Canada v. Robertson, 2012 FCA 94 (2012)

Parts:Canada v. Robertson
Reporting Judge:EVANS J.A.
Docket Number:A-456-10
 
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Federal Court of Appeal - Canada v. Robertson [Anonymoused]

Source: http://decisions.fca-caf.gc.ca/en/2012/2012fca94/2012fca94.html

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Federal Court of Appeal

Cour d'appel fédérale

Date: 20120320

Docket: A-456-10

Citation: 2012 FCA 94

CORAM: EVANS J.A.

PELLETIER J.A.

LAYDEN-STEVENSON J.A.

BETWEEN:

HER MAJESTY THE QUEEN

Appellant and

RONALD ROBERTSON and

ROGER SAUNDERS

Respondent s

Heard at Winnipeg, Manitoba, on November 16, 2011.

Judgment delivered at Ottawa, On tario, on March 20 , 2012.

REASONS FOR JUDGMENT BY: EVANS J.A.

CONCURRED IN BY: LAYDEN-STEVENSON J.A.

CONCURRING REASONS BY: PELLETIER J.A.

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Federal Court of Appeal

Cour d'appel fédérale

Date: 20120320

Docket: A-456-10

Citation: 2012 FCA 94

CORAM: EVANS J.A.

PELLETIER J.A.

LAYDEN-STEVENSON J.A.

BETWEEN:

HER MAJESTY THE QUEEN

Appellant and

RONALD ROBERTSON and

ROGER SAUNDERS

Respondents

REASONS FOR JUDGMENT

EVANS J.A.

A. INTRODUCTION

[1] This is yet another case in which the Court must determine whether income is exempt from income tax because it is “the personal property of an Indian … situated on a reserve.” Again, the disputed question is whether the income in question is “situated on a reserve” within the meaning of paragraph 87(1)( b ) of the Indian Act, R.S.C. 1985, c. I-5 (Act).

[2] This is the first occasion this Court has had to consider the issue since the Supreme Court of Canada’s restatement of the relevant law in Bastien Estate v. Canada , 2011 SCC 38, [2011] 2 S.C.R. 710 ( Bastien ), and Dubé v. Canada , 2011 SCC 39, [2011] 2 S.C.R. 764 ( Dubé ), which the Court released at the same time. I shall refer in these reasons principally to paragraphs in Bastien because it is the leading case.

[3] The present case is an appeal by the Crown from a decision of the Tax Court of Canada, in which Justice Hershfield (Judge) allowed the appeals of Ronald Robertson and Roger Saunders from assessments of their income tax liability for the taxation years 1999, 2000, 2001, and 2002 (Mr Robertson), and 2002 and 2003 (Mr Saunders). He held that the Minister of National Revenue (Minister) had wrongly included in their income the business income they had earned in those years from commercial fishing, and the employment insurance benefits that they had received.

[4] The Judge held that the Appellants’ income was situated on the Norway House Reserve (Reserve) and was thus exempt from income tax by virtue of section 87 of the Act. He did not have the benefit of Bastien and Dubé , and his analysis may be inconsistent with this jurisprudence in one or two respects, particularly in the weight he attached to the fact that commercial fishing had long been integral to the life of the Reserve.

[5] Nonetheless, in my opinion the Judge reached the right result. For the reasons that follow, I would dismiss the Crown’s appeals.

B. FACTUAL BACKGROUND

[6] The facts set out in these reasons are taken from the parties’ partial agreed statements of facts prepared for the purpose of their appeals to the Tax Court, and from the Judge’s additional findings of fact. What follows is an introductory factual synopsis.

(i) Appellants

[7] Both Mr Robertson and Mr Saunders are Indians as defined by section 2 of the Indian Act , and members of the Norway House Cree First Nation (First Nation), which in 1875 became signatory to Treaty No. 5.

[8] Mr Robertson has lived his entire life on the Reserve, situated near the Norway House Settlement, on the south shore of Little Playgreen Lake which flows into Lake Winnipeg. During the years in question, Mr Saunders lived off-reserve on West Island Route, in the Norway House Settlement, not far from the Reserve.

[9] In the taxation years in question, both Appellants were self-employed commercial fishers. They owned fishing licences and received fishing quotas from the Norway House Fishermen’s Co-operative (Co-op), the owner of the quotas. Mr Robertson started his fishing business in 1992, and Mr Saunders in 1973. They fish during the summer and fall in Playgreen Lake, Lake Winnipeg and, in Mr Saunders’ case, in Grassy Lake as well. They generally reach the lakes by boat from the Reserve, although the lakes themselves are off-reserve.

