada will administer and enforce the DGG Act in accordance with this Agreement free of charge. In particular, any costs, charges or expenses (including amounts required to be paid in respect of prosecutions or other legal proceedings) incurred by Canada in the collection of the Income Tax will be paid by Canada for each Year covered by the Term of this Agreement.
4. Canada will, for each Year covered by the Term of this Agreement, vacate tax room equivalent to the Designated Percentage of the Federal Tax payable by an Individual residing, on the last day of the Year in respect of which Income Tax is imposed, within Déline Lands.
Covenants by the DGG
5. The ?ekw’ahtidé agrees that within 14 days following the Effective Date of this Agreement, it will recommend to the DGG:
- (a) that it enact, within 30 days following the Effective Date of this Agreement, the attached draft DGG Act or a law that is similar in all material respects to the attached draft DGG Act; and
- (b) that the DGG Act come into force on the day of its enactment.
6. The DGG will, in respect of each Year covered by the Term of this Agreement, impose an Income Tax in the following manner:
- (a) in the case of an Individual who resides within Déline Lands on the last day of the Year in respect of which Income Tax is imposed and who only has Income Earned in the Year in the NWT, Income Tax will be the Designated Percentage multiplied by the Federal Tax payable by that Individual for the Year; and
- (b) in the case of an Individual who resides within Déline Lands on the last day of the Year in respect of which Income Tax is imposed and who has Income for the Year other than Income Earned in the Year in the NWT, Income Tax will be the Designated Percentage multiplied by the Federal Tax payable by that Individual for the Year, the product of which is multiplied by the ratio of the Individual’s Income Earned in the Year in the NWT to the Individual’s Income for the Year.
7. The DGG agrees that the obligations, authorities, rights and privileges imposed upon or granted to an Individual under the DGG Act will not depend on whether that Individual is a DFN Citizen.
8.(1) Subject to subclause (2), the DGG will, in respect of each Year covered by the Term of this Agreement, maintain a DGG Act that incorporates by reference, where appropriate, the provisions of the Federal Act relating to administration, enforcement and collection of the Federal Tax.
(2) No criminal offences and penalties will be imposed under the DGG Act.
9. The DGG will, in respect of each Year covered by the Term of this Agreement, ensure that the Minister has the necessary authority to remit to a taxpayer any Income Tax or penalty imposed under the DGG Act, including any interest paid or payable thereon, where any Federal Tax or penalty has been remitted to the taxpayer under section 23 of the Financial Administration Act.
10.(1) The DGG will, in respect of each Year covered by the Term of this Agreement, make best efforts to inform the Minister before amending the DGG Act.
(2) The DGG will provide the Minister in a timely manner with a certified true copy of:
- (a) the DGG Act, following its enactment; and
- (b) any amendment to the DGG Act, following its enactment.
Payments to the DGG
11.(1) In this clause the following definitions apply:
“Average Basic Federal Tax Assessed Per Canadian Filer” (AvBFTpC) for a Year is the total amount of Canadian basic federal tax assessed in respect of that Year as determined by the Canada Revenue Agency as of December 31 of the Year following that Year, divided by the total number of filers for that Year;
“DGG Personal Income Tax” (DGGPIT) for a Year is equal to the aggregate of the following:
“Population of Relevance” (PofR) for a Year is the number of DFN Citizens who were assessed under the DGG Act for that Year during the period January 1 to December 31 of the Year following that Year;
“Threshold 1” for a Year is an amount equal to [ 1.5 * (AvBFTpC) * Designated Percentage * PofR ]; and
“Threshold 2” for a Year is an amount equal to [ 3 * (AvBFTpC) * Designated Percentage * PofR ].
(2) The amount payable to the DGG in respect of each Year covered by the Term of this Agreement is calculated in accordance with the following formula:
[ A + ( B * 50% ) + ( C * 5% ) ]
where
A is the lesser of Threshold 1 and DGGPIT in respect of that Year;
B is:
- (a) the result obtained by subtracting Threshold 1 from Threshold 2 for that Year, where DGGPIT for that Year is greater than or equal to Threshold 2 for that Year;
- (b) the result obtained by subtracting Threshold 1 from DGGPIT for that Year, where DGGPIT for that Year is greater than Threshold 1 but less than Threshold 2 for that Year; and
- (c) nil in any other case; and
C is:
- (a) the result obtained by subtracting Threshold 2 from DGGPIT for that Year, where DGGPIT for that Year is greater than Threshold 2 for that Year; and
- (b) nil in any other case.
