Posts tagged ‘Tax Exemption’

Native Women face the Tax Man

Tina Pelletier, Photo

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.

Why I’m an angry Native

By Jessica Lee

Right now I’m owning the title/stereotype/image/whatever you conjure up in your mind about “angry Natives” because along with the usual colonial-type affronts to our people and communities, there are some notable racist extremities happening across Canada as of late. Initially I felt like there was just way too much going on to even write a single post about – but I thought to at least round up a few of the points of why I’m so flippin’, screaming, ANGRY that may shed light on what some of you may not be aware of yet. And we also need y’all to do something about this stuff in your communities too:


  • The continuous denial of racism towards Aboriginal people in the education system. A new study from the Canadian Teacher’s Federation interviewed 59 Aboriginal teachers teaching in public schools throughout the country. The teachers reported a disregard for their qualifications and capabilities, a standard lowered expectation from Aboriginal students; and general disparage of the long-lasting effects of colonization.
  • The “Free Native Extraction Service” placed on the (of course taken down now) advertising that it could “get rid of those pesky buggers with extraction services to relocate them to their habitat.” To top it off they actually illegally used a photo in their advertisement from the Native Lens Film “March Point” which I wrote about here some months back – which is, incidentally, a film about environmental justice and what Native youth are doing positively in our communities.
  • Tuberculosis is 185 times higher in the Inuit population than in the rest of Canada. I repeat 185 times the national average – according to the Public Health Agency of Canada.  The recently released data from their Tuberculosis in Canada 2008 publication shows these appalling numbers contributing factors include “inadequate housing, as a result of both overcrowding and construction ill suited to the Arctic climate, and immune systems severely compromised by a general lack of healthy, affordable food’.”
  • Harmonized Sales Tax or HST coming to the provinces of British Columbia and Ontario. Not that the government ignoring treaties is news by any stretch of the mind – however this is a big one to throw out the door of rights. The imposition of HST means that instead of seeing 8 per cent provincial Retail Sales Tax (RST or PST) and 5 per cent Goods and Services Tax (GST), consumers will pay a combined 13 per cent HST. Yet for the first time since the introduction of the provincial sales tax, HST means status First Nations will be subject to the 8 per cent portion of the tax. This is a total and blatant violation of our treaty rights, not to mention the Canadian Constitution. This is a good article to find out more and you can go here to do something about it.
  • Massive cuts to the Aboriginal Healing Foundation, along with other insulting highlights from the Throne Speech, which is essentially an outline of the Canadian federal government’s budget. (Sign the online petition to reinstate funding here.) The Aboriginal Healing Foundation has provided support to residential school survivors and their families for a decade, in addition to funding major projects in communities across the country. My colleagues and friends at the Native Women’s Shelter of Montreal and Inuvialuit Regional Corp in the Northwest Territories will have to axe some of their most necessary programs like health promotion and community wellness worker certification. In total it means 134 community projects across Canada will no longer provide culturally-based healing services to Aboriginal people. Oh sure Harper said he was “sorry” for residential schools in 2008, but just last year he said that Canada has no history of colonialism, so I guess this is right in line with the$199 million promised to address the legacy of residential schools not being committed to the Aboriginal Healing Foundation. But don’t worry, in this same speech they said that Canada thinks the issue of missing and murdered Aboriginal women is a “pressing criminal justice priority.” Uh-huh.
  • All of the racist garbage  and lateral violence people are spewing on the internet and in person about the proposed changes to Indian Status which would restore treaty rights to about 45 000 people. This decision is based mostly off of the Sharon McIvor court case, which addressed the specific gender discrimination of the Indian Act where even after the laws were changed in 1985 to restore status to Native women who lost it if they married a non-Native man, it didn’t extend past the children of those unions.  However the new changes would now extend to grandchildren. I definitely don’t think the government should be able to regulate who is and is not considered “status”, but I don’t anymore appreciate the internalized racism that we are doing to each other by adding extra jumps and hoops to go through within the community for who is really recognized as having rights on reserve and who is not.
  • These are just some of the latest oppressive occurrences against Indigenous people in Canada. On the regular I suppose I’ll also mention since it was International Women’s Day week last week, I didn’t find it any easier to get chastised by white women at the many events I spoke at when I brought up the mostly white academic industrial complex that mainstream feminism still lies in, and really doesn’t appear to care about the origins in Indigenous societies or the realities of Indigenous women for that matter – up until now (well, sort of) since we’re all of a sudden making the media with the thousands of us being murdered and going missing.

But it’s been going on for the last 500+ years, anyways.

Time to Tax Wealthiest Canadians

Yesterday, the first official work day of 2010, most of Canada’s top CEOs made the average annual wage in Canada by lunch-time.  According to the Canadian Centre for Policy Alternatives, the average salary in for Canada’s 100 highest paid CEOs was $7.8 million.

Meanwhile, the average annual income for a First Nations person in Canada was less than $20,000.00. Still, many more – without any source of income – are battling the bitter cold, homeless in Canada’s urban centres. We’re not talking about couch-surfing homeless. We’re talking about people sleeping in crowded shelters, cardboard shanties or in sleeping bags over sewer grates.

There is something seriously wrong with this picture.

