Maa-nulth First Nations Tax Treatment Agreement

BETWEEN:

HER MAJESTY THE QUEEN IN RIGHT OF CANADA, as represented by the Minister of Finance

(“Canada”)

AND:

HER MAJESTY THE QUEEN IN RIGHT OF BRITISH COLUMBIA, as represented by Minister of Finance

(“the Province”)

AND:

HUU-AY-AHT FIRST NATIONS

KA:’YU:’K’T’H’/CHE:K’TLES7ET’H’ FIRST NATIONS

TOQUAHT NATION

UCHUCKLESAHT TRIBE

UCLUELET FIRST NATION

(“Maa-nulth First Nations”).

WHEREAS:

NOW THEREFORE in consideration of the premises and the covenants and agreements set out below, the parties agree as follows:


1. INTERPRETATION

1 (1) In this agreement:

" claimant" means:

(A) a trust, board, commission, tribunal or similar body, established by a Maa-nulth First Nation;

(B) an eligible corporation of a Maa-nulth First Nation; or

(C) a partnership each member of which is a person described in subparagraph (i) or clause (A) or (B); and

Cultural Property Export and Import Act”means the Cultural Property Export and Import Act,R.S.C. 1985, c. C-51;

eligible corporation ” of a Maa-nulth First Nation means:

Excise Tax Act”means the Excise Tax Act, R.S.C. 1985, c. E-15;

Income Tax Act”means the Income Tax Act, R.S.C. 1985, c.1 (5th supp);

Interpretation Act” means the Interpretation Act, R.S.C. 1985, c. I-21;

Maa-nulth First Nations Final Agreement” means the Maa-nulth First Nations Final Agreement between and signed by Canada, the Province and the Maa-nulth First Nations, as amended from time to time.

Maa-nulth First Nations Final Agreement Actmeans the Maa-nulth First Nations Final Agreement Act, S.B.C. 2007, c. 43;

“Maa-nulth First Nation Settlement Trust” at any time means a trust that has been designated before that time by the Minister of National Revenue pursuant to subsection 9(1) as a Maa-nulth First Nation Settlement Trust and that is at that time designated as a Maa-nulth First Nation Settlement Trust.

Mineral Land Tax Act” means the Mineral Land Tax Act, R.S.B.C. 1996, c. 290;

Mineral Tax Act” means the Mineral Tax Act, R.S.B.C. 1996, c. 291;

Motor Fuel Tax Act” means the Motor Fuel Tax Act, R.S.B.C. 1996, c. 317;

permanent establishment ” of a claimant means:

Petroleum and Natural Gas Act” means the Petroleum and Natural Gas Act, R.S.B.C. 1996, c. 361;

Property Transfer Tax Act” means the Property Transfer Tax Act, R.S.B.C. 1996, c. 378;

Social Service Tax Act” means the Social Service Tax Act, R.S.B.C. 1996, c. 431; and

specified activity” of a claimant means:

(2) The Interpretation Act applies to this agreement as if it were an enactment, except that the definition of “government “ in subsection 123(1) of the Excise Tax Act does not apply for the purposes of section 4.

(3) Except as provided in subsections (1) and (4), the definitions in Chapter 29 Definitions of the Maa-nulth First Nations Final Agreement, other than the definitions “agreement”, “director”, “disagreement”, “dispose”, “mineral”, “municipality”, “natural gas”, “petroleum” and “schedule”, apply to this agreement.

(4) The definition of “person” in Chapter 29 Definitions does not apply in the definition of “permanent establishment”.

2 GENERAL

2 (1) This agreement does not form part of the Maa-nulth First Nations Final Agreement.

(2) This agreement is not a treaty or a land claims agreement and does not recognize or affirm any aboriginal or treaty rights within the meaning of sections 25 and 35 of the Constitution Act, 1982.

(3) This agreement enures to the benefit of and is binding upon the parties and their respective successors.

(4) Nothing in this agreement affects any entitlement of Maa-nulth First Nation Citizens, Maa-nulth First Nations, Maa-nulth First Nation Public Institutions or a Maa-nulth First Nation Settlement Trust to any benefit available under federal law or provincial law.

(5) No provision of this agreement, or performance by a party of an obligation under this agreement, may be waived unless the waiver is in writing and signed by the party or parties giving the waiver.

(6) No written waiver of a provision of this agreement, of performance by a party of an obligation under this agreement, or of default by a party of an obligation under this agreement, is deemed to be a waiver of any other obligation or provision or of any subsequent default.

(7) This agreement may not be assigned, either in whole or in part, by any party.

(8) This agreement may be executed at one or more times and in one or more places. Each counterpart is deemed an original instrument as against any party who has signed it and the aggregate of the counterparts are deemed to constitute a single executed document.

