Now that the Supreme Court of Canada has ruled that interest earned on bank accounts on Indian Reserves is properly non-taxable, what’s next? The court rebuffed two decisions which had concluded that interest earned in a reserve credit union or similar firm was taxable because it was “earned in the general economy” — that is, off the reserve. But what really mattered, said the high court justices, is that it was deposited on the reserve. Hmm. Are you thinking what we’re thinking? Would it be possible to transfer a wad of cash to a financial institution on a reserve and thus make interest tax free? The news stories do not address this issue and it may well be the unstated proviso is that you have to be a member of the band to get this advantage. But shouldn’t that mean that natives can get their interest tax free even if it’s deposited at Yonge and Bay? They’re exempt from sales taxes off the reserve. Readers no doubt would be grateful for a legal view.
