Harold W. Brant v. Minister of National Revenue, [1992] 2 CTC 2635, 92 DTC 2274

Sobier, T.C.C.J.:—The appellant appeals from the assessments of the respondent whereby the respondent included in the appellant's income $30,243.86 and $25,317 representing income from employment, and $1,031.14 and $1,554.24 representing amounts received by the appellant as family allowance payments for the 1987 and 1988 taxation years respectively.

I. Facts and issues

The appellant is an "Indian" as defined in section 2 of the Indian Act, R.S.C. 1985, c. 1-6, and is a member of the Tyendinaga Band. In the taxation years in issue the appellant resided on the Tyendinaga Reserve #38 and was employed off the reserve by the Department of National Revenue, Customs and Excise as an audit officer.

The parties agreed that the appellant's employment income and family allowance payments are taxable income but disagreed on whether it qualified for an exemption from taxation. There are two issues in this appeal. The first is whether the appellant's income is exempt from taxation pursuant to paragraphs 81 (1)(a) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72,

c. 63) (the "Act") and 87(1)(b) of the Indian Act. The second issue is whether section 87 of the Indian Act infringes a right guaranteed by section 15 of the Canadian Charter of Rights and Freedoms (the "Charter") and if it is established that an infringement has taken place, can the infringement be justified under section 1 of the Charter.

II. Relevant statutory provisions

In order for the income of an Indian to be exempt from taxation, it must be "personal property of an Indian” and must be “situated on a reserve”. The applicable statutory provisions which provide the tax exemption follow:

Subsection 81(1) of the Act reads in part:

(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;

Subsections 87(1) and (2) of the Indian Act read in part:

(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,

(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. [1]

Sections 1 and 15 of the Charter read as follows:

1. The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

15 (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

(2) Subsection (1) does not preclude any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

Subsection 15(2) is not applicable in this case.

III. Case law

In order to decide whether the employment income and family allowance payments received by the appellant are exempt from taxation, it is necessary to explore the purposes of the exemption provided in section 87 of the Indian Act, the type of property received and the nature of the taxation of that property.

A. The Type of Property and Purpose of the Exemption from Taxation

In Nowegijick v. The Queen, [1983] 1 S.C.R. 29, [1983] C.T.C. 20, 83 D.T.C. 5041, the Supreme Court of Canada noted that in order for the property of an Indian to be exempt from taxation pursuant to paragraph 87(1)(b) of the Indian Act, there are four requirements that must be met:

1. It must be personal property;

2. It must be owned by the Indian;

3. The Indian must be taxed in respect of that property; and

4. The property must be situated on the reserve.

The Court held that salary income is personal property for the purpose of the exemption from taxation provided by the Indian Act. I can see no difference between salary income, like that received by the taxpayer in Nowegijick, supra, and that which the appellant received, as well as the family allowance payments. Therefore, I find that the types of property at issue, salary income and family allowance payments, are personal property for the purposes of the Indian Act.

In the recent Supreme Court of Canada decision of Williams v. Canada, [1992] 1 C.T.C. 225, 92 D.T.C. 6320, the Court dealt with the issue of whether unemployment insurance benefits received by a status Indian were personal property of an Indian . . . situated on a reserve" and therefore exempt from taxation pursuant to paragraph 87(1)(b) of the Indian Act. In light of the decision in Nowegijick, supra, there was no dispute that the unemployment insurance benefits were personal property. Therefore, the only question to be determined by the Court was whether the benefits were situated on a reserve.

Mr. Williams, a status Indian residing on a reserve, received unemployment insurance benefit cheques for which he was qualified because of his former employment on a reserve. The Federal Court-Trial Division ([1989] 1 C.T.C. 117, 89 D.T.C. 5032) held that the regular unemployment insurance benefits were "personal property situated . . . on a reserve" and therefore exempt from taxation pursuant to paragraph 87(1)(b) of the Indian Act. The Trial Division held that all of the connecting factors, except the residence of the debtor at the time of the receipt of the benefits, suggested that the benefits themselves were situated on the reserve. The Federal Court of Appeal ([1990] 2 C.T.C. 124, 90 D.T.C. 6399) rejected the Trial Division's use of the "connecting factors” test and found that the regular benefits were not situated on the reserve. In determining the situs of the unemployment insurance benefits, the Court of Appeal relied on the well-established residence of the debtor" test applicable to conflicts of law situations. The Court held that the debtor, the Canadian government, was situated off the reserve and therefore the situs of the unemployment insurance benefits was not on a reserve as required by paragraph 87(1 )(b) of the Indian Act.

