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1998 Legislative Session: 3rd Session, 36th Parliament

THIRD READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

Certified correct as passed Third Reading on the 22nd day of April, 1999

Ian D. Izard, Law Clerk

BILL 51: NIS G A'A FINAL AGREEMENT ACT –

SCHEDULE

CHAPTER 16 OF 22

CHAPTER 16

TAXATION

DIRECT TAXATION

1. Nis g a'a Lisims Government may make laws in respect of

direct taxation of Nis g a'a citizens on Nis g a'a Lands in order to raise

revenue for Nis g a'a Nation or Nis g a'a Village purposes.

2. Nis g a'a Lisims Government powers provided for in

paragraph 1 will not limit the powers of Canada or British Columbia to impose or levy tax

or make laws in respect of taxation.

OTHER TAXATION AND TAX ADMINISTRATION

AGREEMENTS

3. From time to time Canada and British Columbia, together or

separately, may negotiate with the Nis g a'a Nation, and attempt to reach agreement

on:

a. the extent, if any, to which Canada or British Columbia will

provide to Nis g a'a Lisims Government or a Nis g a'a Village Government direct

taxation authority over persons other than Nis g a'a citizens, on Nis g a'a

Lands; and

b. the coordination of Nis g a'a Lisims Government or Nis g a'a

Village Government taxation, of any person, with existing federal or provincial tax

systems.

4. Nis g a'a Lisims Government and Nis g a'a Village

Governments may make laws in respect of the implementation of any taxation agreement

entered into with Canada or British Columbia.

SECTION 87 EXEMPTION

5. Subject to paragraph 6,

section 87 of the Indian Act

applies to Nis g a'a citizens only to the extent that an Indian other than a Nis g a'a

citizen, or the property of that Indian, would be exempt from taxation in similar

circumstances by reason of the applicability of

section 87 of the Indian Act.

Section 87 of the Indian Act will have no application

to Nis g a'a citizens:

a. in respect of transaction taxes, only as of the first day of the

first month that starts after the eighth anniversary of the effective date; and

b. in respect of all other taxes, only as of the first day of the

first calendar year that starts on or after the twelfth anniversary of the effective date.

REMISSION ORDERS

7. Subject to paragraphs 8 and 9, as of the effective date,

Canada and British Columbia will each grant a remission of, respectively, federal and

provincial tax imposed or levied in respect of:

a. the estate or interest of an Indian in lands described in

subparagraph 2 (

b) of the Lands

Chapter that are within Nis g a'a Lands;

b. the personal property of an Indian situated on lands described in

subparagraph 2 (

b) of the Lands

Chapter that are within Nis g a'a Lands; and

c. an Indian's ownership, occupation, possession or use of any

property referred to in subparagraph (

a) or (b).

8. A remission of tax under paragraph 7 will be granted only

where the property referred to in subparagraph 7 (

a) or (b), or the Indian in respect

of the ownership, occupation, possession or use of the property referred to in

subparagraph 7 (

a) or (

b) would, but for this Agreement, be exempt from taxation by

reason of the applicability of

section 87 of the Indian Act.

9. The orders authorizing the remissions of tax referred to in

paragraph 7 will cease to be effective:

a. in respect of transaction taxes, as of the first day of the first

month that starts after the eighth anniversary of the effective date; and

b. in respect of all other taxes, as of the first day of the first

calendar year that starts on or after the twelfth anniversary of the effective date.

VALUATION TIME

10. In paragraphs 11 and 12:

a. "eligible individual" means an Indian who, at the

valuation time, holds an eligible interest;

b. "eligible interest" means any estate or interest

in specified lands or in personal property situated on specified lands;

c. "specified lands" in respect of an Indian means:

i. lands described in subparagraph 2 (

b) of the Lands

Chapter

that are within Nis g a'a Lands, and

ii. if the Indian is a Nis g a'a citizen, a reserve as

defined in the Indian Act; and

d. "valuation time" means the beginning of the first

day of the first calendar year that starts on or after the twelfth anniversary of the

effective date.

11. For the purposes of the Income Tax Act and the Income

Tax Act (British Columbia), if an eligible individual elects as described in paragraph

12 to have this paragraph apply:

a. the individual is deemed to have disposed of each of the

individual's eligible interests, at the time that is immediately before the time that is

immediately before the valuation time, for an amount equal to its fair market value at

that time, and to have reacquired the eligible interest at the valuation time at a cost

equal to that fair market value;

b. for greater certainty, it is understood that the deemed

disposition and reacquisition described in subparagraph (

a) apply to all eligible

interests owned by the eligible individual at the valuation time; and

c. for the purposes of applying sections 37, 65 to 66.4, 111,

subsections 127 (5) to 127 (26) and

section 127.3 of the Income Tax Act,

the individual will be deemed not to have owned an eligible interest referred to in

subparagraph (

a) at any time before the time it was deemed to have been reacquired by

the individual under that subparagraph.

