"To understand these aspects of tax conversation concerning Indians in the interwar years, it is important to appreciate that the tax exemption features of the Indian Act were designed with property taxation in mind. From that design emerged an unstable distinction of “on reserve” and “off reserve” that assumed great significance. As Joel Oliphant has pointed out, a tax authority could not enforce a property tax in the usual way on reserve land because to seize and sell that land was not open as a means of collecting unpaid taxes. To live “on reserve” was therefore to live on non-taxable property. In this view of the tax clauses within the Indian Act, it was the property, not the person, that held the tax-exempt status. Indians living off reserve had the same municipal tax obligations as anyone else, as Indian Affairs officers regularly explained. Dog taxes, poll taxes, property taxes, or school taxes — there was nothing in Indian status that exempted from these imposts someone with that status who “ordinarily lived off reserve.” As a provincial tax collector told an Indigenous property owner in Hazelton, British Columbia, people who owned property in the Hazelton School District had to pay the tax whether or not they had children who would go to school there: not sending his children to the “white man’s school” made him no different from the non-Canadian investor living in, say, England who owned land in Hazelton but never set foot in Canada. Both had to pay the school tax or have their land sold for tax arrears.
...throughout the 1920s, Indian Affairs had used the residence criterion, “on reserve” or “off reserve” (with no mention of property ownership), as the rule in responding to queries about any form of taxation, including income tax. Any Indian who lived off reserve paid the same taxes as any other person. Equally, any Indian living on reserve did not pay taxes. In this distinction was a republican notion that different political communities might have different membership obligations, but there was also a liberalism: an Indian off reserve was just one more market actor and property owner, an individual like any other.
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However, the distinction on reserve/off reserve did not apply consistently to all aspects of Indian status. The legal prohibition on drinking was one. Some provinces’ purely racial disqualification from voting was another. Being “wards” of the Crown or legal “minors” was another and most fundamental. Correspondents to the department observed that surely people in those categories didn’t have citizen obligations. In eastern Canada, the Royal Proclamation of 1763 and the provisions of the Jay Treaty were also offered (and contested) as evidence that “Indians” had a distinct legal status, whether on reserve or off, that implied freedom from some tax obligations. As Alex Sioui, working in the aluminum plant at Arvida, put it in 1942, “I cannot enjoy Canadian citizenship, being an Indian; but I am entitle[d] to Indian privileges; meaning no Taxes.” Some non-Indians, including a few individuals within the sprawling Indian Affairs system, recognized the justice of Indians having at least some tax immunities when they did not enjoy full citizen rights. That living on reserve or off was not consistent in legal consequences produced much confusion and reasonable resentment in the interwar and early war years among both status Indians and fair-minded non-Indigenous people, whether employers, Indian agents, or friends of Indians.
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The assertion that earning income off reserve, like owning property off reserve, conferred indistinguishable citizen obligations on status Indians seemed to be dangerous to Indigenous leaders such as Andrew Paull of the Squamish and John Tootoosis of the prairie Cree. As Hugh Shewell has explained, they linked conscription and income taxation during the Second World War as instances of Canadian state agencies misrepresenting Indigenous people’s legal standing. Taxing Indians as though they were not legally distinct, like conscripting them as though they were ordinary citizens, was to act as though obligations under treaties and the Indian Act were without force.
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But precisely because of rurality or poverty or both, Indians in the interwar years encountered other kinds of taxation more frequently than they encountered the federal income tax, and in these taxes, too, there were problems of negotiating a fair legal regime. Probably the most fraught of these other taxes were customs duties, in particular the charging of customs duties to members of Indigenous communities on the international border.
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The taxation of Indigenous people is possibly the most enduring and fraught question of race and taxation in Canada. In their efforts to negotiate taxation, both First Nations individuals and communities reminded revenue officials that they lacked voting rights or were denied other citizen rights. They were not, in that sense, citizens like any other. The liberal democratic slogan “no taxation without representation” was meaningful for them as it was for the proponents of other tax resistance projects. However, even though non-voters, they had means to push back at taxes that they saw as unfair. Indigenous rights formed a well-established (if contested) basis of legal and political struggles around taxation and citizenship. Particular rights, rather than liberal equality, were foundational in those struggles.
On this basis, various First Nations activists petitioned and wrote letters of protest, making arguments based upon treaty rights and Indian status. In the interwar years and the early war years, neither kind of political strategy was especially successful. In relation to local customs administration in border areas, however, a discretionary lenience showed that the settler state could be accommodating. But accommodation was a mixed blessing, providing a context in which favour arbitrarily given could also arbitrarily be withdrawn.
- Shirley Tillotson, Give and Take: The Citizen-Taxpayer and the Rise of Canadian Democracy (Vancouver: UBC Press, 2017), 119-120, 122-125, 128-129.