The Supreme Court of Canada rejected the Federal Court of Appeal's adoption of the "residence of the debtor” test in determining the situs of personal property. The Court held that the adoption of conflicts of law principles would be entirely out of keeping with the scheme and purposes of the Indian Act and when determining whether property is "personal property . . . situated on a reserve" within the meaning of section 87 of the Indian Act, the overall context of the property being taxed must be examined in light of all the connecting factors having regard to the following 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.

In Williams, supra, Gonthier, J. said at page 231 (D.T.C. 6325):

It is simply not apparent how the place where a debt may normally be enforced has any relevance to the question whether to tax the receipt of the payment of that debt would amount to the erosion of the entitlements of an Indian qua Indian on a reserve. The test for situs under the Indian Act must be constructed according to its purposes not the purposes of the conflict of laws. Therefore, the position that the residence of the debtor exclusively determines the situs of benefits such as those paid in this case must be closely re-examined in light of the purposes of the Indian Act, It may be that the residence of the debtor remains an important factor, or even the exclusive one. However, this conclusion cannot be directly drawn from an analysis of how the conflict of laws deals with such an issue.

and at page 232 (D.T.C. 6326) he added:

Furthermore, it would be dangerous to balance connecting factors in an abstract manner, divorced from the purpose of the exemption under the Indian Act. A connecting factor is only relevant in so much as it identifies the location of the property in question for the purposes of the Indian Act. In particular categories of cases, therefore, one connecting factor may have much more weight than another. It would be easy in balancing connecting factors on a case-by-case basis to lose sight of this.

However, an overly rigid test which identified one or two factors as having controlling force has its own potential pitfalls. Such a test would be open to manipulation and abuse, and in focusing on too few factors could miss the purposes of the exemption in the Indian Act as easily as a test which indiscriminately focuses on too many.

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.

The purpose of the Indian Act and the exemptions thereunder were established by the Supreme Court of Canada in Mitchell v. Pegu is Indian Band, [1990] 2 S.C.R. 85, 71 D.L.R. (4th) 193, where La Forest, J. held that Indians have an unrestricted entitlement to their treaty property; it is owed to them qua Indians. The Court added that personal property acquired by Indians in normal business dealings is clearly different; it is simply property which anyone else might have acquired, and there is no reason in those circumstances why Indians should be treated any differently than their fellow citizens.

At page 133 S.C.R. (D.L.R. 228) La Forest, J. said:

I would reiterate that in the absence of a discernible nexus between the property concerned and the occupancy of reserve lands by the owner of that property, the protections and privileges of sections 87 and 89 have no application.

I draw attention to these decisions by way of emphasizing once again that one must guard against ascribing an overly broad purpose to sections 87 and 89. These provisions are not intended to confer privileges on Indians in respect of any property they may acquire and possess, wherever situated. Rather, their purpose is simply to insulate the property interests of Indians in their reserve lands from the intrusions and interference of the larger society so as to ensure that Indians are not dispossessed of their entitlements.

At page 138 S.C.R. (D.L.R. 232) he added:

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 the same way as other people.

And at pages 144-45 S.CR. (D.L.R. 237-38) he concluded:

I have no doubt that Indians are very much aware that ordinary commercial dealings constitute “ affairs of life" that do not fall to be governed by their treaties or the Indian Act. Thus I take it that Indians, when engaging in the cut and thrust of business dealings in the commercial mainstream are under no illusions that they can expect to compete from a position of privilege with respect to their fellow Canadians. This distinction, it is fair to say, will be driven home every time Indians do business off their reserve lands.

