Canada’s new approach to Indigenous tax policy 


Ottawa, Ontario (July 22, 2022) — The Minister of Crown–Indigenous Relations, Marc Miller, issued the following statement today:

“Today, as a result of extensive engagement with Indigenous partners, and after carefully considering and assessing its existing federal tax policy approach, Canada will change its approach to the phasing out of section 87 of the Indian Act as a requirement in Canada’s Modern Treaties.

Since becoming minister, I have heard very clearly from across the country that the discontinuance of section 87 of the Indian Act and the removal of the federal tax exemption on First Nations’ reserve lands is a significant disincentive to advancing self-government, a divisive issue within communities that have recently signed Modern Treaty arrangements, and a material barrier to entering into Modern Treaties.

The tax exemption will be available for continuation on Indigenous governments’ former reserves and on other First Nations reserves in Canada for prospective and existing Modern Treaty beneficiaries who are registered pursuant to the Indian Act.

Tax exemptions for First Nations property situated on reserves have existed since before Confederation to protect reserve property. These changes bring an end to the era of First Nations community members having to trade their exemption from non-Indigenous government taxation in order to advance self-determination.

Indigenous governments will continue to have the choice to maintain existing tax arrangements or take up direct tax powers on their own timeline, consistent with the commitment to advance the priority of Indigenous communities to reclaim jurisdiction over tax matters and be consistent with the principle of self-determination.

This new policy will also apply to scenarios where lands that were formerly First Nations reserves cease to be “reserve land,” as part of reconciliation agreements (e.g., Recognition of Indigenous Rights and Self-Determination agreements). Together, these changes help remove obstacles for communities choosing to pursue self-determination, tax policy and control over their lands, in their way out from under the Indian Act.

We know more work is needed, and we will work closely with interested communities to implement this change in prospective draft agreements and modify existing Modern Treaties. In the coming weeks, the government will contact prospective and existing Modern Treaty groups to begin working with interested parties on implementing this new approach. The government has also begun collaborating with provincial and territorial counterparts to support their analysis on the provincial/territorial approach to addressing the section 87 tax exemption in trilateral agreements.”

Quick facts

During the latest round of engagement with Indigenous partners, which concluded in November 2021, First Nations feedback coalesced around two main points: Modern Treaty beneficiaries who are registered pursuant to the Indian Act should not have to exchange a tax exemption for their Modern Treaty rights; and Indigenous governments should not be compelled to exercise their tax jurisdiction on an arbitrary timeline.


Media may contact:

Renelle Arsenault
Director of Communications
Office of the Honourable Marc Miller
Minister of Crown–Indigenous Relations

CIRNAC Media Relations:
Phone: 819-934-2302

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