Date: 19991115
Docket: 96-1341-IT-I
BETWEEN:
ROSE ADAMS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Archambault, J.T.C.C.
[1] Ms. Rose Adams, a member of the Athabasca Chipewyan First Nation (Chipewyan or Chipewyan Band) and an Indian as defined in the Indian Act (Act), is appealing an assessment by the Minister of National Revenue (Minister) with respect to the 1993 taxation year. The Minister included in her income $18,541.26 as employment income for that taxation year. Ms. Adams claims that her employment income is exempted from taxes pursuant to section 87 of the Act which reads as follows:
87. (1) Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83, the following property is exempt from taxation, namely,
(a) the interest of an Indian or a band in reserve lands or surrendered lands; and
(b) the personal property of an Indian or a band situated on a reserve.
(2) No Indian or band is subject to taxation in respect of the ownership, occupation, possession or use of any property mentioned in paragraph (1)(a) or (b) or is otherwise subject to taxation in respect of any such property.
[2] The main issue raised by this appeal is whether Ms. Adams' employment income was situated on a reserve within the meaning of the Act. Ms. Adams is basically relying on two grounds in support of her appeal. The first is that her employment income constitutes personal property given to her under a treaty or an agreement between her Band and Her Majesty and deemed to be situated on a reserve pursuant to paragraph 90(1)(b) of the Act. Section 90 reads as follows:
90. (1) For the purposes of sections 87 and 89, personal property that was
(a) purchased by Her Majesty with Indian moneys or moneys appropriated by Parliament for the use and benefit of Indians or bands, or
(b) given to Indians or to a band under a treaty or agreement between a band and Her Majesty,
shall be deemed always to be situated on a reserve.
(2) Every transaction purporting to pass title to any property that is by this section deemed to be situated on a reserve, or any interest in such property, is void unless the transaction is entered into with the consent of the Minister or is entered into between members of a band or between the band and a member thereof.
(3) Every person who enters into any transaction that is void by virtue of subsection (2) is guilty of an offence, and every person who, without the written consent of the Minister, destroys personal property that is by this section deemed to be situated on a reserve is guilty of an offence.
[3] Secondly, applying the connecting factors developed by the case law, in particular in Williams v. Canada (1992), 90 D.L.R. (4th) 129, 92 DTC 6320, Ms. Adams contends that her employment is situated on a reserve as defined in section 2 of the Act, namely: "a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band".
[4] One of the main difficulties raised by this second ground is whether the place where her services were performed and in which she lived is a reserve within the meaning of the Act. Although the land on which her employer’s premises and her own residence are located is not part of the lands set aside as reserves by the Governor General in Council on June 3, 1954, Ms. Adams contends that her employer’s premises and her own residence are located on a de facto reserve.
[5] In her submission, the Respondent says that paragraph 90(1)(b) of the Act does not apply because Ms. Adams' employment income was not given to her pursuant to a treaty or to an agreement which is ancillary to a treaty. Alternatively, even if the agreement between Ms. Adams' band and Her Majesty is an agreement referred to in paragraph 90(1)(b) of the Act, the Respondent submits that the money received by Ms. Adams was paid pursuant to an employment agreement and not pursuant to an agreement between her band and Her Majesty. The Respondent also submits that the concept of de facto reserve ought to be rejected in this case. Finally, Ms. Adams' income is insufficiently connected to a reserve for her to be able to invoke paragraph 87(1)(b) of the Act.
Facts
[6] There is no dispute as to most of the relevant facts in this case. Indeed, the parties have filed an Agreed Statement of Facts, which I reproduce here:
1. The Appellant is an Indian as defined in the Indian Act.
2. The Appellant is a member of the Athabasca Chipewyan First Nation ("ACFN"), as it is now called, which is a "Band" as defined in s. 2 of the Indian Act, which treated with Canada in 1899 at Fort Chipewyan, which is located within the boundaries of Treaty 8.
3. In 1993 the Appellant was employed by the ACFN as the Band’s Secretary, Clerk of the Band Council and Indian Registry Administrator. Her duties included keeping minutes of Band Council meetings, distributing same, preparing agenda for council meetings and preparing correspondence of Council. As Indian Registry Administrator, she issued Status Cards to ACFN members, maintained the Band’s registry of Band Membership and reported events affecting the ACFN membership, such as births, deaths and marriages, to the Department of Indian Affairs and Northern Development (DIAND). In addition, she had general office duties such as receiving and distributing mail, telephone calls, preparing and sending correspondence, acting as a receptionist, purchasing office supplies and maintaining office equipment.
4. The Appellant was paid a salary of $18,541.26 by the ACFN in 1993.
5. The Minister of National Revenue assessed tax on the said salary.
6. For the period April 1, 1992 to March 31, 1993, DIAND and the ACFN were parties to a Comprehensive Funding Arrangement No. 92-93-00463-01. This Funding Arrangement was amended June 30, 1992 to add funds for Band housing.
7. For the period April 1, 1993 to March 31, 1994, DIAND and the ACFN were parties to a Comprehensive Funding Arrangement No. 93-94-00463-01, which was amended on April 20, 1994 to add funds for Band housing.
8. These Comprehensive Funding Arrangements provided for the allocation of funds to the ACFN for activities described in Schedules C and D of the Arrangements.
9. There are general terms and conditions provided for in the Arrangements and there are also specific terms and conditions which vary according to the type of funding, which types are defined as: Contributions, Flexible Transfer Payments, or Grant.
10. It is the usual case that Bands in Alberta who receive funding for the activities described in Schedule C and D of the Comprehensive Funding Arrangements are Bands who are located on reserves set aside by Order in Council. The ACFN is an exceptional case.
11. DIAND has an agreement with the Northlands School Division and provides funds for tuition costs for the education of the children of ACFN members separately from the Comprehensive Funding Arrangements.
12. The Band Support Funding Policy (DIAND, Program Procedures 20-2, vol. 1, Chapter 7.1) states, among other things, that:
6.1 The Band Support Funding grant program is intended to provide a financial base for the conduct of band government. Councils may utilize funds provided to defray expenses incurred such as
a) allowance for Chief and elected members of Council;
b) travel expenses for Chief and elected members;
c) salaries and travel for administrative staff;
d) office supplies, utilities, rent and equipment;
e) basic telephone rental and installation;
f) long distance telephone costs for council and administrative purposes;
g) postage and bank charges;
h) band office janitorial and maintenance services;
i) annual audit and other professional fees; or
j) contributions toward tribal council expenses.
13. Unless arrangements are otherwise made by individual members of the ACFN, DIAND will administer the estates of members of the ACFN who resided in Fort Chipewyan at the time of their death and the estates of orphaned minor children or handicapped adults who reside in Fort Chipewyan.
14. For the 1992-1993 fiscal year, the ACFN received $143,703 from DIAND for Band Support Funding. The amount of $6,489 was carried forward from the previous years’ Band Support Funding amount. For Band administrative purposes, the ACFN also received $6,412 in funding from DIAND, which was designated for the administrative costs of other programs (such as lands, revenues and trusts); it also received a $8,014 SEED grant from the federal government to hire a summer student and it had $15,330 from miscellaneous sources, including interest.
15. The ACFN maintains several bank accounts, including a band administration account. In the Band administration account, there is deposited Band Support Funding from DIAND, allocation for education and the membership clerk from DIAND, grants for hiring summer students (e.g. SEED), as well as miscellaneous revenue.
16. The monies in the Band administration account are used to pay salaries, Chief and Council expenses, office expenses and miscellaneous administration costs. In 1993 the salary of the Appellant was paid from the Band administration account.
17. If there are insufficient funds in the Band administration account to pay salaries, Chief and Council expenses, or necessary office expenses, monies are transferred from other program bank accounts to supplement the Band administration account.
18. In 1954, the following lands[1] were set aside by Order in Council for the use and benefit of the ACFN and are reserves within the meaning of the Indian Act:
a) Chipewyan Indian Reserve No. 201 consisting of 49,600 acres more or less (Certificate of Title dated December 23, 1937).
b) Chipewyan Indian Reserve No. 201A consisting of 54 acres more or less (Certificate of Title dated December 23, 1937).
c) Chipewyan Indian Reserve No. 201B consisting of 48 acres more or less (Certificate of Title dated December 23, 1937).
d) Chipewyan Indian Reserve No. 201C consisting of 45 acres more or less (Certificate of Title dated December 23, 1937).
e) Chipewyan Indian Reserve No. 201D consisting of 10 and 7/10 acres more or less (Certificate of Title dated December 23, 1937).
f) Chipewyan Indian Reserve No. 201E consisting of 240 acres more or less (Certificate of Title dated December 23, 1937).
g) Chipewyan Indian Reserve No. 201F consisting of 163 and 5/10 acres more or less (Certificate of Title dated December 23, 1937).
h) Chipewyan Indian Reserve No. 201G consisting of 2,237 acres more or less (Certificate of Title dated December 23, 1937).
19. Reserve #201 was set aside for the ACFN for the purpose of providing the ACFN exclusive use of an area of the Athabasca Delta for trapping purposes. The lands of Reserve #201 are comprised mainly of swamp and are accessible only by water. The lands are unsuitable for housing development.
20. There is no access by road to any of the reserves set out in paragraph 18 above. There are no schools, roads, or utilities, such as water, sewer, natural gas, electricity, or telephone services, on these reserves. There are trapping cabins on these reserves, which may be occupied seasonally.
21. The Hamlet of Fort Chipewyan, Alberta, has a population of approximately 2,500 people, the majority of whom are status or non-status Indians.
22. Many members of the ACFN reside at or near the Hamlet of Fort Chipewyan on Federal Crown land or on lots acquired by Canada for the purpose of providing housing to the members. The acquisition of municipal lots for Indian housing is not common and was required in this instance, since the reserves set aside by Order in Council are not developed and have difficult access.
23. In 1993, the Appellant resided in the Hamlet of Fort Chipewyan on Lot 16, Block 8, Plan 912291 in an area commonly known as the "Indian Affairs Subdivision".
24. The home in which the Appellant lived in 1993 was a house trailer owned by the ACFN and purchased by the Band with monies provided by DIAND through the Indian On-Reserve Housing Program.
25. The "Indian Affairs Subdivision" consists of 106.17 acres for which the administration and control was transferred by the Province of Alberta to DIAND on December 9, 1975 by Alberta Order in Council 1551/75, which states, among other things, that the land is "to be re-transferred to the Province of Alberta when the land is no longer required by Canada for housing natives at Fort Chipewyan".
