Taxation: A path to independence

There will be many changes if we accept the Final Agreement, some of those changes will take place as soon as the Agreement comes into effect. Others will take place over a longer time.

Over about 12 years, members will lose their on-reserve tax exemption. That means we will have to pay taxes on income earned and purchases made on Lheidli T’enneh land, where we do not have to now. However, those taxes will go to fund our own Lheidli T’enneh government and will come back to us in programs and services.

The Lheidli T’enneh government will still be able to collect property taxes from people and businesses on Lheidli T’enneh land, just as we do now under section 83 of the Indian Act. The power to tax property under the Final Agreement will apply to all treaty settlement land, including land within the city of Prince George.

The taxes collected will give us financial resources we can use to service the land and set the course for our future.

The Final Agreement is a path to self-government and self-determination for the Lheidli T’enneh. It offers us a road-map toward increased prosperity and self-reliance now and into the future. It gives us the financial means to set our own course. It puts in place the modern tools we need to govern and to build strong working relationships with other governments.

Tax revenue will provide a stable source of funding

The ability to tax will give the Lheidli T’enneh government a powerful tool. It will give our government an opportunity to generate revenue and build a future that works for the Lheidli T’enneh. The money that members and others pay in taxes will flow back into our community and help provide programs, services, and facilities for our people.

Who will be taxed?

The Lheidli T’enneh government will have the power to collect property tax from anyone who lives on Lheidli T’enneh lands, including lands within the city of Prince George, whether they are band members or not.

The Lheidli T’enneh government will in turn be responsible for providing local services to residents on its lands. Lheidli T'enneh will likely rely on agreements with the City and Regional Districts for these services.

Will the Lheidli T’enneh government have to pay taxes?

Like other governments in Canada, the Lheidli T’enneh government will not have to pay income taxes or GST and provincial transaction taxes. The specifics of intergovernmental taxation and refunds will be set out in a separate tax treatment agreement.

Will we lose our Indian Act tax exemption?

Indian Act tax exemptions apply to income earned and purchases made on reserve. Any income, investments, and purchases made off-reserve by members are already taxed.

Eight to 12 years after the Final Agreement comes into effect, however, we will lose our Indian Act tax exemption for income earned and purchases made on reserve land. This is because the land will no longer be Indian Reserve land governed under the Indian Act. However, the income and sales taxes Lheidli T’enneh citizens will pay will go to the Lheidli T’enneh government. The taxes collected will help fund Lheidli T’enneh operations, programs and services, and so our tax money will be returned to work for us through our government.

Will we end up paying more in taxes?

The Lheidli T’enneh tax powers will work alongside those of the governments of British Columbia and Canada. In some cases, Canada has agreed to take a smaller tax amount to give the First Nations government room to impose its own sales or personal income taxes, without adding extra burden. The Final Agreement sets the groundwork for a similar arrangement.

In other words, the Final Agreement will not result in double taxation. As employment and business opportunities increase, incomes may also increase and this will, of course, result in changes to tax obligations.