At pages 228-29 (D.T.C. 6323) of Williams, supra, Gonthier, J. referred to La Forest, J.'s decision in Peguis, supra:

. . . La Forest, J. expressed the view that the purpose of these sections was to preserve the entitlements of Indians to their reserve lands and to ensure that the use of their property on their reserve lands was not eroded by the ability of governments to tax, or creditors to seize. The corollary of this conclusion was that the purpose of the sections was not to confer a general economic benefit upon the Indians (at pages 130-31):

The exemptions from taxation and distraint have historically protected the ability of Indians to benefit from this property in two ways. First, they guard against the possibility that one branch of government, through the imposition of taxes, could erode the full measure of the benefits given by that branch of government entrusted with the supervision of Indian affairs. Secondly, the protection against attachment ensures that the enforcement of civil judgments by non-natives will not be allowed to hinder Indians in the untrammelled enjoyment of such advantages as they had retained or might acquire pursuant to the fulfillment by the Crown of its treaty obligations. In effect, these sections shield Indians from the imposition of the civil liabilities that could lead, albeit through an indirect route, to the alienation of the Indian land base through the medium of foreclosure sales and the like; see Brennan, J.’s discussion of the purpose served by Indian tax immunities in the American context in Bryan v. Itasca County, 426 U.S. 373 (1976), at page 391.

In summary, the historical record makes it clear that sections 87 and 89 of the Indian Act, the sections to which the deeming provision of section 90 applies, constitute part of a legislative" package" which bears the impress of an obligation to native peoples which the Crown has recognized at least since the signing of the Royal Proclamation of 1763. From that time on, the Crown has always acknowledged that it is honour-bound to shield Indians from any efforts by non-natives to dispossess Indians of the property which they hold qua Indians, i.e., their land base and the chattels on that land base.

It is also important to underscore the corollary to the conclusion I have just drawn. The fact that the modern-day legislation, like its historical counterparts, is so careful to underline that exemptions from taxation and distraint apply only in respect of personal property situated on reserves demonstrates that the purpose of the legislation is not to remedy the economically disadvantaged position of Indians by ensuring that Indians may acquire, hold, and deal with property in the commercial mainstream on different terms than their fellow citizens. An examination of the decisions bearing on these sections confirms that Indians who acquire and deal in property outside lands reserved for their use, deal with it on the same basis as all other Canadians.

The Supreme Court of Canada in Williams, supra, has confirmed that the purpose of the exemption from taxation provided by section 87 of the Indian Act is to ensure protection of Indian reserve lands and property on those lands from erosion by the government through taxation; it is not meant to confer a general economic benefit on Indians.

B. Nature of the Taxation of the Property

Section 6 of the Act is the section which taxes income from office or employment. Section 5 of the Act stipulates that a taxpayer's income from office or employment is the salary, wages or other remuneration ” received by him in the year". Subsection 56(5) of the Act is the subsection which taxes income from family allowance payments. That subsection specifies that family allowance payments which are received by him or his spouse for a month of the year" are to be included in computing the income of the taxpayer. Thus, the nature of the taxation of the income received by the appellant is such that each of the employment income and the family allowance payments is being taxed.

Three of the four requirements set out in Nowegijick, supra, which must be met in order to be exempt from taxation pursuant to section 87 of the Indian Act are clearly met in this appeal. The employment income and family allowance payments are personal property, they are owned by an Indian and the Indian is being taxed in respect of that property. The fourth requirement, whether that property is situated on a reserve, is yet to be determined.

C. The "Connecting Factors" Test

The "connecting factors" test set out in Williams, supra, requires this Court to apply each of the three considerations noted above to the relevant connecting factors involved in this appeal in order to determine the situs of the property in issue. In general, a determination as to whether the receipt of property by an Indian is taxable requires all of the “ connecting factors" to be considered in light of the purpose of the Indian Act on a case by case basis. The first step to the test 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 having regard to the three considerations. The Court must ask whether taxation of that form of property would amount to the erosion of the entitlement to that property of the Indian qua Indian on a reserve. This test depends on all the circumstances surrounding the property being taxed.

The property in issue in Williams, supra, was unemployment insurance benefits received by an Indian. The Court decided that there was a strong connection between the receipt of the benefits and the place where the employment giving rise thereto was located. In particular, Mr. Williams had made his compulsory contributions, which gave rise to the benefits he subsequently received, when he resided on the reserve and was employed on the reserve by an employer situated on the reserve. Because the contributions themselves originated from Indian property on a reserve and were being paid back to an Indian on a reserve in the form of unemployment insurance benefits, the Court held that the taxation of these benefits would amount to an erosion of the entitlement of an Indian qua Indian on a reserve.

