Eastern Door Volume 7 Number 23

Volume 7 Number 23

July 3, 1998

Court Restricts Tax Benefit
Supreme Court says only goods delivered to reserve are tax-free
By: Kenneth Deer

Tapis Lanctot in St. Isidore has been assessed $35,000 by Revenue Quebec for taxes on goods sold to Mohawks at the counter. Revenue Quebec has acted swiftly on a Supreme Court decision that states that all goods sold to Natives off reserve is taxable.

Michel Lanctot is livid about the tax assessment. "We were not doing anything wrong. We were not deliberately violating the law. All we were doing was saving the customer the trouble and time of having their purchases delivered," said Lanctot. He has talked to a lawyer and is contesting the assessment.

"Kahnawake residents are now leaving their stock at the counter when told that I have to charge tax unless delivered. They say what is the difference between delivered or not?" said Lanctot. "The people are not very happy. They blame me but it's not my fault. The Quebec Government insists that I collect the tax. The Band Council has to do something. They have to take a stronger stand on this issue."

Supreme Court

The Supreme Court decision stems from a 1993 court challenge by the Union of New Brunswick Indians who protested a change by the province of New Brunswick to begin charging sales tax on goods purchased off reserve, unless delivered to the reserve. Previous to this, New Brunswick allowed goods to be tax free if purchased by a Native and the goods would be used on the reserve. The lower court upheld the decision by the province but the Court of Appeal overturned the lower court and stated that intent Section 87 of the Indian Act extended to off reserve purchases.

The Supreme Court, however, ruled that Section 87 of the Indian Act is very specific and is confined to property physically situated on a reserve or property whose "paramount location" is on a reserve. A tax is applied at the point of sale. If the sale takes place outside the reserve, then the taxes are applied.

How strictly the decision will be interpreted and applied is yet to be determined. The Quebec government is studying the ruling.

Crees upset

Bill Namagoose of the Grand Council of the Cree was very disappointed at the decision and very upset that not more Native from across Canada intervened in the court case.

"The New Brunswick Indians won a big victory at the Court of Appeals level. When the New Brunswick government appealed to the Supreme Court, the Federal government and the governments of Manitoba, Alberta and British Columbia joined New Brunswick in the appeal and ganged up on us. The Grand Council of the cree were the only Native group to support the New Brunswick Indians in the Supreme Court. Where was the Assembly of First Nations or other First Nations?" said Namagoose.

"Why did the governments get involved? The governments are so afraid of us having any kind of tax advantage that they had to make sure the Court of Appeals ruling was overturned," said Namagoose.

Lawyer disagrees

James O'Reilly, a well know Native rights lawyer, said that the decision was a step backwards. "This is a narrow interpretation of the Indian Act. It broadens the scope of what is taxable. The want to enclave the rights of Natives to reserves. That our rights are not transportable," said O'Reilly.

By ruling that the point of sale dictates the application of sales taxes, O'Reilly says it complicates some transactions like car sales and for Natives who live off reserve.

"Your purchases will have to be Cash On Delivery (COD) to the reserve or, in any transaction, the agreement should state that the transfer of ownership of the goods takes place at the point of delivery," said O'Reilly. On the positive side, it could create more businesses on reserve that could meet the needs of the community since they will not shop outside to save the tax.

According to O'Reilly, there will probably be more court cases to further clarify this decision.

Grand Chief talks

Grand Chief Joe Norton said the MCK will definitely do something after the new council is elected. "When the Supreme Court makes a ruling in our favour the government says it has to study the issue, but when the ruling goes against us, they are ready to implement it right away," said Norton.

"I blame the Quebec Revenue Office in Montreal for the speed that they are using the Supreme Court decision. They are a racist office who will do anything to impose taxation on Kahnawake," said Norton.

"What is unfortunate is that the Quebec government will not interfere because they are afraid that it may be considered political interference. But at the same time they are saying they want to speak to us about everything and we say let's start with taxation," said Norton.

"The Deputy Minister of Revenue knows the problem. I challenge the Quebec government to take care of this situation. If they had any guts they will take care of this office in Montreal," said Norton.

The MCK is waiting for a legal evaluation of the court decision but, Norton says, the government knows that Kahnawake will continue to pursue the issue at a political level.

In the meantime, businesses like Lanctot are waiting for a solution to keep serving their Kahnawake customers without sales tax.

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Kahnawake Chiefs: 1998 Canadian Masters Champions
Win in Overtime - 6 to 5
By: J.C. Teiorakwate

You couldn't ask for a more dramatic ending to Sunday night's Final of the 1998 Canadian Masters Championships played at the Kahnawake Sports Complex and won by the Kahnawake Chiefs over the Valleyfield Express in sudden death overtime.

Just 2:06 into the sudden death overtime period, David McComber scores the winner and Championship goal assisted by a very tenacious, determined and almost "possessed" Davey Diabo

Having just killed off a very inopportune and bad penalty to Kahnawake's Ricky Diabo which had carried over from the third period, with 9 seconds remaining, Kahnawake quickly went on the attack.

The key play by the very gritty and determined Davey Diabo who gained control of the ball in front of Valleyfield's net was the factor in the winning goal. Diabo quickly passed off to David McComber, the Tournament's MVP, who was off to the left of Valleyfield goalie, Francois Leboeuf, and in one swift motion scored the winner over Leboeuf's left shoulder.

In what seemed like a frozen moment, it felt like seconds before all of the Kahnawake players poured over the bench to mob McComber, the game's hero.

Just a few feet away from the celebrating mob of players the Valleyfield team consoled a very dejected, Francois Leboeuf. This had been a very tough game for any team to have to lose. Leboeuf was voted the game MVP for Valleyfield's side.

