Bowie
T.C.J.:
The
Appellant
is
an
Indian,
as
defined
by
the
Indian
Act)
and
a
member
of
the
Fort
Good
Hope
Dene
Indian
Band
(the
Band).
The
Band
is
located
at
Fort
Good
Hope
in
the
Northwest
Territories,
within
the
boundaries
of
Treaty
No.
11,
to
which
it
is
an
adherent.
In
1992
the
Appellant
was
Chief
of
the
Band,
for
which
he
was
paid
a
salary
of
$56,420.00.
That
salary
was
paid
by
the
Band,
out
of
funds
provided
to
it
by
the
Crown
in
right
of
Canada
under
a
program
known
as
Band
Support
Funding.
What
is
at
issue
in
this
appeal
is
whether
or
not
that
salary
was
subject
to
income
tax.
The
Appellant
relies
on
subsections
87(1)
and
(2)
and
paragraph
90(
!)(/>)
of
the
Indian
Act
together
with
paragraph
81(1)(a)
of
the
Income
Tax
Act?
in
support
of
the
position
that
his
salary
was
exempt.
Indian
Act
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.
90(1)
For
the
purposes
of
sections
87
and
89,
personal
property
that
was
(b)
given
to
Indians
or
to
a
band
under
a
treaty
or
agreement
between
a
band
and
Her
Majesty,
shall
be
deemed
always
to
be
situated
on
a
reserve.
Income
Tax
Act
81(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
the
Parliament
of
Canada,
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;
Loi
sur
les
Indiens
87(1)
Nonobstant
toute
autre
loi
fédérale
ou
provinciale,
mais
sous
réserve
de
l’article
83,
les
biens
suivants
sont
exemptés
de
taxation:
a)
le
droit
d’un
Indien
ou
d’une
bande
sur
une
réserve
ou
des
terres
cédées;
b)
les
biens
meubles
d’un
Indien
ou
d’une
bande
situés
sur
une
réserve.
(2)
Nul
Indien
ou
bande
n’est
assujetti
à
une
taxation
concernant
la
propriété,
l’occupation,
la
possession
ou
l’usage
d’un
bien
mentionné
aux
alinéas
(1
)a)
ou
b)
ni
autrement
soumis
à
une
taxation
quant
à
l’un
de
ces
biens.
90(1)
Pour
l’application
des
articles
87
et
89,
les
biens
meubles
qui
ont
été:
b)
soit
donnés
aux
Indiens
ou
à
une
bande
en
vertu
d’un
traité
ou
accord
entre
une
bande
et
Sa
Majesté,
sont
toujours
réputés
situés
sur
une
réserve.
Loi
de
l’impôt
sur
le
revenu
81(1)
Ne
sont
pas
inclus
dans
le
calcul
du
revenu
d’un
contribuable
pour
une
année
d’imposition:
a)
une
somme
exonérée
de
l’impôt
sur
le
revenu
par
toute
autre
loi
fédérale,
autre
qu’un
montant
reçu
ou
à
recevoir
par
un
particulier
qui
est
exonéré
en
vertu
d’une
disposition
d’une
convention
ou
d’un
accord
fiscal
conclu
avec
un
autre
pays
et
qui
a
force
de
loi
au
Canada;
The
Crown
contends
that
section
87
has
no
application
in
this
case
because
no
reserve
has
been
set
aside
for
the
Fort
Good
Hope
Band.
The
Appellant’s
salary,
therefore,
cannot
be
said
to
be
“situated
on
a
reserve”
within
the
meaning
of
that
expression
as
it
is
used
in
section
87,
so
as
to
exempt
it
from
tax.
The
Crown
also
takes
the
position
that
paragraph
90(1)(b)
does
not
apply.
As
to
this,
it
says
that
the
Appellant’s
salary
was
not
paid
from
money
given
to
the
Band
“...under
a
treaty
or
agreement
between
[the]
Band
and
Her
Majesty...”,
as
the
words
of
that
paragraph
require,
and
even
if
the
money
were
so
given,
it
was
no
longer
subject
to
the
deeming
provision
once
it
had
passed,
in
the
form
of
salary,
from
the
Band
to
the
Appellant.
At
the
opening
of
the
trial
I
was
advised
by
counsel
that
to
try
the
issue
whether
or
not
the
Fort
Good
Hope
Band
is
situate
on
a
reserve
would
require
perhaps
as
much
as
two
weeks
of
evidence,
including
the
evidence
of
expert
witnesses.
The
cost
of
this
would
be
considerable,
and
would
be
unnecessary
if
the
issue
were
ultimately
to
be
resolved
in
favour
of
the
Appellant
on
the
basis
of
section
90.
