28 May 1992 Income Tax Severed Letter 9214475 - Indian Remission Order - Training Allowances

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.

SUBJECT: INDIAN REMISSION ORDER - TRAINING ALLOWANCES SECTION: 81(1)(a)]

Mr. Richard Courville
Chief, Program Development
Employment Policies Branch Glen Thornley
Employment and Immigration Canada (613) 957-2101
140 Promenade du Portage 921447
Ottawa, Ontario
K1A 0J9

May 28, 1992

Dear Mr. Courville

Re: Indian Remission Order-Training Allowances

This is in reply to your letter of March 17, 1992 addressed to Ms. Ida McDonald, Chief, Coverage and Legislation, which was given to us for reply. You refer to correspondence received by your Saskatchewan regional office from the Regina District Office with respect to the above noted subject and ask for confirmation of the comments made therein regarding the income tax consequences of Status Indians who are in receipt of training allowances under the National Training Act or the Unemployment Insurance Act.

At the outset, we note that we have reviewed the correspondence between your Regina office and ours. We concur with the answers given by our Regina office in their letter dated November 28, 1991. Your Regina official raised the question of when a status Indian is resident on a reserve in connection with the phrase 'was resident on a reserve" as used in paragraph (b)(iv) of the Indian Remission Order as amended on February 14, 1991 (P.C. 1991-264 14 February, 1991). There it states that amounts covered by the Remission Order include "each amount received by the taxpayer at a time when the taxpayer was resident on a reserve as or on account of a training allowance from a government, municipality or other public authority."

In order to be covered by the Remission Order, the training allowance payments must be received by the status Indian at a time when he or she was resident on a reserve, irrespective of where the training took place. Thus a recipient would qualify under the Order if, while a resident of a reserve, training was taken at an off-reserve site.

In our view the resolution of the matter rests in the meaning of the word 'resident'. In this regard Interpretation Bulletin IT-221R2 states with respect to being resident in Canada, "The term 'resident' is not defined in the Income Tax Act. The Courts have held that an individual is resident in Canada for tax purposes if Canada is the place where he, in the settled routine of his life, regularly, normally or customarily lives. In making this determination, all of the relevant facts in each case must be considered." Similarly we can say that being resident on a reserve is a question of fact. We would consider an Indian to be resident on a reserve if the reserve is the place where he or she, in the settled routine of life, regularly, normally or customarily lives. Thus, as indicated above, the answers given by the Regina District Taxation Office in their letter of November 28, 1991 appear to be correct.

We trust that this is the information you require.

Yours truly,

E. Wheeler
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental Affairs Branch

• c. c. Mr. R. Cousineau Source Deductions