Kelly v. Canada, 2013 DTC 5129 [at at 6203], 2013 FCA 171 -- summary under Section 87

By services, 28 November, 2015

The taxpayer worked as a consultant, and claimed the s. 87 exemption in respect of consulting income purportedly earned on a reserve. The trial judge found that the taxpayer's services to on-reserve clients were "entrenched in the traditional, social and cultural integrity of life on reserves" and "promote the preservation and furtherance of the traditional way of life on reserves" benefiting the "Native community as a whole," but nevertheless found that the s. 87 exemption did not apply because the taxpayer earned his income in the commercial mainstream.

Stratas JA granted the taxpayer's appeal and ordered a new trial. The trial judge's commercial mainstream analysis could no longer apply post-Bastien. Regarding the connecting factors test, Stratas JA stated (at para. 45):

In light of Bastien, the approach of listing factors in the abstract, as if they are relevant and deserving of weight in all cases, and then simply applying them to the facts of a particular case can no longer stand ... .

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Bastien greatly diminishes "commercial mainstream" test
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