(3) In respect of each Year covered by the Term of this Agreement, the Minister will:
- (a) estimate the amount payable to the DGG under subclause (2);
- (b) subject to subclause (4), make payments to the DGG on the basis of the estimate referred to in paragraph (a) in twelve instalments, once on the last Working Day of each month throughout the twelve-month period, commencing on or before the last Working Day of the month of January of the Year, or as soon thereafter as is practical; and
- (c) provide to the DGG a statement outlining the method of calculating the estimate referred to in paragraph (a).
(4) If, for a Year in respect of which payments are being made in accordance with this clause, it becomes apparent to the Minister that the estimate made in accordance with paragraph (3)(a) in respect of that Year should be revised, the Minister will make a new estimate and the remaining instalments in respect of that Year will be adjusted accordingly.
(5) Following the end of each Year in respect of which payments in accordance with this clause have been made by Canada to the DGG, and in no case later than November 30 of the Year following that Year, or as soon thereafter as is practical, the Minister will, on the basis of information available on September 30 of the Year following that Year:
- (a) make an interim recalculation of the amount payable to the DGG in accordance with subclause (2);
- (b) provide the DGG with a statement outlining the method and result of that interim recalculation; and
- (c) subject to subclause (6), pay to the DGG, upon request, within 30 days following December 31 of the Year following that Year, or as soon thereafter as is practical, all or any part of the amount that the Minister may determine, of that interim recalculation that exceeds the total payments made to the DGG during that Year.
(6) If, in the opinion of the Minister, the information used to make the interim recalculation under subclause (5) should be reviewed by the Minister of National Revenue to verify the accuracy of the information, the Minister has the sole discretion to determine the amount, if any, payable to the DGG under paragraph (5)(c).
(7) Following the end of each Year in respect of which payments in accordance with this clause have been made by Canada to the DGG, and in no case later than the last day of the fifteenth month following the end of that Year, or as soon thereafter as is practical, the Minister will, on the basis of information available on December 31 of the Year following that Year:
- (a) make a revised recalculation of the amount payable to the DGG in accordance with subclause (2);
- (b) provide the DGG with a statement outlining the method and result of that revised recalculation; and
- (c) subject to subclause (8), pay to the DGG the amount, if any, of that revised recalculation that exceeds the total payments made to the DGG in respect of that Year.
(8) If, in the opinion of the Minister, the information used to make the revised recalculation under subclause (7) should be reviewed by the Minister of National Revenue to verify the accuracy of the information, the Minister has the sole discretion to determine the amount, if any, payable to the DGG under paragraph (7)(c) and further adjustments in respect of the revised recalculation for that Year will be captured in a subsequent Year as soon as is practical once the Minister of National Revenue has completed its review of the information.
Debts Due to Canada
12. If, under this Agreement, the DGG has received an amount in excess of the amount to which it is entitled, the Minister will recover as a debt due to Canada an amount equal to that excess, in the following manner:
- (a) unless Canada and the DGG agree otherwise, in any case where this Agreement is in effect, the Minister will recover any overpayment through a set-off against future payments from Canada to the DGG pursuant to this Agreement, in twelve equal instalments, beginning with the month in which the statement referred to in paragraph 11(7)(b) is provided to the DGG and subject to any adjustments that may be required as set out in the Auditor General’s report, referred to in subclause 18(1); or
- (b) in any case where this Agreement has been terminated, an amount equal to any overpayment will be paid to Canada by the DGG within 60 days from the date that the Auditor General's report, referred to in subclause 18(1), is provided to the DGG.
Administration
13.(1) The DGG will ensure, in respect of each Year covered by the Term of this Agreement, that the Minister of National Revenue has and may exercise all the powers of the DGG necessary for the administration and enforcement of the DGG Act or the collection of amounts payable under the DGG Act, all of which will operate concurrently with, but not in duplication of, the Federal Act.
(2) If requested by the Minister of National Revenue for the purposes of administering the DGG Act, the DGG will provide free of charge to the Minister of National Revenue information that it may have relating to:
- (a) any person liable to Income Tax or the determination of any liability of any person to Income Tax; and
- (b) real property valuations and transactions.
(3) Any information made available by the DGG under subclause (2) will be provided in confidence and will not be used for any purpose other than the purpose for which it was provided.
(4) The DGG, except in its capacity as a taxpayer, will accept as final and binding all Assessments, decisions and other steps made or taken by the Minister of National Revenue under the DGG Act in pursuance of this Agreement.
