2013-0484541R3 149(1)(c) Ruling

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether a particular First Nation qualifies as a public body performing a function of government for purposes of paragraph 149(1)(c).

Position: 1. Yes.

Reasons: It has enacted section 81 and 83 by-laws under the Indian Act and provides other services to its Members on the Reserve.


Section: 149(1)(c)




Re:  Public Body Ruling – XXXXXXXXXX 149(1)(c)


This is in reply to your letter of XXXXXXXXXX and your subsequent submissions of XXXXXXXXXX, in which you request an advance income tax ruling on behalf of the above-named taxpayer.

We understand that, to the best of your knowledge and that of the taxpayer, none of the issues involved in the ruling request is:

(i)   in an earlier return of the taxpayer or a related person;
(ii)  being considered by a tax services office or taxation centre in connection with a previously filed tax return of the taxpayer or a related person;
(iii) under objection by the taxpayer or a related person;
(iv)  before the courts, or if a judgment has been issued, the time limit for appeal to a higher court has not yet expired;
(v)   the subject of a ruling previously considered by this Directorate to the taxpayer or a related person.

In this letter, unless otherwise expressly stated, all statutory references are to the provisions of the Income Tax Act (Canada), R.S.C. 1985, c.1 (5th Supp.), as amended to the date of this letter (the “Act”), and all terms and conditions used herein that are defined in the Act have the meaning given in such definition unless otherwise indicated.

Our understanding of the relevant definitions and the facts is as follows:



a)    “Council” means the XXXXXXXXXX;
b)    “First Nation” means the XXXXXXXXXX;
c)    “Indian Act” means the Indian Act (R.S.C. I985, c.l-5), as amended;
d)    “Member” means a member of the First Nation;
e)    “Province” means Her Majesty the Queen in Right of the Province of XXXXXXXXXX;
f)    “Reserve” means the XXXXXXXXXX, located XXXXXXXXXX.


1.    The mailing address of the First Nation is XXXXXXXXXX. The First Nation is served by the XXXXXXXXXX Tax Services Office and by the XXXXXXXXXX Taxation Center.

2.    The First Nation is governed by the Council consisting of one chief and XXXXXXXXXX councillors. The elected chief and councillors have a XXXXXXXXXX-year term. The Council exercises control over the administration and development of the Reserve, represents the Members in dealing with third parties, including the provincial and federal governments, and has the power to enact taxation and land laws.

3.    The First Nation has XXXXXXXXXX Members of which approximately XXXXXXXXXX percent live on the Reserve.

4.    The Council has full jurisdiction and control of land management on the Reserve and can make laws pursuant to section 81 of the Indian Act. Laws made to date include:


5.    The Council has submitted the annual laws for property taxation to the First Nation Tax Commission for approval with respect to section 83 of the Indian Act. The First Nation Tax Commission has since approved the:



7.    The Economic Development Department has been involved in many capital projects such as residential and commercial developments in the XXXXXXXXXX area. It is currently working on XXXXXXXXXX new development projects including XXXXXXXXXX.


9.    The First Nation administers its own property taxation and assessment laws and is responsible for issuing tax notices and collecting taxes from residents on the Reserve.

10.   A portion of the taxes collected by the First Nation are transferred to XXXXXXXXXX for the First Nation’s share of municipal services provided within the boundaries of XXXXXXXXXX. The remaining portion is retained by the First Nation to cover the cost of services it provides to the Members on the Reserve including:

*     Sewer;
*     Water;
*     Road and sidewalk repair;
*     Recreation; and
*     Projects focusing on community enrichment.

11.   The First Nation is responsible for administering a number of housing programs for its members. These programs are operated with various sources of funding from other outside agencies such as Aboriginal Affairs and Northern Development Canada, Canada Mortgage and Housing Corporation and Heath Canada:

*     Non-profit housing
*     Homeowner residential rehabilitation assistance;
*     Residential rehabilitation assistance for persons with disabilities; and
*     Home adaptations for seniors’ independence.

12.   The First Nation provides an educational program for its members through an agreement with the XXXXXXXXXX. 

13.   The First Nation owns and maintains public facilities on the Reserve including:

*     Administration and governance offices;
*     Community centre, hall and gym;
*     Sports field; and
*     Meeting rooms.


Provided that the preceding statements constitute a complete and accurate disclosure of all of the relevant facts and provided further that the facts continue to describe the First Nation and describe the activities of the First Nation, we rule as follows:

A.    As of the date of this letter, the First Nation is considered to be a public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) of the Act, and, accordingly, is exempt from tax under Part I of the Act.

The above public body ruling, which is based on the Act and Regulations in their present form and does not take into account any proposed amendments thereto, is given subject to the general limitations and qualifications set out in Information Circular 70-6R5, “Advance Income Tax Rulings”, dated May 17, 2002.

This letter is based solely on the facts described above. The documentation submitted with your request does not form part of the facts and proposed transaction and any references thereto are provided solely for the convenience of the reader.

Municipal and public bodies performing a function of government in Canada that want to be recognized as qualified donees must apply for registration with Canada Revenue Agency (“CRA”). Successful registrants will be added to a public list maintained by the CRA and available on our website. As a qualified donee, the organization will be eligible to issue official donation receipts and to receive gifts from registered charities. Should the First Nation choose to apply, a copy of this letter should be submitted with the application. For more information on the application process, please refer to our website at http://www.cra-arc.gc.ca/chrts-gvng/qlfd-dns/mncplpblcbds-eng.html.

Nothing in this advance income tax ruling should be construed as implying that we are ruling on any other issue related to the First Nation.


Yours truly,


Non-Profit Organizations and Aboriginal Issues Section
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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© Her Majesty the Queen in Right of Canada, 2015

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