PST imposed: court fight looms

The Federation of Saskatchewan Indian Nations (FSIN) has begun legal proceedings to challenge the Saskatchewan government's right to force First Nations' peoples to pay the provincial sales tax on off-reserve purchases.

The FSIN filed the legal notice in Court of Queen's Bench in Saskatoon on March 31, two days after Finance Minister Eric Cline announced the expansion of PST charges in the provincial budget.

The FSIN believes the numbered treaties signed between First Nations and the federal government exempt First Nations people from paying provincial sales taxes, said Grand Chief Perry Bellegarde. While he's angry the province has broken a long-standing tradition in its taxation policy, he says he's eager for the legal fight ahead.

"The question is now: How do we get our rights acknowledged as treaty Indian peoples in this province?" he said. "We're basing our claim on four principles. The sales tax exemption is an inherent treaty right. We have prepaid our taxes by sharing our land with the non-Aboriginal settlers. Thirdly, treaties are signed on a nation-to-nation basis, and can't be changed unilaterally. And since the federal government has the duty to pay for First Nations' education and health, the province is in fact requiring us to pay for something this government doesn't provide for our peoples."

Saskatchewan Finance spokesman Roy Schneider declined to comment why the provincial government changed the long-standing policy, saying the matter is now before the courts.

"It was a tax policy decision by the provincial government," he said. "Since we're going to court now, apparently, there's a limit on what can be said about the matter."

However, all other provinces with a sales tax except Prince Edward Island apply the levy on treaty Indians, he said.

Almost all treaty Indians who live in poverty will be eligible for the Provincial Sales Tax Credit. To be paid in four yearly installments, much like Ottawa's Goods and Services Tax Credit, those eligible will get a maximum $268 back from the province through the system. Grand Chief Bellegarde also predicts the PST imposition will "boomerang" on the province, as First Nations open their own stores on reserve, where the PST may not apply no matter who buys the products.

"You'll see that it could light an economic fire in our people," he said. If stores open on First Nations reserves, and people - whether or not they have a treaty - buy goods and obtain services there and pay seven per cent less, off-reserve businesses in rural Saskatchewan could suffer.

"Many stores in rural Saskatchewan depend on the business of our people. They will be the ones most hurt by this decision," Bellegarde added.

The Saskatchewan government first created a sales tax in 1937. Until recently it was referred to as the "E & H tax" because the province used the funds raised this way to pay for education and health.

Grand Chief Bellegarde also said the breakdown in First Nations-provincial relations over the PST imposition will affect other matters of common concern, especially negotiations over lands and resources.

The provincial government and the FSIN are supposed to meet at a common table on matters dating back to the Natural Resources Transfer Agreement of 1930, where the federal government transferred the responsibility for administering - and getting revenue - from minerals and forestry in the province.