[10] The Appellants stay overnight at off-reserve fishing camps on about half of their fishing trips; they are able to return home from the others at the end of a day’s fishing. They dress the fish in the camps or in their boats. Each day, weather permitting, they take their catch to packing stations operated by the Co-op, which is described further below. The packing stations are located off-reserve, but not far from either the fishing camps or the Reserve. The Judge described (at para. 107) the camps and the packing stations as being only “short commutes from the on-reserve docks of both Appellants.”

[11] At the packing stations, the fish are graded, sorted for size and species, weighed, and packed on ice. An official receipt for the fish delivered by the fishers, and the price to be paid, is prepared at the packing station where they deliver their catch.

[12] In addition to starting out for their fishing areas from the Reserve, the Appellants store and maintain their boats on the Reserve. Mr Robertson also keeps and maintains his nets and other fishing gear on the Reserve. Because he lives off-reserve, Mr Saunders sometimes keeps his fishing gear at his home. The Appellants employ helpers from the Reserve, where they pick them up to take them fishing. Before setting out, the Appellants fill their boats with gas from the Co-op on the Reserve.

[13] The Appellants keep their books, records, and other material related to their fishing businesses, at home. For Mr Robertson this means on-reserve, and off-reserve for Mr Saunders.

(ii) The Co-op

[14] Like other fishers on the Reserve, the Appellants are members of the Co-op. In the taxation years in question, the Co-op had approximately 52 members; all but four lived on the Reserve. In addition, it employed about 160 Band members all of whom lived on the Reserve. However, not all members of the Co-op are members of the First Nation; a few are not status Indians.

[15] The Co-op purchases fish from its members as the agent of the Freshwater Fish Marketing Corporation (Freshwater), which is described below. The Co-op pays the fishers weekly, on the basis of the receipts sent to it by the packing stations. The Co-op makes the payments from funds provided by Freshwater, which pays money into the Co-op’s bank account in trust for this purpose. Fishers collect the payment for their weekly catch from the Co-op’s administration office on the Reserve.

[16] In addition to acting as Freshwater’s purchasing agent, the Co-op assists its members in their fishing businesses in a number of ways. For example, it receives and divides the fishing quotas managed by the provincial government; it provides loans for the purchase of boats; sells gas, oil, nets, and other fishing gear; and it pays the fishers’ helpers by deducting their wages from the fishers’ cheques. The Co-op predates Freshwater.

[17] Indeed, the Co-op is active in every aspect of commercial fishing by members of the First Nation, from assisting fishers to get started in business, to acting on their behalf when dealing with Freshwater.

(iii) Freshwater

[18] Freshwater, a federal Crown corporation, was established in 1969 by the Freshwater Fish Marketing Act , R.S.C. 1985, c. F-13, to regulate inter-provincial and export trade in freshwater fish. Its purposes include marketing and trading in fish, their products and by-products, within Canada and beyond (section 7). It operates in Manitoba, Saskatchewan, Alberta, the Northwest Territories, and part of northwestern Ontario. Freshwater is obliged to purchase all legally caught fish offered to it by fishers in the areas where it operates (subsection 22(2)). However, Freshwater is not a monopoly buyer: fishers are at liberty to bypass it and to sell their fish directly into the market.

[19] Freshwater purchases fish through agents, including the Co-op. The relationship between Freshwater and the Co-op is governed by an agreement which provides, among other things, that the Co-op will purchase fish from its members as the agent of Freshwater at the agent’s current delivery points at Whiskey Jack and Playgreen Point, which are off-reserve. Under the agreement, the Co-op charges Freshwater a fee for buying the fish, which covers some of the cost of the services it provides to its members.

[20] At the start of each fiscal year, Freshwater sets the price at which it will purchase different species of fish on the basis of their predicted market price, less its projected operating costs. As fishers deliver their catches, Freshwater pays to the Co-op in trust for the fishers 85% of the predicted market price of the fish caught . At the end of the fiscal year, Freshwater mails cheques directly to the fishers for the difference, if any, between the money paid to them by the Co-op and the actual market price of the fish sold. In the taxation years in question, Freshwater...

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