Tax exemptions hot topic at economic conference

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Tax exemptions for Alberta Indians was a central issue during a two day Edmonton conference held (Dec. 2 and 3) on Taxation and Economic Development Issues for Alberta Indians.

More than 200 participants representing most of Alberta's 42 Indian bands heard practical suggestions on how to limit tax liability in the areas of income tax and federal and provincial sales tax.

In an opening address to participants, president of the Indian Association of Alberta, Gregg Smith, said one of the purposes of the conference was to discuss how present Indian taxation powers can be strengthened.

The Edmonton conference was sponsored by the Indian Association of Alberta, the Blackfoot Band and the Department of Indian Affairs and Northern Development.

Bob Bartlett, one of the guest speakers and University of Saskatchewan professor, told the conference how to find tax relief for employees and businesses located off reserve.

Currently, Treaty Indians are exempt from income tax as long as they are living and working on reserve. The same tax free status also applies to businesses located on reserve.

However, Indian employment and businesses are subject to income tax if they are situated off reserve.

But, according to Bartlett there are ways to get around this situation.

The author of Indians and Canadian Taxation said, "There are ways of developing a business in which the physical work my be located off the reserve but the head office, the directors, and the accounting office is located on reserve."

This would provide "a tax exemption situation," he said.

Exemption from provincial sales tax was another subject addressed during the conference.

Edmonton lawyer Bob Reiter said special attention needs to be given to this area because many bands are seeking negotiations with the province to gain formal recognition of their exemption from provincial sales tax.

The exemption for Indians is found in Section 87 of the Indian Act.

Under the Indian Act it state that any real or personal property which is brought or transacted upon within reserve boundaries is exempt from any tax statute whether it is provincial, federal or municipal. However, the Act does not necessarily apply to off-reserve transactions.

"The status now, according to the provincial government, is that there is no (tax) exemption for Indians," says Reiter.

"If you look at the Acts that define people who are charged or come within the tax liability, there's mention of the Indian in the Fuel Tax Act and Hotel Room Act," he said.

Reiter added provincial government information bulletins state that Indians in Alberta are liable for provincial sales tax regardless of whether they are making purchases on or off reserve.

But he pointed out that the information bulletins are not necessarily the law, but rather statements of what the Provincial Treasurer would like the law to be.

In other provinces such as Saskatchewan and Ontario, Treaty Indians carry status cards which allow them to buy goods both on and off reserve without paying provincial sales tax.

Reiter said there are two approaches Alberta Indians can take to gain recognition of their tax exemption status.

"Negotiations should be the first route of strategy or court cases which would be the last resource to get that exemption."

Reiter was also the coordinator for the taxation conference.

In an interview at the end of the conference he stressed that tax exemptions are important and should be used by Indians.

"Money saved by the tax exemptions allows more money to stay on the reserve to be used for training and economic development," said Reiter.

He further added, "Tax exemptions serve as a catalyst to economic development. They bring reserve economics into the mainstream of Canadian economy."

Reiter believes that taxation and generated revenues is the formula for bringing Indian self-government into reality. "Without the economic superstructure, self-government is just a dream," he said.

Indian Associatin of Alberta president Gregg Smith said he was "very pleased, with the turnout and added he received all good feedback" from Alberta Indian chiefs who attended the conference.

Smith says the conference showed him that more information must be delivered to communities at the band level.

He said there will be a follow up conference dealing with bylaw issues, early next year.