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Aboriginal Peoples in Canada pay taxes. There appears to be a perception that we are all free from the long arms of the Canada Revenue Agency.  For some Indigenous Peoples living on sanctioned and recognized reservations, an exemption from paying income tax applies.  Now before anyone jumps on this, let’s take a serious look at this.  There are individuals, not-for-profit corporations, charities and corporations in Canada that do not pay tax on income/revenue earned.  We have all heard this and therefore can’t say that Aboriginal Peoples are getting treated differently than other people living in Canada.

The income tax exemption stems from s.87 of the Indian Act of Canada.  The Indian Act of Canada is recognized as federal jurisdiction within the Constitution Acts of Canada 1867 and 1982.  Two other source of exemption from taxation are existing aboriginal rights which have been recognized and affirmed under s.35 of the Constitution Act of Canada, 1982 and treaties.

Aboriginal right to taxation exemption flows from the recognition by courts and governments that Aboriginal Nations have the right to self government and have recognized that these Indigenous governments have customary law.  Therefore, self government and the ability to invoke customary law naturally allow an Aboriginal government to be exempt from a “foreign” government from taxing an Aboriginal government.  Sounds complicated but requires a deeper analysis which this form of media doesn’t permit.

There also exist Aboriginal treaties that were signed between the ancestors of modern Aboriginal governments and what is now Canada’s government.  These treaties explicitly state that Indians are exempt from paying taxes.  We cannot on a whim say that those documents were signed a hundred or even five hundred years ago.  These are sacred agreements signed in good faith between nations at a time when both needed each other.

Now the more difficult matter to address, is the fact that statistics indicate that unemployment rates for Aboriginal groups continue to be twice the unemployment rate for all Canadians.  Aboriginal Peoples living in a family setting are three times as likely to have incomes below the poverty level of Canadians and an Aboriginal person on average earns $20,940 while the average Canadian earns $35,872.  Furthermore, 80 percent of Aboriginal Peoples earn incomes below $30,000.

So, why do non-aboriginal peoples in Canada get so upset over the exemption from paying tax?  Both morally and legally we have the right, as hollow as it may be.

Bernd Christmas

Bernd Christmas

Mr. Christmas is the owner of Bernd Christmas Law Group, Barrister & Solicitor with the primary focus on Corporate and Commercial law. He recently assisted Hill & Knowlton Canada develop its aboriginal affairs practice while in the position of Senior Vice President and National Practice Leader. As former Chief Executive Officer (CEO) of the Membertou Band of Nova Scotia and the Membertou Corporate Division, and as a negotiator for several First Nations bands, Mr. Christmas brings a deep understanding of Aboriginal perspectives. He also brings extensive experience on national and international boards and commissions. The first Mi'kmaw to become a lawyer in Canada, Mr. Christmas obtained his law degree in 1991 from Osgoode Hall at York University. In 1993, he accepted a position in corporate and commercial law with Lang Michener, where he also expanded the firm's Aboriginal practices. In 2003, he was appointed by Prime Minister Chrétien to the External Advisory Committee on Smart Regulation. From 2000 to 2002, he was one of three Canadian commissioners to the International Commission for the Conservation of Tuna. He is a former member of the National Aboriginal Economic Development Board and of the executive committee organizing the Governor General's Conference on Leadership and Diversity. He has been a member of the board’s of the Canadian Broadcasting Corporation, Keltic Petrochemcials Inc. and the National Aboriginal Achievement Foundation. He currently is a director on the board of Investors Group. Mr. Christmas is a member of the Nova Scotia Barristers' Society and of the Law Society of Upper Canada (Ontario).

3 Responses to Aboriginal Taxation Exemption

  1. So much for equality says:

    I don’t agree with aboriginal people getting special treatment so they dont’ have to pay taxes. If they get access to Canadian social programs and services, then they should have to pay for them like the rest of us. I don’t think we’re doing them any favour with the special treatment anyway. As you’ve said yourself, the tax exemption has been enshrined in the constitution for a long time, and most of them still have incomes below $30,000. So, obviously, the free tax ride isn’t helping them get ahead. That’s where we should be focusing our attention, not on exemptions like this which undermine their relationship with taxpaying Canadians who look down on them as “freeloaders”.

  2. Sarah says:

    So Canadians aren’t freeloaders?????
    Canadians have to be the biggest freeloaders, we got all of this land at the expense and detriment that Aboriginal people face today – dishonored treaties, poor education and reserves with the poorest land quality and geography compared to tax-paying Canadians. I think you should be happy that you are able to follow the laws of your home country back in Europe, not too much of a stretch for you, I’m sure.

    For all of you who think tax exemption is a bad thing for Aboriginals, I dare ANY of you to switch your life for one single day with an Aboriginal person living on an reserve here in Canada. After you experience suicides, no access to medical facilities, moldy homes, cramped bedrooms, not able to drink the water from your tap….now 90 out of 633 aboriginal reserves have boiled water alerts in place and have been for years.

    All the while you poor tax-paying Canadians have had a pretty easy transition from your grandparents boat ride over here 100 years ago….

  3. truth sayer says:

    Fact is the Norse were the first to inhabit North America as discovered 5 years ago by archeologists on the the east coast. Fact North American Indians are Asians that migrated over the Barren Straits and were stranded when they could not get back. Average Canadian earns over $35000 and an indian $20000?? Whose fault is that?? Yes Canadians earn $35000 but with all the tax levies indians dont pay Canadians are left with less than half that amount!! Indians have self government…with all the woes that Sarah has stated why are you whining to Canadians? Your “self government” has done that to you!! There is a reason you are called first nations….first at whining first at the hospitals you dont pay for first on the roads you dont pay for and first with your hand out when there is a hint of money to be had!

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