28 October 1993 Income Tax Severed Letter 9329598 - Taxation of Indian Employment Income

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.

MINISTER/DM'S OFFICE                        Y.S. 93-1659
ADM'S OFFICE
RETURN TO RULINGS, ROOM 303, MET. BLDG.
AUTHOR
SUBJECT OR CORPORATE CASE FILE
October 28, 1993

XXXXXXXXXX

Dear XXXXXXXXXX

          Mr. Pierre Gravelle, Deputy Minister of Revenue Canada,
Customs, Excise and Taxation, has asked me to respond to your letter of
August 24, 1993, in which you expressed concerns with respect to the
consultation process regarding the taxation of status Indians as a
result of the Williams case.

          The Supreme Court of Canada, in the Sparrow case to
which you referred, stated that the Government of Canada must justify
proposed infringements on constitutionally protected aboriginal and
treaty rights.  The Department does not intend to alter any aboriginal
or treaty rights.  The Department does not intend either to amend the
policy which is at the base of the tax exemption in Section 87 of the
Indian Act.  The sole purpose of the Department is to properly apply the
Income Tax Act and Section 87 of the Indian Act as a result of the
Williams case.

          Notwithstanding that the Sparrow decision does not
have application in this instance since we do not intend to infringe on
constitutionally protected aboriginal and treaty rights but to merely
interpret a statutory provision, we recognize that the consultative
approach is the best way to develop our guidelines and therefore the
Department has consulted with many individuals and organizations.

                          XXXXXXXXXX

         It was not intended to limit the consultations in any way.  
The Department is interested in hearing from all interested parties 
and has not limited itself to the views of any one group.  The 
Department has consulted with interested parties across the country 
and we have received many constructive written representations.  We 
would be pleased to review your comments on any factors you consider 
are relevant in connecting employment income to a reserve.  I would 
invite you to write to Mr. Bryan Dath of the Department immediately 
as we intend to conclude the consultation process very soon, following 
which draft guidelines will be made available to a large number of 
Indian organizations and interested parties.  His address is:

          B.W. Dath, Director
          Business and General Division
          Rulings Directorate
          Legislative and Intergovernmental Affairs Branch
          Revenue Canada, Customs, Excise and Taxation
          Room 300
          88 Metcalfe Street
          Ottawa, Ontario
          K1A 0L8

          You have also commented on the draft working paper entitled
"A Working Paper on Indian Government Taxation".  As this paper was
prepared by the Department of Finance, I will make them aware of your
concerns.

          I would like to reiterate that it would be most useful to
have your input in the development of the guidelines.  I am confident
that with the participation of interested parties an appropriate
application of the Court decision will be obtained.

                                Yours sincerely,

                                Denis Lefebvre
                                Assistant Deputy Minister
                                Legislative and Intergovernmental
                                  Affairs Branch

J. Humphrey 952-0245 October 20, 1993 932959 Y.S. #93-1659