| July 10, 1989 | |
| TO - Source Deductions Division | FROM - Glen Thornley |
| I.M. McDonald, A/Chief | Specialty Rulings |
| Research and Enquiries Section | Directorate |
| 957-2101 | |
| R. Cousineau | |
| File No. 7-3950 |
SUBJECT: Brandon University Northern Teacher Education Program ("BUNTEP")
This is in reply to your memorandum of May 23, 1989, requesting that we confirm the taxability and the withholding requirements of living allowances paid to status Indians under the BUNTEP program.
In particular, you ask us to review, in light of recently announced amendments to the Indian Remission Order, the previous position taken in a May 14, 1987 letter signed by Elmer MacKay who was the Minister of National Revenue at the time.
OUR COMMENTS
It is our understanding that the Northern Development Agreement is an agreement between the federal government and the governments of certain provinces and that amounts contributed by the federal government pursuant to this Agreement are used to benefit Northern residents generally rather than being restricted to programs which benefit Native persons. In view of the fact that payments under the BUNTEP program are paid by the Government of Manitoba to BUNTEP students pursuant to the Northern Development Agreement, it cannot be said that they are given to Indians "under a treaty or agreement between a band and Her Majesty" and thus are not deemed situated on a reserve for purposes of section 90 of the Indian Act. As they are in fact living expenses and not salaries or wages, they are also not personal property of an Indian situated on a reserve for purposes of section 87 of the Indian Act as amplified in the Nowegijick case (83 DTC 5041).
21(1)(b) Thus our position remains the same as that set out in Elmer MacKay's May 14, 1987 letter.
E.M. WheelerChiefServices, Public Utilities andExempt Corporations SectionSmall Business and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch