Bennett v. The Queen, docket 97-248-IT-I (Informal Procedure)

Date: 19990506

Docket: 97-248-IT-I

BETWEEN:

MARION R. BULLER BENNETT,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for judgment

Bowman, J.T.C.C.

[1] This appeal is from an assessment for the appellant's 1994 taxation year. The issue is whether amounts withdrawn by her from a registered retirement savings plan ("RRSP") and a registered retirement income fund ("RRIF") are exempt from taxation under the Income Tax Act by reason of section 87 of the Indian Act.

[2] The parties entered into an Agreed Statement of Facts, which, together with the attachments, was the only evidence.

[3] The Agreed Statement of Facts reads as follows:

The parties admit the following facts for the purposes this appeal and any appeal therefrom. The parties may adduce further evidence at trial that is not inconsistent with this Partial Agreed Statement of Facts.

1. The Appellant is an Indian as defined by the Indian Act and is registered pursuant to that Act [and is a member of the Mistawasis band in Saskatchewan].

2. At no time has the Appellant lived on an Indian reserve.

3. At all relevant times, the Appellant earned employment income, all of which was earned off reserve land and was not exempt from taxation. Attached as Exhibits "A" and "B" to this partial Agreed Statement of Facts are true copies of the Appellant's 1993 and 1994 T-1 Income Tax Returns.

4. During the 1993 and 1994 taxation years, the Appellant was employed as a lawyer at the law firm of Ray Connell and her office was located at 1900-1055 West Georgia Street, Vancouver, British Columbia.

5. On February 19, 1994, the Appellant opened a Registered Retirement Savings Plan in the form of a daily savings interest account numbered 679-646-0 (the "RRSP") and contributed $10,000 to the RRSP. Attached as Exhibit "C" to this Partial Agreed Statement of Facts is a true copy of the Appellant's RRSP Application.

6. The RRSP was opened at the Park Royal branch of the Canadian Imperial Bank of Commerce ("CIBC"). This branch is located at 902 Park Royal South in the Park Royal South Shopping Centre in West Vancouver, British Columbia.

7. The CIBC is a bank as defined in the Bank Act.

8. The Park Royal branch of the CIBC is located on reserve land as defined in s. 2 of the Indian Act. The CIBC subleases the land from the Park Royal Shopping Centre which leases it from the Squamish Indian Band.

9. The Appellant's $10,000 contribution to her RRSP came from her personal line of credit account with the main Vancouver branch of the CIBC located at 400 Burrard Street, Vancouver, B.C. (the "Main Branch"). The Main Branch is not located on a reserve. The Appellant repaid this line of credit with non-exempt employment income.

10. In her income tax return for her 1993 taxation year, which was signed by the Appellant on April 20, 1994, the Appellant claimed a deduction for her contribution to the RRSP, thereby reducing her taxable income by $10,000.

11. On February 28, 1994, the Appellant withdrew $650 (payment of $625 and a termination charge of $25) from the RRSP. When the Appellant withdrew that amount, the CIBC withheld income tax of 10% of the payment totalling $62.50 as required by the Income Tax Act. Attached as Exhibit "D" to this Partial Agreed Statement of Facts is a true copy of the RRSP Daily Interest Savings Account Statement of Redemption.

12. On March 15, 1994, the Appellant, in person, at the Park Royal branch, transferred the $9,350 remaining in the RRSP into a Registered Retirement Income Fund named "CIBC Retirement Income Fund" bearing contract number 89100002080 (the "RIF"). Attached as Exhibit "E" to this Partial Agreed Statement of Facts is a true copy of the Appellant's CIBC RIF Application, CIBC RSP Centre Internal Transfer Request and Designation of Annuitant Beneficiary.

13. The funds in the RIF were held in a cashable certificate of deposit which was called a guaranteed rate certificate, the name of which was later changed to "guaranteed investment certificate" without changing any of its characteristics. This certificate was cashable, in whole or in part, before its maturity date.

