8a) I've heard that native people don't pay any taxes. Is this true?
Taxes are never easy to understand, whether for native or non-native. In the last decade,
an increasing number of cases have been before the courts in an attempt to clarify specific
exemptions to which native people are entitled by treaty or law.
The federal government has exclusive jurisdiction over "Indians, and lands reserved for
Indians," including the power to tax or to exempt from tax.
Section 87, a key section of the Indian Act, states:
Notwithstanding any other Act, the Parliament of Canada, or any Act of
the legislature of a province, but subject to section 83, the following
property is exempt from taxation, namely:
(a) The interest of an Indian or a band in reserve or surrounding lands;
(b) The personal property of an Indian band situated on a reserve; And no
Indian or band is subject to taxation in respect of the ownership,
occupation, possession or use of any property mentioned in paragraph (a)
or (b) or is otherwise subject to taxation in respect of any such property. . .
8b) What does that really mean? Who is exempt from tax and who is not?
Maureen Maloney, former Dean of the Faculty of Law at the University of Victoria,
- Status Indians are entitled to all the benefits of section 87.
- Non-status band members are entitled to a tax exemption for any interest which they
hold in reserve or surrounding lands in exactly the same manner as status Indians.
This would include exemption from tax in respect of any possessory interest in
reserve land, for example, a lease. However, any personal property (other than that
one the reserve or surrounding lands) of a non-status Indian band member is not
- Metis and Innuit are not entitled to any of the favourable tax exemption treatment set
out in the Indian Act.
8c) What is exempt?
Exemptions become complicated but it is safe to say: