Indigenous Tax Exemptions in Canada 2025

Tax exemptions for Indigenous peoples in Canada are governed primarily by Section 87 of the Indian Act, but also by treaty rights, provincial agreements, and specific CRA administrative policies. Understanding which exemptions apply to you requires knowing your status, where you live, and where your income is earned.

Section 87 of the Indian Act — The Core Exemption

Section 87(1)(b) of the Indian Act states that the personal property of an Indian or a band situated on a reserve is exempt from taxation. This is the foundational tax exemption for Status Indians in Canada.

What "situated on a reserve" means in practice is determined by the courts and the CRA using a set of connecting factors. Simply being a Status Indian does not make all your income or property tax-exempt — the property must have a sufficient connection to a reserve.

Income Tax Exemption Under Section 87

Income earned by a Status Indian may be exempt from federal and provincial income tax if the income is situated on a reserve. The CRA considers:

The location where the work is performed
The location of the employer (on-reserve or off-reserve)
Whether the work benefits the reserve community
The residence of the employee

Key Point: The Supreme Court of Canada's decisions in cases like Williams v. Canada established that the connecting factors test must be applied to determine whether the exemption applies. No single factor is determinative.

GST/HST Exemptions for Indigenous Peoples

Status Indians (registered under the Indian Act) are exempt from paying the GST/HST on goods and services that are purchased on a reserve or delivered to a reserve. This exemption does not apply to Métis or Inuit people who are not registered under the Indian Act.

How to Claim GST/HST Exemption

Present your Certificate of Indian Status (Status Card) to the vendor
The goods must be purchased on-reserve OR delivered to a reserve address
Services must be performed entirely on-reserve to qualify
Online purchases shipped to a reserve address are typically exempt

Important: If you purchase goods off-reserve and take them home to the reserve yourself, the GST/HST exemption generally does not apply. The goods must be delivered to the reserve by the vendor.

Provincial Tax Exemptions

Province	Exemption	Details
British Columbia	PST Exemption	Status Indians exempt on purchases delivered to reserve; FNPPTA for property
Ontario	HST Point-of-Sale	Status Indians qualify for HST rebate on qualifying purchases on-reserve
Alberta	No provincial sales tax	No PST in Alberta, but income exemptions still apply
Saskatchewan	PST Exemption	First Nations people exempt from PST on qualifying on-reserve purchases
Manitoba	RST Exemption	Status Indians exempt on goods delivered to reserve
Quebec	QST Exemption	Recognized under Harmonized system; Status Indians exempt on-reserve

Property Tax Exemptions

Reserve lands held by the Crown for the use and benefit of a First Nations band are generally exempt from municipal and provincial property taxes. Individual band members living on-reserve may also be exempt from property taxation under Section 87.

However, First Nations governments can and do levy their own property taxes on reserves under the First Nations Fiscal Management Act and the Indian Act. These band-level taxes are separate from federal or provincial taxes.

What Is NOT Exempt

Understanding the limits of Indigenous tax exemptions is as important as knowing what is exempt:

Métis and Inuit peoples generally do not benefit from Section 87 exemptions (they are not registered under the Indian Act)
Income earned off-reserve by Status Indians living off-reserve is generally fully taxable
Investment income from off-reserve accounts is taxable
Goods purchased off-reserve and not delivered to a reserve are taxable
Business income from businesses operating off-reserve is taxable

Métis Tax Considerations

Métis people are recognized as Indigenous under Section 35 of the Constitution Act, 1982, but do not have registered status under the Indian Act. As a result, the Section 87 exemption does not apply to Métis people. Métis people pay the same taxes as other Canadians, though some provinces have specific Métis-focused programs.

Inuit Tax Considerations

Inuit people similarly do not fall under the Indian Act and are not entitled to Section 87 exemptions. However, Inuit living in Nunavut and other northern territories benefit from northern residents deductions and other location-based tax incentives available to all Canadians in remote areas.

Filing Your Taxes as a First Nations Person

Even if your income is fully exempt under Section 87, you may still be required to file a tax return to claim benefits such as:

Canada Child Benefit (CCB)
GST/HST Credit
Canada Workers Benefit
Ontario Trillium Benefit (if in Ontario)
Alberta Carbon Levy Refund

Free Tax Help: The Community Volunteer Income Tax Program (CVITP) offers free tax clinics for eligible Canadians, including many First Nations communities. Contact your band council or local Indigenous organization to find clinics near you.

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Getting Professional Help

Indigenous tax law is complex and fact-specific. Consider working with:

A CPA or tax professional with Indigenous tax expertise
Your band council's finance department
Legal Aid clinics specializing in Indigenous law
The Native Law Centre of Canada

Understanding your tax exemptions is key to keeping more of your money and accessing all the benefits you're entitled to. Start by knowing your status, where your income is earned, and filing your return annually even when income is fully exempt.