14. At the time the Appellant transferred the funds into the RIF, she directed that monthly payments be made out of the RIF, beginning March 31, 1994, in the amount of $650. These payments were transferred to the Appellant's CIBC bank account #3802132 which was situated at the Main Branch.

15. The Appellant changed the amount of the monthly payments in September, 1994 to $300.

16. Between March 31, 1994 and December 31, 1994, the Appellant withdrew $5,100 from the RIF, all of which amounts were transferred to the Appellant's account at the Main Branch. When the Appellant withdrew the amounts throughout the year, the CIBC withheld income tax of 10% of the payment totalling $510.00 as required by the Income Tax Act. Attached as Exhibit "F to this Partial Agreed Statement of Facts are true copies of the Statements of Account in respect of the Appellant's RIF for the 1994 taxation year.

17. The Appellant did not include the payments of $650 and $5,100 in her income tax return for the 1994 taxation year.

18. The funds contributed by the Appellant to the RRSP and the RIF form part of the funds on deposit of the CIBC as a whole.

19. The payment to the Appellant of $650 from the RRSP was made by the CIBC RSP Centre, which is a department of the CIBC head office. Attached hereto and marked as Exhibit "G" to this Partial Agreed Statement of Facts is a true copy of the T4RSP Statement of Registered Retirement Savings Plan Income.

20. The payment to the Appellant of $5,100 from the RIF was made by the CIBC RIO Centre, which is a department of the CIBC head office. Attached hereto and marked as Exhibit "H" to this Partial Agreed Statement of Facts is a true copy of the T4RIF Statement of Income from a Registered Retirement Income Fund.

21. The head office of the CIBC is located in Toronto, Ontario and is not on a reserve.

22. The income earning activities of the CIBC as a whole, not just the Park Royal branch, take place predominantly at locations which are not part of a reserve.

23. The assets of the CIBC as a whole, not just the Park Royal branch, are located predominantly at locations which are not part of a reserve.

[4] The appellant submits that the amounts of $625 withdrawn from the RRSP and $5,100 withdrawn from the RRIF are exempt from tax under the Income Tax Act by reason of section 87 of the Indian Act. Subsections (1) and (2) of section 87 of that Act read as follows:

87(1) Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83, the following property is exempt from taxation, namely,

(a) the interest of an Indian or a band in reserve lands or surrendered lands; and

(b) the personal property of an Indian or a band situated on a reserve.

(2) No Indian or band is subject to taxation in respect of the ownership, occupation, possession or use of any property mentioned in paragraph (1)(a) or (b) or is otherwise subject to taxation in respect of any such property.

[5] The statutory provisions upon which the respondent contends that the withdrawals from the RRSP and the RRIF are taxable are reproduced below.

[6] Subsection 146(8) of the Income Tax Act reads:

(8) There shall be included in computing the income of a taxpayer for a taxation year the total of all amounts received by the taxpayer in the year as benefits out of or under registered retirement savings plans, other than excluded withdrawals (within the meaning assigned by subsection 146.01(1)) in respect of the taxpayer and amounts that are included under paragraph (12)(b) in computing the taxpayer's income.

[7] Registered retirement savings plan is defined in subsection 148(1):

"registered retirement savings plan" means a retirement savings plan accepted by the Minister for registration for the purposes of this Act as complying with the requirements of this section.

