First Nations Taxation in Canada

There are certain circumstances under which First Nations people are tax exempt, except the Metis and Inuit. Exemptions apply to real and personal property and specifically property that is situated on the reserve. At the same time, some reserves have implemented First Nations tax which is also known as community improvement fee.

Taxes on Reserves

Personal property and income can be exempt, and some persons don't pay provincial and federal income tax. At the same time, some reserves have imposed taxes and both non-status and status Indians are required to pay taxes. There are different tax systems in place, one being the sharing model of the Whitecap Dakota First Nation. Regardless of the system adopted, the main goal is to collect revenue that can be used for different programs and projects, including culture and language programs. Revenue is also used to offer elder care, improve infrastructure on reserves, build roads, schools, hospitals, etc. Some reserves have imposed good and services tax while others have implemented sales tax on different products sold in reserves. Other communities charge personal income tax to collect revenue. In fact, hundreds of bands in Canada have adopted tax regimes to pay for programs on reserve lands.

First Nations Tax

Different communities and bands have implemented FNT, including Cowichan, Tzeachten, Adams Lake, Tk'emlúps te Secwépemc, Little Shuswap Lake, and more. The tax applies to listed products such as tobacco, fuel, and alcohol, including malt liquor, porter, ale, and beer. Listed products also include fuel such as propane gas, gasoline fuel, and diesel, the only exception being oil that is used for heating. Except for small businesses, other suppliers are required to have a GST/HST account to sell listed products and collect, charge and remit harmonized sales tax and goods and services tax. There are partial HST rebates in some Canadian provinces for products that are bought off reserves.

Tax Exemptions for First Nations People

There are tax exemptions for persons who are working and living on reserves and these apply to property tax, sales, and income. There are certain exemptions under section 87, including personal property found on reserves and investment and employment income that is earned on reserves. Personal property is exempt from estate duty, inheritance tax, and succession duty for deceased persons.

Duties and excise taxes apply to manufactured products. The same goes for farming products, depending on where farmers raise cattle and harvest crops. Cattle raised on reserves and fish caught on reserve fishing grounds can be tax exempt.

When it comes to the Child Tax benefit, First Nations people qualify but are still required to file a tax return.

Exemptions offer certain benefits, one being that First Nations people find it more affordable to work and live on reserves. Lower taxes encourage people to stay on reserves which is one way to preserve their heritage, culture, and traditional ways of life. Exemptions also help protect their land and ensure that people living on reserves are not in a disadvantaged position compared to non-First Nations people. Under the Indian Act, personal property owned by aboriginal people and found on reserves is not subject to distress, seizure, levy, attachment or execution. The only exception is leasehold interest. In addition to tax exemptions, there are other ways to ensure that the rights, land, and property of First Nations people are protected. Certain property cannot be transferred or acquired, including rock carvings and paintings, carved house posts, totem poles, carved grave poles, and Indian grave houses. It is forbidden to destroy, deface, mutilate, and remove such property.

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Residential Schools for Aboriginal People in Canada

Residential schools for indigenous people operated as boarding schools until 1996 when the last institution was closed. The goal was to assimilate aboriginal children into mainstream culture, a practice that is today deemed a form of cultural genocide.


The Battleford Industrial School was the first to open doors in 1883 and in just 7 years, 61 boarding schools were already operating across Canada. Attendance was compulsory for all children aged 7 to 16 until 1948. Three decades later, it was evident that boarding schools were expensive to run and pose a financial burden. Some 18,000 day schools opened doors to integrate rather than assimilate aboriginal children. However, children were still removed from their homes and families in the 60s and 70s, and many were placed into custody. It was not until 1996 when the last institution of this type, the Gordon Indian Residential School, closed doors.

Controversy and Implications

The residential school system was plagued with problems from the onset. Many students suffered sexual, verbal, and physical abuse by administrators and teachers. Corporal punishment was used in many institutions, resulting in serious injuries and even death. In fact, figures show that some 6,000 aboriginal children died while attending church-run institutions. Reports show that death rates were higher than that of soldiers during World War II. Many children were buried away from their home place in unmarked graves. Records show that more than 150,000 children were taken away from their homes and families and incarcerated in boarding schools. Many suffered from poor nutrition, physical abuse, and neglect.

As the goal was to assimilate indigenous children, the use of native languages was prohibited in church-run institutions. Traditional practices and ways of living were also banned, including practices such as the Sun Dance, Potlach, and more.

Apology and Compensation

In 1998, a reconciliation statement by the Canadian government acknowledged the fact that hundreds of thousands of indigenous children were subjected to forceful removal and physical, emotional, and cultural abuse. The Aboriginal Healing Foundation was also founded to support victims of abuse and educate the general public. The foundation worked on multiple projects, reports, and studies, including digital storytelling projects, community projects, exhibits, and a lot more. Reports, interviews, and series published by the foundation focus on the history, legacy, and experiences of boarding schools. A number of projects were funded as well, including projects by different centres, societies, and foundations. The list is long and includes societies such as the Hinton Friendship Centre Society, Aboriginal Survivors for Healing, Fox Lake Cree Nation, and many others. The Truth and Reconciliation Commission was also established in 2008 to interview victims and collect documents and testimonies. The Presbyterian, Anglican, Roman Catholic, and United churches also funded a number of projects aimed at victims of residential schools. Projects with a focus on healing and reconciliation were developed to help victims and their families. Different workshops and initiatives were organized to this end. Several Canadian universities such as the University of Winnipeg and Lakehead University introduced courses with a focus on aboriginal culture, tradition, heritage, and history. Other institutions, including the University of Manitoba and University of Saskatchewan also organized different workshops, forums, and other initiatives to raise awareness of the conditions at boarding school and abuse suffered by victims.