26. The transfer was accepted by the Federal Government[2] by P.C. 1976-1293 dated June 1, 1976.
27. Once the 106.17 acre parcel was transferred to DIAND, it was subdivided for the purpose of providing band housing and the subdivision plan was approved by both the ACFN and the Mikisew Cree First Nation by Band Council Resolution dated April 21, 1978.
28. The acquisition of the "Indian Affairs Subdivision" met with the favour of both DIAND and the ACFN and Mikisew Cree Band, as it provided the members with an enclave within the community.
29. Both the ACFN and the Mikisew Cree Band have been allocated lots in the "Indian Affairs Subdivision" for the purpose of Band housing and each Band has constructed housing on these lands for Band members utilizing monies from DIAND’s housing program.
30. DIAND paid for the roads, water and sewer developed within the subdivision. Roads within the subdivision were developed by the two Bands and the Bands and DIAND re-surveyed the subdivision in 1991.
31. The legal description of the subdivision until 1991 was Lot 1, Block 4, Plan 7520446. After the 1991 re-survey, the plan number changed to 912291.
32. Since at least the early 1960’s, DIAND has used Federal Crown lands for the purpose of Band housing, Band offices and a nursing station in Fort Chipewyan for both the ACFN and the Mikisew Cree Band and has purchased lands from the Province of Alberta or individual land owners if needed for Band housing. The "Indian Affairs Subdivision" was acquired for this reason.
33. The treatment of lands held by Canada for housing the members of the ACFN and the treatment of reserves created by Order in Council are identical in respect of Canada’s provision of funding for housing and other community programs.
34. In 1985 the ACFN and Mikisew Cree Band jointly purchased, through the Cree-Chip Development Corporation, federal land in Fort Chipewyan for the purpose of constructing a building to house new, larger band offices and to accommodate other community services. This building is commonly referred to as the "Multiplex".
35. The Cree-Chip Development Corporation was incorporated in 1985 by the two Bands for the purpose of developing the Multiplex. Each Band holds 50% of the shares in trust for its respective members.
36. DIAND provided each Band with $150,000 through the Housing and Capital Infrastructure Program toward the cost of acquiring the land and building the Multiplex.
37. In 1986, both Bands relocated their offices to the Multiplex. The remaining office space was leased to the province and used as a Court house and for Keyano College classrooms.
38. In 1988 two reserves were set aside by Order in Council for the Mikisew Cree First Nation and its Band office was relocated to an on reserve location. Thereafter, that Band’s space at the Multiplex was used as an adult training centre.
[7] In addition to the Agreed Statement of Facts, the parties filed a Book of Exhibits (Exhibit A-1) which contains a number of relevant documents. Among these is a copy of Treaty No. 8 and of the Report of Commissioners for Treaty No. 8 dated September 22, 1899. The Chipewyan Band was one of the parties to this treaty.
[8] Treaty No. 8 is a fairly short document - only 21 paragraphs - the most relevant portions of which are the following:
AND WHEREAS, the said Commissioners have proceeded to negotiate a treaty with the Cree, Beaver, Chipewyan and other Indians, inhabiting the district hereinafter defined and described, and the same has been agreed upon and concluded by the respective bands at the dates mentioned hereunder, the said Indians DO HEREBY CEDE, RELEASE, SURRENDER AND YIELD UP to the Government of the Dominion of Canada, for Her Majesty the Queen and Her successors for ever, all their rights, titles and privileges whatsoever, to the lands included within the following limits, that is to say:
. . .
And Her Majesty the Queen HEREBY AGREES with the said Indians that they shall have right to pursue their usual vocations of hunting, trapping and fishing throughout the tract surrendered as heretofore described, subject to such regulations as may from time to time be made by the Government of the country, acting under the authority of Her Majesty, and saving and excepting such tracts as may be required or taken up from time to time for settlement, mining, lumbering, trading or other purposes.
And Her Majesty the Queen hereby agrees and undertakes to lay aside reserves for such bands as desire reserves, the same not to exceed in all one square mile for each family of five for such number of families as may elect to reside on reserves, or in that proportion for larger or smaller families; and for such families or individual Indians as may prefer to live apart from band reserves, Her Majesty undertakes to provide land in severalty to the extent of 160 acres to each Indian, the land to be conveyed with a proviso as to non-alienation without the consent of the Governor General in Council of Canada, the selection of such reserves, and lands in severalty, to be made in the manner following, namely, the Superintendent General of Indian Affairs shall depute and send a suitable person to determine and set apart such reserves and lands, after consulting with the Indians concerned as to the locality which may be found suitable and open for selection.
. . .
Her Majesty also agrees that next year, and annually afterwards for ever, She will cause to be paid to the said Indians in cash, at suitable places and dates, of which the said Indians shall be duly notified, to each Chief twenty-five dollars, each Headman, not to exceed four to a large Band and two to a small Band, fifteen dollars, and to every other Indian, of whatever age, five dollars, the same, unless there be some exceptional reason, to be paid only to heads of families for those belonging thereto.
. . .
FURTHER, Her Majesty agrees to pay the salaries of such teachers to instruct the children of said Indians as to Her Majesty’s Government of Canada may seem advisable.
FURTHER, Her Majesty agrees to supply each Chief of a Band that selects a reserve, for the use of that Band, ten axes, five hand-saws, five augers, one grindstone, and the necessary files and whetstones.
FURTHER, Her Majesty agrees that each Band that elects to take a reserve and cultivate the soil, shall, as soon as convenient after such reserve is set aside and settled upon, and the Band has signified its choice and is prepared to break up the soil, receive two hoes, one spade, one scythe and two hay forks for every family so settled, and for every three families one plough and one harrow, and to the Chief, for the use of his Band, two horses or a yoke of oxen, and for each Band potatoes, barley, oats and wheat (if such seed be suited to the locality of the reserve), to plant the land actually broken up, and provisions for one month in the spring for several years while planting such seeds; and to every family one cow, and every Chief one bull, and one mowing-machine and one reaper for the use of his Band when it is ready for them; for such families as prefer to raise stock instead of cultivating the soil, every family of five persons, two cows, and every Chief two bulls and two mowing-machines when ready for their use, and a like proportion for smaller or larger families. The aforesaid articles, machines and cattle to be given one for all for the encouragement of agriculture and stock raising; and for such Bands as prefer to continue hunting and fishing, as much ammunition and twine for making nets annually as will amount in value to one dollar per head of the families so engaged in hunting and fishing.
[Emphasis added.]
[9] The terms of the treaty must be read in conjunction with the Report of Commissioners for Treaty No. 8 dated September 22, 1899, which reveals the following information:
. . . The Chipewyans confined themselves to asking questions and making brief arguments. They appeared to be more adept at cross-examination than at speech-making, and the Chief at Fort Chipewyan displayed considerable keenness of intellect and much practical sense in pressing the claims of his band. They all wanted as liberal, if not more liberal terms, than were granted to the Indians of the plains. Some expected to be fed by the Government after the making of treaty, and all asked for assistance in season of distress and urged that the old and indigent who were no longer able to hunt and trap and were consequently often in distress should be cared for by the Government. They requested that medicines be furnished. At Vermilion, Chipewyan and Smith’s Landing, an earnest appeal was made for the services of a medical man. There was expressed at every point the fear that the making of the treaty would be followed by the curtailment of the hunting and fishing privileges, and many were impressed with the notion that the treaty would lead to taxation and enforced military service. They seemed desirous of securing educational advantages for their children, but stipulated that in the matter of schools there should be no interference with their religious beliefs.
We pointed out that the Government could not undertake to maintain Indians in idleness; that the same means of earning a livelihood would continue after the treaty as existed before it, and that the Indians would be expected to make use of them. We told them that the Government was always ready to give relief in cases of actual destitution, and that in seasons of distress they would without any special stipulation in the treaty receive such assistance as it was usual to give in order to prevent starvation among Indians in any part of Canada; and we stated that the attention of the Government would be called to the need of some special provision being made for assisting the old and indigent who were unable to work and dependent on charity for the means of sustaining life. We promised that supplies of medicines would be put in the charge of persons selected by the Government at different points, and would be distributed free to those of the Indians who might require them. We explained that it would be practically impossible for the Government to arrange for regular medical attendance upon Indians so widely scattered over such an extensive territory. We assured them, however, that the Government would always be ready to avail itself of any opportunity of affording medical service just as it provided that the physician attached to the Commission should give free attendance to all Indians whom he might find in need of treatment as he passed through the country.
Our chief difficulty was the apprehension that the hunting and fishing privileges were to be curtailed. The provision in the treaty under which ammunition and twine is to be furnished went far in the direction of quieting the fears of the Indians, for they admitted that it would be unreasonable to furnish the means of hunting and fishing if laws were to be enacted which would make hunting and fishing so restricted as to render it impossible to make a livelihood by such pursuits. But over and above the provision, we had to solemnly assure them that only such laws as to hunting and fishing as were in the interest of the Indians and were found necessary in order to protect the fish and fur-bearing animals would be made, and that they would be as free to hunt and fish after the treaty as they would be if they never entered into it.
We assured them that the treaty would not lead to any forced interference with their mode of life, that it did not open the way to the imposition of any tax, and that there was no fear of enforced military service. We showed them that, whether treaty was made or not, they were subject to the law, bound to obey it, and liable to punishment for any infringements of it. We pointed out that the law was designed for the protection of all, and must be respected by all the inhabitants of the country, irrespective of colour or origin; and that, in requiring them to live at peace with white men who came into the country, and not to molest them in person or in property, it only required them to do what white men were required to do as to the Indians.
As to education the Indians were assured that there was no need of any special stipulation, as it was the policy of the Government to provide in every part of the country, as far as circumstances would permit, for the education of Indian children, and that the law, which was as strong as a treaty, provided for non-interference with the religion of the Indians in schools maintained or assisted by the Government.
. . .
The Indians are given the option of taking reserves or land in severalty. As the extent of the country treated for made it impossible to define reserves or holdings, and as the Indians were not prepared to make selections, we confined ourselves to an undertaking to have reserves and holdings set apart in the future, and the Indians were satisfied with the promise that this would be done when required. There is no immediate necessity for the general laying out of reserves or the allotting of land. It will be quite time enough to do this as advancing settlement makes necessary the surveying of the land. Indeed, the Indians were generally averse to being placed on reserves. It would have been impossible to have made a treaty if we had not assured them that there was no intention of confining them to reserves. We had to very clearly explain to them that the provision for reserves and allotments of land were made for their protection, and to secure to them in perpetuity a fair portion of the land ceded, in the event of settlement advancing. [Emphasis added.]
