For over 100 years, aboriginal people living on reserves who meet federal requirements as Status Indians have been exempt from most federal and provincial taxes on income and property while public services on reserves are largely funded by the federal government. Aboriginal people on reserves have been subject to the bureaucracy of the Indian Act and legislated restrictions on economic development. As a result of the Nisga’a Final Agreement, the Nisga’a, after a transition period will:
Canada and British Columbia will also equally share the cost of an $11.5
million agreement to purchase commercial fishing vessels and licences on
the open market to allow the Nisga’a to participate in commercial fishery
Canada, British Columbia and the Nisga’a will share responsibility for funding public services and programs on Nisga’a Lands at a level generally comparable to services provided by other local and regional governments in northwestern British Columbia
The Final Agreement requires the three parties to negotiate five-year fiscal financing agreements detailing the contributions Canada, British Columbia and the Nisga’a will make to public services on Nisga’a Lands.
The Fiscal Financing Agreements and Own Source Revenue Agreements will
require that, as the Nisga’a generate more of their own revenue from sources
such as resource development, taxes, and interest on capital payments,
the Nisga’a will pay a higher proportion of the cost of services, while
provincial and federal contributions will decrease.
Under section 87 of the Indian Act, Status Indians living on reserve and Indian bands are exempt from federal and provincial taxes on property and on income generated on reserve. Under the Final Agreement, this tax exemption will be phased out for Nisga’a citizens -- in eight years for sales taxes and other transaction taxes and after 12 years for all other taxes.
As part of generating revenue for its operations, Nisga’a Government will have the authority to levy direct taxes on Nisga’a citizens residing on Nisga’a Lands. The Nisga’a taxation power will not limit or displace federal or provincial taxation powers.
Nisga’a Government will not be able to tax non-Nisga’a residents on Nisga’a Lands. In the future, the provincial or federal government may decide to delegate the power to tax non-Nisga’a residents of Nisga’a Lands to Nisga’a Government.
British Columbia would not enter into negotiations to delegate tax collection powers unless the Nisga’a guarantee appropriate representation for non-Nisga’a taxpayers and strict non-discrimination provisions.
Nisga’a Government will be exempt from paying the Goods and Services
Tax, social services tax, motor fuel tax and income tax on non-profit or
government activities. In the case of income tax, Nisga’a Government and
its corporation will be treated the same as a municipality.
For further information on this or other topics, contact:
Ministry of Aboriginal Affairs
4th Floor, 908 Pandora Avenue
Victoria BC V8W 1X4