[8] Retirement savings plan is defined:

"retirement savings plan" means

(a) a contract between an individual and a person licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada an annuities business, under which, in consideration of payment by the individual or the individual's spouse of any periodic or other amount as consideration under the contract, a retirement income commencing at maturity is to be provided for the individual, or

(b) an arrangement under which payment is made by an individual or the individual's spouse

(i) in trust to a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee, of any periodic or other amount as a contribution under the trust,

(ii) to a corporation approved by the Governor in Council for the purposes of this section that is licensed or otherwise authorized under the laws of Canada or a province to issue investment contracts providing for the payment to or to the credit of the holder thereof of a fixed or determinable amount at maturity, of any periodic or other amount as a contribution under such a contract between the individual and that corporation, or

(iii) as a deposit with a branch or office, in Canada, of

(A) a person who is, or is eligible to become, a member of the Canadian Payments Association, or

(B) a credit union that is a shareholder or member of a body corporate referred to as a "central" for the purposes of the Canadian Payments Association Act, (in this section referred to as a "depositary")

to be used, invested or otherwise applied by that corporation or that depositary, as the case may be, for the purpose of providing for the individual, commencing at maturity, a retirement income.

[9] Subsection 146.3(5) reads:

(5) There shall be included in computing the income of a taxpayer for a taxation year all amounts received by the taxpayer in the year out of or under a registered retirement income fund other than the portion thereof that can reasonably be regarded as

(a) part of the amount included in computing the income of another taxpayer by virtue of subsections (6) and (6.2); or

(b) an amount received in respect of the income of the trust under the fund for a taxation year for which the trust was not exempt from tax by virtue of subsection (3.1).

[10] Registered retirement income fund is defined in subsection 146.3(1):

"registered retirement income fund" means a retirement income fund accepted by the Minister for registration for the purposes of this Act and registered under the Social Insurance Number of the first annuitant under the fund.

[11] Retirement income fund is defined:

"retirement income fund" means an arrangement between a carrier and an annuitant under which, in consideration for the transfer to the carrier of property, the carrier undertakes to pay to the annuitant and, where the annuitant so elects, to the annuitant's spouse after the annuitant's death, in each year that begins not later than the first calendar year after the year in which the arrangement was entered into one or more amounts the total of which is not less than the minimum amount under the arrangement for the year, but the amount of any such payment shall not exceed the value of the property held in connection with the arrangement immediately before the time of the payment.

[12] Paragraph 56(1)(h) of the Income Tax Act requires the inclusion in income of:

(h) amounts required by section 146 in respect of a registered retirement savings plan or a registered retirement income fund to be included in computing the taxpayer's income for the year.

[13] Paragraph 81(1)(a) reads:

(1) There shall not be included in computing the income of a taxpayer for a taxation year,

(a) an amount that is declared to be exempt from income tax by any other enactment of Parliament, other than an amount received or receivable by an individual that is exempt by virtue of a provision contained in a tax convention or agreement with another country that has the force of law in Canada.

[14] It is clear from these provisions that, unless the withdrawals are exempt from taxation under the Indian Act, they are taxable under the Income Tax Act.

[15] The first question is, therefore, what is the "personal property" in respect of which the appellant claims exemption. The appellant's position is that that property is the amounts received by her from the RRSP and the RRIF. No tax is asserted in respect of the RRSP or the RRIF in themselves, nor the income earned within them. Therefore the property in respect of which tax is claimed by the respondent, and in respect of which exemption is claimed by the appellant, can only be the money withdrawn by the appellant from the RRSP and the RRIF, which, under the Income Tax Act, attracts taxation upon its receipt by the appellant.

[16] She develops her argument as follows. She characterizes the RRIF as a bank account. The funds were held in a cashable certificate of deposit, called a "guaranteed rate certificate". Since a bank account involves simply a debtor-creditor relationship a withdrawal from the RRIF constitutes merely the repayment of a debt. A debt owing by a bank to its customers is traditionally regarded as situate at the branch where the deposit is held: Rex v. Lovitt, [1912] A.C. 212.

[17] The appellant also refers to section 461 of the Bank Act, which reads:

461(1) For the purposes of this Act, the branch of account with respect to a deposit account is

(a) the branch the address or name of which appears on the specimen signature card or other signing authority signed by a depositor with respect to the deposit account or that is designated by agreement between the bank and the depositor at the time of opening of the deposit account; or

(b) if no branch has been identified or agreed on as provided in paragraph (a), the branch that is designated as the branch of account with respect thereto by the bank by notice in writing to the depositor.