For
this
reason,
I
agreed
to
the
joint
request
of
counsel
that
the
trial
proceed
only
on
the
section
90
issue,
and
be
resumed
to
deal
with
the
question
whether
or
not
the
Band
is
situate
on
a
reserve
only
if
the
Appellant
does
not
succeed
under
that
section.
As
will
appear,
I
have
reached
the
conclusion
that
the
Appellant
is
entitled
to
succeed
on
the
basis
of
the
deeming
provision
in
section
90,
and
so
it
will
therefore
not
be
necessary
to
resume
the
trial.
The
evidence
in
support
of
the
Appellant’s
case
consists
principally
of
a
number
of
documents,
including
submissions
to
the
Treasury
Board
of
Canada
and
decisions
of
that
body
in
the
form
of
letters
to
officials
of
the
de-
partment
of
government
responsible
for
native
affairs
from
time
to
time,
a
letter
from
the
Department
to
the
Appellant
in
his
capacity
as
Chief
of
the
Band,
and
the
application
made
by
the
Band
to
the
Department
for
BSF
for
the
relevant
year.
In
addition,
counsel
read
in
certain
answers
given
on
the
examination
for
discovery
of
an
officer
of
the
Crown,
Mr.
Mansel
Barstow,
a
Senior
Policy
Analyst
in
the
Department,
whose
involvement
with
the
BSF
program
extends
over
some
20
years
or
more.
Mr.
Barstow
was
also
called
by
counsel
for
the
Crown.
From
the
evidence
of
Mr.
Barstow,
and
from
the
documents,
it
is
apparent
that
through
the
BSF
program
the
government
of
Canada
has,
over
a
period
of
some
three
decades,
shifted
responsibility
for
the
delivery
of
certain
basic
programs
for
the
benefit
of
native
people
from
the
Department
to
Band
Councils,
not
only
in
the
Northwest
Territories,
but
throughout
the
country.
To
do
so,
of
course,
required
that
the
necessary
funding
be
made
available
to
the
Bands,
not
only
to
carry
out
the
programs
in
question,
but
also
to
provide
for
a
level
of
Band
government
adequate
to
administer
the
programs
and
the
funding
for
them.
It
was
for
this
that
the
government
initiated
the
BSF
program.
It
was
explained
this
way
in
a
letter
from
the
Area
Manager
of
Funding
and
Community
Development
of
the
Department
to
Chief
Kakfwi
in
September
1992:
Band
Support
Funding
is
intended
to
provide
Bands
with
sufficient
core
funding
to
allow
them
to
administer
their
affairs
and
adequately
represent
the
interests
of
their
members.
All
duly
constituted
Band
Councils
are
eligible
to
receive
the
BSF
grant
allocated
to
them
each
year
through
the
BSF
formula.
Band
Councils
may
utilize
the
funds
provided
to
defray
such
expenses
as:
•
Honoraria
and
travel
expenses
for
the
Chief
and
Councillors;
•
Salaries
and
benefits
for
administrative
staff;
•
Office
rent,
utilities,
janitorial
services,
supplies
and
equipment;
¢
Telephone
and
facsimile
transmission
costs;
•
Postage
and
bank
charges;
and
•
Annual
audit
and
other
professional
fees.
PLEASE
NOTE:
The
above
list
is
meant
simply
as
a
guide
for
budgeting
purposes.
The
only
item
which
Council
must
budget
for
under
the
BSF
policy
is
the
annual
audit
fee.
There
are
three
separate
questions
which
I
must
answer
to
determine
whether
or
not
the
Appellant
can
succeed
under
this
branch
of
the
case.
1.
Are
the
BSF
funds
paid
to
the
Band
pursuant
to
an
agreement?
2.
If
so,
is
it
an
agreement
of
the
kind
referred
to
in
paragraph
90(
1
)(£?)
of
the
Indian
Act?
3.
If
the
answers
to
these
questions
are
affirmative,
does
paragraph
90(
1
)(£>)
have
the
effect
of
deeming
the
Appellant’s
salary
to
be
paid
to
him
on
a
reserve,
or
does
its
deeming
effect
end
with
the
disbursement
of.
the
funds
by
the
Band?
Question
1
—
is
there
an
agreement?
The
words
“agreement”
in
the
English
language,
and
“accord”
in
the
French
language,
both
connote
a
concept
broader
than
simply
“a
contract”
or
“un
contrat”.
It
is
not
every
agreement
that
may
be
enforced
at
law.
The
Federal
Court
of
Appeal,
in
Bow
River
Pipelines
Ltd.
v.
