Qayqayt First Nation sues B.C. over taxes

The Qayqayt First Nation is seeking an exemption from insurance premium taxes as it prepares its legal claim that the colonial government illegally took its reserve land in the 1800s.

The First Nation, also called the New Westminster Indian Band, has filed two claims against the federal government, with one of them heading to the Specific Claims Tribunal. The tribunal handles allegations of treaty breaches, fraud, illegal dispositions or inadequate compensation relating to reserve lands.

But in a recent B.C. Supreme Court filing, the Qayqayt First Nation said the “process to seek justice for Canada’s unlawful actions is lengthy and costly,” and the band does not have the resources to fund its claims.

Instead, the Qayqayt First Nation sought financing options and landed an insurance policy with AmTrust Europe to fund both claims.

At the heart of the dispute is the 7% tax on the insurance premiums. The band has payed nearly $43,000 in taxes, but claims it is not subject to the provincial Insurance Premiums Tax Act because, as a First Nation, the federal government has exclusive authority over it.

The Qayqayt First Nation’s legal counsel also argued the Indian Act exempts First Nations from taxation of their property, adding that the Insurance Premiums Tax Act does not include bands or First Nations in its definition of a taxable “person.”

But the provincial government denied the claim. The B.C. government said the First Nation does count as a person under the act, adding that the Indian Act only exempts taxes that apply to property on reserve.

Between December 2016 and February 2018, lawyers were unable to come to an agreement, and a tax notice was ultimately sent to the Qayqayt First Nation. That was appealed with the Ministry of Finance in May 2018, but the band also paid the disputed taxes later that year.

On July 8 this year, the Ministry of Finance denied the appeal, and the band has since appealed the decision again – this time to the B.C. Supreme Court.

In its appeal, the band is seeking an order to reimburse the disputed taxes, as well as an order stating the band is exempt from paying taxes on the insurance premiums.

The B.C. government has not yet filed a response, and claims have not been proven in court.

In 2013, the Qayqayt First Nation claimed five parcels of reserve land were unlawfully taken by the colonial government shortly before Confederation in 1867. After Confederation, “these reserves were unlawfully taken up by Canada,” the claim adds.

In 2015, the Qayqayt First Nation filed a claim that Canada transferred 2.24 acres of reserve land to the New Westminster Southern Railway in 1891 without the consent of the First Nation.

The Qayqayt First Nation is seeking compensation from the federal government on both claims, and the federal government has agreed to negotiate a settlement on the first claim. However, the second claim, related to the railway, was rejected by the federal government, and the Qayqayt First Nation is expected to file its case with the Specific Claims Tribunal for resolution.