[10] At the time the Chipewyan people entered into a treaty with Canada, section 77 of the Indian Act, 49 Victoria, Chapter 43 (Revised Statutes of Canada 1886), provided for tax exemption for Indians as follows:
77. No Indian or non-treaty Indian shall be liable to be taxed for any real or personal property, unless he holds, in his individual right, real estate under a lease or in fee simple, or personal property outside of the reserve or special reserve--in which case he shall be liable to be taxed for such real or personal property at the same rate as other persons in the locality in which it is situate:
2. No taxes shall be levied on the real property of any Indian, acquired under the enfranchisement clauses of this Act, until the same has been declared liable to taxation by proclamation of the Governor in Council, published in the Canada Gazette:
3. All land vested in the Crown or in any person, in trust for or for the use of any Indian or non-treaty Indian, or any band or irregular band of Indians or non-treaty Indians, shall be exempt from taxation.
[11] In the Book of Exhibits, there is also the Report On: WAC Bennett Dam and Damage to Indian Reserve No. 201 Claim of March 1998 (Bennett Dam Report) prepared by the Indian Claims Commission. This report contains a very informative summary of the historical background and the circumstances in which Treaty No. 8 was negotiated and signed. I reproduce hereunder an extract from this report, starting at page 14. It should be noted that I have added the bold characters to indicate my emphasis and that I have omitted the footnotes:
Treaty 8
On June 21, 1899, Treaty 8 was signed at Lesser Slave Lake. Its written terms state that the "Cree, Beaver, Chipewyan and other Indians" inhabiting the area ceded to Canada approximately 324,900 square miles of land in northern Alberta, northeastern British Columbia, northwestern Saskatchewan and southern North-West Territories. Because the area was so vast, it was impossible to have all interested Indians represented at the Lesser Slave Lake negotiations, and so, in the months that followed, the Treaty Commissioners travelled to different locations in the ceded area to negotiate with other bands. By 1914, some 32 bands had adhered to the terms of Treaty 8. On July 13, 1899, Treaty Commissioners J.A.J. McKenna and J.H. Ross met with two bands – one Cree and one Chipewyan - at Fort Chipewyan on Lake Athabasca. Chief Alexandre Laviolette and headmen Julien Ratfat and S. Heezell signed the adhesion to Treaty 8 on behalf of the Chipewyan Band.
In the 1880s, railway construction and public works projects expanded northward in Alberta. As a result, the Hudson’s Bay Company and the Indians to the north of the Treaty 6 area petitioned for a treaty. The Crown initially declined to enter into treaty in this area but with the discovery of gold in the Yukon in 1896, interest in the treaty-making process was renewed. The Yukon gold rush caused a large number of non-Indians to pass through what is now northern Alberta and Saskatchewan. An Order in Council dated June 27, 1898, gave federal Treaty Commissioners discretion to decide what territory would be included within the treaty area. Treaty Commissioner Laird explained how boundaries of the Treaty 8 area were determined:
The scope of the Commissioners' instructions was to obtain the relinquishment of the Indian and Halfbreed title in that tract of territory north of Treaty 6 to which Governmental authority had to some extent been extended by sending Northwest Mounted Police there to protect and control whites who were going into the country as traders, travellers to the Klondike, explorers, and miners. The territory, watered by the Lesser Slave Lake, the Peace and Athabasca Rivers, the Athabasca Lake, the South of Great Slave Lake and their tributaries, was where these whites were finding their way, and the Commissioners did not deem it necessary to extend Treaty 8 farther than they did.
In February 1899, Commissioner Laird issued instructions to the government’s field representatives to clarify the "misleading reports . . . being circulated among the Indians" of the area and to assure them that their right to hunt, fish and trap would be protected under the proposed treaty:
You may explain to them that the Queen or Great Mother while promising by her Commissioners to give them Reserves, which they can call their own, and upon which white men will not be allowed to settle without payment and the consent of the Indians before a Government officer, yet the Indians will be allowed to hunt and fish over all the country as they do now, subject to such laws as may be made for the protection of game and fish in the breeding season; and also as long as the Indians do not molest or interfere with settlers, miners or travellers.
The written terms of Treaty 8 provided for annuities, education, agricultural assistance, and "reserves for such bands as desire reserves, the same not to exceed in all one square mile for each family of five for such number of families as may elect to reside on reserves." The Indians were also promised that they would have "the right to pursue their usual vocations of hunting, trapping and fishing throughout the tract surrendered . . . subject to such regulations as may from time to time be made by the Government . . ."
With respect to the establishment of reserves, the Indians told the Treaty Commissioners that they were primarily concerned with protecting and continuing in their traditional hunting, fishing, and trapping economy. This is confirmed by the following excerpts from the Commissioners’ Report for Treaty 8:
. . . [3]
The Treaty 8 Commissioners were aware that the northern people’s traditional way of life based on hunting, fishing, and trapping would continue to provide them with a viable means of making a living. It is for this reason that the Indians did not want to be limited to reserves and, for the most part, did not want to take up farming. At Fort Chipewyan, a Catholic missionary recorded this discussion between the Indians and Treaty Commissioners in his diary:
The Commissioner explained the Government’s views and the advantages it offered to the people. The Chief of the Crees spoke up and expressed the conditions on which he would accept the Government’s proposals:
1. Complete freedom to fish.
2. Complete freedom to hunt.
3. Complete freedom to trap.
4. As himself and his people are Catholics, he wants their children to be educated in Catholic schools.
In his turn, the Chipewyan spokesman set the same conditions as the first speaker. The Commissioner acknowledged all the requests which both had voiced.
Father Gabriel Breynat also witnessed the treaty at Fort Chipewyan and later wrote:
Discussions were long enough but sincere; Crees and Chipewyans refused to be treated like Prairie Indians, and to be parked on reserves. . . . It was essential to them to retain complete freedom to move around.
At the conclusion of the Treaty 8 negotiations, the Commissioners reported to the Superintendent General of Indian Affairs that the selection and survey of reserves could wait until some future date, when they were required to protect a band’s land base:
. . .[4]
Selection and Survey of Athabasca Chipewyan Indian Reserves
In the period immediately following the treaty, the Chipewyan Band of Fort Chipewyan continued to follow its traditional pursuits in relative prosperity with minimal interference from government officials and non-Indians. The Department of Indian Affairs did not establish an agency in the area until 1911 and contact with federal officials was limited to the annual treaty annuity payments. Reports of these visits were typically short and without detail, but they do provide some information about the livelihood and well-being of the band. In 1903, for example, the Treaty 8 Inspector, H.A. Conroy, reported on his stop at Fort Chipewyan:
We paid the annuities of the Chipewyans and Crees. These Indians also had been very successful in their hunts, as they had sold large quantities of furs to the Hudson’s Bay Company and traders. They had no sickness nor epidemics. Fish was very plentiful and they were very prosperous, fur bringing good prices.
By 1918, railways had been built to Peace River Crossing and Fort McMurray, and steamers were operating on the Peace and Athabasca Rivers, both of which provided non-Indian and Métis trappers from the south with easy access to the abundant fur supply in the Fort Chipewyan area. The influx of trappers into the area soon began to cause a decline in fur harvests, and by the early 1920s, the Indians of northern Alberta were asking the Department of Indian Affairs for protection of their way of life.
At the treaty payments at Fort Chipewyan in 1922, the Cree Band and "some 50 members of the Chipewyan Band, living at the mouth of Birch River" complained to the Agent about the "outsiders", and the Agent recommended that approximately 4000 square miles be set aside as a hunting preserve for the exclusive use of these Indians:
in my opinion, the only effective way to protect their interests would be to apply for a hunting and trapping Reserve in that district in which they have their homes and have always lived. I have outlined on the attached map the district which they desire reserved. . . . [T]he district is much larger than the amount of land guaranteed by treaty. But, as the greater part of the district is swamp and marsh ground, not suitable for farming or grazing, it would appear to me, that it might justly, viewed from the Indian standpoint, be set aside as a trapping reserve, and set aside for them, as from time immemorial, they have used it for this purpose. The Indians have no other way of making a living, constituted as they are, than by hunting and trapping.
Chief Laviolette and other members of the Band made their first formal request for this land as early as 1922. The area requested was much larger than what they would later receive, but the Peace-Athabasca Delta was definitely the desired location, and they emphasized the fact that they needed the land to continue their traditional vocations:
I have consulted the matter with my own people and the Cree Band. We are now asking for as hunting reservation, according to the size of the population of the two tribes, at the present time, viz. From the old Fort on the Athabasca River to Jack Fish Creek on the Peace River, down to the Junction of the Peace and Athabasca River, from there to Big Bay on the north shore of Athabasca Lake and across the Lake to the south shore, and up to the boundary and back to Old Fort.
The above mentioned will give us the sufficient ground for hunting, trapping and fishing we want big enough hunting reserve for all of us to make a living on, in hunting, trapping and fishing.
We can not go in for farming as we know farming will never be a success down here.
We are all signing this to show that we are all ask for the above reserve. There are lots of white men who are trapping during the closed season, we want them stopped.
In the years that followed, while federal authorities negotiated with the provincial government for larger hunting preserves, the Cree and Chipewyan Bands at Fort Chipewyan actively campaigned for a survey of its reserve. In 1923, a delegation of the bands travelled to Edmonton at their own expense where they met with the Minister of the Interior to press their case. The matter was also discussed with government officials during the annual treaty payments.
By 1926, the competition for fur resources in the area became critical. In that year, the boundaries of neighbouring Wood Buffalo Park were extended to include much of the Peace delta, Lake Claire, Lake Mamawi, and areas as far west as the Athabaska and Embarrass Rivers. Non-Indian trappers who were excluded from the park moved into the Jackfish Lake area where the Indians traditionally trapped. The situation became so tense that, in the summer of 1926, the Indians retaliated against non-Indian encroachment by setting forest fires in the hunting grounds.
In February 1927, Chipewyan Chief Jonas Laviolette wrote a long letter to "The Chief of the Indian Department" in Ottawa. His frustration is evident as he described the problems created by the non-Indian trappers in the area and the absolute necessity of a reserve:
I hope you will not mind me writing this letter to you but I have been waiting so long to hear from you that I think you have forgotten all about me and my people from Fort Chipewyan. . . . I told you in Edmonton that the white trappers where [sic] going to spoil my country and what I said then has come true. My country is just about ruined.