(9) If any provision of this agreement is declared or held to be void, voidable, invalid, illegal or unenforceable for whatever reason, the provision will be severed from the remainder of this agreement but all other provisions of this agreement will remain in full force and effect and will be construed as if this agreement had been executed without the void, voidable, invalid, illegal or unenforceable portion.

(10) Time is of the essence in this agreement.

3 INCOME TAX ACT STATUS OF MAA-NULTH FIRST NATIONS

3 (1) For the purpose of paragraph 149(1)(c) of the Income Tax Act, each Maa-nulth First Nation is deemed to be a public body performing a function of government in Canada.

(2) For the purposes of paragraphs 149(1)(d) to 149(1)(d.6) and subsections 149(1.1) to 149(1.3) of the Income Tax Act, each Maa-nulth First Nation is deemed to be a municipality in Canada whose boundaries are those of its Maa-nulth First Nations Lands.

(3) For the purposes of subsections 110.1(1), 118.1(1) and 149.1(1) of the Income Tax Act, each Maa-nulth First Nation is deemed to be a municipality.

(4) A Maa-nulth First Nation will be treated as a public authority designated pursuant to subsection 32(2) of the Cultural Property Export and Import Act and any non-profit organization established by that Maa-nulth First Nation to receive, store and display cultural objects will be treated as an institution designated under that subsection of that Act if that Maa-nulth First Nation or the non-profit organization, as the case may be:

4 GST REFUND

4 (1) A claimant who acquires or imports property or a service in respect of which it pays tax under subsection 165(1) or section 212 or 218 of the Excise Tax Act is entitled to a refund of that portion of the tax that is not recoverable as an input tax credit under Part IX of that Act and is not otherwise recovered under any law, if:

(3) Despite paragraph 141.1(1)(b), subsection 200(3), section 1 of Part V.1 of Schedule V and sections 2 and 25 of Part VI of that Schedule, of the Excise Tax Act, and despite subsection 2(4) of this agreement, if a claimant makes a supply by way of sale of property that is capital property of the claimant and in respect of which the claimant is entitled to receive a refund under subsection 4(1), the supply is deemed, for the purposes of Part IX of that Act, to be made in the course of a commercial activity of the claimant.

(4) A refund of tax under subsection 4(1) will not be paid unless an application for the refund is filed with the Minister of National Revenue within four years after the tax was paid.

(5) The provisions of Part IX of the Excise Tax Act apply, with such modifications as the circumstances require, in respect of claims under
subsection 4(1) and in respect of amounts paid or payable as a refund under that subsection, as though the refund provided for under that subsection were a rebate provided for under Division VI of Part IX of the Excise Tax Act.

5 SOCIAL SERVICE TAX AND MOTOR FUEL TAX

5 (1) Subject to subsections 5(2) to 5(5), a claimant is entitled to a refund of:
(2) A claimant is entitled to a refund under subsection 5(1), to the extent that the tax is not otherwise recoverable by the claimant under any law, if:
(3) A claimant must pay a tax at the time of a change of use as required by the Social Service Tax Act if:

(4) The Social Service Tax Act, the Motor Fuel Tax Act and any other relevant law of the Province apply to subsections 5(1) to 5(3) to the extent that they are not inconsistent with those subsections.

(5) For all purposes a refund made under subsection 5(1) is deemed to be made under the Social Service Tax Act or the Motor Fuel Tax Act, as the case may be.

6 PROPERTY TRANSFER TAX

6 (1) Neither a Maa-nulth First Nation nor its Maa-nulth First Nation Public Institutions are subject to tax under the Property Transfer Tax Act in respect of the Maa-nulth First Nation Lands of that Maa-nulth First Nation.

(2) A Maa-nulth First Nation Citizen is not subject to tax under the Property Transfer Tax Act in respect of the registration of that citizen’s interest in Maa-nulth First Nation Lands:

7 REAL PROPERTY TAX

7 (1) No estate or interest of a Maa-nulth First Nation or an eligible corporation in Other Maa-nulth First Nation Lands as set out in 2.2.0 of Chapter 2 Lands and Appendix C is subject to real property taxation under provincial law, except for an estate or interest in a parcel of such lands when the parcel is used for a purpose other than:

(2) Maa-nulth First Nation Lands held or occupied by a person for the purpose of harvesting timber on those lands under a licence or permit issued by, or an agreement entered into with, a Maa-nulth First Nation are exempt from real property taxes, except real property taxes imposed by the applicable Maa-nulth First Nation Government.

(3) Maa-nulth First Nation Lands and improvements that are:

(4) If an improvement is not a designated improvement within the meaning of 19.3.2 (b) of Chapter 19 Taxation and a Maa-nulth First Nation uses a portion of the improvement for a public purpose or a purpose ancillary or incidental to a public purpose, 19.3.1 of Chapter 19 Taxation applies in respect of the portion, as if that portion were a designated improvement.