(2) The amount of any debt owing by a bank by reason of a deposit in a deposit account in the bank is payable to the person entitled thereto only at the branch of account and the person entitled thereto is not entitled to demand payment or to be paid at any other branch of the bank.

(3) Notwithstanding subsection (2), a bank may permit either occasionally or as a regular practice, the person to whom the bank is indebted by reason of a deposit in a deposit account in the bank to withdraw moneys owing by reason of that deposit at a branch of the bank other than the branch of account or to draw cheques or other orders for the payment of such moneys at a branch other than the branch of account.

(4) The indebtedness of a bank by reason of a deposit in a deposit account in the bank shall be deemed for all purposes to be situated at the place where the branch of account is situated.

[18] The appellant contends that if I accept her initial premise that the RRSP and the RRIF are simply bank accounts, they are personal property situated on a reserve. That the RRIF and the RRSP are personal property seems indisputable. The money which is withdrawn from them is equally personal property. It is not, however, the situs of the RRSP or the RRIF that is the issue. The essential question is: what was the situs of the money that was withdrawn?

[19] In this analysis it is important to determine whether the RRSP and the RRIF are, as the appellant contends, simply bank accounts to which section 461 of the Bank Act applies.

[20] "Deposit account" in section 461 of the Bank Act is not defined. It would obviously include an ordinary bank account. The question is whether it also covers an arrangement of the type set out in the definitions of RRSP and RRIF in the Income Tax Act.

[21] The definition of RRSP includes, in subparagraph (b)(iii), "... a deposit with a branch or office, in Canada, of ...".

[22] In the appellant's CIBC RRSP application/contribution form, the appellant indicated that she chose as her account option a daily interest savings account. The other options were a non-redeemable guaranteed rate account and a redeemable guaranteed rate account.

[23] Paragraph 15 of the RRSP agreement reads:

15. NOTICES AND BRANCH OF ACCOUNT: Any notice, direction or instruction to CIBC under this Agreement must be delivered or mailed postage prepaid to CIBC at Commerce Court Postal Station, Toronto, Ontario M5L 1A2, or any other address as CIBC may advise in writing and will be considered to have been given to CIBC on the day that it is actually delivered to or received by CIBC. Any notice statement, receipt or advice given by on behalf of CIBC to me or my Spouse must be delivered personally or mailed postage prepaid to me or my Spouse at the address recorded in CIBC's books, and if mailed, will be considered to have been received five days after mailing.

For the purpose of the Bank Act, Canada, my branch of account is the branch name on the Application. It may be changed to any other CIBC branch in Canada which CIBC or I specify in a written notice.

[24] The branch named on this application is the Park Royal South branch. The CIBC Retirement Income Fund Application similarly names the Park Royal branch.

[25] The CIBC retirement income fund agreement as well as the CIBC RRSP agreement are lengthy and complex. I shall not reproduce them, but a number of provisions merit comment.

[26] Clause 4 of the RRIF agreement sets out the types of transfers to the fund that the CIBC will accept, for example transfers from RRSPs or other RRIFs as well as other types of transfers that are permissible under the Income Tax Act without attracting adverse tax consequences. Clause 6 sets out the type of investment in which the fund's money may be put. Clause 7 provides for minimum payments to be made to the annuitant. Clauses 8 and 9 deal with beneficiaries and payments after an annuitant's death. Clauses 14 to 17 prohibit pledges, assignments or offsets of the fund.

[27] Similar provisions and restrictions are found in the RRSP agreement.

[28] I have summarized these provisions because they demonstrate the numerous restrictions and conditions that apply to the RRIF and the RRSP. It is true that one of the investments in which the money in an RRSP or RRIF may be put is a savings account, but this does not make an RRSP or an RRIF a deposit account. There may be certain similarities but to describe the complex contractual relationship between the annuitant and the carrier as a deposit account is inaccurate and overly simplistic.