The white men they kill fur with poison, they trap in the sand before the snow comes. They break the rat house and they break the beaver house and now there is hardly anything left and if you don’t do something for us we are going to starve . . .
For a long time now I have been begging for a Reserve for me and my people at Jackfish Lake and we still want this very badly. I hope you won’t mind me writing this to you but it is no good sending this letter to Mr. Card he does not seem to try to help us. Why doesn’t he come down here and try and stop these trappers doing wrong to us. No one seems to care what happens to us. There are lots of men here looking after Buffalo, no one looking after us. We only see Mr. Card once a year and then only for a few hours. . . .
The white trapper comes here and kills all here then moves to another country. We cannot move and we don’t want to because our fathers' fathers used to live here and want our children to live here when we die. Jackfish Lake use to be fine rat country but they don’t get a chance to breed up because there are more trappers than rat. If you will give us this country for a Reserve and someone to help us look after it will save me and my people from starvation. Thirty years ago it was a fine country because just the Indians lived in it. . . .
From Jackfish Lake it is not far to the Buffalo Park and we like our Reserve to join to that line. And from Jackfish Lake we would like it to go to the big lake because there we can catch the fish. We are afraid to ask for too much hunting land for our Reserve because you may not give us what we want, but we want to have some land to call our own, where we can hunt and fish and grow a little potatoes. If we get this Reserve, the white trappers and the half breeds cannot bother us . . .
At one of the Commission’s community sessions, Mrs. Victorine Mercredi told the Commission:
In 1928 Chief Jonas Laviolette requested for a piece of land which is known [as] Reserve 201 today for the Band members only because there were a lot of people coming in and people were starting to mix up and it was creating a problem for everybody. So he requested the land, the delta just for trapping for the people.
Despite Chief Laviolette’s entreaties, federal authorities took no action to set aside reserve land until 1931, when increased mineral exploration in the area threatened the most desirable locations already selected by the Indians as reserves. In the summer of 1931, H.W. Fairchild, a surveys engineer employed by the Department of Indian Affairs, was instructed to meet with the Indians to define reserve locations "in accordance with the terms of Treaty No. 8 and according to their population at this year’s Treaty payment." Fairchild met the Chief and various band members after treaty annuities were paid in July 1931 and determined that Indian houses, gardens, cemeteries, and fishing grounds were located at various sites, including five small areas on the south shore of Lake Athabasca and on the eastern edge of the delta, and another two sites up the Athabasca River at Point Brule and Poplar Point. Seven small reserves, identified as Indian Reserves 201A to 201G, were surveyed that summer. The reserves ranged in size from 10.7 acres to 2237 acres for a total of 4.4 square miles of land.
Establishing the boundaries of IR 201, the main reserve in the delta, was not as straightforward.Before Fairchild and the survey party had left Edmonton, they had approached Alberta government officials for permission to deviate from the standard practices by, first, granting acreage in excess of the treaty provisions because of the marshy nature of the land and, second, by accepting natural water boundaries, which could be identified from aerial surveys. Alberta officials deferred their response to this request, and the survey party in the field in the summer of 1931 traversed only the eastern boundary of the proposed reserve. It was not until 1935 that federal and provincial governments finally agreed on certain natural boundaries and an area somewhat larger than the 68 square miles required by treaty. According to the survey plan, the area set aside for the Chipewyan Band was 77.5 square miles (49,600 acres) "after deducting the water areas." Certificate of title transferring the land from Alberta to Canada was issued on December 23, 1937, and on June 3, 1954, Chipewyan Reserve 201 was officially established as an Indian reserve by Order in Council PC 1954-817.
[12] In addition to the Agreed Statement of Facts and the Book of Exhibits, there was the evidence of Mrs. Victorine Mercredi who testified, as she had done before the Indian Claims Commission, as an elder of the Chipewyan Band. Mrs. Mercredi, aged 82 at the time she gave her testimony, was a member of the Chipewyan Band Council from 1974 to 1984. Her father had been a chief of the Band. Mrs. Mercredi was born at Old Fort Point which is now part of Chipewyan Indian Reserve No. 201A. She indicated that she grew up in Old Fort Point and in the bush engaging in trapping, hunting and fishing.
[13] Ms. Adams’ counsel asked Mrs. Mercredi to explain to the Court how the Chipewyan people perceived Treaty No. 8 and to describe her people's way of life. Mrs. Mercredi indicated that she obtained her information about the treaty mainly from a woman who was not identified, and from her father, who was present at the time of the signing of the treaty. Given that her father was only 10 years old at that time, Mrs. Mercredi acknowledged that he could not then have been aware of the terms of the treaty.
[14] Mrs. Mercredi’s understanding of the treaty is that Canada promised that her people would be allowed to trap, hunt and fish as long as the sun shines and the river flows. She also acknowledged that Canada had undertaken to provide her people with ammunition and twine. Although questioned repeatedly by Ms. Adams’ counsel, Mrs. Mercredi indicated that she was not aware of any other aspect of the treaty and she stated she did not want to say anymore about it because she was not there at the time of the treaty negotiations.
[15] Mrs. Mercredi described the main locations - Old Fort Point, Jackfish Lake, Point Brule and Poplar Point - where the Chipewyan people lived during her youth. These areas are now respectively described as Chipewyan Indian Reserves 201A, 201E, 201F and 201G. All are situated on the south shore of Lake Athabasca and along the Athabasca River. She confirmed that the Chipewyans lived in these locations because the Chipewyan were hunters and trappers and wanted to live near their hunting and trapping grounds.
[16] In those days, the Chipewyan people sent their children as boarders to a residential school at Fort Chipewyan on the north shore of Lake Athabasca. As long as the residential school continued to be in operation, the Chipewyans were able to live on their reserves, trapping, hunting and fishing. When the residential school closed, only a regular public school - that is, without boarding - was available at Fort Chipewyan. In order to be able to live where their children could attend school, more and more Chipewyans moved their residence to Fort Chipewyan where no reserve lands had been set aside by Her Majesty in 1954.
[17] Mrs. Mercredi stated that around 1958 the Department of Indian Affairs and Northern Development (DIAND) had funded the construction of houses on the Indian Reserves at Jackfish Creek and Old Fort Point. After that, DIAND funded the construction of buildings for her people only at Fort Chipewyan. Mrs. Mercredi confirmed that she was presently living in Fort Chipewyan and that her dream was to go back to live at Old Fort Point.
[18] Mrs. Mercredi also confirmed that the WAC Bennett Dam built by the Government of British Columbia had an adverse impact on the hunting and trapping activities of the Chipewyan people. The Indian Claims Commission concluded in its report that the Chipewyan suffered extreme hardship and economic loss as a result of environmental damage to Indian Reserve No. 201 caused by the construction and operation of the WAC Bennett Dam. The Indian Claims Commission found that Canada had breached its statutory and fiduciary obligations toward the Chipewyan and it recommended that the Chipewyan claim be accepted for negotiation under Canada’s Specific Claims Policy.
[19] Mr. Tony Punko, a non-Native, testified at the request of Ms. Adams. In the past, he has worked as a manager in charge of several outposts for the Hudson Bay Company in several locations in northern Alberta, British Columbia and the Northwest Territories, including Fort Chipewyan. Mr. Punko has also acted either as a manager or as a consultant for the Band. At the time of the hearing, he was acting as a consultant. He confirmed that many Chipewyan people were still hunting, trapping and fishing but for most Native people these traditional vocations could not constitute a sufficient source of income. They needed income from other sources to sustain their livelihood.
[20] When asked whether he agreed that the Chipewyan Band had obtained all the land that it was entitled to under Treaty No. 8 as reserve, Mr. Punko refused to answer. However, he acknowledged that negotiations were going on to exchange reserve land for other land.
[21] Mr. Punko also stated that the Band was looking to tourism as a source of future income for the Chipewyan. The Athabasca Lake area is gorgeous country. If the government built a road to the lake from the south, tourists would be able to go there in greater numbers.
Analysis
[22] Before analyzing the application of sections 87 and 90 of the Act, it would be useful to restate the principles of interpretation enunciated by the courts for determining the scope of a particular statutory provision.
[23] The most basic of those principles is the "contextual and purposive approach". This approach was described as follows by the Supreme Court of Canada in Verdun v. Toronto-Dominion Bank, [1996] 139 D.L.R. (4th) 415, at page 422, per L’Heureux-Dubé, J.:
[22] To state the obvious, the first step in a question of statutory interpretation is always an examination of the language of the statute itself. As Elmer A. Driedger wrote in his text, Construction of Statutes, 2d ed. (Toronto: Butterworths, 1983), at p. 87:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament ... Lord Atkinson in Victoria (City) v. Bishop of Vancouver Island [[1921] 2 A.C. 384, at p. 387] put it this way:
"In the construction of statutes their words must be interpreted in their ordinary grammatical sense, unless there be something in the context, or in the object of the statute in which they occur, or in the circumstances with reference to which they are used, to show that they were used in a special sense different from their ordinary grammatical sense."
This principle has been cited by our Court on numerous occasions: see, for example, Friesen v. Canada, [1995] 3 S.C.R. 103, 127 D.L.R. (4th) 193 (S.C.C.), Stubart Investments Ltd. v. The Queen, [1984] 1 S.C.R. 536, 10 D.L.R. (4th) 1 (S.C.C.), and Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, [1994] 3 S.C.R. 3 (S.C.C.). . . .
[24] Furthermore, given the nature of the Act and its legislative intent to protect Native people, Dickson, J. of the Supreme Court of Canada stated in Nowegijick v. The Queen et al., 144 D.L.R. (3d) 193, at page 198:
It is legal lore that, to be valid, exemptions to tax laws should be clearly expressed. It seems to me, however, that treaties and statutes relating to Indians should be liberally construed and doubtful expressions resolved in favour of the Indian. If the statute contains language which can reasonably be construed to confer tax exemption that construction, in my view, is to be favoured over a more technical construction which might be available to deny exemption.
[25] It was on the basis of this principle of interpretation, namely the "liberal interpretative method", that the Supreme Court of Canada concluded that the expression "personal property" included employment income.
[26] This principle of interpretation adopted in Nowegijick (supra) was also applied by the Manitoba Court of Queen’s Bench in Mitchell v. Sandy Bay Indian Band, [1983] 5 W.W.R. 117. The issue was whether the expression "Her Majesty" in paragraph 90(1)(b) of the Act included Her Majesty both in right of a province and in right of Canada. Basing itself on the liberal interpretative method, that court concluded that it did include Her Majesty in right of a province.