The government needs to take steps to tax the highest paid earners – Canada’s wealthy elite.  It is a travesty that richest 1% of families also now pay a lower tax rate than the poorest 10%. Canada’s tax system is seriously out of balance.

The wealthy need to be taxed and those resources need to be mobilized immediately to eliminate poverty, beginning with children and First Nations people.

Corporations turning substantial profits also need to be taxed. There are still many corporations are turning health profits despite the global recession.

Inheritances need to be taxed at a greater rate. Capital gains and investment income also need to be taxed more substantially.

Finally, Canada’s poorest people need breaks from taxes. This includes maintaining First Nations’ right to tax exemption. First Nations, as sovereign people and governments, have always maintained they are exempt from imposed taxes from settler governments. In fact, First Nations governments need to fully mobilize an effort to tax government and resource companies who have benefited from their traditional territory for so long. First Nations are only beginning to develop taxation laws and generate taxation revenue of their own.

Why First Nations Shouldn’t Pay HST

Last week, the Government of Ontario introduced legislation entrenching the Harmonized Sales Tax (HST) in Ontario beginning July 1, 2010.  There is a lot of mixed reviews, both for and against the HST.  There is no question, the one thing that the HST is sure to do, is continue the trend that Ontario is one of the most taxed jurisdictions in all of North America.

On most purchases, most people won’t know the difference.  Instead of seeing 8 per cent provincial Retail Sales Tax (RST or PST) and 5 per cent Goods and Services Tax (GST), consumers will see a flat 13 per cent HST on their receipts.

However, the population that will be most adversely affected and will see the most change will be First Nation people.

For the first time since the introduction of the provincial sales tax, First Nations people living on-reserve will be subject to the 8 per cent portion of the tax.  We will have to pay the entire brunt of the 13 per cent sales tax.

Since time immemorial… well, at least my time immemorial, I’ve been able to go into Walmart or The Source, or any other retailer for that matter, present my status card and receive a point-of-sale tax exemption of 8 percent.  In doing so I’d have to endure my share of customer service ignorance, fill out a monstrosity of forms and put up with verbal jibes from the rednecks standing in line behind me.  The more noise they make, the slower I fill out the form.  In one case, after a couple of comments, I reverted to filling out the exemption form left-handed.

If the retailer tried to mess with my right, I would either get an individual fired or go corporate on their ass.

In the end, I felt that the point-of-sale tax exemption was my right.  The contemporary Anishinaabe teaching is that we are supposed to exercise our rights or one day we may lose them.  Apparently that day has come.

But I have a bombshell for many of you.  And it may be difficult for me to say.  But here goes…

First Nations do NOT have the Treaty right to tax exemption.

There, I said it.  It makes me shudder but it’s entirely true.  The majority of our Treaties, certainly the 1850 Robinson Huron Treaty, does not make reference to taxation.  There are no references or right to tax exemption in most of the Treaties.  It’s a basic fact.

But the treaties said nothing of being subject to paying taxes either.

First Nations must assert that First Nations have the aboriginal right and the sovereign inherent right to be immune from foreign taxation.  Such a right is not only fundamental, it may be protected under international law.  For example:  the United States cannot enter sovereign Canadian territory and force Canadians to pay US taxes.

I think First Nations have a strong case in stating that Canada cannot assert unproven jurisdiction in First Nations’ traditional territory and force First Nations to pay Canadian taxes.

But paying the eight percent is no big deal, we can get it back at the end of the year, right?

Not exactly.  That’s what I thought.  That’s what First Nations leaders thought too.  That’s what a lot of people thought.

My latest research indicates that First Nation individuals are unable to claim a rebate for any purchases off-reserve unless it is delivered to reserve by the retailer’s official agent.

According to the HST/GST Information Update (B-039R3), “… If the purchaser uses his or her own vehicle to transport the property to the reserve, the acquisition is subject to the normal GST/HST rules.”

To their credit, the Government of Ontario is going to bat for First Nations on this issue.  The Minister of Finance and the Minister of Aboriginal Affairs have asked the Government of Canada to respect and continue the current practice of administering the point-of-sale exemption for First Nations.

However, that’s the whole issue: administration of the HST.

Ontario does not have a say in the administration of the tax.  Canada is holding all the cards on point-of-sale exemptions.  Ontario may request a certain point-of-sale exemption, but it’s Canada that has to agree to it.  Unfortunately, the issue of First Nation tax exemption is not a deal breaker for either party.

The biggest argument against First Nations paying the HST should be a socio-economic argument.

First Nations are the poorest of all Canadians.  The socio-economic gap between First Nations and the rest of Canada is staggering.  In Ontario, the unemployment rate for First Nation living on-reserve is at least 3 times higher than the rest of Ontario.  The average income in Ontario is over one third higher than the average income of First Nations people.  One in four First Nations children living on-reserve are growing up in poverty.

Now these same poor people are being asked to pay more and live on less.

Right now, those same red necks in shopping lines everywhere, are praising the changes.  They cite equality and fairness.  “Finally, those Indians are having to pay tax.  What’s fair is fair.”

I’m all for equality and fairness, but that’s a few generations away.  So let’s start with the concept of equity.

What will it take to equalize the unemployment gap?  What will it take to equalize the income gap?  What will it take to bring First Nations children out of poverty?

Forcing the poorest people to pay an additional 8 per cent won’t do it.