Principal Issues: 1. Whether the First Nation will be considered a public body described in 149(1)(c).
2. Whether the new trust to be established will be an inter vivos trust, as defined in 108(1).
3. Whether the new trust to be established will be a personal trust, as defined in 248(1).
4. Whether the new trust to be established will meet the requirements in ¶(g) of the definition of trust in 108(1), with the result that 104(4),(5) and (5.2) will not apply.
5. Whether 75(2) will apply to the trust's income.
6. Whether the trust will be able to make deductions under 104(6).
7. Whether 107(2) will apply to distributions from the trust to the First Nation.
8. Whether Pt. XII.2 tax will be exigible.
Position: 1. Yes, as determined by W/S 045, Aboriginal and Non-Profit Section.
2. Yes.
3. Yes.
4. Yes.
5. Yes.
6. Yes.
7. Subject to certain conditions, yes.
8. No.
Reasons: 1. The First Nation was found to be performing relevant activities.
2. Since it will not be a testamentary trust.
3. In order for an inter vivos trust to be a personal trust, there must be no beneficial interest in the trust acquired for consideration payable to the trust or to any person who has made a contribution to the trust. 108(7) provides that, for purposes of the definition of personal trust in 248(1), if only one person makes a contribution of property to the trust, that person will be deemed to have acquired his or her beneficial interest in the trust for no consideration. In the case at hand, the First Nation will be the sole contributor to the trust.
4. All interests in the trust have vested indefeasibily and the trust is not a spousal trust, alter ego trust, etc.
5. The First Nation will be the sole contributor of funds to the trust, and is the sole beneficiary (?) and the funds may revert to the First Nation, and during the Trust's existence, funds will not be disbursed without the First Nation's approval.
6. Any income (other than income subject to 75(2)) will be irrevocably payable to the First Nation.
7. s.t. normal provisos.
8. The sole beneficiary, the First Nation, although a tax-exempt entity, will not acquire its interest directly or indirectly from another beneficiary. As a result, the First Nation is not a designated beneficiary as defined in 210. In order to be relieved of the obligation to pay the tax, the Trust must certify that there are no designated beneficiaries of the Trust.