[27] On appeal to the Supreme Court of Canada and in a decision reported at 71 D.L.R. (4th) 193, [1990] 2 S.C.R. 85 (sub nom. Mitchell v. Peguis v. Indian Band), all the judges, except Dickson, J., who had enunciated the liberal interpretative method in Nowegijick (supra), concluded that the term "Her Majesty" did not include the provincial crown. While accepting the rule that treaties and statutes relating to Indians should be liberally construed and doubtful expressions resolved in favour of the Indians, La Forest, J. stated that it was still necessary to reconcile any given interpretation with the policy the Act seeks to promote. He qualified the rule as follows at page 236:
I note at the outset that I do not take issue with the principle that treaties and statutes relating to Indians should be liberally construed and doubtful expressions resolved in favour of the Indians. In the case of treaties, this principle finds its justification in the fact that the Crown enjoyed a superior bargaining position when negotiating treaties with native peoples. From the perspective of the Indians, treaties were drawn up in a foreign language, and incorporated references to legal concepts of a system of law with which Indians were unfamiliar. In the interpretation of these documents it is, therefore, only just that the courts attempt to construe various provisions as the Indians may be taken to have understood them.
But as I view the matter, somewhat different considerations must apply in the case of statutes relating to Indians. Whereas a treaty is the product of bargaining between two contracting parties, statutes relating to Indians are an expression of the will of Parliament. Given this fact, I do not find it particularly helpful to engage in speculation as to how Indians may be taken to understand a given provision. Rather, I think the approach must be to read the Act concerned with a view to elucidating what it was that Parliament wished to effect in enacting the particular section in question. This approach is not a jettisoning of the liberal interpretative method. As already stated, it is clear that in the interpretation of any statutory enactment dealing with Indians, and particularly the Indian Act, it is appropriate to interpret in a broad manner provisions that are aimed at maintaining Indian rights, and to interpret narrowly provisions aimed at limiting or abrogating them. Thus if legislation bears on treaty promises, the courts will always strain against adopting an interpretation that has the effect of negating commitments undertaken by the Crown: see United States v. Powers, 305 U.S. 527 (1939), at p. 533.
At the same time, I do not accept that this salutary rule that statutory ambiguities must be resolved in favour of the Indians implies automatic acceptance of a given construction simply because it may be expected that the Indians would favour it over any other competing interpretation. It is also necessary to reconcile any given interpretation with the policies the Act seeks to promote. [Emphasis added.]
[28] I shall deal with the submissions made by the Appellant in the order that they were presented.
Is Ms. Adams' employment income deemed to be situated on a reserve?
[29] Ms. Adams' first submission is that her employment income constitutes personal property given to her as an Indian under an agreement between her Band and Her Majesty, and that this income is deemed pursuant to paragraph 90(1)(b) of the Act to be always situated on a reserve. I do not believe that this paragraph applies to the salary received by Ms. Adams.
[30] First, the money that she received was not given to her pursuant to an agreement between the Band and Her Majesty. It was paid to her pursuant to an employment agreement entered into between herself and the Band. The money was paid to her in consideration for the services that she performed for the benefit of the Band. A good example of what would constitute property given under a treaty which would be covered by s. 90 of the Act is a scholarship granted to a Native person to allow that person to attend university: for an example, see Greyeyes v The Queen, [1978] CTC 91.
[31] Ms. Adams argues that her salary is paid from moneys provided under the Comprehensive Funding Arrangement entered into by Her Majesty and the Chipewyan Band and that that Arrangement is an agreement referred to in paragraph 90(1)b) of the Act. Under the Comprehensive Funding Arrangement, Her Majesty provides an unconditional grant to finance, at least in part, the conduct of Band government. This is done pursuant to DIAND's Band Support Funding Program. Since the Band Council utilizes such funds to defray such expenses as salaries and travel for administrative staff, it is fair to assume that a good portion of Ms. Adams’ salary was paid out of this grant.
[32] However, it is also possible that some of her salary may not have been paid out of moneys received pursuant to the Comprehensive Funding Arrangement. This could have occurred because the Band on occasion incurs a deficit and her salary is paid out of a bank account in which other funds are deposited, for instance, CMHC loans and other "miscellaneous revenue" such as rental income from Band housing (see paragraphs 14 and 15 of the Agreed Statement of Facts in paragraph [6] above). So it is equally fair to assume that a portion of her salary could have been paid out of funds from a source other than an agreement between Her Majesty and Ms. Adams’ Band.
[33] Even if we were to assume, as Ms. Adams contends, that her salary can be traced to funds paid under the Comprehensive Funding Arrangement, can it be said that her salary was given to her under that arrangement? I do not have any doubt that such an arrangement constitutes an agreement between the Chipewyan Band and Her Majesty and that the funds granted thereunder constitute money given to a band. However, does the Comprehensive Funding Arrangement constitute an agreement referred to in paragraph 90(1)(b) of the Act? Respondent’s counsel submits that it does not. He relies on the following dictum of La Forest, J. in Mitchell (supra), at page 221, in support of his position:
. . . as I see it, the terms "treaty" and "agreement" in s. 90(1)(b) take colour from one another. It must be remembered that treaty promises are often couched in very general terms and that supplementary agreements are needed to flesh out the details of the commitments undertaken by the Crown; see for an example of such an agreement Greyeyes v. The Queen (1978), 84 D.L.R. (3d) 196, [1978] 2 F.C. 385, [1978] C.T.C. 91 (T.D.).
[34] La Forest, J. states at page 229 that the agreements referred to in paragraph 90(1)(b) of the Act are those which refer to monies given to Indians pursuant to the Crown’s obligations under treaties and ancillary agreements:
If, as I believe, the term "Her Majesty" in s. 90(1)(b) is limited to the federal Crown, it follows that the exemptions and privileges of ss. 87 and 89 will apply, regardless of situs, solely in respect of such property as the federal Crown gives to Indians in acquitting itself of its responsibilities pursuant to treaties, and their ancillary agreements. This interpretation is consistent with the historical antecedents to the section inasmuch as I interpret the terms "presents" and "annuities" in those sections as a reference to moneys the Crown has committed itself to giving Indians pursuant to the cession by Indians of their native lands.
[Emphasis added.]
[35] At the same page, La Forest, J. provides the following explanation for having so concluded:
The reason why Parliament would have chosen to provide that personal property of this sort should be protected regardless of where that property is situated is obvious. Simply put, if treaty promises are to be interpreted in the sense in which one may assume them to have been naturally understood by the Indians, one is led to conclude that the Indian signatories to the treaties will have taken it for granted that property given to them by treaty would be protected regardless of situs. In the case of chattels, I am aware of no historical evidence that would suggest that Indians ever expected that their ability to derive the full benefit of this property could be placed in jeopardy because of the ability of non-natives to impose liens or taxes on it every time it was necessary to remove this property from the reserve. Similarly, when the Crown acquits treaty and ancillary obligations through the payment of moneys relating to assistance in spheres such as education, housing, and health and welfare, it cannot be accepted that Indians ever supposed that their treaty right to these entitlements could be compromised on the strength of subtle legal arguments that the property concerned, though undoubtedly property to which the Indians were entitled pursuant to an agreement engaging the honour of the Crown, was notionally situated off the reserve and therefore subject to the imposition of taxes or to attachment. It would be highly incongruous if the Crown, given the tenor of its treaty commitments, were permitted, through the imposition of taxes, to diminish in significant measure the ostensible value of the benefits conferred.
I think it was precisely this reasoning that led the Federal Court, Trial Division in Greyeyes v. The Queen, supra, to conclude that a scholarship paid to an Indian student pursuant to an agreement setting out the details of the federal government's promise in Treaty No. 6 to provide assistance for education, should be deemed to be situated on a reserve by the operation of s. 90(1)(b).
In support of my view that Indians will have perceived that their treaty benefits were given unconditionally, I would point to the following extract from the report of the Treaty Commissioners in respect of Treaty No. 8. The passage is eloquent testimony to the fact that native peoples feared that the imposition of taxes would seriously interfere with their ability to maintain a traditional way of life on the lands reserved for their use, and, additionally, leaves no doubt that Indians were promised that their entitlements would be exempt from taxation:
There was expressed at every point the fear that the making of the Treaty would be followed by the curtailment of the hunting and fishing privileges, and many were impressed with the notion that the Treaty would lead to taxation and enforced military service.
We assured them that the Treaty would not lead to any forced interference with their mode of life, that it did not open the way to the imposition of any tax, and that there was no fear of enforced military service.
(Treaty No. 8, 1899 (Queen’s Printer, Ottawa), as quoted in Bartlett, supra, at p. 5)
In summary, I conclude that an interpretation of s. 90(1)(b), which sees its purpose as limited to preventing non-natives from hampering Indians from benefitting in full from the personal property promised Indians in treaties and ancillary agreements, is perfectly consistent with the tenor of the obligations that the Crown has always assumed vis-à-vis the protection of native property.
[Emphasis added.]
[36] In this particular case, counsel for the Respondent argued that, under Treaty No. 8, Her Majesty had no obligation to provide Band Support Funding. After having read carefully the terms of Treaty No. 8 together with the Report of Commissioners for Treaty No. 8 which provides additional information as to what took place during the negotiations, I am unable to find any statement that would confirm the existence of any obligation on the part of Canada to finance the cost of band government for the Chipewyan Band. Therefore, the Comprehensive Funding Arrangement is not the type of agreement referred to in paragraph 90(1)(b) of the Act.
[37] In support of his submission, counsel for the Respondent makes the following additional argument :
9. In addition, the context of subsection 90(1) of the Indian Act includes subsections 90(2) and 90(3). If the interpretation urged by the Appellant is correct, the Appellant’s salary earned as an employee of the ACFN would be property that is deemed by section 90 to be situated on a Reserve, such that subsections 90(2) and 90(3) apply. It would then appear that any transaction by which the Appellant attempted to spend any portion of her salary, other than one involving the Band or another member of the Band, would require the consent of the Minister of Indian Affairs and Northern Development and, in the absence of such consent, would constitute an offence both by the Appellant and by the other party. This absurd result provides an additional basis for rejecting the breadth of application of paragraph 90(1)(b) of the Indian Act and urged by the Appellant.
[38] I agree with counsel for the Respondent that if Ms. Adams' salary was deemed to be property always situated on the reserve, she would not be free to spend her money as she pleased outside her reserve and this would certainly be an odd result.
