Principal Issues: Opinions on:
1. Is an honorarium a gift or income when given to a Status Indian for ceremonial services performed?
2. If the honorariums are paid to Status Indians, are they exempt from tax under 81(1)(a)?
Position: 1. Honorariums are income in this situation.
2. Whether the honorarium is taxable or exempt from tax is a question of fact, but likely taxable. Connecting factors test apply.
Reasons: 1. Honorariums have been determined to be income and do not fall within the common definition of gifts. -Supported by CRA publications and court cases.
2. The income must be evaluated in light of the connecting factors tests. The fact that the income is received by a Status Indian for performing a ceremonial service does not in itself tie the income to a reserve. There appears to be insufficient connecting factors to tie the income to a reserve.