[29] It is obvious that the relationship between the annuitant and the carrier of an RRSP or RRIF is a matter of contract governed by the applicable provincial law. The Income Tax Act merely ascribes to such contractual relationships particular tax consequences. It does not and could not govern the civil relationship. Nonetheless, the contractual relationship between the annuitant and the carrier is tailored to fit the definition in the Income Tax Act so as to achieve the desired tax consequences.

[30] I say this to emphasize the fact that the legal nature of a contract or arrangement that meets the definition of an RRSP or RRIF under the Income Tax Act is not altered by the fact that the Income Tax Act ascribes fiscal consequences to their ownership, or to the contribution to or receipt of money from them.

[31] It is important to distinguish between three things:

(a) the contractual relationship that exists between the annuitant and the carrier under the RRSP and the RRIF agreements;

(b) the investments in which the money is held: in the case of the RRSP it was a savings account and in the case of the RRIF it was a guaranteed investment certificate or GIC;

(c) the benefits received from the RRSP and RRIF.

[32] It is the situs of (c) that is relevant for the purpose of section 87 of the Indian Act. Nonetheless, this determination cannot be made in a vacuum and the situs of (a) or (b) may assist in determining the situs of (c).

[33] I start the analysis with the decision of the Supreme Court of Canada in Nowegijick v. The Queen et al., 83 DTC 5041, in which Dickson J. (as he then was) speaking for the Court, adopted the language of the Supreme Court of Illinois in Bachrach v. Nelson, (1932) 182 N.E. 909, in holding that income and taxable income are personal property and that a tax on income is a tax on the property itself.

[34] Beyond that the case is of little assistance in determining the situs of income of the type involved here. An amount withdrawn from an RRSP or a RRIF is not income in any conventional sense. It is (except possibly for the portion that represents interest or other accrued income) a return of capital that is taxable only because the Income Tax Act says it is taxable. The justification for taxing such amounts is that they represent amounts that were deducted in computing income previously or were in part made up of amounts of income or capital gain that were not taxed so long as they remained in the RRSP or RRIF.

[35] It is difficult then to see how Nowegijick, which dealt with wages for services performed off the reserve for an employer that was on the reserve, can assist here. At page 5043, Dickson J. said:

One point might have given rise to argument. Was the fact that the services were performed off the reserve relevant to situs? The Crown conceded in argument, correctly in my view, that the situs of the salary which Mr. Nowegijick received was sited on the reserve because it was there that the residence or place of the debtor, the Gull Bay Development Corporation, was to be found and it was there the wages were payable. See Cheshire Private International Law (10th ed.) pp. 536 et seq. and also the judgment of Thurlow A.C.J. in R. v. National Indian Brotherhood, [1979] 1 F.C. 103 particularly at pp. 109 et seq.

[36] Of more direct relevance to this case is Williams v. The Queen, 92 DTC 6320 (S.C.C.). That case involved the exemption from taxation of unemployment insurance benefits for which the taxpayer qualified because of his former employment with a logging company situated on the reserve and the employment by the band. In both cases, the employer was on the reserve, the work was performed on the reserve and the appellant was paid on the reserve.

[37] The cheques for the unemployment insurance benefits were paid out of the Canada Employment and Immigration Commission's regional computer centre in Vancouver.

[38] The Supreme Court of Canada held that the situs of the unemployment insurance benefits was on the reserve and that they were therefore not taxable. It would serve no useful purpose for me to reproduce several pages of quotations from the judgment of Gonthier J. It is sufficient if I simply summarize those propositions that the case appears to establish and that are of application here:

(a) In determining exemption under the Indian Act it is important that the nature and purpose of the exemptions be taken into account. That purpose is to preserve the entitlements of Indians to their reserve lands and ensure that the use of their property on the reserve lands not be eroded by the ability of governments to tax or creditors to seize.