[39] I am also aware that my colleague Judge Bowie in Kakfwi v. R. [1998] 1 C.T.C. 2695, took an approach different from that taken by La Forest, J. in Mitchell (supra) and concluded that paragraph 90(1)(b) of the Act could apply to an agreement which was not ancillary to a treaty: in that case the Band Support Funding program was not related to any treaty rights either. With great respect for the contrary opinion, I not only believe that I am bound by the dictum of La Forest, J. in Mitchell (supra) but I think that it expresses the appropriate interpretation to be given that paragraph.[5]
[40] Ms. Adams’ salary from her employment could not constitute personal property given to her under an agreement referred to in paragraph 90(1)(b) of Act and is not deemed always to be situated on a reserve.
Is Ms. Adams' employment income actually situated on a reserve?
[41] Having concluded that Ms. Adams' employment income is not deemed always to be situated on a reserve under paragraph 90(1)(b) of the Act, it remains to be determined whether her income was situated on a reserve according to the usual rules of situs developed by the Supreme Court of Canada in Williams (supra). At page 6326 DTC, Gonthier, J. described the approach to be followed as follows :
The approach which best reflects these concerns is one which analyzes the matter in terms of categories of property and types of taxation. For instance, connecting factors may have different relevance with regard to unemployment insurance benefits than in respect of employment income, or pension benefits. The first step is to identify the various connecting factors which are potentially relevant. These factors should then be analyzed to determine what weight they should be given in identifying the location of the property, in light of three considerations: (1) the purpose of the exemption under the Indian Act; (2) the type of property in question; and (3) the nature of the taxation of that property. The question with regard to each connecting factor is therefore what weight should be given that factor in answering the question whether to tax that form of property in that manner would amount to the erosion of the entitlement of the Indian qua Indian on a reserve.
[42] In her review of the proper weight to be given to the connecting factors in accordance with the Williams’ decision, Ms. Adams' counsel makes the following statements in her written submission:
27. In reviewing the considerations set out by Justice Gonthier it is clear that the analysis was not intended to be a mechanistic application of a rigid test. Rather, the weighing factors identified by Gonthier anticipate consideration of property acquired by virtue of commercial enterprise as opposed to Indian status and, indeed, to the intent of the Indian in structuring his or her affairs within the protection of the Indian Act provisions respecting property as opposed to entry into the larger commercial world.
28. The connecting factors test set out in Williams was never intended as a technical exercise. Factors must always be considered with a view to the purpose of the exemptions and where the nature of the employment is the delivery and provision of benefits to Indians, the factors weigh in favour of the exemption.
In my view, when the personal property at issue is employment income, it makes sense to consider the main purpose, duties and functions of the underlying employment; specifically, with a view to determining whether that employment was aimed at providing benefits to Indians on reserves.
[43] Ms. Adams' counsel subsequently sets forth a list of connecting factors which must be considered in this particular case:
30. Rose Adams in 1993:
(a) resided on land subject to the administration and control of Canada;
(b) resided on land which has been set aside by Canada for the express purpose of providing housing for her Band;
(c) was and is counted by Canada as an Indian resident on reserve for the purposes of providing funding under a Comprehensive Funding Agreement;
(d) was an employee of an Indian band;
(e) performed job functions including assistance in band governance and maintaining band membership records and registration of Indians entitled to Indian status;
(f) performed job functions connected to the delivery of services, including treaty benefits, to members of the First Nation in Fort Chipewyan;
(g) is paid from funds provided to the band pursuant to a Comprehensive Funding Agreement with Canada; and
(h) worked in the Band offices owned by a corporation whose shares are held in trust for the members of her Band and another Band.
[44] She then concludes as follows:
31. The circumstances of Rose Adams could hardly be said to be characteristic of a person engaged in the commercial mainstream of Canada. The nature of her employment, place of her employment, and her employer are all intrinsically connected to her status as an Indian and her membership in a recognized band. Having regard to the purposive analysis set out by Justice Gonthier, the property of Rose Adams was clearly intended to be exempt from taxation.
[45] In applying the proper approach to resolve the issue here, I also feel compelled to take into account the dicta of the Federal Court of Appeal in Recalma et al. v. The Queen, 98 DTC 6238. In that case Linden, J. stated the following at pp. 6239-40:
In evaluating the various factors the Court must decide where it "makes the most sense" to locate the personal property in issue in order to avoid the "erosion of property held by Indians qua Indians" so as to protect the traditional Native way of life. It is also important in assessing the different factors to consider whether the activity generating the income was "intimately connected to" the Reserve, that is, an "integral part" of Reserve life, or whether it was more appropriate to consider it a part of "commercial mainstream" activity. (See Folster v. The Queen (1997), 97 DTC 5315 (F.C.A.)) We should indicate that the concept of "commercial mainstream" is not a test for determining whether property is situated on a reserve; it is merely an aid to be used in evaluating the various factors being considered. It is by no means determinative. The primary reasoning exercise is to decide, looking at all the connecting factors and keeping in mind the purpose of the section, where the property is situated, that is, whether the income earned was "integral to the life of the Reserve", whether it was "intimately connected" to that life, and whether it should be protected to prevent the erosion of the property held by Natives qua Natives.
It is plain that different factors may be given different weights in each case. Extremely important, particularly in this case, is the type of income being considered as attracting taxation. Where the income is employment or salary income, the residence of the taxpayer, the type of work being performed, the place where the work was done and the nature of the benefit to the Reserve are given great weight. (See Folster, supra)
[Emphasis added]
[46] I would like to add a few comments to the statement of Linden, J. that the concept of "commercial mainstream" is not determinative. First, a few examples will illustrate the accuracy of this statement. Many activities carried on by Native people on reserves may not be part of their "traditional way of life" but, on the contrary, may constitute "commercial mainstream" activities and yet still qualify for the exemption. For instance - and this would be particularly true for reserves situated near urban agglomerations – Native people can operate gas stations, convenience stores[6] and even shopping centres and casinos[7] whose clientele is mainly non-Native. Although these activities can be described as being carried on in the "commercial mainstream", the income earned from them would clearly be exempt from taxation as long as they are engaged in on a reserve by a Native person living on that reserve.
[47] The main distinction between activities of this nature that are being conducted on a reserve and similar activities conducted off a reserve is that in the first case they are being carried on under protection from taxation as is often the case in what people call tax haven countries.[8] But they are nevertheless "commercial mainstream" activities. When the expression "commercial mainstream" was used in Mitchell, I suspect that what La Forest, J. had in mind was more that if a Native person held property outside a reserve that property would be situated in an unprotected, as opposed to a protected, world.
[48] This brings me to my last comment. Given the interpretation of section 87 of the Act which has been adopted in the case law, we must realize that although the original intent of this section may have been to avoid the "erosion of property held by Indians qua Indians" so as to protect the traditional Native way of life, the effect of the tax exemption appears to be quite the opposite: it seems to accelerate on reserves the replacement of "traditional way of life" activities by "commercial mainstream" activities[9]. So the use of the concept of "commercial mainstream" as an aid in evaluating the various connecting factors being considered should become less relevant in the future.
[49] Having reviewed the approach to be followed to resolve the issue herein, let us now apply it to the facts of this case. As established in Williams, the first step is to identify the various connecting factors which are potentially relevant. In this particular case, these factors will include the employee’s place of residence, the location where the work is performed, the type of work performed and the nature of the benefit to the reserve.
Employee’s place of residence and where the services are performed
[50] I shall address together the issue of the employee’s place of residence and that of where the services are performed because they raise similar difficulties. Ms. Adams lives in a trailer located on a lot in the Indian Affairs Subdivision of the Hamlet of Fort Chipewyan. This lot is not located on the Chipewyan Indian Reserves. As far as the premises on which Ms. Adams performed her services are concerned, they were also located in Fort Chipewyan but not in the Indian Affairs Subdivision.
[51] There is a historical background that explains this situation. When the Chipewyan people surrendered their rights to their land under Treaty No. 8, Her Majesty granted them the right to pursue their usual vocations of hunting, trapping and fishing throughout the land surrendered. As Mrs. Mercredi stated, the Chipewyan people were given the assurance of being able to hunt, trap and fish as long as the sun shines and the river flows. For them, this was the most important thing. They were even generally adverse to being placed on a reserve.
[52] They had to be convinced to accept the undertaking by Her Majesty to create a reserve in the future for their own protection. That they did so proved to be a wise decision because in the early 1920s, the Chipewyan Band informed the government that it wanted to exercise its right to reserve lands. It took over 30 years to obtain an order in council which formally set aside the lands to be used as reserves for the Band. The Chipewyan people basically chose the territory which they thought best for hunting and trapping and this territory is essentially what makes up Chipewyan Indian Reserve No. 201. They also obtained other lands, identified as Chipewyan Indian Reserves Nos. 201A to 201G, which basically represent locations where they had traditionally settled. These included Old Fort Point where Mrs. Mercredi was raised and lived, Jackfish Lake, Point Brule and Poplar Point. No lands situated at Fort Chipewyan were selected and set aside by Her Majesty as a reserve in the orders in council of 1954.
[53] Over a period of time, members of the Chipewyan Band living on the reserves gradually moved to Fort Chipewyan. One of the reasons for this was the closing of the residential school and the need to find living accommodation near the public school at Fort Chipewyan. In order to facilitate providing for the housing needs of the Chipewyan people, Her Majesty acquired from the province of Alberta the Indian Affairs Subdivision land to allow members of the Chipewyan Band and those of the Mikisew Cree Band to live in the Hamlet. An order in council of the province of Alberta dated December 9, 1975 enabled the transfer of the administration and control of certain public land to Her Majesty (Canada) subject to a proviso that this land be transferred back to the province when no longer required by Her Majesty (Canada) for housing Native people at Fort Chipewyan. Another order in council, issued by the Governor General in Council and dated June 1, 1976, confirmed that Canada accepted this transfer from the province of Alberta. There is no order in council, similar to the ones in 1954 creating the Chipewyan Indian Reserves, which formally sets apart the Indian Affairs Subdivision as a reserve.
[54] Ms. Adams' counsel states in her written submission that Ms. Adams lives and works on a de facto reserve. So this issue has to be dealt with. A reserve is defined in subsection 2(1) of the Act as follows:
"reserve"
(a) means a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band, and
. . .
