6 September 1990 Income Tax Severed Letter ACC9684 - Taxation of Status Indians

SEP - 6 1990

Edmonton District Office                 Business and General
Source Deductions Section                  Division
                                         W.P. Guglich

Wayne Kwamsoos

                                         901915

Taxation of Status Indians Covered by Treaty No. 8

This is in reply to your round trip memorandum of June 19, 1990 which has been referred to us.

You indicate that an organization has requested "tax free" status for all natives covered by Treaty No. 8, on the basis of the comments made by the Commissioners at page 6 of their report. Those comments were:

          "we assured them that the treaty would not lead to any  
          forced interference with their mode of life, that it did 
          not open the way to any imposition of any tax, and that 
          there was no fear of enforced military service." 

The organization appears to have overlooked the rest of the Commissioners comments in that paragraph, namely:

          "We showed them that , whether treaty was made or not,  
          they were subject to the law, bound to obey it, and
          liable to punishment for any infringements of it."

When the Commissioners' comments are read within the context of the whole paragraph it is by no means clear that they were suggesting any tax free status or exemption for Indians. In any event the comments of the Commissioners are not reflected in Treaty No. 8, which does not refer to taxation, it would require an Act of Parliament (see for example, section 87 of the Indian Act) to over- ride the provisions of the Income Tax Act. The Supreme Court of Canada has held that Treaties do not take precedence over federal legislation (see R. v. George (1966) S.C.R. 267).

We trust that this will be of assistance to you.

for Director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch

c.c. R. Cousineau Source Deductions Division