A-407-76
Minister of National Revenue (Applicant)
v.
Iroquois of Caughnawaga (Caughnawaga Indian
Band) (Respondent)
Court of Appeal, Jackett C.J., Pratte J. and Hyde
D.J.—Montreal, December 16 and 17, 1976;
Ottawa, January 21, 1977.
Judicial review — Unemployment insurance — Application
for review of Umpire's decision that employers' premiums are
not payable in respect of persons employed by an Indian Band
on the Band's reserve — Whether premiums are taxation on
property within meaning of s. 87 of Indian Act — Whether
respondent an employer within meaning of s. 2(1)(e) of Unem
ployment Insurance Act, 1971 — Whether Court has jurisdic
tion to review Umpire's decision — Unemployment Insurance
Act, 1971, S.C. 1970-71-72, c. 48, ss. 2(1)(e), 66(2) and 84 —
Indian Act, R.S.C. 1970, c. I-6, s. 87 — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
Applicant claims that employers' premiums are payable in
respect of persons employed by an Indian Band on the Band's
reserve. The respondent claims that the premiums are a tax on
property within the meaning of section 87 of the Indian Act
and that the Band is therefore exempted from the relevant
provisions of the Unemployment Insurance Act, 1971 and that
in any event the Band is not an employer as defined by section
2(1)(e) of the Unemployment Insurance Act, 1971.
Held, section 87 of the Indian Act only exempts Indian
Bands from direct taxation on property and the premiums
herein, even if they are taxes, are taxes on the person. The
respondent is in fact an employer within the meaning of section
2(1)(e) of the Unemployment Insurance Act, 1971 and no
evidence was led to show that it had no authority to be one. The
Umpire's decision is referred back (Jackett C.J. dissenting).
Per Jackett C.J. (dissenting): For the reasons set out in
M.N.R. v. Dame L. H. MacDonald the Court has no jurisdic
tion to review the decision of an Umpire under section 84 of the
Unemployment Insurance Act, 1971.
Provincial Treasurer of Alberta v. Kerr [1933] A.C. 710
and M.N.R. v. Dame L. H. MacDonald [1977] 2 F.C. 189,
applied.
JUDICIAL review.
COUNSEL:
Claude Blanchard and W. Lefebvre for
applicant.
James A. O'Reilly and William S. Grodinsky
for respondent.
SOLICITORS:
Deputy Attorney General of Canada for
applicant.
O'Reilly, Hutchins & Archambault, Mont-
real, for respondent.
The following are the reasons for judgment
rendered in English by
JACKETT C.J.: This is a section 28 application to
set aside a decision rendered by an Umpire under
section 84 of the Unemployment Insurance Act,
1971.
The question involved in the matter before the
Umpire was whether employers' premiums are
payable in respect of persons employed by an
Indian Band at a hospital and related facility
operated by the Band on the Band's reserve. The
Umpire held that such premiums are not payable.
The provision of the Unemployment Insurance
Act, 1971 that would appear to be the "charging
provision" in respect of what were previously
called employers' and employees' contributions
and are called "premiums" under the 1971 Act is
section 66(2), which reads:
(2) Every employer shall, for every week during which a
person is employed by him in insurable employment, pay, in
respect of that person and in the manner provided in Part IV,
an amount equal to such percentage of that person's insurable
earnings as is fixed by the Commission as the employer's
premium payable by employers or a class of employers of which
the employer is a member, as the case may be, for the year in
which that week occurs.
The principal basis put forward by the respond
ent for supporting the correctness of the Umpire's
decision was that the premiums in question are
"taxation" on "property" that falls within section
87 of the Indian Act', which reads:
87. Notwithstanding any other Act of the Parliament of
Canada or any Act of the legislature of a province, but subject
to subsection (2) and to section 83, the following property is
exempt from taxation, namely:
' R.S.C. 1970, c. I-6.
(a) the interest of an Indian or a band in reserve or surren
dered lands; and
(b) the personal property of an Indian or band situated on a
reserve;
and no Indian or band is subject to taxation in respect of the
ownership, occupation, possession or use of any property men
tioned in paragraph (a) or (b) or is otherwise subject to
taxation in respect of any such property; and no succession
duty, inheritance tax or estate duty is payable on the death of
any Indian in respect of any such property or the succession
thereto if the property passes to an Indian, nor shall any such
property be taken into account in determining the duty payable
under the Dominion Succession Duty Act, being chapter 89 of
the Revised Statutes of Canada, 1952, or the tax payable under
the Estate Tax Act, on or in respect of other property passing
to an Indian.