The relevant connecting factors in this appeal include the location of the employment which gave rise to the employment income, the source of that income and the residence of the appellant at the time the appellant earned and received the employment income. The factors to be given the greatest weight in this circumstance are the source of the employment income earned by the appellant and the location of the employment where the appellant actually earned the income. The residence of the appellant when he earned and received the employment income will be given weight albeit slightly less than the previous two factors.

The source of the appellant's employment income is the government's general revenue and not property from a source situated on a reserve which requires protection from erosion. The appellant earned this income in the general commercial mainstream. In this way, the appellant is no different from any other person working for the federal government. If an Indian chooses to work for an employer off a reserve, then income earned in the general commercial mainstream, in the day-to-day "affairs of life" off the reserve lands, is not personal property exempt from taxation pursuant to section 87 of the Indian Act. To allow the appellant an exemption from taxation of this income would be an attempt to remedy the economically disadvantaged position of Indians who cannot find employment on the reserve. This is not the purpose of the exemption from taxation provided by section 87 of the Indian Act.

The family allowance payments received by the appellant were paid out of general government revenues and in this regard are unlike the unemployment insurance benefits received by the taxpayer in Williams, supra, which were funded through contributions made by the taxpayer from property situated on the reserve. Therefore, the family allowance payments received by the appellant in the 1987 and 1988 taxation years are to be treated in the same manner for taxation purposes as the appellant's employment income.

IV. Section 15 of the Canadian Charter of Rights and Freedoms

In 1989 a trilogy of cases was decided by the Supreme Court of Canada dealing with section 15 of the Charter. The leading case is Andrews v. Law Society of British Columbia, [1989] 1 S.C.R. 143, 56 D.L.R. (4th) 1 [1] McIntyre, J. held that the promotion of "equality" under section 15 has a much more specific goal than simply the elimination of all distinctions, especially since other provisions of the Charter are designed to safeguard against certain distinctions. [2] Differential treatment is permitted provided it is without "discrimination". Therefore, there are two steps to a section 15 analysis. The appellant must first establish that one of his equality rights protected by section 15 of the Charter has been infringed and then he must demonstrate that this results in discrimination.

A. Equality

On the meaning of “equality” McIntyre, J. stated at pages 163-164 S.C.R. (D.L.R. 9-10):

Subsection 15(1) of the Charter provides for every individual a guarantee of equality before and under the law, as well as the equal protection and equal benefit of the law without discrimination. This is not a general guarantee of equality; it does not provide for equality between individuals or groups within society in a general or abstract sense, nor does it impose on individuals or groups an obligation to accord equal treatment to others. It is concerned with the application of the law. No problem regarding the scope of the word “law”, as employed in subsection 15(1), can arise in this case because it is an Act of the Legislature which is under attack.

It [equality] is a comparative concept, the condition of which may only be attained or discerned by comparison with the condition of others in the social and political setting in which the question arises. It must be recognized at once, however, that every difference in treatment between individuals under the law will not necessarily result in inequality and, as well, that identical treatment may frequently produce serious inequality . . . .

and at page 165 S.C.R. (D.L.R. 10-11), concluded:

In simple terms, then, it may be said that a law which treats all identically and which provides equality of treatment between "A" and “B” might well cause inequality for"C", depending on differences in personal characteristics and situations. To approach the ideal of full equality before and under the law—and in human affairs an approach is all that can be expected—the main consideration must be the impact of the law on the individual or the group concerned. Recognizing that there will always be an infinite variety of personal characteristics, capacities, entitlements and merits among those subject to a law, there must be accorded, as nearly as may be possible, an equality of benefit and protection and no more of the restrictions, penalties or burdens imposed upon one than another. In other words, the admittedly unattainable ideal should be that a law expressed to bind all should not because of irrelevant personal differences have a more burdensome or less beneficial impact on one than another.

