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FIRST NATIONS TAX IMMUNITY REAFFIRMED IN TWO SIGNIFICANT SUPREME COURT OF CANADA CASES

Toronto, ON — The Supreme Court of Canada released their decisions today on long awaited cases — Bastien v. Canada and Dubé v. Canada —both cases involved First Nations citizens — Rolland Bastien and Alexandre Dubé — who had deposited money in Casse Populaire bank branches on the Wendake and Mashteuiatsh reserves respectively and had earned interest which Revenue Canada assessed as taxable income.

Although both Bastien and Dubé used on-reserve banking institutions, the Canada Revenue Agency (CRA) attempted to tax the income generated from their personal investments arguing that it was generated from off-reserve investment markets – in the “commercial mainstream”. The Tax Court and Federal Court of appeal ruled in favour of the CRA in both cases. However, the Supreme Court of Canada has ruled in favour of Bastien and Dubé that their investment activities are exempt from taxes in accordance with section 87 of the Indian Act.

The Chiefs of Ontario (COO) obtained intervener status for both cases. For many years, COO has been critical of the Canada Revenue Agency’s attempts to undermine First Nations tax immunity flowing from treaties and the nation to nation relationship. CRA’s assimilationist approach promotes the idea that First Nations that participate in the “mainstream economy” lose their entitlements as “Indians” and that the right to tax exemption is limited to the “Indian way of life”. Regional Chief Toulouse said: “we rejected this approach in our fight against HST and we reject it with regard to other forms of tax. This concept is not only a violation of First Nation rights and sovereignty in its assumption that by engaging in “mainstream” commercial activity a First Nation citizen loses their First Nation status and rights. Such a conception is offensive and attempts to exclude First Nation citizens as regional, national and international economic developers, partners and job creators.”

Regional Chief Angus Toulouse stated: “As an intervenor in these cases, the Chiefs of Ontario, on behalf of First Nations in Ontario, are pleased with the ruling released today by the Supreme Court of Canada. The maintenance of the principle that First Nations lands and property should not be subject to the tax jurisdiction of other governments is an important victory for First Nations peoples and their governments. Canada’s political leaders must reject Revenue Canada’s bureaucratic approaches to aggressively collect tax revenue without regard to First Nations rights and the agreements between First Nations peoples and the Crown about respecting each other’s sovereignty. Tax jurisdiction and revenue is a significant economic tool that can support First Nations economic growth and self-sufficiency. Reconciling First Nations’ and Canada’s tax jurisdiction is consistent with the direction from the Supreme Court of Canada on other cases and should be a priority for resolution.”

Coming on the heals of their recent victory over HST, Regional Chief Toulouse, said these two Supreme Court victories will open up more opportunities for First Nation citizens to be able to enhance their own economic development and become economic partners and job creators within the domestic and international economy. The Supreme Court of Canada has acknowledged that reconciliation will not come through assimilationist policies, but through affirming the right of First Nation peoples to evolve commercially and economically and not be expected to develop only by means of maintaining their traditional way of life.