Nowegijick v. The Queen

Supreme Court of Canada – [1983] 1 S.C.R. 29

Ontario Indian ActTaxation

Wages are exempt from taxation when the employer is located on reserve. The Supreme Court calls for a generous interpretation of the tax exemption of the Indian Act in favour of the Indians.


Is income personal property?


Yes, and therefore it can be exempted from taxation when earned on reserve (unanimous decision).


Between: Gene A. Nowegijick

And: The Queen

Interveners: The Grand Council of the Cree (of Quebec), the Cree Regional Authority, the Cree School Board, the Cree Board of Health and Social Services of James Bay, the Cree’s Bands and their chiefs and the National Indian Brotherhood


Nowegijick is a registered Indian living on the reserve of the Gull Bay, Ontario. He worked for the Gull Bay Development Corporation during the 1975 fiscal year. The corporation had its head office and administrative offices on the reserve and all its directors and employees are Indians from the reserve. In the course of its business, the corporation employed the appellant as a logger on a site situated 10 miles from the reserve. Nowegijick maintained his residence on the reserve during this period.

He earned an income of 11,057.08$ for the said period and was assessed taxes amounting to 1,965.80$. He filed a Notice of Objection claiming that his income is “personal property of an Indian situated on a reserve” and therefore not taxable (section 87 of the Indian Act). He also took proceedings to quash the Notice of Assessment before the Federal Court Trial Division.


Nowegijick: Since the situs of the income is situated on the reserve, the salary is not subject to taxation.

The Crown: The tax imposed on Nowegijick under the Income Tax Act was not taxation in respect of personal property within the meaning of section 87 of the Indian Act. Taxable income is a concept made up of operations done to one’s salary under the Income Tax Act and it is not personal property. Also, the exception of section 87 of the Indian Act concerns only direct taxation on property such as municipal and school taxes.

The Crees: They do not argue for a general tax exemption, but for one concerning personal property situated on a reserve.

Decision of the lower courts

Federal Court Trial Division (1979): Justice Mahoney instructed the Minister of National Revenue to review Nowegijick’s tax assessment since the income received from the Corporation was erroneously included in the computation of his taxable income.

Federal Court of Appeal (1981): On appeal, Mahoney’s decision was overturned and the initial assessment was restored.

Reasons for Judgement


Ritchie, Dickson, Beetz, Estey, McIntyre, Chouinard, Lamer


A tax on income is a tax on personal property and section 87 exempts, not only property, but also persons from taxation. The situs of wages is where the employer is located. Since Gull Bay Development Corporation had its headquarters on the Gull Bay reserve, the appellant’s income is exempt from taxation.

The provisions of the Indian Act and other statues or treaties giving tax exemption must be constructed in favour of the Indians, and in the sense they would have understood them.


The tax exemption for Indians can be traced back to 1850 when the Act for the Protection of the Indians in Upper Canada provided for an immunity against civil judgment if the concerned Indian owned land valued over 25£. The first Indian Act of 1876 also allowed for such exemption and extended it to mortgage and on all real or personal property of an Indian. The tax exemption came in the 1951 version of the Indian Act (Reynold, 2002: 41-42).

The tax exemption in the Indian Act is considered as part of the Crown’s fiduciary obligation towards First Nations. At the time, Parliament was concerned that non-Natives could exploit Indians due to their disadvantageous socio-economic situation (Reynolds, 2002: 43).

In Nowegijck, the Supreme Court justified its decision under principles of private international law, shown here by the reference to the concept of situs, which refers to the legal treatment of a property based on its location (Reynolds, 2002 : 45; Sullivan, 2007). The notion of “connecting factors”, elaborated in Williams, is now used to determine if the income of a registered Indian will be tax. (Reynolds, 2002 : 45-46).

In 1994, the Canada Revenue Agency issued guidelines to help in determining the cases when the income of a registered Indian is exempt from taxation, as well as an Interpretative Bulletin in 1995. Even though these documents are not law binding, they represent well the Canada Revenue Agency’s position in such matters (Olthuis, Kleer and Thownshend, 2008: 451).

See Williams for more details.

Related Cases

Mitchell v. Peguis indian band, [1990] 2 S.C.R. 85

Bastien Estate v. Canada, [2011] 2 S.C.R. 710


Canada Revenue Agency. 2003. Indian Act Exemption for Employment Income Guidelines. Online. Retrieved on July 20th 2010.

Canada Revenue Agency. 1995. Interpretation Bulletin IT-397RSR: Amounts Excluded from Income – Statutory Exemption and Certain Service or RCMP Pensions, Allowances and Compensations. Online. Retrieved on July 20th 2010.

Olthuis, John, Kleer Nancy and Roger Thownshend. 2008. Aboriginal Law Handbook. Toronto : Thompson Carswell.

Sullivan Ruth. 2007. Statutory Interpretation. 2nd ed. Toronto : Irwin Law.

Reynolds James I. 2002. Taking and Enforcing Security under the Indian Act and Self-Government Legislation, in Banking & Finance Law Review 18: 37-65.

Thomas Kimberly and Merle Alexander. 1998. The Taxation and Financing of Aboriginal Businesses in Canada. Carswell : Toronto.

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