McLachlin, J.A. of the British Columbia Court of Appeal (as she then was) accepted the proposition that equal protection and equal benefit is to be applied in such a way as to ensure that those persons who are “ similarly situated” should be” similarly treated” and those who are "differently situated" should be "differently treated". McIntyre, J. rejected this "similarly situated” test, stating at page 166 S.C.R. (D.L.R. 11-12):

The test as stated, however, is seriously deficient in that it excludes any consideration of the nature of the law. If it were to be applied literally, it could be used to justify the Nuremberg laws of Adolf Hitler.

at page 167 S.C.R. (D.L.R. 12) he added:

Thus, mere equality of application to similarly situated groups or individuals does not afford a realistic test for a violation of equality rights. For, as has been said, a bad law will not be saved merely because it operates equally upon those to whom it has application. Nor will a law necessarily be bad because it makes distinctions.

and at page 168 S.C.R. he concluded:

For the reasons outlined above, the test cannot be accepted as a fixed rule or formula for the resolution of equality questions arising under the Charter. Consideration must be given to the content of the law, to its purpose, and its impact upon those to whom it applies, and also upon those whom it excludes from its application. The issues which will arise from case to case are such that it would be wrong to attempt to confine these considerations within such a fixed and limited formula.

B. Discrimination

The appellant must first show that he is not receiving equal treatment before and under the law and that the law has a differential impact on him in the protection or benefit accorded by law. He must also show that the legislative impact of the law is discriminatory (see Andrews, supra, at page 182).—In Andrews, supra, the Court held that the phrase “without discrimination" in section 15 is crucial. On the meaning of“ discrimination”, McIntyre, J. stated at page 172 S.C.R. (D.L.R. 16):

The right to equality before and under the law, and the rights to the equal protection and benefit of the law contained in section 15, are granted with the direction contained in section 15 itself that they be without discrimination. Discrimination is unacceptable in a democratic society because it epitomizes the worst effects of the denial of equality, and discrimination reinforced by law is particularly repugnant. The worst oppression will result from discriminatory measures having the force of law. It is against this evil that section 15 provides a guarantee.

and at page 174 S.C.R. (D.L.R. 18) he went on to say:

. . . I would say then that discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society.

The Court addressed the issue of discrimination having regard to the “enumerated grounds” set out specifically in section 15 of the Charter. As Mcintyre, J. noted at page 175 S.C (D.L.R. 18-19):

The enumerated grounds in subsection 15(1) are not exclusive and the limits, if any, on grounds for discrimination which may be established in future cases await definition. The enumerated grounds do, however, reflect the most common and probably the most socially destructive and historically practised bases of discrimination and must, in the words of subsection 15(1), receive particular attention. Both the enumerated grounds themselves and other possible grounds of discrimination recognized under subsection 15(1) must be interpreted in a broad and generous manner. . .

and at pages 180-81 S.C.R. (D.L.R. 22-23):

The analysis of discrimination in this approach must take place within the context of the enumerated grounds and those analogous to them. The words “without discrimination” require more than a mere finding of distinction between the treatment of groups or individuals. Those words are a form of qualifier built into section 15 itself and limit those distinctions which are forbidden by the section to those which involve prejudice or disadvantage.

In O.P.S.E.U. v. The National Citizens’ Coalition, [1990] 2 C.T.C. 163, 90 D.T.C. 6326 (Ont. C.A.), the appellants sought a declaration that their rights to equal benefit of the law had been infringed under the Act and that those provisions discriminated against individuals receiving employment income as opposed to business income. Such preference was alleged to have arisen because individuals carrying on business are permitted certain deductions not allowed by individuals receiving employment income. Blair, J.A. held that the appellants' right to equal benefit of the law was not infringed under the Act. At page 166-67 (D.T.C. 6328) he said:

In my opinion, Canadian taxpayers earning income from employment, who constitute the great majority of the working population, do not constitute a group suffering discrimination on grounds analogous to those enumerated in subsection 15(1) of the Charter. This huge group of taxpayers is not a“ "discrete and insular minority’. It is a large segment of the population which we described in Mir- hadizaaeh, supra, at page 426 as “not linked by any personal characteristics relating to them as individuals or members of a group”. They are what we called in Mirhaoizadeh, supra, at page 426 "a disparate and hetero enous group”, linked together only by the fact that they are taxed on their employment income. They are incapable of being discriminated against on grounds analogous to those enumerated in subsection 15(1). The appellants’ claim that ITA infringes the equality rights of taxpayers earning income from employment must fail.

