Laboucan v. R. – TCC: No Blanket Tax Exemption for Native Peoples

Bill Innes on Current Tax Cases

http://decision.tcc-cci.gc.ca/site/tcc-cci/decisions/en/item/64718/index.do New Window

Laboucan v. The Queen[1] (November 18, 2013) is a case arguing for a blanket tax exemption for native peoples.  While the pleading was not identical, this is largely another incarnation of the Sackaney et al. decision of the Tax Court issued a few weeks ago where the same sort of claims were raised unsuccessfully:

http://decision.tcc-cci.gc.ca/site/tcc-cci/decisions/en/item/63090/index.do New Window

The court summarized the claim in a pithy fashion:

[3]             The taxpayer’s Notice of Appeal claims that Treaty 8 provides an exemption to aboriginals covered by that treaty from taxes of any kind whether or not they reside on a reservation. In addition, the taxpayer’s Notice of Appeal refers to The Royal Proclamation of 1763, the Charter of Rights and Freedoms, the United Nations Declaration on the Rights of Indigenous Peoples and the Supreme Court of Canada mandated duty to consult on issues relating to the rights of native peoples, all in support of his claimed income tax exemption.

As to Treaty 8, the court found:

[4]             The Federal Court of Appeal has decided in Canada v. Benoît, 2003 FCA 236 that Treaty 8 does not contain or give rise to an income tax exemption. In Benoît the taxpayers sought leave to appeal to the Supreme Court of Canada which was denied. This decision of the Federal Court of Appeal is clear and is binding upon this Court.

As to the duty to consult, the court concluded:

[8]             The only apparent support for Mr. Laboucan’s appeal that can be found in The Royal Proclamation of 1763 would be, arguably, the duty to consult. The Royal Proclamation of 1763 does not support any income tax exemption for aboriginal people generally that are not grounded in their treaty rights.

[9]             The Crown’s duty to consult arises where contemplated Crown conduct may adversely affect potential or established aboriginal or treaty rights. Since the Federal Court of Appeal has conclusively determined in Benoît that there is no income tax exemption in Treaty 8, neither the assessments of Mr. Laboucan for income tax, nor anything else he has referred to in his Notice of Appeal or in the hearing, can adversely affect his treaty rights. For this reason, the duty to consult can not arise.

[10]        I would also note that a breach by the Crown of any duty to consult would not in any event be something that the Tax Court of Canada appears to have jurisdiction to remedy.

Finally, as to the United Nations Declaration on the Rights of Indigenous Peoples:

[15]        To the extent the taxpayer’s position is that the United Nations Declaration obliges the Crown to have meaningful consultation on the rights of indigenous people when disputes arise, and takes the position that the Crown has not fulfilled that obligation, the Tax Court of Canada does not have jurisdiction to determine and remedy his alleged concern. As with an alleged failure of the duty to consult, this would be within the jurisdiction of the Federal Court.

In the result the court allowed the Crown’s motion, struck the Notice of Appeal and quashed Mr. Laboucan’s appeal to the Tax Court.

[1] 2013 TCC 357.