Nisga’a citizens are poised to regain sales and income tax exemptions given up when a land claims and self-government treaty came into effect with the provincial and federal governments in 2000.
The move follows a federal government decision in 2022 that Indigenous peoples who sign modern-day treaties should not lose the exemptions as a result.
Exemptions date back to Section 87 of the Indian Act of 1876 which stated the personal property of an Indigenous person living on a reserve should not be taxed.
Court actions over the years have expanded upon that section so that income earned by an Indigenous person on a reserve is not taxed and Indigenous people are freed from sales taxes for goods and services purchased on a reserve.
Nisga’a citizens lost their federal and provincial sales tax exemption in 2008 and their federal and provincial income tax exemption in 2013 thanks to provisions within their treaty.
At the time the treaty was being negotiated, the ending of the exemptions was regarded as a step toward the establishment of a revenue stream to support Nisga’a governments within the Nass Valley homelands of the Nisga’a peoples.
Under provisions of the treaty, the Nisga’a replaced goods and services taxes and income taxes within Nisga’a lands in the Nass Valley with their own tax system.
Information from the Nisga’a Lisims Government indicated income tax was generating approximately $4.5 million each year and goods and services taxes were bringing in $1.5 million.
In a statement, the Nisga’a Lisims national government said the Nisga’a legislature will need to determine how to overcome the revenue loss if it decides to renew the exemptions within Nisga’a lands.
“At present, through the annual budget process, the Nisga’a Finance Committee has recommended these revenues be allocated to the four Nisga’a village governments [in the Nass Valley] for programs and services delivery,” the statement added.
The federal decision to renew exemptions “bring an end to the era of First Nations community members having to trade their exemption from non-Indigenous government taxation in order to advance self-determination,” said Canadian Crown-Indigenous Relations Minister Marc Miller in 2022.
The prospect of renewed tax exemptions for Nisga’a citizens becomes complicated owing to where a Nisga’a citizen who has status might live.
Nisga’a citizens who do not live within Nisga’a lands in the Nass Valley will have to apply to the federal government for new status cards affirming their exempt status for income earned on a reserve within Canada or for goods and services purchases on a reserve within Canada.
Should that income be earned or goods and services be purchased on a reserve or on a former reserve where Indigenous taxes apply, the exemptions will not count.
The exemption effective date for “off-lands” Nisga’a is Jan. 1. 2024.
But Nisga’a citizens paying Nisga’a income and sales taxes on Nisga’a lands don’t yet know what will apply to them. A decision to repeal or keep the current Nisga’a tax system won’t be made by the Nisga’a legislature until this fall.
The return of exemptions required the Nisga’a treaty to be amended by the Nisga’a, by the federal government because of the income tax implications and by the provincial government because of the sales tax implications.