(5) Canada will retain interest and penalties imposed under the DGG Act and collected by the Minister of National Revenue.
14.(1) If, in the opinion of the Minister, the Minister of National Revenue or the DGG, an amendment to the DGG Act or to this Agreement would improve the effective administration and enforcement of the DGG Act or the collection of amounts payable under the DGG Act, the Minister and the DGG will discuss the issue.
(2) Should Canada and the DGG find that a solution is required, Canada and the DGG agree to take whatever steps that are in their respective powers, subject to any necessary approvals, authorisations or legislative requirements, to effect the solution.
(3) This provision in no way obligates Canada to consult or advise the DGG in respect of any amendments or contemplated amendments to the Federal Act.
15.(1) Notwithstanding that this Agreement has been terminated, the Minister of National Revenue will continue to assess and collect Income Tax in respect of the Years covered by the Term of this Agreement.
(2) The DGG will ensure that, for the purposes of assessing and collecting the Income Tax as described in subclause (1), the Minister of National Revenue will have all the powers with respect to the Assessment and collection of Income Tax after this Agreement has been terminated in respect of the Years covered by the Term of this Agreement that the Minister of National Revenue would have had if the Assessment were made and the collection effected during the Term of this Agreement.
(3) If this Agreement has been terminated, and if Canada has paid to the DGG an amount representing Income Tax in respect of a Year covered by the Term of this Agreement, any amount collected in respect of such Income Tax at any time thereafter will be retained by Canada.
(4) If this Agreement has been terminated and any loss is incurred by Canada in respect of the Years covered by the Term of this Agreement because the DGG has failed to provide the Minister of National Revenue with authority sufficient to collect the Income Tax, an amount equal to the amount of the loss may be retained or recovered by Canada as a debt due to Canada by the DGG.
16.(1) Any actions, suits, prosecutions or other legal proceedings instituted by the Crown or against the Crown or the DGG in respect of the DGG Act will be conducted by Canada on behalf of the DGG:
- (a) in the same name in which that action, suit, prosecution or other legal proceeding would have been brought or taken if brought or taken under corresponding provisions of the Federal Act; or
- (b) in any other name that would be appropriate if that action, suit, prosecution or other legal proceeding were brought or taken by the DGG on the DGG’s own behalf; and
the DGG will assist Canada with respect to the conduct of that action, suit, prosecution or other legal proceeding or any matter related or incidental thereto.
(2) The DGG will, with all due dispatch and free of charge, forward to the Minister of National Revenue any document in the possession of the DGG relating to any Assessment made under the DGG Act or relating to any action, suit, prosecution or other legal proceeding brought or taken under the DGG Act.
Collection
17. If, in respect of any Year covered by the Term of this Agreement, amounts are required to be paid by a taxpayer on account of tax payable under the DGG Act and under the Federal Act, and the Minister of National Revenue receives a payment on account of the tax payable by the taxpayer for that Year under either the DGG Act or the Federal Act, or both, the payment so received will be applied by the Minister of National Revenue toward the tax payable by the taxpayer under the DGG Act for that Year, and the remainder, if any, will be applied toward the tax payable by the taxpayer for that Year under the Federal Act.
Reporting
18.(1) The Minister will provide the DGG with each report prepared by the Auditor General of Canada, on the results of applying specified auditing procedures to the reconciliation procedures described in subclause 11(7), in a format consistent with current auditing and reporting practices.
(2) The Auditor General’s report will constitute the only specified auditing procedures conducted with respect to Canada’s obligations under this Agreement and the DGG hereby will have no right to inspect the books and records of Canada in connection with this Agreement.
Dispute Resolution
19.(1) In the event of a dispute between the Parties arising out of the interpretation of this Agreement, other than disputes in respect of clause 7, 8, 9, 20, 21, or 22 or subclause 13(4), the Parties will follow the procedure set out in subclauses (2) to (6) before pursuing other legal remedies.
(2) Within 30 days of either the Minister or the ?ekw’ahtidé receiving written notice from the other of a dispute under this Agreement, a meeting will be held between the Parties to attempt in good faith to settle the dispute.
(3) If, within 60 days after the meeting referred to in subclause (2), the Parties have failed to resolve the dispute, they will submit the dispute to a jointly selected mediator and share equally the costs of that mediation.
