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Treaty Tax Exemption Must Be Addressed: Growing Debt Crisis

SASKATCHEWAN INDIAN      SUMMER 1987      SPECIAL EDITION p38  
The issue of Federal and provincial tax exemption for Indian income has reached a crisis situation with many Indian families facing serious debts and possibly personal bankruptcy.

Since the late 60's, the FSIN has taken the treaty position that Indian income is exempt from Federal and Provincial taxation. The issue was never fully resolved or ever negotiated. A remission order was put in place by the Finance Minister and there was a moratorium on collection but the heart of the matter went unresolved.

Revenue Canada has assessed all the FSIN employees past and present and turned the assessments over to their collection department. The FSIN, Band offices and private employees are all receiving garnishees for tax arrears.

The FSIN has remained steadfast in the position that tax exemption is a treaty right.

The matter was discussed at the May, 1987 Legislative Assembly of Chiefs and a series of positions were adopted including: The suspension of tax assessments and collection of all FSIN and band employees, recognition that Indian incomes are tax exempt and full and complete participation of the FSIN and PTNA with Federal and provincial governments in all future tax policies that impact on Indians.

Also, the Treaty Indian Nations must be provided adequate resources to participate in the joint political and technical working groups established to resolve Indian tax exemption issues.

The Federal Government must be prepared to initiate the policy and legislative changes, which will be required to reflect the exemptions from taxation of Indian income and revenue as they are identified and clarified.

The treaty position is that immunity from taxation was guaranteed in the treaty making process which resulted in the articles of the various treaties entered into between the Crown appointed Commissioners and the leadership of the Indian Nations across Canada.

In exchange for the vast tracts of land ceded by the Indian governments, the Crown representatives committed the Crown to respect the various Indian rights and placed firm obligation upon the British (and later Canadian) governments to honor them.

Following the negotiation of treaty number eight, Commissioner Laird wrote in his report, "We assured them that the treaty would not lead to any forced interference with their way of life, that it did not open the way for the imposition of any tax, and that there was no fear for enforced military service".

Periodically, efforts have been initiated by Federal and Indian Governments to resolve and clarify treaty tax immunities with no success to date.

The Federal government has often resorted to "moratoriums" or "remission orders" to buy time to attempt to develop policy and clarify laws regarding Indian tax exemption. These are merely band-aid solutions with no permanent value.

Recent action taken by the Department of Revenue against individual Treaty Indians has led to thousands of cases of seizure of income and property and there is a real danger of collapsing the organizational, economic and employment base that Indian Governments have spent the last thirty years working to re-establish across Canada.

Unless immediate action is taken to deal with this growing crisis, as a priority federal government - Indian government issue which must be resolved, the economic conditions of Canadian Indians will rapidly deteriorate to a point even more unacceptable than they are at present.

The Minister of the Department of Finance indicated in the recent budget speech that Indian taxation exemption and clarification of the problem is important to the current administration. This has been expressed many times in the past also, with no results, and is hollow unless acted upon immediately.