ABORIGINAL PEOPLES |
Taxation |
Bell v. Canada
A-527-98
Létourneau J.A.
18/5/00
25 pp.
Appeal from Tax Court's dismissal of appeal from Minister's assessment appellants' income not situated on reserve, not exempt from taxation under Indian Act, s. 87(1)(b); motion for order authorizing appellants to file exhibits attached to affidavit--S. 87(1)(b) exempting from taxation personal property of Indian or band situated on reserve--Income Tax Act, s. 81(1)(a) providing amount declared exempt from income tax not included in taxpayer's income for taxation year--Appellants status Indians--Taxation years varying for each appellant, ranging from 1986 to 1989--Appellant James Walkus president, sole shareholder, sole director of James Walkus Fishing Co. Ltd., employer of other appellants--Appellants' income generally consisted of individual portions of 7/11 share of catch--12 to 18 of Company's 100 employees status Indians--Six of appellants living on reserve--Work involving fishing at sea, net maintenance at building located off reserve--In 1985, on advice of accountant, Company renting 10 square-foot-room on reserve to secure tax advantage, from which paid status employees--Minister assessed appellants as ineligible for tax exemption in respect of property situated on reserve--Property at issue employment income (share in catch), and for James Walkus ownership interest in Company--Tax Court holding property not situated on reserve in light of "connecting factors" test--Finding most important factors nature of employment, manner in which carried out--Ruling neither evidence Company's fishing activity having any close connection with reserve nor Company carried on its business different than fishing companies owned, operated by non-Indian interests; Company's catch entered directly into mainstream of commerce--That work performed away from reserve not by itself determinative--Residence of appellants not given great weight--Motion dismissed; appeal dismissed--(1) To extent documents of which appellants seeking to have Court take judicial notice filed to establish appellants members of coastal Indian Band having tradition of fishing, documents unnecessary because Tax Court Judge accepting as fact coastal Indians fishing as way of life--Documents not helpful because core issue commercial fishing, and documents not establishing Band having tradition of commercial fishing--Nature, contents of documents requiring testimonial evidence without which difficult to draw valuable inferences--Appellants' commercial fishing taking place outside reserve and no way to determine, on basis of these documents alone, whether fishing grounds referred to therein are location where commercial fishing activity performed--(2) Tax Court Judge correctly identified factors to be taken into account in determining situs of personal property exempt from taxation pursuant to s. 87(1)(a) i.e. nature of employment, residence of appellants, residence of debtor, place at which cheques paid, location where employment duties performed--Correctly applied "connecting factors" test developed by Supreme Court of Canada in Williams v. Canada, [1992] 1 S.C.R. 877--Tax Court Judge did precisely as indicated in Canada v. Folster, [1997] 3 F.C. 269 (C.A.) wherein held connecting factor best indicating whether personal property within commercial mainstream nature of employment, surrounding circumstances--Character of particular form of property cannot be appreciated for purpose of s. 87 tax exemption "without reference to the circumstances in which it was earned", such as residence of taxpayer, place where work done, nature of benefit to reserve--Appellants submitting as additional connecting factor, ability to fish, support themselves in traditional native activity allowing for continuation of traditional native way of life in today's society of benefit to native community and life on reserve--S. 87 aimed at protecting Indians from attempts by non-natives to dispossess them of property which they hold qua Indians i.e. land base, chattels on that land base--Appellants cannot remove themselves from commercial mainstream by asserting that by earning living they benefit native community--Also submitting employment permitting Band members to carry on traditional way of life--No evidence Company's fishing activity closely connected with either Band or reserve--Also assuming s. 87(1)(b) having second purpose i.e. to secure for Indians right to enjoy benefit of traditional ways of life contrary to decisions in Williams and Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85 where held Indians who acquire, hold, deal with property in commercial mainstream must do so on same terms as fellow citizens--Income from commercial fishing in commercial mainstream taxable--Appellants' property, derived from commercial fishing having no immediate and discernable nexus to occupancy of reserve lands--Appellants contending Tax Court Judge failed to give proper weight to fact Company had business office on reserve--Evidence room tiny for size of Company; James Walkus infrequently met accountant, mechanics at office; signed cheques there three times per year; only Company employee assigned to work in office merely picked up mail, paid native employees, local suppliers; only some of corporate documents kept in office on reserve; office computer never removed from box--James Walkus managed Company from wherever he was--Office on reserve not where "real business" of Company carried on, or where "central management and control" actually abided--Income Tax Act, S.C. 1970-71-72, c. 63, s. 81(1)(a)--Indian Act, R.S.C., c. I-5, s. 87(1)(b).