[55] Here, the evidence shows that title to the Indian Affairs Subdivision was vested in Her Majesty. However, was it set apart by "Her Majesty" for the use and benefit of the Band? In my view, Ms. Adams did not succeed in discharging the burden of proving that this land had been set aside by Her Majesty for such purpose. In contrast, such evidence exists with respect to the Chipewyan Indian Reserves as the 1954 orders in council established that Her Majesty through her representative in Canada, the Governor General, exercised her power to thus set apart land.
[56] As has been recognized by Mahoney, J. in Town of Hay River v. The Queen (1979), 101 D.L.R. (3d) 184, at page 186, there is a distinction between the acquisition of land by Her Majesty and the setting aside of such land for the benefit of a Native band:
The authority of the Governor in Council under para. 19(d) of the Territorial Lands Act to "set apart and appropriate such areas or lands as may be necessary to enable the Government of Canada to fulfil its obligations under treaties with the Indians" is not the source of authority to set apart Crown lands as a reserve in that part of Canada to which the Act applies, i.e., the Yukon and Northwest Territories. It is, rather, the authority to create a land-bank for that purpose. The Indian Act defines "reserve" but nowhere deals with the creation of a reserve. Notwithstanding the words "pursuant to the Indian Act" in para. (2) of the Order in Council, the authority to set apart Crown Lands for an Indian reserve in the Northwest Territories appears to remain based entirely on the Royal prerogative, not subject to any statutory limitation.
[Emphasis added and footnotes omitted.]
[57] Here the order in council of June 1, 1976 only establishes the authority for acquiring the Indian Affairs Subdivision. In no way does it set it apart for the benefit of the Chipewyan. There is nothing in the Agreed Statement of Facts to the effect that Her Majesty set the Indian Affairs Subdivision apart for the Chipewyan Band. The closest it comes to so stating is in paragraphs 27, 28 and 29 which I reproduce here again for the sake of convenience:
27. Once the 106.17 acre parcel was transferred to DIAND, it was subdivided for the purpose of providing band housing and the subdivision plan was approved by both the ACFN and the Mikisew Cree First Nation by Band Council Resolution dated April 21, 1978.
28. The acquisition of the "Indian Affairs Subdivision" met with the favour of both DIAND and the ACFN and Mikisew Cree Band, as it provided the members with an enclave within the community.
29. Both the ACFN and the Mikisew Cree Band have been allocated lots in the "Indian Affairs Subdivision" for the purpose of Band housing and each Band has constructed housing on these lands for Band members utilizing monies from DIAND's housing program.
[58] There is no document in which Her Majesty describes the "Indian Affairs Subdivision" and sets it apart. As stated by Mahoney J. in Town of Hay River (supra), there is no provision in the Act dealing with the creation of a reserve. So neither the Minister of Indian Affairs and Northern Development nor any civil servant working for that Department has the authority to create a reserve. Only Her Majesty, by virtue of her royal prerogative, can do so, and that is what the definition of a "reserve" in section 2 of the Act contemplates.
[59] In Wewayakum Indian Band v. Canada and Wewayakai Indian Band, (1995), 99 F.T.R. 1,[10] at paragraph 276, Teitelbaum, J. stated that this royal prerogative must still be exercised by means of some express legal instrument such as an order in council or a letters’ patent. To come to this conclusion, he relied on B.C. (A. G.) v. Mount Currie Indian Band (1991), 54 B.C.L.R. (2d) 156 (C.A.).
[60] It should also be noted that this approach was not followed by Maddison, J. of the Yukon Supreme Court in Ross River Dena Council Band v. Canada, [1998] 3 C.N.L.R. 284 (Y.S.C.), which decision has been appealed by the Respondent. Maddison, J. was of the view that the definition of a reserve in the Act did not require any particular formality such as a proclamation or order in council. As far as I know, a decision of the British Columbia Court of Appeal has not been issued at the time of writing this judgement. In addition, it should be noted that we are not in the same situation as in the Ross River Dena Council Band case: here the Chipewyan people got all the reserve land that they were entitled to under Treaty No. 8. They even received a greater area, exclusive of water surfaces, than was stipulated in the treaty. I doubt that Maddison, J. would have come to the same conclusion in such circumstances.
[61] In addition to issuing orders in council and letters patent as mentioned by Teitelbaum, J. in Wewayakum Indian Band, Her Majesty can exercise her royal prerogative by other methods such as proclamations, charters, grants or other documents under the Great Seal.[11] Her Majesty could have issued a commission authorizing someone to create such a reserve. For instance, a Treaty Commissioner was commissioned for the signing of Treaty No. 8. There is, however, no evidence of any such document here.
[62] I can only infer from the facts of this case that DIAND has authorized members of the Chipewyan Band to occupy the Indian Affairs Subdivision and has helped fund the purchase by the Chipewyan Band of the trailer for the use of Ms. Adams. There is no evidence that the Minister of Indian Affairs and Northern Development or any of its civil servants had any authority to create a reserve. This could only have been done by Her Majesty or her representative, the Governor General. Obviously, the fact that DIAND counted Ms. Adams as a resident of a reserve for the purposes of providing funding under the Comprehensive Funding Arrangement is far from being sufficient to establish the existence of a reserve.
[63] The fact that the Indian Affairs Subdivision is to be returned to the province of Alberta when no longer needed for housing Native people is an indication that this land was not to be used permanently for the benefit of either the Chipewyan people or the Mikisew Cree Indians. Although the word "permanently" is not used in the definition of a reserve, I believe this notion is an important one for the purpose of this definition, especially if one considers the historical context and the legislative purpose of the Act. It is also useful to refer to the words[12] of Chipewyan Chief Jonas Laviolette to determine what is meant by the notion of reserve: "we want to have some land to call our own, where we can hunt and fish and grow a little potatoes. If we get this Reserve, the white trappers and the half breeds cannot bother us." Treaty Commissioner Laird, who negotiated Treaty No. 8, used similar words: . . . Reserves, which they can call their own, and upon which white men will not be allowed to settle without payment and the consent of the Indians before a Government officer.
[64] The fact that the Indian Affairs Subdivision was occupied by both the Chipewyan and the Mikisew Cree people also supports, in my view, the proposition that the Chipewyan Band could not consider those lands as their reserve. I am not aware of any case where two bands share the same territory as a reserve. Indeed, here, each band has its own reserve lands over which each exercises alone its right to self-government.
[65] In the absence of any evidence that Her Majesty or her representative the Governor General set the Indian Affairs Subdivision apart for the use of the Chipewyan Band, I cannot conclude that that subdivision constitutes a reserve within the meaning of section 2 of the Act.
[66] With respect to the land on which the Multiplex was built and where Ms. Adams provided her services, it is more straightforward to determine that it does not constitute reserve land. That land belongs to Cree-Chip Development Corporation, which holds it in fee simple. Given that title to it is not vested in Her Majesty, that land does not meet the requirements of the definition in subsection 2(1) of the Act.
[67] It therefore remains to be decided whether the land in question could constitute a special reserve within the meaning of section 36 of the Act which reads as follows:
36. Where lands have been set apart for the use and benefit of a band and legal title thereto is not vested in Her Majesty, this Act applies as though the lands were a reserve within the meaning of this Act.
[68] There is no evidence that the Cree-Chip Development Corporation has set aside the land for the benefit of a band. There is nothing to contradict the conclusion that the Cree-Chip Development Corporation is holding this property, as do most corporations, for its own benefit and indirectly for the ultimate benefit of its shareholders. The Multiplex was built not only to provide premises for the administration of the Chipewyan and the Mikisew Cree Bands and but also to supply premises to the provincial government for a courthouse and suchlike. In any event, I do not believe that section 36 was meant to cover land such as the lot owned by the Cree-Chip Development Corporation in the circumstances of this case.[13]
[69] In conclusion, it cannot be said that the building in which the Chipewyan Band has its administrative offices and where Ms. Adams provided her services is situated on a reserve. It should be added that there is no evidence either establishing that the Chipewyan Band’s head office was located on one of its Chipewyan Indian Reserves. Based on the overall evidence in this appeal, I think it is fair to assume that the Chipewyan Band carries on all of its administrative functions at Fort Chipewyan where it has no reserve.
The type of work performed and the nature of the benefit to the reserve
[70] Having concluded that the Indian Affairs Subdivision and the Multiplex were not located on a reserve, it is important to determine through the application of the other connecting factors whether Ms. Adams' employment income could still be considered to be located on the Chipewyan Indian Reserves. In this case, it makes sense to look at the type of work performed and the nature of the benefit to the reserve together because those two factors are intimately connected. Ms. Adams provides services that directly benefit her Band and its members. Her services are provided as part of the Band’s self-government and the Band possesses reserves. In most cases, this would constitute a factor strongly indicative of an intimate connection to a reserve. Being part of the process of providing government services to the members of a band would certainly qualify to a high degree as being integral to the life of that band. And if the band lived on a reserve, then it would be quite apparent that such services and the income arising from the provision thereof would be integral to the life of the reserve. The benefits to such a band would be obvious.
[71] However, the facts of this particular case are very unusual. There is no actual evidence that the members of the Band live on the Chipewyan Indian Reserves. As I understand the evidence, most members of the Chipewyan Band are living at or near Fort Chipewyan.[14] The members of the Chipewyan Band seem to use the Chipewyan Indian Reserves mainly, if not exclusively, for hunting, trapping and fishing. This is not a surprising fact given that Chipewyan people never wanted to be treated like Prairie Indians, and to be parked on reserves. It is quite apparent that the Chipewyan people are living off-reserve, in Fort Chipewyan. It is there that they enjoy the benefits of modern life: housing with water, sewage and services, access to stores and so on. If most, if not all, of the people benefiting from the services provided by Ms. Adams live off-reserve, how can it be said that her services and the salary paid for those services are connected to a reserve?
[72] Ms. Adams' services appear to be mainly directed toward the members of the Band. Although this is not specifically mentioned in the Agreed Statement of Facts,[15] it would be fair to assume that some of her duties would necessarily have to be performed in connection with the Chipewyan Indian Reserves. However there is no evidence that this would represent a major portion of those duties. Furthermore, there is evidence that trapping, hunting and fishing can no longer sustain the livelihood of the Chipewyan people. They need other sources of income to provide them with a living. Given that most of her services benefited people living in Fort Chipewyan, I think it is fair to conclude that Ms. Adams' work was more intimately connected with life at Fort Chipewyan than life on the Chipewyan Indian Reserves.
