The people of Saskatchewan need and deserve tax relief and tax reform, but both must be based on the principle of tax fairness.

In support of this goal, the Canadian Taxpayers Federation (CTF) last week presented the Finance Minister with a petition of 29,000 names demanding that Saskatchewan treaty Indians pay PST on off-reserve purchases. For most people it is common sense that tax policy should be based on economics, not genetics. Racially-based tax exemptions have no place in 21st century Saskatchewan. (I have been accused of divisive language, but there is no simple way to sugar-coat this point to the satisfaction of the political-correctness patrol.)

The 29,000 petitioners are in good company. Every other province (except PST-free Alberta) charges Native people sales taxes on purchases made off the reserve. The right of provinces to levy such taxes has been upheld by the Supreme Court. And the report by the government's own Personal Income Tax Review Committee in November 1999 proposed an end to the Native PST exemption. Ending race-based exemptions is also supported by the vast majority of Saskatchewan people, is advocated by the Saskatchewan Party, and is obviously being considered by the NDP government.

Some Native leaders say that they have "pre-paid" their taxes by agreeing to share the land with others, and believe that their tax-free status stems from their treaties. But in fact there is not a single reference to taxes in any of the treaties. The tax exemptions for Native people on reserve originate from Section 87 of the Indian Act, and were originally provided to prevent Indians from losing their reserves through the imposition of liens and other levies on their land. I'm sure this seemed a good idea at the time, but the absence of economic rights and obligations (including tax free status) and the absence of property rights, was a profound policy mistake that economically segregated Indians from the rest of Canada and helped keep them in abject poverty. You can't even get a loan to start a business on reserve because you can't use reserve property as collateral!

This puts the lie to the argument that charging PST on off-reserve purchases will give reserve-based businesses a significant commercial advantage. There are already broad property, sales, and income tax exemptions in place on reserves that have failed to convey such an advantage. There is no reason to think if the 6% sales tax exemption off-reserve was eliminated that there would be a major migration of businesses onto traditional reserves.

As for new "urban reserves" in our cities, whose primary purpose is commercial development, the PST exemption is just one part of the tax-free picture. Many commentators seem unsure of their sympathies on this one, saying on one hand that charging PST off-reserve is "unfair" to Indians, but on the other hand saying that it will give Native businesses on urban reserves an "unfair" advantage. The CTF view is that if the tax-free status of urban reserves distorts the economy by giving an advantage to reserve-based businesses, it is one more incentive to reduce taxes for everyone and ensure that taxes are applied fairly to people regardless of race.

It is worth noting that the Nisga'a Agreement - flawed as it may be in other ways - does provide for the eventual elimination of race-based tax exemptions. But Saskatchewan Indians are going the other way. The Treaty 8 Indian bands of northern Alberta, British Columbia, and Saskatchewan are presently in court fighting to be exempted from all taxes for now, for all time, everywhere in Canada. The CTF is seeking intervenor status to argue that the tax exemptions Natives receive are not treaty rights, and even if they were, it would be a violation of Section 15 of the Charter of Rights and Freedoms that ensures all Canadians are equal under the law. In other words, we are working for the day when all Canadians, Native and non-native have the same economic rights and obligations. Our argument on the PST is part of that.

If people do not pay taxes, it should be because they are too poor to pay, not because of ancestry or an alleged verbal treaty entitlement. If the number of Native people in Saskatchewan increases to a third of the population as is predicted, and if their purchasing power also increases, the PST exemption will mean higher taxes for everyone else and the starvation of social funding on which many poor people depend. Unfair exemptions for some means unfair burdens for others. How will Saskatchewan survive if a third of us, because of our ancestry, are isolated from the economy and pay no taxes whatsoever

This is truly a case of "united we stand, divided we fall." Our province isn't big enough for two hobbled economies, one for Natives and one for everyone else. Both economies will fail. The defenders of the Indian "right" to not pay taxes ought to take a long hard look at what they are defending. The economic segregation of Indians, the lack of economic responsibilities (e.g. taxes) and rights (e.g. property rights) is the failed paternalistic model of the Indian Act. It is a disincentive to progress that to this point has encouraged only poverty, isolation, and a multitude of social ills.

If we have learned one useful lesson from the past hundred years, it is that when the members of society don't share both the benefits and the burdens, society fails.