Federal Court Clarifies Applicability And Mechanisms For Repeal Of First Nations' Financial Administration Laws

Introduction

On January 12, 2026, the Federal Court delivered its decision in Louie v Lower Kootenay First Nation, 2026 FC 39, addressing the enforceability of two financial administration laws voluntarily adopted under the First Nations Fiscal Management Act, SC 2005, c 9 (the “FNFMA”) in 2012 and 2014 (the “2012 FAL” and “2014 FAL”).

The case arose from a judicial review application brought by a member of the Lower Kootenay Indian Band (“LKIB”) seeking to compel LKIB to implement and adhere to financial transparency and accountability mechanisms set out in the FALs.

The Court allowed the application, finding that the 2012 FAL had not been entirely repealed by the 2014 FAL, and had key provisions that remained in effect; and that approval of the First Nations Financial Management Board (the “Board”) was necessary to validly effect a repeal of a financial administration law in any event. The decision provides important guidance on the nature of financial administration laws and procedural requirements under the FNFMA. The Court reiterated the importance of Indigenous self-government, as well as the need for financial accountability and transparency.

Background

First Nations Fiscal Management Act

The FNFMA is federal legislation that enables participating First Nations to access capital markets to support governance, infrastructure, economic development, and economic reconciliation.

Opting into the FNFMA legislative scheme ay entail, among other things, enacting a financial administration law, setting out rules governing fiscal management, accountability, and administrative oversight. Once approved, a financial administration law provides participating First Nations with substantive rights, including a pathway to borrow funds through the First Nations Financial Authority (“FNFA”).

Lower Kootenay Indian Band

LKIB, also known as Yaqan Nukiy, is a First Nation in southern British Columbia. Between 2012 and 2014, LKIB purchased the Ainsworth Hot Springs Hotel located on its traditional territory. To finance the acquisition, the LKIB initially sought to borrow funds from the FNFA under the FNFMA.

The Financial Administration Laws

To meet the requirement of adopting a financial administration law, LKIB enacted its first FAL in 2012. Some parts of the 2012 FAL came into force upon enactment, and other parts came into force 36 months after approval of the 2012 FAL by the First Nations Financial Management Board. In 2014, LKIB enacted a new FAL (i.e. the 2014 FAL), largely mirroring the 2012 FAL and including a provision to conditionally repeal the 2012 FAL.

Judicial Review Application

The dispute emerged in 2023, when a Band member (the “Applicant”) requested that the Band comply with its 2014 FAL financial governance provisions. LKIB responded that those provisions were not in force. The Applicant filed the application for Judicial Review at issue in this case, and in 2024, after the application at issue, LKIB passed Band Council Resolutions to repeal the 2014 FAL and sought ministerial removal from the FNFMA schedule.

Issues and positions of the parties

The Applicant argued that the Band became a “borrowing member” under the FNFA as it took the necessary steps to become one, and that the 2014 FAL was fully in force; alternatively, if it did not become a borrowing member, the provision of the 2014 FAL that repealed the 2012 FAL never came into force, leaving at least part of the 2012 FAL in force. Either way, the financial governance obligations under the 2014 FAL or the 2012 FAL applied, and the LKIB had failed to implement and comply with those requirements. The Applicant sought an order of mandamus compelling the LKIB to implement the financial transparency and accountability measures required under the applicable FAL.

The LKIB submitted that it never became a “borrowing member” of the FNFA, and that even if the 2014 FAL did not formally repeal the 2012 FAL, the 2012 FAL was repealed pursuant to the doctrine of implied repeal.

The Board appeared as an intervenor, submitting that the LKIB's purported repeal of the 2014 FAL was not legally effective because it constituted an amendment of a FAL under the FNFMA, and therefore required approval from the Board.

The court's decision

The Court held that the LKIB never became a “borrowing member”, as the LKIB never finalized a borrowing agreement with the FNFA. However, because the section of the 2014 FAL that repealed the 2012 FAL was only to come into force 36 months after LKIB became a “borrowing member” of the FNFA, that repeal was never triggered. The 2012 FAL, at least the relevant accountability sections, remained in force. As noted above, different sections the 2012 FAL came into force at different times, with some sections coming into force 36 months after approval of the law by the Board. The 2014 FAL was enacted before all of the sections of the 2012 FAL had come into force. However, these timelines were fully within the knowledge of LKIB, and the enactment of the 2014 FAL did not prevent the 2012 FAL from coming into force. The Court found that the sections of the 2014 FAL that were duplicative of the 2012 FAL repealed those sections of the 2012 FAL, but that the whole 2014 FAL did not impliedly repeal the 2012 FAL, as it did not “cover the field”. Namely, the accountability provisions the Applicant sought to enforce within the 2012 FAL were not duplicated by any operative sections of the 2014 FAL, and remained in force.

Repeal of the 2014 FAL required approval by the Board

On the issue of the validity of the repeal of the 2014 FAL, the Court held that any repeal of a financial administration law enacted under the FNFMA requires prior approval from the Board. Specifically, the Court found that although LKIB had the statutory power to repeal its financial administration laws, such repeals were themselves “financial administration laws”, which require Board approval, pursuant to subsection 9(2) of the FNFMA. The Court found, reading the FNFMA as a whole, that the Board's interpretation provided transparency and certainty among the parties affected by the FNFMA, and prevented the absurd consequences of the Court taking judicial notice of a financial administration law as published in the First Nations Gazette, which had subsequently been repealed without any such publication. Consequently, since the LKIB did not obtain Board approval before purporting to repeal the 2014 FAL, the repeal was of no force and effect.

Remedy

The Court agreed that the Applicant had met the test for mandamus, namely, LKIB had a legal duty to act, that duty was owed to the applicant, there was a clear right to performance of that duty, the duty sought to be enforced is not discretionary so the factors affecting discretionary duties did not apply, no adequate remedy was otherwise available to the applicant, the order sought would have some practical value or effect, there was no equitable bar to the relief sought, and on a balance of convenience, an order of mandamus should be issued.

The Court therefore ordered that LKIB comply with and implement its obligations under the 2012 FAL and the 2014 FAL within 120 days of the judgment, including the establishment of a Finance and Audit Committee as required by the 2012 FAL. The Court was not prepared on the evidence before it to find LKIB acted in bad faith in seeking to repeal the 2014 FAL, and noted that it remained open to LKIB to repeal the 2012 and 2014 FALs after consulting the LKIB members and obtaining the approval of the Board.

Conclusion

The decision provides a useful summary of the nature of the FNFMA and financial administration laws, including the legislative framework, and statutory interpretation principles applicable. Ultimately, financial administration laws are laws, which impose legal duties. The decision also provides specific clarification regarding the operation of the opt-in and opt-out mechanisms under the FNFMA. Although participation in the FNFMA regime is voluntary, once a First Nation elects to participate and enacts a financial administration law, it becomes bound by the statutory framework governing financial administration laws, including in respect of their repeal.

The Applicant was represented by Kyle McMillan of McCarthy Tétrault.

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