In Turpin, supra, the Supreme Court of Canada once again looked at the definition of “ discrimination” at pages 1331-33:

In determining whether there is discrimination on grounds relating to the personal characteristics of the individual or group, it is important to look not only at the impugned legislation which has created a distinction that violates the right to equality but also to the larger social, political and legal context

Accordingly, it is only by examining the larger context that a court can determine whether differential treatment results in inequality or whether, contrariwise, it would be identical treatment which would in the particular context result in inequality or foster disadvantage. A finding that there is discrimination will, I think, in most but perhaps not all cases, necessarily entail a search for disadvantage that exists apart from and independent of the particular legal distinction being challenged.

A search for indicia of discrimination such as stereotyping, historical disadvantage or vulnerability to political and social prejudice would be fruitless in this case because what we are comparing is the position of those accused of the offences listed in section 427 in the rest of Canada to the position of those accused of the offences listed in section 427 in Alberta. To recognize the claims of the appellants under section 15 of the Charter would, in my respectful view, "overshoot the actual purpose of the right or freedom in question”: see The Queen v. Big M Drug Mart Ltd., at page 344.

I would not wish to suggest that a person's province of residence or place of trial could not in some circumstances be a personal characteristic of the individual or group capable of constituting a ground of discrimination. I simply say that it is not so here. Persons resident outside Alberta and charged with section 427 offences outside Alberta do not constitute a disadvantaged group in Canadian society within the contemplation of section 15.

Discrimination must be in respect of or analogous to the "enumerated grounds” set out in section 15 of the Charter and involve "prejudice or disadvantage” based on personal characteristics which cannot be within the control of the person nor alterable by conscious action. The appellant must be a member of a "discrete and insular minority” who would fall within the protection of section 15. If Indians earning employment income off the reserve are found to be members of a "disparate and heterogeneous group" linked together only by the fact that they are taxed on their employment income, it cannot be said that they are being discriminated against on grounds analogous to those enumerated in section 15 of the Charter.

The first question to be answered is whether one of the appellant's four equality rights set out in section 15 has been infringed by the taxation of his employment income. The appellant argues that his right to equal benefit of the law is violated by section 87 of the Indian Act.

In Andrews, supra, Mcintyre, J. noted that the purpose of section 15 of the Charter is to ensure equality in the “formulation and application of the law". A comparison with the condition of others in the social and political setting in which the question arises must be made. The appellant must be accorded an equality of benefit and protection and be subject to no more of the restrictions, penalties or burdens imposed upon him than are imposed upon other Indians residing on a reserve. In conclusion, there should not, "because of irrelevant personal differences”, be a more burdensome or less beneficial impact on him than on others. Consideration must be given to the content of the law, the purpose of the Indian Act and its impact on those Indians who work on and off the reserve.

Indians who choose to work off a reserve and earn employment income from a source not situated on a reserve do so pursuant to their freedom of choice as Canadians. This has nothing to do with their status as Indians or with the preservation of "personal property . . . situated on a reserve” which they hold qua Indians. When I consider the purposes of section 87 of the Indian Act and the impact that exemption has on the preservation of reserve lands and property, I must conclude that the appellant's right to equal benefit of the law is not violated by denying him the exemption from taxation of his employment income earned off a reserve and received from a source not situated on a reserve.

The purpose of section 15 of the Charter is to ensure protection from discrimination based on personal characteristics, such as race or ethnic origin, which are outside the control of an individual. Note that the Charter provides protection of personal rights and not of economic rights (see The Queen v. Falk, 52 Man. R. (2d) 143, [1988] 4 W.W.R. 754 at 758-59 (Man. Q.B.), and Symes v. Canada, [1991] 2 C.T.C. 1, 91 D.T.C. 5397, at page 11 (D.T.C. 5405) (F.C.A.)). I find that the appellant is not a member of a“ discrete and insular minority” but is a member of a "disparate and heterogenous group" of Indians linked together only by the fact that they chose employment off the reserve. To recognize a violation of section 15 of the Charter in this case would "overshoot the actual purpose of the right or freedom in question".

Given that I have found that section 87 of the Indian Act does not infringe the appellant's rights guaranteed by section 15 of the Charter, it is not necessary to address section 1 of the Charter.

V. Conclusion

The appeals are dismissed on the basis that: (1) the employment income and the family allowance payments received by the appellant in the 1987 and 1988 taxation years were situated off a reserve and therefore not exempt from taxation pursuant to section 87 of the Indian Act; and (2) section 87 of the Indian Act does not infringe the appellant's rights guaranteed by section 15 of the Charter.

Appeals dismissed.