Indigenous Peoples

Thursday, February 12, 2026

The Standing Senate Committee on Indigenous Peoples has the honour to table its

THIRD REPORT

Your committee, which was authorized to examine the subject matter of Part 4 and those elements contained in Division 35 of Part 5 of Bill C-15, An Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025, has, in obedience to the order of reference of November 26, 2025, examined the said subject-matter and now reports as follows:

First Nations Goods and Services Tax Act

Since 2018, the First Nations Tax Commission (“the commission”) has been calling for the establishment of a First Nations sales tax on fuel, alcohol, cannabis, tobacco and/or vaping products (FACT). First Nations governments can choose the products to which their taxes would apply. The optional tax proposed in the bill replaces the Goods and Services Tax, or federal portion of the Harmonized Sales Tax, and would be levied at 5%. Currently, the opt-in First Nations Goods and Services Tax Act enables band councils and other First Nations governing bodies to pass laws imposing sales taxes on the land they govern. Under this regime, First Nations do not have discretion to choose the goods and services to which the First Nations Goods and Services Tax (FNGST) applies.

Your committee welcomes the proposed amendments to establish a framework for First Nations to levy a FACT tax. Chief Derek Epp, Tzeachten First Nation, told the committee that existing taxation powers exercised under the First Nations Fiscal Management Act and the Framework Agreement on First Nation Land Management Act have raised his Nation’s own-source revenues to comprise 90% of its overall budget. With expanded tax powers, the Tzeachten government has had revenue to use for priorities such as keeping First Nations children with their families rather than in care, closing infrastructure gaps, providing care to Elders and investing in post-secondary education. Chief Gord Bluesky, Brokenhead First Nation, suggested that the FACT tax could be expanded to include revenue from casinos and, potentially, the ATMs located within them. Manny Jules, Chief Commissioner of the commission emphasized, “We are here to make sure that we look after those who are unborn and those that we will probably never meet. That’s the responsibility of leadership.” Opting into the proposed FACT tax would grant First Nations additional, necessary revenues.

During its study of the subject matter of Part 4 of Bill C-15, the commission proposed amendments to the First Nations Fiscal Management Act to give the commission a role supporting First Nations lawmaking for FNGST revenues. New responsibilities could include the approval of FNGST laws, the segregation of FNGST revenues, the publication of FNGST laws in the First Nations Gazette and the establishment of standards for FNGST laws, among other matters. Your committee encourages the Government of Canada to consider new, innovative approaches related to advancing the new fiscal relationship with First Nations that can be implemented rapidly, while upholding First Nations’ Aboriginal and treaty rights protected under section 35 of the Constitution Act, 1982. Section 35 recognizes and affirms existing Aboriginal and treaty rights, which underpin the legal framework for specific tax exemptions and the jurisdictional authority for First Nations to enact their own taxation laws.

Your committee takes note of the views expressed by Chief R. Donald Maracle, Tyendinaga Mohawk Council, that Bill C-15 does not take significant steps to “address the core funding inequities or structural limitations in the Crown-First Nations relationship.” He observed that these taxation powers may work for some First Nations; however, his community members would likely be opposed to such a tax. Chief Maracle argued that FACT taxes affect lower income individuals and communities that may have substance use issues, which “creates a moral and practical tension, particularly where addictions and mental health services are under funded.” Your committee notes that officials from Finance Canada indicated that First Nations interested in a new FACT taxation framework tended to be prosperous and located where the prospective tax revenues are significant.

Chief Maracle also maintained that First Nation governments have an inherent right to levy taxes rather than requiring “federal permission.” Chief Maracle noted that under Bill C-15, long-term base funding for First Nations is absent and called on the Government of Canada to embark on meaningful fiscal reconciliation that would include broad fiscal reform or treaty-based revenue sharing. Revenue generated by First Nation businesses and income tax from non-Indigenous individuals employed by First Nations governments, for example, could also be collected and used by First Nation governments.