12. Paragraphs 10 and 11 apply to any eligible individual who

so elects in writing in the individual's return of income under

Part I of the Income

Tax Act for the year that starts at the valuation time.

NIS G A'A LANDS

13. Neither the Nis g a'a Nation nor any Nis g a'a

Village is subject to capital taxation, including real property taxes and taxes on capital

or wealth, in respect of the estate or interest of either the Nis g a'a Nation or any

Nis g a'a Village in Nis g a'a Lands on which there are no improvements or on

which there is a designated improvement.

14. In paragraph 13, "designated improvement"

means:

a. a residence of a Nis g a'a citizen;

b. an improvement, all or substantially all of which is used for a

public purpose or a purpose ancillary or incidental to the public purpose, including:

i. a public governance or administration building, public meeting

building, public hall, public school or other public educational institution, teacherage,

public library, public health facility, public care facility, public seniors home, public

museum, place of public worship, manse, fire hall, police facility, court, correction

facility, public recreation facility, public park, or an improvement used for Nis g a'a

cultural or spiritual purposes,

ii. works of public convenience constructed or operated for the

benefit of Nis g a'a citizens, occupiers of Nis g a'a Lands or persons visiting

or in transit through Nis g a'a Lands, including public utility works, public works

used to treat or deliver water or as part of a public sewer system, public roads, public

bridges, public drainage ditches, traffic signals, street lights, public sidewalks, and

public parking lots, or

iii. similar improvements;

c. an improvement that is used primarily for the management,

protection or enhancement of a natural resource, including a forestry, fishery or wildlife

resource, other than an improvement that is used primarily in harvesting or processing a

natural resource for profit; and

d. forest resources and forest roads.

15. In paragraph 14 (b), "public purpose" does

not include the provision of property or services primarily for the purpose of profit.

16. Paragraph 13 does not affect the taxation of a person,

other than the Nis g a'a Nation or a Nis g a'a Village, in respect of an estate

or interest in Nis g a'a Lands, or exempt from taxation a disposition of capital by

the Nis g a'a Nation or any Nis g a'a Village.

17. If, within 20 years after the effective date, Canada or

British Columbia enacts legislation giving effect to another land claims agreement

applicable in northwest British Columbia that:

a. provides that all of the lands that were set apart as reserves of

an Indian band whose members were represented by a party to the agreement cease to be

reserves; and

b. provides a tax exemption, not provided in paragraph 13, in respect

of an estate or interest in settlement lands

Canada and British Columbia, upon request of Nis g a'a

Nation, will negotiate and attempt to reach agreement on the provision of a similar tax

exemption for the Nis g a'a Nation and Nis g a'a Villages.

NIS G A'A CAPITAL

18. A transfer, or recognition of ownership, under this

Agreement, of Nis g a'a capital is not taxable.

19. For the purposes of paragraph 18, an amount paid to a Nis g a'a

participant will be deemed to be a transfer of Nis g a'a capital under this Agreement

if the payment:

a. reasonably can be considered to be a distribution of a capital

transfer received by the Nis g a'a Nation; and

b. becomes payable to the Nis g a'a participant within 90 days,

and is paid to the Nis g a'a participant within 270 days, after the Nis g a'a

Nation receives the capital transfer.

20. For the purposes of the Income Tax Act and the Income

Tax Act (British Columbia), Nis g a'a capital transferred to, or recognized as

owned by, the Nis g a'a Nation or any Nis g a'a Village under this Agreement

will be deemed to have been acquired by the Nis g a'a Nation or the Nis g a'a

Village, as the case may be, on the latest of the effective date, the date of transfer or

the date of recognition, at a cost equal to its fair market value on that date.

TAXATION AGREEMENT

21. On the effective date, the Parties will enter into a

Taxation Agreement. The Taxation Agreement does not form part of this Agreement.

22. The Taxation Agreement is not intended to be a treaty or

land claims agreement, and is not intended to recognize or affirm aboriginal or treaty

rights within the meaning of sections 25 and 35 of the Constitution Act, 1982.

23. Canada and British Columbia will recommend to Parliament

and the Legislature, respectively, that the provisions of the Taxation Agreement be given

effect under federal and provincial law.

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