As the province marks one year of treaty education in schools, children and adults alike must reconsider not only what was, but what was not, in those treaties.  Unfortunately, there’s a well perpetuated myth that those treaties dictate that reserve land is free from taxation. This is not the truth. Legislation, passed by Parliament is the only thing maintaining the tax-free status, and the will of our politicians is the only thing that would be needed to change it.

The tax exemption can be found in Section 87 of the 1876 Indian Act. Regarding reservations, the Act states, “No Indian or band is subject to taxation in respect of the ownership, occupation, possession or use of any [such] property.”

The clause was originally intended to prevent Indians from losing their lands due to liens and other levies. Taxation, frankly, wasn’t much of an issue during the era the numbered treaties were signed (1871 to 1921). As the 19^th century ended, Canada’s only taxes were duties on imported products and municipal properties. Income taxes were only introduced in 1917 as a “temporary” war measure.

Despite various legal challenges, Canadian courts have ruled repeatedly that treaties with Indians did not grant tax exemptions. The most recent verdict came in 2003 from the Federal Court of Appeal regarding Treaty 8. The court concluded that in 1899, the treaty commissioners did not give a tax exemption to 23 Indian bands in the north, nor were they qualified or mandated to give any exemption.

The Indian Act is the only document that dictates that an Indian can conduct business on reserve, earn income on reserve (by employment or by social assistance), and live on reserve all tax-free. Meanwhile, the federal government pays the salaries of band leaders and for the education of on-reserve children.

Justice Muldoon of the Federal Court blasted the Indian Act as a “racist” document that created Canada’s own system of apartheid. In 1995, he said, “It makes financial dependents of those who pay no taxes as an eternal charge on those who are taxed to meet the expense of such dependency.”

Yet, this 133 year old “racist” law is still in place.

Aboriginal birth rates are higher than the rest of the Canadian population, suggesting that this dependency will grow in the future. Yet, whatever the burden is on taxpayers, it is even heavier for aboriginal people living in poverty on reserve, unable to own the house they live in or the land upon which it sits.

No wonder 56 per cent of Status Indians have left these communal zones to join mainstream Canadian life. Private property is the foundation of creating wealth, and without that, Indians cannot sell or mortgage their property. This hinders the development of small businesses or other on-reserve development because nothing can be used for collateral. Even when it does occur, government red tape for on-reserve development can be enormous.

It is time that everyone knew that the treaties have nothing to do with the lack of property rights on reserve or its tax-free status. Moreover, it is also time this situation changed. Unfortunately the cowardice of politicians in Ottawa and the vested interests of band chiefs and councils have perpetuated a poor situation.

By: Lee Harding
Posted: November 05, 2009
Topic: Saskatchewan

Contact the regional director Colin Craig for further information.

Type: Commentary

Join Us   |   Donate