Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
MINISTER/DM'S OFFICE 94-01326M
ADM'S OFFICE
CENTRAL RECORDS
RETURN TO RULINGS, ROOM 303, MET. BLDG.
AUTHOR
SUBJECT OR CORPORATE FILE
April 5, 1994
XXXXXXXXXX
Dear XXXXXXXXXX:
I am replying to a memorandum of February 8, 1994, from your XXXXXXXXXX concerning the taxation of Indians following the decision in the case of Glenn Williams v. The Queen.
I understand that you need this information in order to respond to concerns expressed in a letter you received from a constituent in your riding, XXXXXXXXXX
Enclosed with the memorandum was a letter dated December 29, 1992, which Mr. Denis Lefebvre, Assistant Deputy Minister, sent to various interested parties regarding the application of the Indian Act tax exemption as a result of the Supreme Court of Canada's decision in the Williams case. A key purpose of that letter was to inform the Indian community that unemployment insurance benefits were exempt from taxation if they were received in respect of employment income which was exempt from taxation. Prior to the Williams decision, the location of the payor had been the sole factor in determining whether an amount was exempt from tax. The Court has now indicated that it is more appropriate to weigh all the factors which link the income of an Indian to a reserve.
As a result of this decision, the Department proceeded to identify the factors which would determine whether the income of an Indian was exempt from taxation. During 1993, extensive input was received from the native community in meetings held across Canada and in over 250 written submissions. This led to a good understanding of the types of employment income situations which exist.
After considering this input and undertaking a thorough analysis of the case, guidelines were developed which explain the application of the tax exemption relating to an Indian's employment income. These guidelines are a fair and liberal interpretation of the exemption provided by the Indian Act and they expand on the number of exempt situations initially identified in Mr. Lefebvre's letter of December 29, 1992. The guidelines were attached to a letter sent to interested parties on December 15, 1993, including XXXXXXXXXX I have enclosed a copy of the letter and guidelines for your information.
The Government has provided a remission order in regard to existing employment arrangements to December 31, 1994. This will give those who may be adversely affected time to study the guidelines and rearrange their affairs, if they wish.
I can assure you that the Department does not intend to alter any aboriginal or treaty rights, nor does it intend to amend the legislation or the policy which is at the base of the tax exemption in section 87 of the Indian Act. The Department's objective is to properly apply the Income Tax Act and section 87 of the Indian Act following the decision in the Williams case. As I mentioned above, the Government has extended the transition period for existing arrangements to December 31, 1994. I can also tell you that all the comments made at the various meetings and all the written submissions were considered in drafting the guidelines. XXXXXXXXXX and his group were invited to make written submissions. In addition, the Department met with him and his associates in Ottawa and he was also in attendance at some of the other meetings which were held.
I trust this explanation will assist you in responding to XXXXXXXXXX.
Yours sincerely,
David Anderson, P.C., M.P.
Bill Kerr
957-2139
March 21, 1994
940462
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© Her Majesty the Queen in Right of Canada, 1994
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© Sa Majesté la Reine du Chef du Canada, 1994
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