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TAXATION OF THE INDIGENOUS: COMPLICATED!

MYRIAD OF CANADIAN TAX & DUTY LAWS & OUR INDIGENOUS PEOPLES

One of the more complicated areas of tax and trade law in Canada lies in the intersection of these rules with Canada’s Indigenous Peoples, and their historic rights under sections 87 to 89 of the Indian Act (“the Act”).  A recent case from the Canadian International Trade Tribunal (“CITT”) underscores that point in the context of import obligations.

The Indian Act & Customs Duties

Sections 87 to 89 of the Act provide rights to Indigenous peoples (provided they are registered or entitled to be registered as an Indian under the Act) which generally makes their personal property situated on a reserve exempt from taxation.  Despite these rights, there is longstanding jurisprudence in Canada that confirms sections 87 to 89 of the Act do not apply to customs duties.  Nonetheless, the application of customs duties to an Indigenous person’s personal property can be greatly affected by the rights contained in various treaties, remission orders and other laws, as highlighted by the CITT decision below. 

CITT Appeal AP-2022-033 – Case Background

Loran Thompson (“the Appellant”) brought multiple shipments of poultry (“the shipments”) into Canada through the Windsor border crossing and customs office.  As the Appellant was a resident of the Akwesasne Reserve, he declared that he was exempt from customs duties due to the Akwesasne Residents Remission Order (the “Remission Order”), and he did not pay any duties as a result.

The Canada Border Service Agency (“CBSA”) subsequently contacted the Appellant to advise duties were owning on the shipments as they were not imported through the Cornwall border crossing as required by the Remission Order.  Three detailed adjustment statements (“DASs”) were issued to the Appellant, followed by a notice of arrears from the Canada Revenue Agency, showing the duties owning.  The Appellant then sought to appeal the DASs at the CITT, following unsuccessful attempts to challenge them in the Tax Court of Canada and the Federal Court.

The CITT Decision

The CITT held that its jurisdiction to hear appeals under subsection 67(1) of the Customs Act was limited to cases concerning origin, tariff classification, value for duty or marking of imported goods.  Consequently, the CITT had no jurisdiction to determine the application of the Remission Order and whether duties were correctly charged to the Appellant under the DASs, and suggested that a legislative change may be needed to address this issue.

The CITT’s decision highlights the complexity of the rules surrounding the appeal of a DAS. What goes unmentioned is that assistance from experienced customs and trade counsel will generally be required to navigate these complex rules and their intersection with Indigenous Peoples’ rights to maximize the chances of success on appeal.

Takeaways

How Canada’s federal and provincial laws impact our Indigenous People is a complicated area of the law, involving the intersection of a number of different set of rules. For instance, determining the correct method of appeal for a levy of tax such as the DASs in Appeal AP-2022-033 can be a difficult task. Navigating such rules will generally require the assistance of experienced legal counsel.

For help with an appeal of a DAS, please click here.

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