Does a Financial Administration Law apply to a First Nation's business enterprises?
No. The FAL is for the financial administration of the First Nation only. It does not apply to business enterprises such as corporations, limited partnerships and not-for-profit societies.
A FAL does set rules for the First Nation to oversee and manage its investments that may include business enterprises. These are covered in more detail under Investments.
Can a business enterprise borrow money from the First Nations Finance Authority (FNFA)?
No. The FNFA can only lend to a First Nation that has received a Financial Performance Certificate from the FMB. A First Nation may choose to enter into a loan agreement with its own business enterprise using similar terms as the original FNFA loan.
The First Nation, as the borrowing member , remains ultimately responsible for fulfilling the terms and conditions in its borrowing agreement and is liable for repaying the loan. If a First Nation chooses to enter into a secondary loan arrangement with a business enterprise, it should take the necessary steps through the Finance and Audit Committee to minimize any credit risk.
Does the First Nations Financial Management Board certify business enterprises or tribal councils?
Not currently. Under the existing First Nations Fiscal Management Act, the FMB is unable to certify separate business enterprises or tribal councils.