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It is the interaction between paragraph 81(1)(a) of the ITA and section 87 of the IA that leads to the tax-exemption of property situated on a reserve and belonging to a registered Indian:   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 Parliament, 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;   Indian Act   87. (1) Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83 and section 5 of the First Nations Fiscal Management Act, the following property is exempt from taxation:   (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 ...

Furthermore, unlike the Respondent’s interpretation, that simple phrase would have followed the statutory convention of drafting in the present tense. ...

  [4]              Paragraph 81 of the ITA reads as follows:   81(1)    There shall not be included in computing the income of a taxpayer for a taxation year,   (a)        statutory exemptions [including Indians]- an amount that is declared to be exempt from income tax by any other enactment of Parliament, 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; ...

Y sont assimilés la réduction, l’évitement ou le report d’impôt ou d’un autre montant qui serait exigible en application de la présente loi en l’absence d’un traité fiscal ainsi que l’augmentation d’un remboursement d’impôt ou d’un autre montant visé par la présente loi qui découle d’un traité fiscal. « opération » Sont assimilés à une opération une convention, un mécanisme ou un événement. (2) En cas d’opération d’évitement, les attributs fiscaux d’une personne doivent être déterminés de façon raisonnable dans les circonstances de façon à supprimer un avantage fiscal qui, sans le présent article, découlerait, directement ou indirectement, de cette opération ou d’une série d’opérations dont cette opération fait partie. (3) L’opération d’évitement s’entend: a) soit de l’opération dont, sans le présent article, découlerait, directement ou indirectement, un avantage fiscal, sauf s’il est raisonnable de considérer que l’opération est principalement effectuée pour des objets véritables — l’obtention de l’avantage fiscal n’étant pas considérée comme un objet véritable; b) soit de l’opération qui fait partie d’une série d’opérations dont, sans le présent article, découlerait, directement ou indirectement, un avantage fiscal, sauf s’il est raisonnable de considérer que l’opération est principalement effectuée pour des objets véritables — l’obtention de l’avantage fiscal n’étant pas considérée comme un objet véritable. (4) Le paragraphe (2) ne s’applique qu’à l’opération dont il est raisonnable de considérer, selon le cas : a) qu’elle entraînerait, directement ou indirectement, s’il n’était pas tenu compte du présent article, un abus dans l’application des dispositions d’un ou de plusieurs des textes suivants : (i) la présente loi, (ii) le Règlement de l’impôt sur le revenu, (iii) les Règles concernant l’application de l’impôt sur le revenu, (iv) un traité fiscal, (v) tout autre texte législatif qui est utile soit pour le calcul d’un impôt ou de toute autre somme exigible ou remboursable sous le régime de la présente loi, soit pour la détermination de toute somme à prendre en compte dans ce calcul; b) qu’elle entraînerait, directement ou indirectement, un abus dans l’application de ces dispositions compte non tenu du présent article lues dans leur ensemble ...

I-5. [2]            Paragraph 81(1)(a) of the Act provides:              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 Parliament, 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. [3]            Subsection 87(1) of the Indian Act reads as follows:              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. [4]            Although each of the five appellants' cases was called separately, there was some common evidence presented and all the cases were joined for the purposes of argument. ...

Relevant legislative provisions   Income Tax Act   81. (1) Amounts not included in income – There shall not be included in computing the income of a taxpayer for a taxation year,   (a) Statutory exemptions [including Indians] – an amount that is declared to be exempt from income tax by any other enactment of Parliament, 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;   Indian Act   87. (1) Property exempt from taxation – Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83 and section 5 of the First Nations Fiscal and Statistical Management Act, the following property is exempt from taxation:   (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.                                                                                               ...

  (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 Parliament, 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;   [51]     Therefore if a person who has been assessed tax claims that the income is exempt from taxation as a result of the provisions of section 87 of the Indian Act, this court has the jurisdiction to hear that person’s appeal. ...

There shall not be included in computing the income of a taxpayer for a taxation year,   (a)        Statutory exemptions – an amount that is declared to be exempt from income tax by any other enactment of Parliament, 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;   [4]      In reassessing the Appellants, the Minister of National Revenue refused to exempt their employment income from taxation on the basis that it was not “personal property of an Indian … situated on a reserve” within the meaning of paragraph 87(1)(b) of the Indian Act ...

At the objection stage, the Minister allowed the professional dues for 1998 and convention expenses for 1995 and 1996. ...

Cash flow and revenue projections were based on the venue accommodating hockey, boxing, concerts, bingos, conventions and trade shows, estimating annual revenues of approximately $59.5 million with net profit of $6.5 million. ...