Indigenous Peoples, Legal Bodies, and Personhood: Navigating the 'Public Body' Exemption with Private Law Hybrid Entities

• Author: Bradley Bryan
• Position: Assistant Professor, University of Victoria Faculty of Law
• Pages: 58-77

Indigenous Peoples, Legal Bodies,

and Personhood: Navigating the

“Public Body” Exemption with

Private Law Hybrid Entities

Bradley Bryan*

Over the past 40 years, the Canada Revenue Agency’s application of the ‘public body

exemption’ in paragraph 149(1)(c) to First Nation governments has evolved to include

all ‘Indian bands’ and what are called ‘Modern Treaty Nations’. Paragraph 149(1)(c)

– the so-called ‘public body exemption’ – exempts public bodies performing a function of

government from taxation on income received regardless of the geographic origin of the

income-generating activity. To this day, this exemption is referred to as the ‘Municipal

Exemption’ in the Income Tax Act, RSC 1985, c 1 (5th Supp). e story of the

emerging application of the exemption to ‘Indian bands’ and First Nations, however,

is not to be gleaned from a study of the jurisprudence, nor of a legislative history of

successive amendments to the Income Tax Act. Instead, the story of this evolution

lies in the interactions of the various First Nations across Canada with the Canada

Revenue Agency by way of applications for Advance Tax Rulings, or through audits and

reassessments. is article explores some of the legal categories at play in this evolution,

along with some of the corporate law issues that were also arising for First Nations as

they pursued economic self-determination from the early 1980s to the present.

* Assistant Professor, University of Victoria Faculty of Law. e author

wishes to thank Kathryn Chan, Patricia Cochran, Caroline Grady, Freya

Kodar, Rebecca Johnson, Tamara Larre, Johnny Mack, Shiri Pasternak,

Samuel Singer, Mark Wedge, and David Wright for commentary and

discussion on the ideas and argument in this paper. anks is also owed

and of‌fered to my generous colleagues at the Faculty of Law at the

University of Victoria, and to Howard Kislowicz and the Faculty of Law

at the University of Calgary for inviting me to give this paper at the Junior

Scholars Workshop in June of 2019.

59

(2020) 6 CJCCL

I. I

II. T S  S    indian aCt

III. O T E: P ()()   inCome tax aCt

IV. L P  P V P B

V. T A  L C   U   P

B E

VI. C: C R

I. Introduction

Over the past 40 years, the Canada Revenue Agency’s (“CRA”)

application of the ‘public body exemption’ in paragraph 149(1)(c)

of the Income Tax Act1 (“ITA ”) to First Nation governments has evolved

to include all ‘Indian bands’ and what are called ‘Modern Treaty Nations’.

Paragraph 149(1)(c) – the so-called ‘public body exemption’ – exempts

public bodies performing a function of government from taxation on

income received regardless of the geographic origin of the income-

generating activity.2 To this day, this exemption is referred to as the

‘Municipal Exemption’ in the ITA .3 e story of the emerging application

of the exemption to ‘Indian bands’ and First Nations, however, is not to

be gleaned from a study of the jurisprudence, nor of a legislative history

of successive amendments to the ITA. Instead, the story of this evolution

lies in the interactions of the various First Nations across Canada with the

CRA by way of applications for advance tax rulings (“ATR”) or through

audits and reassessments. is article explores some of the legal categories

at play in this evolution, along with some of the corporate law issues

that were also arising for First Nations as they pursued economic self-

determination from the early 1980s to the present.

First Nations today are caught between legal notions of public and

private, and their status as legal subjects rests precariously on dif‌ferent

forms of legal personhood and as recognized ‘bodies’. Since the inception