In Davad v. R., The Federal Tax Court of Canada denied the appeal of several Aboriginal people who worked for (1) Miziwe Biik Aboriginal Employment and Training , or (2) Aboriginal Legal Services of Toronto, or (3) the Ontario Federation of Indian Friendship Centres. All of these Aboriginal organizations are located in Toronto and the Aboriginal employees were placed by Native Leasing Services, an Aboriginal job placement business.
The issue was whether or not the employment income received by the appellants was exempt from income tax. The judge determined that it was not.
None of the Appellants lived on a reserve. The centre of their vital interests at all relevant times was the GTA. The Appellants visited their reserves much in the same way that other taxpayers may, on vacations or on statutory holidays, return to the communities where they were born or raised. For example, it is common knowledge, although less true in recent times, that many Newfoundlanders move out West to find employment in the oil and mining industries but return to the communities where family members live to take part in family activities, renew acquaintances and reimmerse themselves in the communities that form part of their heritage as Newfoundlanders. These Canadians generally reside and pay taxes where they work, although they maintain strong social and cultural ties with the communities of their birth. The frequency of Emil Kwandibens’ visits to a First Nation reserve may have been greater than those of the other Appellants, but this is not sufficient to situate his employment income on the reserve that he visited and on which he had a secondary dwelling made available to him.
Nature and Location of and Circumstances Surrounding the Work
32 Each Appellant reported to work and lived in the GTA. There is little evidence to suggest that the Appellants performed any of their work directly on, or for the benefit of, a reserve. The nature of their work was to provide employment placement, training, legal and other social services to aboriginals living in the GTA. As stated in the Shilling case above:
51 … As the Trial Judge found, merely because the nature of employment is to provide services to Indians does not connect that employment to an Indian reserve as a physical place.
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