International Women’s Day highlights the plight of First Nations women
First Nations citizens, no matter where they choose live, have the right to tax exemption. No nation has the right to impose taxation on another nation’s citizens without due process, including consent, tax implementation agreements and even further treaty provisions.
So why is it that the Canada Revenue Agency (CRA) is going after Canada’s most impoverished citizens: First Nations women?
Over the past few months, current and former employees of OI Employee Leasing-Native Leasing Services (OI-NLS), have been contacted by the CRA to address outstanding tax assessments, begin paying significant tax bills, penalties and interest. To me, this indicates that the CRA is starting to move toward aggressive collection and enforcement of income taxes.
This is truly alarming, given the significant financial repercussions on these First Nations families.
The reality is that the majority of the OI-NLS employees are First Nations women. Many are single mothers. Most earn less that $37,000 per year. They are among Canada’s most marginalized and impoverished people.
Proceeding with the collection and enforcement of taxes and penalties will result in extreme financial hardship, countless personal bankruptcies, and even homelessness. The very few homeowners among this group may lose their homes. These actions will further contribute to First Nations poverty and is, most definitely, not in the public interest.
The issue dates back to the early to mid-1990s. OI-NLS provided a service whereby status Indian employees could be “leased” to off-reserve aboriginal organizations. Because the employees are status Indians, and their employer is a First Nations employer located on-reserve, their incomes were considered to be situated on-reserve and thus exempt from income tax.
In the early 1990s, the CRA changed their interpretation of these rules. CRA now required these duties to be performed on-reserve for the benefit of on-reserve citizens in order to be tax exempt. As a result, most of these employees would be required to pay taxes, back taxes and penalties depending on individual assessments.
OI-NLS publically challenged these changes and CRA’s interpretation of section 87 of the Indian Act, which exempts personal property for status Indians. What followed was a number of tumultuous years, which included strained relations with CRA, high profile demonstrations across the country, and “Revenue Rez” – the occupation of the CRA office in Toronto. Eventually, the Deputy Minister of Revenue Canada agreed to support four test cases and keep individual tax files in abeyance pending the result of the cases.
Over the years, the good and loyal employees of OI-NLS continued to practice their right to tax exemption, given that they were indeed status Indians who were paid by their First Nations employer based on-reserve. These “connecting factors”, which are the central tenets to the CRA policy, have never changed.
Sadly, the test cases, which the employees hoped would affirm their right to income tax exemption, were lost and the court ruled in favour of the CRA. In 2009, the Supreme Court of Canada decided they would not hear an appeal. Many of the cases are being taken individually to the Tax Court of Canada have also lost. In another bizarre twist, the Tax Court has recently stated it would not hear any further individual cases that have similar circumstances. If individuals insist on bringing their case forward, they would be fined upwards of $2500.
Sure, this fight must, and will continue. Tax exemption is fundamental to our view of aboriginal rights as well as First Nation-Crown relations. However, given these mounting losses and growing tax bill, we also have to consider the best interest of these individuals. For these employees, it’s not only about their aboriginal rights, or a political issue. It’s not even about principle. For them, this is very real.
The action of the Canada Revenue Agency in collecting these taxes will have an immediate, long-term and irreversible affect on their lives. Literally, this is about their ability to put food on the table, keep a roof over their heads and take care of their children.
It’s clear, that in the circumstances of the OI-NLS employees, the Government of Canada needs to examine this further. This is about the best interests of the individuals affected as well as their families and their children. It is not in their best interest or in the public’s best interest to move forward with stringent tax collection.