Each side had their chances to win the game in the overtime. Valleyfield came as close as hitting the crossbar early in the OT while enjoying a man advantage.

Bryan Jacobs, Kahnawake's MVP, held steady despite an almost disastrous tying goal in the dying minutes of the third period.

In an uncharacteristically bad play by Robbie Horn who up to this point was having one of his finest series, passed off a "floater" in front of Kahnawake's goalie. It was picked off by the pressing Sylvain Galipeau of Valleyfield who put it past a stunned Bryan Jacobs.

Horn carried the weight of the teams dejection heavily on his shoulders. After having such a great series up to this point, Robbie Horn surely deserved a better fate.

The two Davids, Diabo and McComber, lifted that burden off him two minutes and six seconds into the overtime. Justice was done!

Notable performers were David Charles who had 3 goals and 5 assists for the tournament and Darren "Orr" Diabo who was 5-1. They demonstrated great face-off skills, rarely losing the ball when it came down to the draw.

Peter Delormier's selfless determination in getting the ball in the corners especially in the final game resulting in Valleyfield player, Serge Paquette, being ejected from the game for boarding and a 5 minute advantage for the home side.

Warren Goodleaf who seemed to be everywhere and put fear in the minds of the opposing goalies with his wicked blazing shots.

Coach Eddie Delaronde who effectively kept Valleyfield off balance with his constant line changes not allowing them to build up any sustained pressure.

Valleyfield over Oshweken in overtime to win berth in Championship Final

Both Valleyfield and Kahnawake were 3-0 in the 'round robin' part of the tournament. Valleyfield's win over Oshweken, who were clearly the much more skilled team, in their final round robin game was notable but not without controversy.

In a very exciting game, Valleyfield was able to upset the fans' favorites despite a "non-goal" by Oshweken's Ladd Statts with just six seconds remaining in the regulation time in what should have been the winner.

It was not a goal according to the ever-controversial and rotund referee Chuck Baronowski, who was again out of position to see the ball bouncing inside the goal line. Despite every other person in the building seeing the ball go into the net and vigorously voicing their opinion, the "non-goal" stood up, and the game went into overtime.

The game winner was scored by number 88, Roland Andre, at 4:22 of the OT on a long shot which surprised goalie Doug Hill who was clearly not ready for such a shot.

After the game, Oshweken's Ladd Statts was philosophical about the loss who said that, "We weren't ready to play early in the game and we came out flat," but he added that, "Valleyfield gave us a good game and worked hard for their win."

His only negative remark was towards the officiating of "Baronowski who," he said, "can barely 'run' more than ten feet in any direction to make any accurate calls."

But he was quick to give full credit to Valleyfield for their win. The Vermont team would surely agree with his observation of referee Baronowski.

Akwesasne wins one

Akwesasne Old Sticks finally wins one in the consolation game over the hard working but luckless Vermont Masters - 6-5.

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Editorial

Tightening the tax screws
By: Kenneth Deer, The Eastern Door

The recent decision by the Supreme Court of Canada to interpret the Indian Act strictly on our tax exemption under Article 87 is a further indication of the government strategy to reduce any tax advantages that we may have.

The court decision, if applied as written, would mean that only goods sold on reserves would be tax free. It specifically rules that sales tax is applied at the point of sale, not at the place of use. So if the sale is made off reserve for goods to be used on reserve, the sales tax must be applied. For goods to be totally tax free, the goods would have to be delivered and paid Cash On Delivery (COD) to be tax free.

How strictly will Quebec interpret the ruling is yet to be determined. Quebec is not obligated to follow the decision since provinces have the power to negotiate tax regulations. Ontario, for instance, has a tax regulation that exempts Natives from paying Ontario sales tax on items purchased off reserve. At this time there is no indication that Ontario will change its policy.

Quebec can do the same if it chooses, although Quebec and Canada have agreed to 'harmonize' both the QST and the GST, something that Ontario has not done. This may complicate any further policy negotiations. However, judging from the swift action taken by the Montreal office of Quebec Revenue, it seems unlikely that Quebec will consider any regulations similar to those in Ontario in the near future.

The court decision could lead to a major increase in the cost of living for the people of Kahnawake. Paying from seven to fifteen percent more for clothes, certain foods, restaurant meals, car repairs and other goods and services will drain more money out of this community.

On the positive side, entrepreneurs may find an opportunity to provide goods and services which are usually provided to the community from outside. Certain businesses could benefit from Kahnawakero:non who will prefer to "Buy Kahnawake" rather than pay taxes to the Quebec Government.

These entrepreneurs, however, have the obligation to provide good quality products and services for a fair and competitive price. Kahnawakero:non also have to consider that in keeping our money in circulation in Kahnawake we encourage job creation and a better local economy.

Who will suffer the most from this decision? Actually, it could be the stores on the outside of our community. While Revenue Quebec insists on stores charging us the sales tax, it is those stores that will suffer. Kahnawake spends tens of millions of dollars each year in the economy outside our borders. If we reduce our spending in those stores, they will lost revenue and so will Revenue Quebec. Remember what happened to Chateauguay after 1990?

The Montreal office of Revenue Quebec may be miscalculating the impact of their witch hunt of area businesses. The tighter they squeeze us for taxes, the less we will spend on the outside, and the more Quebec's economy will suffer.

The solution, however, to this tax issue has to be sought at the political level. With the Federal government and three other provinces intervening in the Supreme Court of Canada against the Union of New Brunswick Indians, one gets the idea that the stakes in this decision were high. But the Indian Act is a piece of Canadian legislation, and our tax rights are not based on this legislation.

Our right to be free of Canada's taxes is a fundamental right based on our position as a sovereign people. We are not going to win this in a Canadian court. We have to assert our rights and the manner in which we assert these is all part of the ongoing political process we are all too familiar with.

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