(5) For the purpose of 19.3.1 of Chapter 19 Taxation, an improvement owned by a Maa-nulth First Nation and not in use is deemed to be a designated improvement.

8 RESOURCE TAXES

8 (1) Subject to subsections (2) and (4) to (6), no person is subject to tax under:
(2) Subsection 8(1) applies to a person only to the extent that:

(3) Neither a Maa-nulth First Nation nor an eligible corporation is subject to tax under the Mineral Land Tax Act on Maa-nulth First Nation Lands of the applicable Maa-nulth First Nation.

(4) Subsection (1)(a) does not apply to Tenured Subsurface Resources listed in Appendices E-12, E-13 and E-15.

(5) The Province will pay to the applicable Maa-nulth First Nation the amount equal to the tax that the Province collects, after the Effective Date, under the Mineral Tax Act in respect of the Tenured Subsurface Resources on that Maa-nulth First Nation’s Maa-nulth First Nation Lands.

(6) Before March 31 in each year, the Province will pay to the applicable Maa-nulth First Nation:
9 (1) On written application, the Minister of National Revenue will designate, as a Maa-nulth First Nation Settlement Trust, any trust whose terms provide the following:

(2) Any refusal by the Minister of National Revenue to designate a trust as a Maa-nulth First Nation Settlement Trust under subsection 9(1) is subject to the same right of appeal as applies to a refusal to register an applicant for registration as a registered charity under the Income Tax Act, with such modifications as the circumstances require.

(3) A Maa-nulth First Nation Settlement Trust, a beneficial interest in a Maa-nulth First Nation Settlement Trust, and any amount contributed to a Maa-nulth First Nation Settlement Trust or distributed as income or capital by a Maa-nulth First Nation Settlement Trust to a beneficiary is not taxable except that
(4) Where the Minister of National Revenue is of the opinion that a Maa-nulth First Nation Settlement Trust has failed to comply with the terms referred to in paragraphs 9(1)(a) to (h):

(5) Any notice or revocation under subsection 9(4) is subject to the same rights of appeal and is subject to the same procedural rules, including applications for extended time periods, as may be available under Canadian law in respect of a revocation of, or a notice of a proposal to revoke, the registration of a charity that is registered under the Income Tax Act, as applicable, with such modifications as the circumstances require.

(6) If the Minister of National Revenue revokes the designation of a Maa-nulth First Nation Settlement Trust, the taxation year of the trust that would otherwise have included the time of revocation is deemed to end immediately before the time of the revocation, and the Maa-nulth First Nation Settlement Trust is deemed to have disposed of each of its assets immediately before that time for proceeds equal to its fair market value, and to have re-acquired the asset at the time of revocation at a cost equal to its fair market value at that time, and for the purposes of calculating the taxable income of the Maa-nulth First Nation Settlement Trust under paragraph 9(3)(b), the amount by which the fair market value of the asset exceeds (or is less than) the cost amount of the asset is deemed to be a capital gain (or capital loss) from the disposition of property that was not an investment referred to in paragraph 9(1)(c) and that was not acquired in the course of carrying on a permitted activity of the Maa-nulth First Nation Settlement Trust.

(7) For purposes of subsection 9(4), the distribution by a Maa-nulth First Nation Settlement Trust of any amount to a beneficiary of the Maa-nulth First Nation Settlement Trust in respect of the beneficiary’s interest in the Trust is not considered to be cause for the revocation of the designation of the Maa-nulth First Nation Settlement Trust.

(8) The rule against perpetuities does not apply to a Maa-nulth First Nation Settlement Trust.

10 MAA-NULTH FIRST NATION CAPITAL

10 Any transfer of Maa-nulth First Nation Capital of a Maa-nulth First Nation, other than cash, between that Maa-nulth First Nation and its Maa-nulth First Nation Public Institutions or an eligible corporation, or registration of an interest in such property, is not taxable.

11 ELECTION FOR DEEMED DISPOSITION OF CAPITAL PROPERTY

11 (1) In this section,

“eligible individual” means an individual who, at the valuation time, is an Indian and who, at that time, holds an eligible interest;

“eligible interest” means any estate or interest in:
“specified lands” means:

“valuation time” means, in respect of an eligible interest, the beginning of January 1 of the first calendar year that starts after the twelfth anniversary of the Effective Date, except that if a Maa-nulth First Nation Government exercises its power to impose an income tax in respect of the eligible interest before that date pursuant to Chapter 19 Taxation and such tax applies to the eligible individual who holds the eligible interest, the valuation time is the effective application date of the Maa-nulth First Nation income tax.

(2) Subject to subsections 11(3) and 11(4), an eligible individual may elect for the purposes of the Income Tax Act to be deemed to have disposed, at the time that is immediately before the time that is immediately before the valuation time, of an eligible interest owned at that time for an amount equal to its fair market value and to have reacquired it at the valuation time at a cost equal to that same amount.