The
Queen,
recently
considered
the
breadth
of
the
word
agreement,
and
found
it
to
encompass
more
than
simply
a
legally
binding
contract.
Desjardins
J.A.,
in
reasons
concurred
in
by
Decary
J.A.
and
Chevalier
D.J.,
specifically
approved
the
conclusion
of
Christie
A.C.J.
in
this
Court
that
the
words
“agreement
in
writing”,
found
in
a
transitional
provision
of
the
Income
Tax
Act
dealing
with
resource
properties,
did
not
require
that
the
agreement
create
contractual
rights
and
obligations.
In
my
view
the
requirement
that
the
funds
must
have
been
paid
under
an
agreement
is
satisfied
in
this
case.
The
letter
of
September
1992,
from
which
I
have
quoted
above,
together
with
the
Band’s
application
for
the
funds,
constitute
an
agreement
that
the
funds
will
be
paid
by
the
Department,
that
they
will
be
used
by
the
Band
for
their
intended
purpose,
and
that
the
Band
will
submit
to
an
audit
as
to
the
use
of
them
as
required.
It
is
certainly
arguable
that
this
falls
short
of
an
enforceable
contract,
but
I
am
satisfied
that
it
comprises
an
agreement.
Before
leaving
the
first
question,
I
should
note
that
I
was
invited
by
Mr.
Carroll
to
find
that
the
BSF
funds
were
paid
to
the
Band
pursuant
to
Treaty
No.
11.
I
do
not
accept
this
submission,
for
reasons
which
I
will
come
to
shortly.
Question
2
—
is
it
an
agreement
to
which
paragraph
90(l)(b)
applies?
The
deeming
provision
in
section
90
of
the
Indian
Act
was
considered
by
the
Supreme
Court
of
Canada
in
the
Mitchell
case.
The
principal
judgment
is
that
of
La
Forest
J.,
and
so
far
as
it
concerns
the
interpretation
of
section
90
it
is
the
opinion
of
six
of
the
seven
judges
who
comprised
the
Court.
In
it
he
made
an
exhaustive
review
of
sections
87,
88
and
90,
both
textually
and
in
their
historical
context,
and
of
the
jurisprudence
surrounding
them,
and
concluded
that
the
purpose
and
effect
of
section
90
is
to
extend
the
protections
of
sections
87
and
88
of
the
Indian
Act
to
property
acquired
by
Indians
from
the
Crown
in
right
of
Canada
pursuant
to
treaties,
or
agreements
ancillary
to
treaties,
no
matter
where
it
may
physicallly
be
situated.
As
he
put
it:/
the
terms
‘treaty’
and
‘agreement’
in
s.
90(1)(b)
take
colour
from
one
another.
It
must
be
remembered
that
treaty
promises
are
often
couched
in
very
general
terms
and
that
supplementary
agreements
are
needed
to
flesh
out
the
details
of
the
commitments
undertaken
by
the
Crown;
As
to
the
purpose
of
these
provisions,
he
said:
...the
statutory
notional
situs
of
s.
90(1)(b)
is
meant
to
extend
solely
to
personal
property
which
enures
to
Indians
through
the
discharge
by
“Her
Majesty”
of
her
treaty
or
ancillary
obligations.
What
was
at
issue
in
the
Mitchell
case,
so
far
as
it
was
concerned
with
paragraph
90(1
)(Z?)
of
the
Indian
Act,
was
simply
whether
the
reference
there
to
“Her
Majesty”
was
limited
to
the
Crown
in
right
of
Canada,
or
included
the
Crown
in
right
of
the
provinces
as
well.
It
was
in
that
context
that
the
Court
considered
that
the
reference
to
agreements
was
concerned
with
obligations
of
the
Crown
ancillary
to
its
treaty
obligations.
The
Court
did
not
have
to,
and
did
not,
define
what
sorts
of
agreements
would
be
found
to
be
“ancillary
obligations”.
It
was
required
only
to
deal
with
the
question
whether
or
not
the
protection
of
a
deemed
situs
on
a
notional
reserve
should
be
extended
to
property
received
by
the
Indian
Appellants
from
the
Crown
in
right
of
Manitoba
as
the
result
of
what
was,
in
effect,
a
commercial
transaction.
Throughout
his
analysis
La
Forest
J.
differentiated
between
two
types
of
property
-
that
acquired
and
held
by
Indians
in
their
capacity
as
Indians,
which
paragraph
90(1
)(Z?)
is
there
to
protect
through
the
concept
of
a
notional
situs,
and
that
which
is
held
by
Indians
in
the
course
of
and
as
the
result
of
their
activities
in
what
he
calls
“the
commercial
mainstream”.
