Appeals court halts tax-free ruling for Natives
- Appeals court halts tax-free ruling for Natives
MONDAY, MAY 6, 2002
Citing potential "chaos" to the country's revenue system, Canada's Court of Appeal has put a halt to a ruling that freed tens of thousands of Natives from paying federal taxes on alcohol, cigarettes and other goods.
In an order filed in court on April 26, appeals court Judge Barry Strayer suspended a decision made just a month earlier. Government attorneys are appealing the case but he agreed to a stay in the meantime.
"There could be irreparable harm as the immediate application of the judgment could result in chaos to tax administration," Strayer wrote in a decision made public last Wednesday.
The action affects an estimated 60,000 Cree and Dene in northern Alberta, northwestern Saskatchewan, northwestern British Columbia and the southwest part of the Northwest Territories. As Strayer was issuing his order, in fact, several First Nations in Alberta were in Edmonton to celebrate a federal judge's ruling which exempted them to taxes both on and off the reserve.
Judge Douglas Campbell based his landmark March 7 decision on negotiations made during the signing of an 1899 treaty and Native oral history. Treaty 8 doesn't explicitly mention taxes but he said the government must honor the promises it made.
"It is clear that during the negotiation of the treaty, Aboriginal people expressed a concern about tax, the tax assurance was given in response to this concern, and the assurance was relied upon," he wrote.
The decision has great implications since the only group of Natives currently free from taxes under the federal Indian Act are certain band members who live on the reserve. With regard to their case, Treaty 8 members said they would begin collecting receipts for everyday purchases in order to obtain refunds.
Government officials played up the potential disruption in asking for the stay. They argued the ruling would encourage smuggling, hurt non-Native businesses and wreck the country's $3.8 billion tax system.
"The revenues from federal excise taxes and excise duties could be significantly reduced if Treaty 8 beneficiaries who are tax exempt undertake the importation or production of goods subject to excise tax and excise duties," the government charged in one court document.
Gordon Benoit, the lead Treaty 8 plaintiff discounted the claims. "A small group of people cannot create economic chaos," the 48-year-old truck driver told The Calgary Herald last week.
Strayer advised the Aboriginals to keep their receipts in case the government loses in the long run. "The balance of convenience is in favor of the status quo in which, as the respondents themselves appear to recognize, taxes can be paid in the interim with records kept for ultimate refund should the appeal not succeed," he wrote.
A settlement is also possible, although talks haven't materialized.
An anti-treaty rights group is intervening in the case. The Canadian Taxpayers Federation says other First Nations could challenge their tax status since the treaties don't mention taxes either.
Stay and Order (4/26)
| Benoit v. Canada (3/7)
Treaty 8 - http://www.treaty8.org
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