(3) An election in respect of an eligible interest shall be made in writing to the Minister of National Revenue and may only be made

(4) For the purposes of applying sections 37, 65 to 66.4, 111, subsections 127(5) to 127(26) and section 127.3 of the Income Tax Act, an eligible individual who makes an election will be deemed not to have owned the eligible interest at any time before the time it was deemed to have been reacquired by the eligible individual under subsection 11(2).

12 DISPUTE RESOLUTION

12 (1) The parties desire and expect that most disagreements will be resolved by informal discussion between or among the parties without the necessity of invoking a dispute resolution mechanism.

(2) Except for a dispute under sections 3 to 11, in the event of a dispute between any of the parties arising under this agreement, the parties involved in the dispute will use the mediation process referred to in Stage 2 of Chapter 25 Dispute Resolution before pursuing any other legal remedy.

13 TERM OF THIS AGREEMENT

13 (1) Subject to subsection 13(2), this agreement comes into effect on the Effective Date and, unless the parties agree otherwise, terminates at the end of March 31st of the second calendar year following the calendar year in which a party notifies the others that it wants the agreement to terminate.

(2) With respect to provincial enactments, any provision of this agreement not contained in the tax treatment agreement as defined in the Maa-nulth First Nations Final Agreement Act, including the amendments to the definitions of claimant and eligible interest, subsection 6(2)(b), 7(3) or section 10, will come into effect on the date the Legislature gives effect and force of law to these provisions.

(3) A party may not, before the end of the calendar year in which the 15th anniversary of the Effective Date occurs, give notice that it wants this agreement to terminate.

(4) At least one year before this agreement is expected to terminate, the parties will use best efforts to negotiate a new tax treatment agreement.

14 AMENDMENT AND REVIEW

14 (1) Any amendment to this agreement must be in writing and executed by all parties.

(2) Any party may at any time request the other parties to review this agreement and to consider amendments to this agreement and the other parties will not unreasonably withhold consent to the review.

(3) For greater certainty, nothing in subsection 14(2) requires any party to agree to amend this agreement.

15 NOTICES

15 (1) Unless otherwise provided, a notice, document, request, approval, authorization, consent or other communication (each a “communication”) required or permitted to be given or made under this agreement must be in writing and may be given or made in one or more of the following ways:
(2) A communication will be considered to have been given or made and received:

(3) A communication must be delivered, transmitted to the facsimile number or mailed to the address of the intended recipient set out below:

For Canada:
Attention: Minister of Finance
House of Commons
Confederation Building
Ottawa (Ontario) K1A 0A6
Fax number: 613-995-1534

For British Columbia:
Attention: Minister of Finance
Parliament Buildings
Victoria (British Columbia) V8V 1X4
Fax number: 250-387-5594

For the Huu-ay-aht First Nations:
Attention: Chief Councillor
Box 70
Bamfield, British Columbia
V0R 1B0
Fax Number: 250-726-1222

For the Ka:’yu:’k’t’h’/Che:k’tles7et’h’ First Nations:
Attention: Chief Councillor
General Delivery
Kyoquot, British Columbia
V0P 1J0
Fax Number: 250-332-5210

For the Toquaht Nation:
Attention: Chief Councillor
Box 759
1316 Pine Street
Ucluelet, British Columbia
V0R 3A0
Fax Number: 250-726-4403

For the Uchucklesaht Tribe:
Attention: Chief Councillor
Box 1118
Port Alberni, British Columbia
V9Y 7L9
Fax Number: 250-724-1806

For the Ucluelet First Nation:
Attention: Chief Councillor
Box 699
Ucluelet, British Columbia
V0R 3A0
Fax Number: 250-726-7552

A party may change its address or facsimile number by giving a notice of the change to the other Parties in the manner set out above in 15(1).

For the Government of Canada:

Signed in Ottawa, this 27th day of May, 2009

James M. Flaherty
The Hon. Minister of Finance

For the Government of British Columbia:

Signed in Vancouver, this 19th day of May, 2009

Colin Hansen
The Hon. Minister of Finance

Maa-nulth First Nations

For the Huu-ay-aht First Nations:

Robert Dennis Sr.
Signed at Port Alberni, this 11th day of May, 2009

For the Ka:’yu:’k’t’h’/Che:k’tles7et’h’ First Nations:

Therese Smith
Signed at Port Alberni, this 11th day of May, 2009

For the Toquaht Nation:

Anne Mack
Signed at Port Alberni, this 13th day of May, 2009

For the Uchucklesaht Tribe:

Charlie Cootes
Signed at Port Alberni, this 11th day of May, 2009

For the Ucluelet First Nation:

Vi Mundy
Signed at Port Alberni, this 11th day of May, 2009

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