Your committee strongly agrees with Chief Maracle that the delegated authority to levy a sales tax is not a substitute for stable, predictable, long-term sources of revenue for First Nations to provide basic services like water, housing or post-secondary education.

First Nations Policing

Your committee heard that the Naskapi Nation of Kawawachikamach recently negotiated amendments to Section 13 of the Northeastern Quebec Agreement with the governments of Canada and Quebec, which relates to the territorial authority of the Naskapi Police Force. In speaking about the negotiations leading to the amendments to section 13, Chief Louise Nattawappio explained that while they “took some time to complete, they were collaborative and constructive, and reflected a shared commitment to ensure that the structure and funding of policing services would truly meet the needs of our community.” These amendments, however, resulted in an inconsistency between the Naskapi and the Cree-Naskapi Commission Act and the amended section 13 of the Northeastern Quebec Agreement regarding the territorial authority of the Naskapi Police Force. Your committee agrees with the changes proposed by Division 35 of Part 5 of Bill C-15, since they serve to resolve this inconsistency.

Your committee was pleased to hear from witnesses about recent positive developments around policing for the Naskapi Nation of Kawawachikamach. William Moffat, Chief of the Naskapi Police Force, indicated that since 2012, the Naskapi Police Force has expanded from four to sixteen officers. Under the new tripartite funding agreement, “salaries and…benefits are comparable [to police services in] the rest of Canada” Further, the Naskapi Nation of Kawawachikamach has recently been able to build a new police station and acquire much needed equipment, vehicles and tactical resources.

Police Chief Moffatt shared with the Committee some best practices for successful and effective policing. Throughout his testimony, he emphasized the importance of effective communication, not only with Quebec and Canada in ensuring adequate funding and resourcing, but also with his community in the delivery of services. He stressed the need to have local, Indigenous people working on his team to deliver culturally appropriate and responsive police services effectively. He also discussed the importance of mentorship and described how he had hired high school or university students for special summer projects, several of whom went on to work in policing as a profession.

Your committee nevertheless wishes to bring attention to several concerns in relation to First Nations policing. The Government of Canada supports the First Nations and Inuit Policing Program on the basis of policy, without any statutory underpinning. An official from Public Safety Canada did acknowledge that Indigenous policing is indeed an essential service. The recent priority of the department has been to ensure “there is a higher degree of federal cost-shared funding available to properly and equitably fund First Nations and Inuit police services.” Further, the department is discussing “whether there is a future role for federal legislation that could support [essential services for policing].” Your committee urges the Government of Canada to collaborate with Indigenous governments to bring forward legislation that formally recognizes Indigenous policing as an essential service to ensure equitable funding for Indigenous police forces to fulfill their duties.

Your committee also heard testimony surrounding the nexus between law enforcement and prosecution. According to Police Chief Moffatt, a $100 fine would cost thousands of dollars to prosecute due to the high costs associated with holding traveling courts in the Naskapi Nation. Your committee heard him paint a grim picture of prosecutions for his community: “As we speak, the [itinerant] court comes three times a year. The years prior, it was four times a year. This is my personal opinion: It doesn’t work. The process gets delayed, delayed, delayed and charges get dropped. I hate to say it, it’s failing.” Your committee wishes to emphasize the importance of the Indigenous right to self-government and sovereignty over law enforcement.

Public Safety Canada noted that funding has recently been augmented for the First Nation and Inuit Policing Program, which has helped to increase staffing levels and provide better community policing services. While your committee is pleased to hear that negotiations for funding agreements are occurring more proactively, it is also aware that the policing reality for many Indigenous communities historically has involved chronic underfunding, challenges relating to capacity and inadequate resources and often a need to resort to litigation to resolve these problems. Your committee believes that Indigenous governments should not have to engage in costly litigation to receive the same level of funding for policing services as non-Indigenous Canadians.

Respectfully submitted,