Without Prejudice __________{The following is not legal advice}__________ Errors & Omissions Excepted
Undertsanding and complying with tax laws is fundamental to advocacy work. The questions here relate to taxable income; and, exclusions : "The issue in both of the appeals in Bastien and Dubé was whether interest, that was earned and owned by an "Indian" (as defined in subsection 2(1) of the Indian Act), was personal property situated on a reserve so as to qualify for the tax exemption under paragraph 87(1)(b) of the Indian Act. " See : Osgoode Hall re "Judicial Authority"
In Canada {through the Supreme Court of Canada} tax case law has evolved {see CANLII} to provide certain specific decisions to validate under Crown law that Original Peoples / "First Nations" are entrenched / vested with relief from Revenue Canada tax claim within certain, defined boundaries.
The relevant case law reads that :
- "The Tax Court of Canada9 applied the decision in Recalma et al. v. The Queen (1998), 158 D.L.R. (4th) 59; 98 DTC 6238; [1998] 2 CTC 403 (F.C.A.)10 ("Recalma") and held that the interest income earned by Mr. Bastien was not situated on a reserve primarily because the Credit Union invested its funds (including the funds derived from Mr. Bastien) in the capital market constituting the "economic mainstream". Consequently the exemption from taxation in paragraph 87(1)(b) of the Indian Act did not apply to the interest earned by Mr. Bastien."
- " A majority of the Supreme Court of Canada held that the interest income which Mr. Dubé earned was situated on a reserve, and was therefore exempt from taxation, notwithstanding that he did not reside on a reserve and the invested capital was not derived from activities conducted on a reserve. As in Bastien, Cromwell J. (McLachlin C.J. and Binnie, Fish and Charron JJ. concurring) assigned the greatest weight to the location of the debtor (i.e. the Credit Union), the location where the certificate of deposits were obtained and held and the location where interest was payable and was paid. Accordingly, the interest was held to be situated on a reserve and the taxpayer’s appeal was allowed."
We will continue to develop and publish information advisements that will assist interested parties in understanding the range of questions and answers on these fundamental matters of due process in a democratic social order.
Parties who are seeking further information on deposits and tax benefit receipts may email inquiries to lawgroup.stttc@gmail.com.