As it seems to me, it is not necessary, for present
purposes, to express any opinion as to whether the
imposition by statute on an employer of liability to
contribute to the cost of a scheme of unemploy
ment insurance such as is found in the Unemploy
ment Insurance Act, 1971 is "taxation" within the
meaning of section 87. 2 If it is taxation, it is not, in
my view, taxation on "property" within the ambit
of section 87.
From one point of view, all taxation is directly
or indirectly taxation on property; from another
point of view, all taxation is directly or indirectly
taxation on persons. It is my view, however, that
when section 87 exempts "personal property of an
Indian or band situated on a reserve" from "taxa-
tion", its effect is to exempt what can properly be
classified as direct taxation on property. The
courts have had to develop jurisprudence as to
when taxation is taxation on property and when it
is taxation on persons for the purposes of section
92(2) of The British North America Act, 1867,
and there would seem to be no reason why such
jurisprudence should not be applied to the inter
pretation of section 87 of the Indian Act. See, for
example, with reference to section 92(2), Provin
cial Treasurer of Alberta v. Kerr. 3 When the
charging section is clear, its terms must be con
strued to decide what is the subject matter of the
2 In this connection, it would be necessary to consider the
decision of the Privy Council in Attorney-General for Canada
v. Attorney-General for Ontario [1937] A.C. 355, section
91(2A) of The British North America Act, and Re Martin
Service Station and M.N.R. (1976) 67 D.L.R. (3d) 294
(S.C.C.).
3 [1933] A.C. 710.
taxation. See the same case per Lord Thankerton
at pages 720-21. Section 62(1) of the Unemploy
ment Insurance Act, 1971 says that an employer
shall pay the amount in question "in respect of" an
employee in insurable employment. As already
indicated, this seems to be the charging provision.
That being so, in my view, the Umpire erred in
holding that section 87 is applicable to exempt
Indians or bands of Indians from paying premiums
under the Unemployment Insurance Act, 1971.
A subsidiary submission of the respondent in
support of the Umpire's decision is that the
respondent is not an "employer" within the mean
ing of section 2(1)(e) of the Unemployment Insur
ance Act, 1971, which reads:
(e) "employer" includes a person who has been an employer;
In my view, it is clear that the respondent does in
fact operate the institutions in question and does
employ the employees in question. No evidence
was led to show that there was not legal authority
for it to do what it did in fact, and I find no basis
for the Umpire's decision in this contention.
However, for the reasons that I have given in
delivering judgment this day in M.N.R. v. Dame
L. H. MacDonald 4 (which was heard at the same
time as this application), I am of opinion that this
Court has no jurisdiction under section 28 to set
aside a decision of the Umpire under section 84 of
the Unemployment Insurance Act, 1971. I am,
therefore, of the view that this section 28 applica
tion should be dismissed for lack of jurisdiction.
* *
The following are the reasons for judgment
rendered in English by
PRATTE J.: I have already said in M.N.R. v.
Dame L. H. MacDonald [ [1977] 2 F.C. 189] that,
in my view, this Court has jurisdiction to review
and set aside a decision pronounced by an Umpire
under section 84 of the Unemployment Insurance
Act, 1971. As I agree with the Chief Justice that
4 [1977] 2 F.C. 189.
the Umpire's decision in this case is wrong, it
follows that I would allow the section 28 applica
tion, set aside the decision under attack and refer
the matter back so that it be decided by an Umpire
on the basis that
(a) the respondent is an "employer" within the
meaning of the Unemployment Insurance Act,
1971, and
(b) the obligation of an employer to pay premi
ums under the Unemployment Insurance Act,
1971, is not a tax in respect of property within
the meaning of section 87 of the Indian Act.
* * *
The following are the reasons for judgment
rendered in English by
HYDE D.J.: For the reasons given by Mr. Justice
Pratte I would dispose of this application in the
manner he suggests.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.