Ending stereotypical thinking - Do Indigenous people pay taxes?

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The first part of my work with educators most often focuses on dismantling the stereotypes that they have heard and/or internalized about Indigenous peoples. This post is part of a series addressing the most common questions I get asked by educators about their OWN learning. 

I do not think I have ever left a workshop without being asked the question "Do Indigenous people pay taxes?" When I put the question to the room most folks who live in Canada, whether they grew up here or whether they are new to the country, have heard or hold the belief that all Indigenous people pay no taxes at all.


Indeed, once a child in grade three asked me this question. Grade three. I'm pretty sure he wasn't paying any taxes at the time, but I digress.


As a Settler on this land, I am happy that audiences feel comfortable sharing this query with me, because it is better voiced and dispelled, not hidden unquestioned under the guise of politeness. My fear is that when folks don't ask the questions really weighing on them, then any biases that stem from the beliefs might stop them from teaching this material, or that this inaccurate information and racist myths might continue to permeate the school system. 

To think about taxes, you first need to remember that according to the Federal Government there are three groups of Indigenous people in Canada, the First Nations, the Métis, and the Inuit.

The Métis and Inuit pay all taxes.  

First Nations is further broken down by government as people who qualify as Status Indians and the rest who are then labeled Non-Status Indians.

Non-Status Indians also do not receive any tax exemptions. 

So we are left with Status Indians as defined and identified by the Federal Government. 

There are two tax exemptions that apply to Status Indians -

(1) exemption from the PST portion of the HST (in Ontario) for goods and services on reserve and being used on reserve, and

(2) exception from income tax if you are living and working on reserve.


To contextualize the income tax exception, I was able to find information from 2005* that stated that median income on reserve for First Nations people aged 25 to 64 was $14,000 a year, whereas the median income of a Canadian working full-time that same year was $41,401.  Many Status Indians do not make enough to qualify to pay income taxes even if the exemption did not exist. 

It is also important to note that according to Statistics Canada, that 50% of Status Indians live off reserve, and so this exemption would not apply to them. 

There are some intricacies to these laws that I do not go into here. To read more in-depth about who these exceptions apply to and under what conditions click here, here or here

*I welcome the return of the long form census and more up to date information! 

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