This
distinction
is
explained
by
him
in
the
following
way:
When
Indian
bands
enter
the
commercial
mainstream,
it
is
to
be
expected
that
they
will
have
occasion,
from
time
to
time,
to
enter
into
purely
commercial
agreements
with
the
provincial
Crowns
in
the
same
way
as
with
private
interests.
The
provincial
Crowns
are,
after
all,
important
players
in
the
market-place.
If,
then,
an
Indian
band
enters
into
a
normal
business
transaction,
be
it
with
a
provincial
Crown,
or
a
private
corporation,
and
acquires
personal
property,
be
it
in
the
form
of
chattels
or
debt
obligations,
how
is
one
to
characterize
the
property
concerned?
To
my
mind,
it
makes
no
sense
to
compare
it
with
the
property
that
enures
to
Indians
pursuant
to
treaties
and
their
ancillary
agreements.
Indians
have
a
plenary
entitlement
to
their
treaty
property;
it
is
owed
to
them
qua
Indians.
Personal
property
acquired
by
Indians
in
normal
business
dealings
is
clearly
different;
it
is
simply
property
anyone
else
might
have
acquired,
and
I
can
see
no
reason
why
in
those
circumstances
Indians
should
not
be
treated
in
the
same
way
as
other
people.
It
was
argued
by
Mr.
Carroll
for
the
Appellant
that
the
agreement
here,
which
I
have
found
is
comprised
of
the
Crown’s
offer
of
the
BSF
funding
and
the
Band’s
application
for
it,
together
with
its
agreement
to
use
the
funds
only
for
the
intended
purposes,
and
to
submit
to
an
audit
in
that
behalf,
springs
from
the
terms
of
Treaty
No.
11.
The
Band,
he
says,
lies
within
the
boundaries
of
the
Treaty,
and
it
receives
benefits
under
it.
The
agreement,
then,
is
simply
a
vehicle
for
the
delivery
of
a
part
of
those
benefits.
Given
the
uncontested
evidence
of
Mr.
Barstow,
that
conclusion
is
not
open
to
me.
His
evidence
was
that
the
BSF
program
was
not
related
to
any
treaty
rights,
and
that
it
was
made
available
in
the
same
way,
and
on
the
same
terms,
to
all
Bands
across
the
country.
In
my
opinion
it
is
not
necessary,
however,
for
the
Appellant
to
show
that
the
BSF
received
by
the
Band
has
a
direct
connection
to
Treaty
No.
11,
or
any
treaty,
in
order
to
bring
it
within
the
words
“...under
a[n]
...
agreement
29
as
they
appear
in
paragraph
90(1)(d).
As
I
have
pointed
out
above,
the
distinction
drawn
by
the
Supreme
Court
in
Mitchell
is
between
what
La
Forest
J.
calls
“...property
[which]
enures
to
Indians
as
an
incident
of
their
status...”
on
the
one
hand,
and
that
which
they
acquire
“...when
engaging
in
the
cut
and
thrust
of
business
deal-
ings
in
the
commercial
mainstream...”
on
the
other.
It
is
beyond
question
that
the
BSF
funds
fall
into
the
former
category,
and
not
the
latter.
The
only
purpose
for
which
Parliament
has
appropriated
them
is
to
enable
Bands
throughout
the
country
to
administer
their
own
affairs,
at
least
to
a
greater
degree
than
was
previously
possible.
Short
of
benefits
paid
directly
under
the
specific
terms
of
a
treaty,
or
the
consideration
for
the
sale
of
Indian
lands,
it
is
difficult
to
see
what
could
better
exemplify
property
held
by
Indians
qua
Indians.
It
would
defeat
the
purpose
of
the
program,
and
of
sections
87
and
89
of
the
Indian
Act
as
well,
if
these
funds
were
left
lacking
the
protection
of
paragraph
90(1
)(Z?)
in
the
case
of
Bands
which
are
not
situate
on
a
reserve.
In
my
view
it
is
to
avoid
exactly
that
type
of
anomaly
that
section
90
was
enacted.
I
find
that
the
agreement
here
in
issue
is
one
that
is
within
the
contemplation
of
paragraph
90(1)(b),
notwithstanding
that
it
cannot
be
said
to
be
ancillary
to
a
treaty.
Question
3
—
does
paragraph
90(1)(b)
deem
the
Appellant’s
salary
to
be
paid
on
the
reserve?
It
was
argued
by
Mr.
