Employees of Native Housing organization exempt from taxation

This is an appeal of six separate tax appellants under the Income Tax Act. All are status Indians and former employees of a native employee leasing agency. The Court found that three of the appellants, working for Brantford Native Housing (BNH), a non profit organization located contiguous to the Reserve, were exempt from income taxation. In the application of the connecting factors test, the Court found that the work performed by the appellants at BNH provided significant and direct benefit to that community.

The services of BNH addressed the on-Reserve housing shortage. The work being performed off-Reserve was disconnected but not fatal as the proximity of BNH to the Reserve made it "contiguous" to the Reserve. The Court found that it was "almost axiomatic that a community that lacks housing, even temporary housing, will gravitate to the closest place outside the community that has facilities to help deal with the problem".

In addition to the benefits of the work being performed by the appellants for the Reserve, the Court also relied on the employers' location and the location of the debt being owed to the appellants as well as the fact that the Indians were resident on Reserve to find that their income was on Reserve for the purposes of s.87 of the Indian Act. An employee in similar circumstances but who did not live on Reserve was denied the exemption.

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