Docket: 2005-85(IT)I
BETWEEN:
VAN DUMONT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
__________________________________________________________________
Appeal heard on December 1, 2005 at Vancouver, British Columbia
Before: The Honourable
Justice G. Sheridan
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
|
|
|
Counsel for the Respondent:
|
Nadine Taylor Pickering
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under the Income Tax Act
for the 2001 taxation year is
dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada,
this 21st day of December, 2005
"G. Sheridan"
Citation: 2005TCC790
Date:20051221
Docket: 2005-85(IT)I
BETWEEN:
VAN DUMONT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Sheridan, J.
[1] The Appellant,
Van Dumont, is a registered Indian who fishes for a living off the coast of British Columbia.
He is appealing the reassessment by the Minister of National Revenue of his
2001 taxation year. His reassessment was held in abeyance pending the outcome
of Benoit v. Canada[1]. By notice dated July 29, 2004, the Minister confirmed
his reassessment of December 2, 2002 on the following assumptions of fact:
a) the Appellant is a Registered Indian residing off the
reserve;
b) in 2001, the Appellant was a fisherman engaged in making a
catch on the vessel Dream Weaver;
c) the Appellant's fishing activities were for income earning
purposes in the commercial mainstream;
d) the Appellant's fishing activities took place off the
reserve;
e) the Appellant earned self-employed fishing income in the
amount of $27,176.00 for the 2001 taxation year;
f) the Appellant incurred fishing expenses $13,370.00 in
2001; and
g) the Appellant's EI benefits received in the 2001 taxation
year were based on income from his fishing activities.
[2] The Appellant
represented himself at the hearing. The Court advised him of the hearing
procedure and that he had the onus of proving wrong the assumptions upon which
the Minister based his reassessment. The Appellant's response was that he had
no quarrel with the facts assumed by the Minister; his disagreement with the
reassessment was based solely on his interpretation of Treaty 8 and certain
provisions of the Royal Proclamation of 1763. According to the Appellant, these
documents deprive the federal government of any authority to tax his income in
2001 or any other year. He further asserted that the province of British Columbia
and all of Canada's coastal waters are Indian land. While this argument
suggests a challenge to the constitutionality of the Income Tax Act, the
Appellant had not given the required notice[2]; accordingly, the issue of whether his 2001 income is
exempt from taxation has been considered in the context of paragraph 81(1)(a)
of the Income Tax Act and subsection 87(1) of the Indian Act, the
provisions upon which the Minister's reassessment was based.
[3] The Respondent's
position is that the Appellant's 2001 income was properly reassessed in that:
a) Treaty 8 did not exempt the
Appellant's income from taxation; and
b) his 2001 income was not "the
personal property of an Indian situated on a reserve" so as to be exempt
from taxation under section 87 of the Indian Act and paragraph 81(1)(a)
of the Income Tax Act.
Treaty
8 Issue
[4] Turning first to
the Treaty 8 issue in Benoit v. Canada,
the Federal Court of Appeal held that the Aboriginal signatories of Treaty 8
did not understand the Treaty Commissioners to be promising them exemption from
taxation. The Appellant's only response to Benoit was that he disagreed
with it and urged this Court to reject the decision. As explained to the Appellant
at the hearing, the Tax Court of Canada is bound by the decisions of the
Federal Court of Appeal; accordingly, his argument that Treaty 8 shelters his
income from taxation is without merit.
Statutory
Exemption: Section 81 of the Income Tax Act
[5] The Appellant
earned his 2001 income "off-reserve" fishing in the waters along the British Columbia
coast. That income may be exempt from taxation under paragraph 81(1)(a)[4] if the Appellant can establish that it was earned in
circumstances that render it the "personal property of an Indian situated
on as reserve" under subsection 87(1)[5].
[6] In making this
determination, the Court must consider the evidence in light of the
"connecting factors" test established by the Supreme Court of Canada
in Williams v. Canada[6] as further refined by Linden, J.A. in Southwind v.
Canada[7]:
1. the location of the business
activities;
2. the locations of the customers
(debtors) of the business;
3. where decisions affecting the
business are made;
4. the type of business and the
nature of the work;
5. the place where the payment is
made;
6. the degree to which the
business is in the commercial mainstream;
7. the location of a fixed place
of business and the location of the books and records; and
8. the residence of the business'
owner.
[7] The Appellant
accepts the Minister's assumptions of fact as set out in the Reply to the
Notice of Appeal. In his evidence and on cross-examination, he provided some
additional information regarding the nature of his income-producing activities.
Analyzed in light of the connecting factors test, I find the following: he
lives and works "off-reserve" on the Dream Weaver, a fishing vessel
he docks in Vancouver. He fishes in an area four to ten miles off the coast
of British Columbia between Vancouver and Prince
Rupert. No evidence was presented to
show that this is reserve land. His catch is sold to "anyone who wants to
buy it", mainly to "packer boats" in the coastal waters. His
business decisions are made on the Dream Weaver or in conducting
his business with Arrow Trading, the company with whom he generally deals. The
Appellant explained that Arrow Trading is owned by a Japanese man named Mr.
Moon. Its head office is in Vancouver; its books and records are kept in Vancouver or Prince Rupert.
The business of fishing is common to both Indian and non-Indian communities.
There was no evidence of where the Appellant's books and records are kept.
[8] Taken as a
whole, the evidence shows that the Appellant's income is not property on a
reserve so as to render it exempt from taxation under section 87 of the Indian
Act and paragraph 81(1)(a) of the Income Tax Act.
Accordingly, the appeal is dismissed.
Signed at Ottawa, Canada, this 21st day of December, 2005.
"G. Sheridan"
CITATION: 2005TCC790
COURT FILE NO.: 2005-85(IT)I
STYLE OF CAUSE: Van Dumont v. H.M.Q.
PLACE OF HEARING: Vancouver,
British Columbia
DATE OF HEARING: December 1, 2005
REASONS FOR JUDGMENT BY: The
Honourable Justice G. Sheridan
DATE OF JUDGMENT: December 21, 2005
APPEARANCES:
|
For the
Appellant:
|
The Appellant himself
|
|
|
|
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Counsel for the
Respondent:
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Nadine Taylor Pickering
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa, Canada
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