Wheeler
for
the
Crown
that
even
if
the
protection
of
paragraph
90(1)(b)
is
found
to
extend
to
the
BSF
funds
in
the
hands
of
the
Band
in
this
case,
the
appeal
still
must
fail
(at
least
on
this
ground)
because
the
protection
extends
only
to
the
Indian,
or
the
Band,
receiving
the
property
directly
from
Her
Majesty
under
the
treaty
or
agreement,
and
not
to
a
subsequent
recipient.
That,
in
this
case,
is
the
Fort
Good
Hope
Band,
and
not
the
Appellant.
When
part
of
those
funds
are
subsequently
turned
over
by
the
Band
to
the
Appellant
in
payment
of
his
salary,
it
is
argued,
they
are
no
longer
within
the
protection
of
the
deeming
provision.
In
my
view
that
is
much
too
mechanical
and
restrictive
an
interpretation
of
paragraph
90(1)(b),
and
I
am
bound
to
reject
it
in
favour
of
a
functional
one
which
will
achieve
the
purpose
of
the
section,
taking
into
account
the
whole
legislative
scheme.
It
would
be
an
odd
result
indeed
if
I
were
to
find
that
Parliament
intended
that
these
funds
should
have
the
protection
of
section
87
in
the
hands
of
the
Band
through
their
location
on
a
notional
reserve
situs,
but
that
that
protection
disappears
when
the
Band
pays
a
part
of
them
to
the
Appellant,
no
doubt
at
the
Band’s
offices,
for
fulfilling
the
important
traditional
office
and
administrative
role
of
Chief
of
the
Band.
Such
an
“intuitively
anomalous”
result
should
be
avoided
if
the
statutory
language
admits
of
another
interpretation,
as
the
language
here
does.
The
operative
phrase
which
has
the
deeming
effect
in
subsection
90(1)
reads:
shall
be
deemed
always
to
be
situated
on
a
reserve
sont
toujours
réputés
situés
sur
une
réserve
(emphasis
added)
The
presumption
against
tautology
requires
that
the
words
“always”
in
the
English
version
and
“toujours”
in
the
French
version
be
given
some
meaning.
They
must
mean
something
more
than
simply
“on
each
occasion
that
such
a
payment
is
made”,
as
that
result
would
be
achieved
without
their
inclusion
in
the
legislative
text.
The
preferable
interpretation,
and
the
true
meaning
of
the
words
intended
by
Parliament,
is
that
the
funds
shall
be
deemed
to
be
situated
on
a
reserve
for
so
long
as
they
are
traceable,
and
are
to
be
found
in
the
hands
of
either
an
Indian
or
a
Band.
In
my
view
it
is
only
through
this
interpretation
that
full
effect
can
be
given
to
the
provision
to
ensure
that
funds
received
by
native
people,
and
by
Bands,
under
agreements
with
the
government
of
Canada
receive
the
protection
from
taxation
and
from
execution
which
Parliament
clearly
intends
them
to
have.
Protection
of
the
funds
only
in
the
hands
of
the
Indian
or
Band
which
is
the
initial
recipient
would
be
at
best
a
half-hearted
protection.
It
is
to
be
expected
that
funds
provided
to
Bands
under
the
BSF
program
will,
at
least
in
part,
be
used
to
make
payments
to
members
of
the
Band,
which
will
have
the
character
of
income
in
their
hands.
A
number
of
potential
uses
of
the
funds
may
be
found
in
the
September
1992
letter
from
which
I
have
quoted.
Some
payees,
for
example
for
telephone,
postage
and
bank
charges,
will
be
non-Indians.
Others,
such
as
the
Appellant,
will
be
Indians.
Funds
used
to
make
payments
to
non-Indians
will
not,
of
course,
continue
to
be
deemed
to
be
situate
on
the
reserve.
But
so
long
as
they
are
in
the
hands
of
a
person,
or
a
Band,
to
whom
sections
87
and
89
of
the
Indian
Act
may
apply,
the
legislation
can
only
achieve
its
purpose
if
the
deeming
effect
of
paragraph
90(1)(b)
continues.
In
conclusion,
I
find
that
the
salary
paid
to
Chief
Kakfwi
in
1992
was
paid
out
of
funds
which,
by
reason
of
paragraph
90(1
)(/?),
are
deemed
to
be
situate
on
a
reserve,
both
in
the
hands
of
the
Band,
and
subsequently
in
the
hands
of
the
Appellant.
The
appeal
is
allowed,
with
costs,
and
the
assess-
ment
is
referred
back
to
the
Minister
for
reconsideration
and
reassessment
on
the
basis
that
the
salary
received
by
the
Appellant
from
the
Band
is
not
to
be
included
in
computing
the
income
of
the
Appellant
for
the
1992
taxation
year.
Appeal
allowed.
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