Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
ADM'S OFFICE (3) ADM 940425
RETURN TO RULINGS, ROOM 303, MET. BLDG.
AUTHOR
SUBJECT OR CORPORATE FILE
XXXXXXXXXX
Dear XXXXXXXXXX:
I am writing in reply to your letter of September 26, 1994, wherein you requested our comments regarding the application of the Indian Act Exemption for Employment Income Detailed Guidelines (the "Guidelines") to Indians who perform their duties on lands to which title has never been absolutely surrendered by the XXXXXXXXXX
In your opinion,
XXXXXXXXXX
the employment income earned by the Indians is exempt from tax under either Guideline 1 or 2.
In order for Guideline 1 to apply, the Indians must perform their duties on a reserve. As regards Guideline 2, it will apply only if the employer is resident on a reserve and the Indians live on a reserve. As you will note from the definitions of terms used, which appear on page 10 of the Guidelines, the expression "on a reserve" means on a reserve as defined for purposes of the Indian Act, including any settlements deemed to be reserves for purposes of the Indian Settlement Remission Order, and any other areas given similar treatment under federal legislation (for example, Category I-A lands under the Cree-Naskapi (of Quebec) Act).
According to subsection 2(1) of the Indian Act, "reserve" means a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band, and for purposes of section 87 of the Indian Act, includes designated lands. "Designated lands" are defined in subsection 2(1) of the Indian Act as "a tract of land or any interest therein, the legal title to which remains vested in Her Majesty and in which the band for whose use and benefit it was set apart as a reserve has, otherwise than absolutely, released or surrendered its rights or interests". If the release or surrender by the band is absolute, such lands, or any interest therein, would not qualify as "designated lands".
In addition, the following settlements, situated in Ontario, are deemed to be reserves:
Long Dog Lake Settlement (Wawakapewin)
Kee-Way-Win Settlement
Savant Lake Settlement (Saugeen Nation)
McDowell Lake Settlement
Slate Falls Settlement (New Slate Falls)
Aroland Settlement
Grandmother's Point Settlement (Landsdowne House)
Webequie Settlement
Only the lands described above are considered to be "reserves" in Ontario. You have noted that there has never been an absolute surrender of the Indian title in the lands in question. However, in order for the Department to establish that these lands are reserves, we would require documentary evidence to that effect. Should such documentation be available, I suggest you provide copies thereof to Mr. Bryan Dath, Director, Business and General Division, at the following address:
Rulings Directorate
Policy and Legislation Branch
Revenue Canada, Customs, Excise and Taxation
Room 300
88 Metcalfe Street
Ottawa, Ontario
K1A 0L8
We will be pleased to reconsider your query in light of such documentation, should it be forthcoming. However, at this time, since we cannot determine conclusively, from the information you have provided, whether the lands in question would constitute "reserves", we cannot comment on the application of the Guidelines in the situation you describe.
I trust that these comments will be of assistance.
Yours sincerely,
Denis Lefebvre Interim Assistant Deputy Minister Policy and Legislation Branch
C. Chouinard
957-2098
October 31, 1994
4-942673