Tax Court of Canada: s. 87 Indian Act Tax Exemption – You Win Some, You Lose Some

Peter Scott Vicaire

With the recent glut of denied appeals for aboriginals seeking s. 87 tax exemption, it’s promising to see a case where the court did in fact, provide that shelter. 

Thanks to Scott Robertson of Gowlings Ottawa (notwithstanding that I interviewed with Gowlings Ottawa in 2008 and wasn’t offered a job.  But I digress…)  for pointing out Dugan v. The Queen, 2011 TCC 269, a recent case where the Tax Court of Canada  accepted three (of five) appellants’ claims for s. 87 tax protection.   

The court rejected the appeals of James Dugan and Wayne Sault because they could not show enough valid “connecting factors” to substantiate protection; neither lived or worked on a reserve during the time in question and the benefit to life on the reserve stemming from their employment was deemed insufficient.

As for Tina Jamieson, Lynden Hill and Douglas Henhawk. the court recognized that:

  1. all three appellants lived on the reserve (Six Nations) 
  2. worked at Brantford Native Housing, an organization which has a specific mandate to assist aboriginals in securing temporary, off-reserve housing.  “That the location of the work is off-reserve, is a disconnecting factor but not a fatal one.”
  3.  The employer (NLS) is located on the Six Nations reserve
  4. The location of the personal property (the employer’s debt to the employees) was on the reserve.

The court distinguished the facts from this case to several others, with varying degrees of differences.  Ultimately it found that these three appellants’ appeals should be allowed, with costs.