[73] I think this is a case which falls within the circumstances, described by Gonthier, J. in Williams (supra), at page 6324, of a Native person who has been integrated into the larger society:
Therefore, under the Indian Act, an Indian has a choice with regard to his personal property. The Indian may situate this property on the reserve, in which case it is within the protected area and free from seizure and taxation, or the Indian may situate this property off the reserve, in which case it is outside the protected area, and more fully available for ordinary commercial purposes in society. Whether the Indian wishes to remain within the protected reserve system or integrate more fully into the larger commercial world is a choice left to the Indian.
[74] As Ms. Adams, like many other Chipewyan people, has decided to live and to work ouside the limits of a reserve in a community where Native people of two different bands and non-Natives live together, she is not entitled to the benefit of section 87 with respect to her income. It is important to recall the purpose for which section 87 was enacted. La Forest, J. in Mitchell (supra) stated that this provision is not meant to remedy the economically disadvantaged position of Native people, but was only intended to ensure that property on a reserve would be protected from taxation. This exemption is not available to all Native people but only those among them who hold reserve lands or personal property situated on a reserve. The exemption is not available with respect to property held by a Native person "qua Native" but only to property held by a Native person "qua Native" "on a reserve". This is what La Forest, J. stated at pp. 226-227:
In summary, the historical record makes it clear that ss. 87
and 89 of the Indian Act, the sections to which the deeming
provision of s. 90 applies, constitute part of a legislative
"package" which bears the impress of an obligation to native
peoples which the Crown has recognized at least since the
signing of the Royal Proclamation of 1763. From that time on,
the Crown has always acknowledged that it is honour-bound to
shield Indians from any efforts by non-natives to dispossess
Indians of the property which they hold qua Indians, i.e.,
their land base and the chattels on that land base.
It is also important to underscore the corollary to the
conclusion I have just drawn. The fact that the modern-day
legislation, like its historical counterparts, is so careful to
underline that exemptions from taxation and distraint apply
only in respect of personal property situated on reserves
demonstrates that the purpose of the legislation is not to
remedy the economically disadvantaged position of Indians by
ensuring that Indians may acquire, hold, and deal with property
in the commercial mainstream on different terms than their
fellow citizens. An examination of the decisions bearing on
these sections confirms that Indians who acquire and deal in
property outside lands reserved for their use, deal with it on
the same basis as all other Canadians.
[Emphasis added.]
La Forest, J. added the following at page 228:
I draw attention to these decisions by way of emphasizing
once again that one must guard against ascribing an overly
broad purpose to ss. 87 and 89. These provisions are not
intended to confer privileges on Indians in respect of any
property they may acquire and possess, wherever situated.
Rather, their purpose is simply to insulate the property
interests of Indians in their reserve lands from the intrusions
and interference of the larger society so as to ensure that
Indians are not dispossessed of their entitlements.
[Emphasis added.]
[75] In this case, Ms. Adams' employment income does not constitute "personal property" received by her "qua Indian" "on a reserve". She was living outside the reserve and working for an employer which carried on its activities outside the reserve and the people benefiting from the services that she performed for her employer were Native people who were also living outside a reserve. In my view, the factors reviewed above establish a more "intimate" connection of Ms. Adams' employment income with life at Fort Chipewyan than with life on the Chipewyan Indian Reserves. Therefore her employment income is not situated on a reserve.
[76] Before concluding, this result should be tested to determine whether it makes sense. For this purpose, I think it would be useful to picture the situation of Ms. Adams by assuming the issue has to do with tangible property rather than intangible property such as income. It is quite obvious to everyone that when the section 87 of the Act was first enacted, income from employment, business or property was not contemplated by Parliament. There was no Income Tax Act at that time. However tangible property such as hunting, fishing, trapping and farming equipment was clearly contemplated. The Supreme Court of Canada in Nowegijick (supra) extended the concept of "personal property" in section 87 of the Act to include income, as that expression was susceptible of such meaning. However, as stated in Mitchell (supra), the exemption only applies to property situated on a reserve.
[77] So, in this case, if Ms. Adams had a vehicle to transport herself from her residence to her work at the Multiplex, this vehicle would not be protected from seizure[16] or taxation[17] because it would not be situated on a reserve.[18] Hence, if a creditor of Ms. Adams tried to seize her car, she could not claim protection under section 89 of the Act. Had I concluded that her salary was situated on a reserve, her creditor could not have seized it, which, I think, would be an illogical result. He or she could seize the vehicle used by Ms. Adams to go to work but not the salary she earns from that work. I therefore think that the result here is in keeping with the spirit of section 87 of the Act and is the one that makes the most sense.
[78] The fact that her salary and her vehicle would be subject to seizure and taxation does not mean that her other property would be so subject. For instance, any of her property situated on the Chipewyan Indian Reserves would be protected therefrom. In addition all property given to her under Treaty No. 8 and any ancillary agreements would also be protected, even if situated off the Chipewyan Indian Reserves, because such property is deemed to be situated on a reserve pursuant to section 90 of the Act. So there would not be any erosion of her entitlements "qua Native" under these agreements.
[79] So, in applying the approach developed by the courts with respect to intangible property, it is important not to lose sight of the spirit in which sections 87 and 89 of the Act were enacted. Intelligent people can always create an intellectual link to establish an intimate connection between income and a reserve. However the result must be in harmony with the purpose of the legislation, which is, in the words of La Forest, J. cited above, to shield Indians from any efforts by non-natives to dispossess Indians of the property which they hold qua Indians, i.e., their land base and the chattels on that land base. That same judge also cautioned that, one must guard against ascribing an overly broad purpose to ss. 87 and 89. I would add that one must guard against stretching too far the connection between income and a reserve, otherwise this approach would be tantamount to giving Native people a tax exemption "qua Natives" (which would be contrary to the teachings of Mitchell) and not qua Natives holding property on a reserve.
[80] This brings me to one last comment. I do not think that the wording of section 87 of the Act with respect to personal property which constitutes intangible property is clear and readily comprehensible. It is, in my view, objectionable that an income tax exemption should be worded in such vague terms. The interpretation of that section requires such a subjective balancing of connecting factors to determine the situs of income - first by civil servants and then by the courts - that it is bound to give rise to uneven application. Furthermore, a person should be able to determine as much as possible his or her tax liability without having to resort to making time-consuming representations and without incurring heavy expenses. In this case, Ms. Adams had two well-prepared counsel who not only spent two days and a half in court but who provided well-researched written submissions. Taxpayers are entitled to clear charging and exempting provisions. The fact that both civil servants and the courts are trying to be as fair as possible to Native people should not detract from efforts at finding a statutory solution to a situation which could create inequity between Native taxpayers thereby fostering resentment.
[81] For all these reasons, Ms. Adams is not entitled to the exemption provided for in section 87 of the Act and her salary is taxable under the Income Tax Act.
[82] The appeal is dismissed.
Signed at Ottawa, Canada, this 15th day of November 1999.
"Pierre Archambault"
J.T.C.C.
[1] I shall refer to these lands as the "Chipewyan Indian Reserves".
[2] That is, the Governor General in Council.
[3] These excerpts are reproduced at paragraph [9] above.
[4] This excerpt is reproduced at paragraph [9] above.
[5] After I wrote these reasons, the Federal Court of Appeal issued on September 8, 1999 a decision (A-932-97) reversing The Tax Court of Canada judgment in Kakfwi and holding that the Band Support Funding program monies and the salary paid to the Band Chief were not paid pursuant to an "agreement" within the meaning of paragraph 90(1)(b) of the Act. (See para.1 of the reasons of Noël, J. and para. 5 of the reasons of Marceau, J.)
[6] In an article in the newspaper Le Soleil, Monday, October 25, 1999 at p. A-4, a journalist describes the significant increase in the number of convenience stores in Listuguj, a Micmac village: there were 4 stores in 1996, 13 in 1997 and 11 in 1998.
[7] In this last example, it is fair to assume that almost all, if not all (assuming a band would bar its own people from any such business except as employees), customers would be non-Native.
[8] Although on a reserve, one has to be a Native person to enjoy the advantage of the tax haven.
[9] For a description of the new way of life on reserves, see the article "Saskatchewan l'avenir indien" in L'Actualité, October 15, 1999, vol. 24, no. 16, at p. 62, and the description by McLachlin, J. in Union of New Brunswick Indians v. New Brunswick (Minister of Finance) [1998] 1 S.C.R. 1161, [1998] S.C.J. No. 50 (QL), at para. 44.
[10] Confirmed on October 12, 1999 by the Federal Court of Appeal as sub nom. Roberts v. Canada [1999] F.C.J. no 1529 except with respect to the issue of solicitor-client costs.
[11] See Halsbury, paragraph 906, page 517.
[12] Cited in par. 11 above.
[13] Although not at all conclusive, it is worthy of note that the Mikisew Cree Band did not believe that its administrative office was, during the time it was in the Multiplex, located on a reserve. The evidence revealed that once this Band learned that Revenue Canada was taking the position that employees in that location were not exempted from taxation, it decided to move its administrative office from the Multiplex to a building located on one of its reserves, which are situated at or near Fort Chipewyan.
[14] Many on Federal Crown land or on lots acquired by Canada (para. 22 of the Agreed Statement of Facts at para.[6] above). Only trapping cabins, which "may be occupied seasonally," seem to be used for housing on the Chipewyan Indian Reserves (para. 20 of the Agreed Statement of Facts at para. [6] above).
[15] For ease of reference, I reproduce the relevant portion here:
Her duties included keeping minutes of Band Council meetings, distributing same, preparing agenda for council meetings and preparing correspondence of Council. As Indian Registry Administrator, she issued Status Cards to ACFN members, maintained the Band’s registry of Band Membership and reported events affecting the ACFN membership, such as births, deaths and marriages, to the Department of Indian Affairs and Northern Development (DIAND). In addition, she had general office duties such as receiving and distributing mail, telephone calls, preparing and sending correspondence, acting as a receptionist, purchasing office supplies and maintaining office equipment.
[16] Section 89 of the Act, which deals with this issue, is worded similarly to section 87:
89. (1) Subject to this Act, the real and personal property
of an Indian or a band situated on a reserve is not subject
to charge, pledge, mortgage, attachment, levy, seizure,
distress or execution in favour or at the instance of any
person other than an Indian.
[17] This assumes that my conclusion on the status of the Indian Affairs Subdivision and the Multiplex is correct.
[18] It should also be recalled that, according to para. 19 of the Agreed Statement of Facts, there are no roads on the Chipewyan Indian Reserves.