(4) If, after 30 days following the period referred to in subclause (3), the Parties are unable to agree on the choice of a mediator, the matter will be referred to a judge of the Supreme Court of the Northwest Territories who will be asked to select at his or her discretion a mediator from a list of four candidates, each Party having nominated two candidates out of the four proposed.
(5) The Parties agree to participate in good faith in the mediation process for a period of 60 days once a mediator has been selected.
(6) The Parties may mutually determine time periods other than those referred to in subclauses (2) to (5).
Termination
20. The DGG may, at any time and for any reason, terminate this Agreement by giving the Minister written notice of termination of this Agreement.
21. Except where clause 22 applies, the Minister may, at any time and for any reason, terminate this Agreement by giving the DGG written notice of termination of this Agreement.
22.(1) The Minister will notify the ?ekw’ahtidé in writing and will specify the amendments and alterations to the DGG Act that the Minister considers necessary where, in the opinion of the Minister, the DGG Act does not:
- (a) comply with this Agreement;
- (b) provide the Minister of National Revenue authority sufficient to administer and enforce the DGG Act and to collect amounts imposed under that act;
- (c) admit of sufficient uniformity between the DGG Act and the Federal Act; or
- (d) respect the covenants set out in clause 7, 8 or 9.
(2) Where, within six months following the receipt of the notification referred to in subclause (1), the DGG fails to amend or alter the DGG Act to rectify the issues identified in that notification, the Minister may terminate this Agreement forthwith by giving written notice of the immediate termination of this Agreement.
23. Where a notice of termination has been given under clause 20 or 21, this Agreement will terminate:
(a) in the case of a notice given by Canada,
- (i) on December 31 of the Year following the Year in which the notice was given; or
- (ii) if a subsequent Year is specified in the notice, on December 31 of that Year; or
(b) in the case of a notice given by the DGG,
- (i) if the notice was given prior to October 1 of a Year, on December 31 of that Year; or
- (ii) if the notice was given after September 30 of a Year, on December 31 of the Year following that Year.
24.(1) Subject to subclause (2), termination of this Agreement will not affect the operation of any clause of this Agreement in respect of the Years covered by the Term of this Agreement. On such termination, the provisions of this Agreement will apply with any necessary modifications in respect of those Years as if this Agreement had been entered into only for the period of those Years. The provisions of this Agreement relating to payments to the DGG in respect of Income Tax for that period will be adjusted to take into account that termination.
(2) Unless the Minister otherwise directs, payments under this Agreement will no longer be made to the DGG five Years after its termination.
No Assignment
25. Neither this Agreement nor any of the rights or obligations under this Agreement may be assigned, either in whole or in part, by either Party.
Saving
26. Nothing in this Agreement will limit or restrict, or be construed as limiting or restricting, Canada's right to alter or vary, in such manner as Canada may determine, the Federal Act.
27.(1) Nothing in this Agreement will be, or be construed as, an undertaking by Canada to collect Income Tax or take any action with respect to the collection of Income Tax if, in the opinion of the Minister, a doubt exists that the DGG has provided sufficient statutory or other authority for the administration, enforcement or collection of such Income Tax.
(2) If Canada does not collect Income Tax or amounts payable on account of Income Tax because, in the opinion of the Minister, the DGG has not provided sufficient statutory or other authority as referred to in subclause (1) and notice has been provided in accordance with clause 22, the amount that, in the opinion of the Minister, Canada has thereby failed to collect may be recovered by Canada as a debt due to Canada by the DGG despite the fact that payments on account have been made to the DGG as if there were sufficient authority.
Term
28. The Effective Date of this Agreement is the latter of the dates when it is signed by the Parties.
29. This Agreement ceases to have effect:
(a) on the 30th day following the Effective Date of this Agreement if the DGG has not, in accordance with clause 5, enacted the DGG Act by that date; or
(b) otherwise, on the date of termination determined in accordance with clause 22 or 23.
30. The Term of this Agreement commences on January 1 of the Year in which this Agreement becomes effective, subject to the DGG having enacted the DGG Act, and ends on the date of termination determined in accordance with clause 22 or 23.
Signature
31. This Agreement may be executed in counterparts each of which so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and this Agreement shall be effective on the date set out in clause 28. Facsimile and scanned signatures will be accepted the same as original signatures.
For the DGG
Signed on this 14th day of October, 2016
Originally signed by:
Raymond Tutcho
?ekw’ahtidé, DGG
For the Government of Canada
Signed on this 10th day of November, 2016
Originally signed by:
William Francis Morneau
Minister of Finance
