Wednesday, 8 January 2014

Tax Relief and Benefits Available to Six Nations Members: Unfair?

I think that it would be fair to say that most Canadians believe that not paying taxes as a legitimate "right" of Native people is highly questionable.  It is no secret that if you ask anyone in Caledonia, Hagersville or Brantford what they think about the tax concessions and other benefits that Six Nations and New Credit people have, you might get an earful.  It is just "one of those topics", intensified perhaps due to the very expensive (to taxpayers) Caledonia "reclamation".  So what are the facts here?

Hence if a local from one of these communities were to pick up the most recent issue of Turtle Island News (31 December 2013) and were to look at the panel on page 7 all in red, it might provoke some not so positive feelings.  This ad says, "No Tax!  Taxes are slowly coming to our Territory, show your support by coming to tax meetings."  Then there is a logo with a circle, the word "Tax" in the middle, and a line across it.  The ad further states, Also, we have a petition saying no to taxes.  Come sign and stop the taxes.  Underling theirs.

So, what are the facts?  The most comprehensive document I have encountered that speaks to this issue is that of Revenue Canada's site pertaining to Indians, see here.  In Ontario we pay the HST (Harmonized Sales Tax) which is a combination of the PST (Provincial Sales Tax) at 8% of the sale and the Federal GST (Goods and Services Sales Tax) at 5% of the sale for a total of 13% taxes on retail purchases of products and services.  On 1 July 2010 the RST (Retail Sales Tax) was replaced by the HST.  The focus here is on Ontario.  Some of the specifics may have changed as taxation is a fluid environment.

I will only address exemptions from tax for individuals, not the multi - faceted rules relating to businesses and business dealings on Reserve.  In essence, what I have discovered is that the fact is that the tax code in relation to Status Indians is horribly complex, and defies my attempts to crack the code without a tax consultant or CPA at my side.  A few bits and pieces will be included, to give a sense of what is what in this arena, but nothing remotely resembling a comprehensive review would be useful here.  All of the below derive from section 87 in the "Indian Act".  Generally a person or group must produce their Federal "Certificate of Indian Status" card to take advantage of the exemptions.  Most of what is included below is from the above Revenue Canada website.

If you have ever stood in line at the cash behind someone from Six Nations in say Canadian Tire or Zehrs in Caledonia, they will produce this card and their bill will be somewhat lower than those who cannot produce this card.  It is a bit mysterious as some items are not taxed, whereas others are.  What is noted here is general to Indians in Ontario:

1)  HST and sales taxes:

a)  No taxes on gasoline if purchased on a Reserve (note, White people purchasing gas on the Reserve are supposed to pay these taxes).
b)  No taxes on cigarettes if purchased on a Reserve.  Here the situation becomes complicated since White people can also purchase these untaxed cigarettes which at one time were smuggled from the USA, but are now largely locally produced in "off brand" forms.  Thus the price locals pay at one of the establishments selling these goods on Reserve, and sometimes illegally from shanties off Reserve by Six Nations vendors, is substantially less than what they would if buying from a convenience store in say Brantford.
c)  No taxes on alcohol if purchased on Reserve, but no exemption if purchased at a location off Reserve.
d)  No taxes for goods (e.g., TV) and services (e.g., a haircut) if purchased on Reserve.
e)  Importation of goods from say the USA are taxable.
f)  Generally goods (including prepared foods over $4) will be taxed if purchased off Reserve.
g)  Motor vehicles purchased on or off Reserve are not subject to taxation (as I understand it) - but the vehicle must be delivered to the Reserve even if registered off Reserve.
h)  If an Indian purchases say a washing machine off Reserve they are subject to paying full taxes, unless it is delivered by the seller to the eligible purchaser on Reserve.
i)  As a rule, Status Indians do not pay taxes on most goods and services as long as these are for use on the Reserve.  Most, but not all.  Good luck in figuring out what is taxed and why in purchases at say a major grocery store such as Zehrs or a major retail outlet such as Canadian Tire.  When you have it all figured out let me know because I have yet to find a clear rationale when there appear to be so many exceptions.

See here for other HST exemptions.

2)  Other Taxes:  Generally the Reserve Councils do not tax their citizens directly.  This gives me the chance to sneak in a bit of reality here.  Most of the needed money comes from transfer payments via the Federal Government which means that the taxpayers of Canada are footing the bill.

-  Employment income is not taxed if earned on Reserve (some complications).
-  The Canada Pension Plan and other pensions are taxed or not based on the manner in which the income generating the pension was earned.  If earned as above, no CPP taxes.
-  Old Age Security is taxable as with every other Canadian.
-  Scholarships to Status Indians are not taxable.
-  As of 1 September 2010 in Ontario Indians do not have to pay the 8% part of the HST "on qualifying property or services at point of sale".  Wonder how this plays out in downtown Toronto.

3)  Benefits or Entitlements Available to Status Indians:  Generally what follows comes from the Federal Government and are "blessings" (entitlements) deriving from the Indian Act, and the specifics can be found here.

a)  Medical - Status Indians are entitled to uninsured heath benefits such as dental and pharmacy (medications) which are not available to "average" Canadians.  See here.
b)  Education - Post - secondary education "support" is extensive, with tuition, scholarships and all sorts of goodies, again not available to "average" Canadians.  See here.

There are numerous other "benefits and entitlements" available to Status Indians.  Until I had sifted through the website above, I did not realize the full extent of what is out there. 

I have not spoken about miscellaneous"perks" available to Six Nations members who reside on Reserve.  Just as an example, years back my neighbour who had a well paying union job off Reserve got $20,000 as a grant (and tax free of course) to build a new home.  I expect that the amount these days would be considerably more.  So Band Council provides these "gifts" as a stimulus to remove the log and tar paper houses, that when I was a kid were just about all there was here, and encourage members to build modern homes.  I fully understand the rationale of grants here since mortgages from Canadian banks cannot be obtained unless secured / guaranteed by Council.  Ultimately though, the Canadian taxpayer foots the bill since the money comes from transfer payments, rather than on Reserve taxation, which does not exist.

Just as a footnote here, I am not exactly sure why, considering the Six Nations historical reality of being refugees from what is today the United States, that the entire spectrum of the benefits available to those who are aboriginal to Ontario, can also be tapped by Six Nations members.  Well, to be frank, other than Treaty obligations spelled out in the clearest of terms when the document was signed, I can't quite grasp why one group in Canadian society has benefits not available to others.  It just seems unfair, to my way of thinking.


No comments:

Post a Comment