(b) The residence of the debtor as a basis for determining for the situs of a debt (the usual conflicts of laws test), is not a reliable basis for determining situs for the purposes of the Indian Act. It may be a factor and even an important one, but its importance must be weighed within the context of the overall purposes of the Indian Act.

(c) The balancing of the relevant connecting factors in determining situs, while useful, is an operation that must be undertaken with some care, in which one must strike a balance between the formulation of too rigid categories on the one hand and the use of overly changeable and impredictable criteria on the other.

[39] At page 6326 Gonthier J. said:

The approach which best reflects these concerns is one which analyzes the matter in terms of categories of property and types of taxation. For instance, connecting factors may have different relevance with regard to unemployment insurance benefits than in respect of employment income, or pension benefits. The first step is to identify the various connecting factors which are potentially relevant. These factors should then be analyzed to determine what weight they should be given in identifying the location of the property, in light of three considerations: (1) the purpose of the exemption under the Indian Act; (2) the type of property in question; and (3) the nature of the taxation of that property. The question with regard to each connecting factor is therefore what weight should be given that factor in answering the question whether to tax that form of property in that manner would amount to the erosion of the entitlement of the Indian qua Indian on a reserve.

[40] Before I endeavour to apply these guidelines to this case, there is one other case, Recalma et al. v. The Queen, 98 DTC 6238 (F.C.A.), to which reference may usefully be made. In that case the appellant claimed exemption on income from bankers' acceptances and mutual funds acquired at the branch of a bank situated on a reserve.

[41] Speaking for the court, Linden JA described bankers' acceptances as short-term notes of third parties guaranteed by a bank. They are sold at a discount and redeemed at face value. The mutual funds formed part of the bank's money market fund which invested in short term debts of governments or corporations, or the bank's mortgage fund.

[42] After referring to the passage from Williams set out above he said at pages 6239-6240:

In evaluating the various factors the Court must decide where it "makes the most sense" to locate the personal property in issue in order to avoid the "erosion of property held by Indians qua Indians" so as to protect the traditional Native way of life. It is also important in assessing the different factors to consider whether the activity generating the income was "intimately connected to" the Reserve, that is, an "integral part" of Reserve life, or whether it was more appropriate to consider it a part of "commercial mainstream" activity. (See Folster v. The Queen (1997), 97 DTC 5315 (F.C.A.)) We should indicate that the concept of "commercial mainstream" is not a test for determining whether property is situated on a reserve; it is merely an aid to be used in evaluating the various factors being considered. It is by no means determinative. The primary reasoning exercise is to decide, looking at all the connecting factors and keeping in mind the purpose of the section, where the property is situated, that is, whether the income earned was "integral to the life of the Reserve", whether it was "intimately connected" to that life, and whether it should be protected to prevent the erosion of the property held by Native qua Natives.

[43] In approving the manner in which the trial judge, Hamlyn J., dealt with the various factors and the weight which he accorded to them, Linden J. observed that the weight of any particular factor may vary from case to case. In Recalma more weight was accorded to the residence of the issuer and less to the residence of the taxpayer, the source of the capital with which the security was bought, where the security document was held and where the income was spent.

[44] The appellant seeks to distinguish the Recalma case on the basis that bankers' acceptances are issued by persons who were not on the reserve and the mutual funds were managed by persons who had no connection with the reserve, whereas here the RRSP and the RRIF were, on the appellant's characterization, savings accounts and therefore deposit accounts that are located on the reserve in accordance with section 461 of the Bank Act.

[45] I shall deal with these two points before commenting on the various connecting factors. I do not think the RRSP or the RRIF are merely bank accounts. They are complex legal arrangements designed to achieve a fiscal result contemplated by the Income Tax Act. If such an arrangement can be said to have a situs at all it is not one that can be localized on the reserve. The relationship is with the CIBC as a whole, and its head office is in Toronto. The moneys invested in the RRSP and the RRIF, and therefore in the savings account and the GIC, are part of the assets of the CIBC as a whole. They are neither assets nor obligations of the Park Royal branch.

[46] I come now to the analysis required by Williams and Recalma:

(a) The nature of the income: The income is essentially an amount that represents a return of capital that the Income Tax Act requires be included in income. That amount originated in an off-reserve bank loan that was paid off out of the income from the appellant's off-reserve legal practice. The payment of the funds to the RRSP, which were later transferred to an RRIF, resulted in a reduction of the appellant's income under the Income Tax Act.

(b) The purpose of the exemption under the Indian Act: Is the granting of the exemption essential to achieving the purpose of section 87 of the Indian Act as set out in Mitchell v. Peguis Indian Band [1990] 2 S.C.R. 85 and adopted in Williams?Would the denial of the exemption affect adversely the preservation of the entitlements of Indians to their reserve lands?

I have difficulty seeing how the denial of the exemption claimed in this case could be inimical to the preservation of the entitlements of Indians to their reserve lands or could erode their use of the reserve lands. The funds contributed to the RRSP and indirectly to the RRIF came from off-reserve sources and their taxation upon withdrawal cannot result in any erosion of entitlements or property on the reserve.

(c) The investment of money in the RRSP or the RRIF was not "intimately connected to the Reserve" or "an integral part of Reserve life" (Recalma, at page 6240; see also Folster v. The Queen, 97 DTC 5315).

It is perhaps less obvious, in the case of an RRSP or an RRIF, that they were part of "commercial mainstream activity". Investing in such vehicles is simply taking advantage of a method given to Canadians under the Income Tax Act to defer taxation on a part of their income. It does, however, involve investing in a competitive market that is off the reserve.

(d) The nature of the taxation of the property: The taxation of the benefits from the RRSP and the RRIF is part of a statutory scheme that allows a deduction of a contribution to an RRSP in one year and requires an inclusion in a later year when the money comes out.

[47] Although, I place no weight on this factor, it does not strike me as particularly unfair, if a person deliberately chooses to take advantage of the favourable tax treatment granted where money is contributed to an RRSP, that that person should be prepared to accept the corresponding tax burden when the money comes out. If, however, the law permits the result for which the appellant contends I must give effect to it.

[48] I note that Gonthier J. said in Williams at page 6324:

Therefore, under the Indian Act, an Indian has a choice with regard to his personal property. The Indian may situate this property on the reserve, in which case it is within the protected area and free from seizure and taxation, or the Indian may situate this property off the reserve, in which case it is outside the protected area, and more fully available for ordinary commercial purposes in society. Whether the Indian wishes to remain within the protected reserve system or integrate more fully into the larger commercial world is a choice left to the Indian.

[49] A number of other factors should be mentioned and I list them, but not in any particular order of importance:

1. The appellant lives off-reserve and earned the money which formed the ultimate basis of the contributions off-reserve. I tend to give relatively less weight to these factors.

2. The RRIF or RRSP are in my opinion not bank accounts, nor are the obligations of the CIBC located on the reserve.

3. The funds held in the RRSP and the RRIF were not held at the Park Royal branch of the CIBC.

4. The funds that were paid out of the RRIF and the RRSP were paid from the Head Office of the CIBC and were transferred to the appellant's account at the main branch of the CIBC in Vancouver. It cannot be concluded, from a careful reading of the Agreed Statement of Facts, that the proceeds from the RRSP or the RRIF ever passed through the Park Royal branch.

5. The CIBC is not located on the reserve, although one branch is.

6. It cannot be said that the income earned is integral to the life of the reserve. In fact it had nothing to do with the reserve. There is no factor connecting the income to the reserve apart from the fact that the RRSP and the RRIF were opened at the CIBC branch on the reserve.

[50] The appeal is dismissed.

Signed at Ottawa, Canada, this 6th day of May 1999.

"D.G.H. Bowman"

J.T.C.C.