Ontario Indigenous group wants exemption to carbon tax

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OTTAWA — With the Liberal government opening the door to exemptions to its carbon tax, an Ontario Grand Chief wants it pushed even wider to a full exemption to the levy on Indigenous lands.

Prime Minister Justin Trudeau announced last week that the government would exempt home heating oil from the carbon tax for the next three years. The exemption will apply nationwide, but the benefit will mostly flow to the Atlantic provinces where 40 per cent of homes use the more carbon intensive fuel to heat their homes.

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Abram Benedict, Grand Chief of the Akwesasne First Nation, has advocated for an exemption for all Ontario Indigenous reserves through the Chiefs of Ontario group.

The group passed a resolution in 2019 calling for an exemption to the carbon tax and wrote a letter earlier this year to the prime minister demanding it.

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Benedict said the carbon tax is a violation of his communities’ tax exemption status and a violation of their rights under the Indian Act.

“The carbon tax has been levied on our communities which, in our belief, is a direct infringement of our tax exemption protections under the Indian Act,” he said.

The Trudeau government introduced the tax on home heating oil and natural gas as well as gas for vehicles in an effort to reduce emissions. The tax is rebated to consumers and the government has long argued that most consumers get more back from the rebate than they pay. But Benedict said to get that rebate you have to file a tax return, which many people living on reserve do not do.

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“It would require that every homeowner file income tax and in some situations, members don’t file tax returns,” he said. “They probably work on reserve and don’t have any real benefits to filing income tax.”

Under the Indian Act, Indigenous people are exempt from paying income tax as long as the work is performed on reserve.

The cost of dropping the carbon tax on reserves is not clear.

When asked about possible further exemptions last week, Trudeau said his government recognized that in the case of heating oil switching to a less carbon intensive fuel such as heat pumps wasn’t easy or cost effective yet, so the government needed to pause.

“We are nothing if not a government that listens to people, that is focused on our goals and is willing to adjust as necessary,” he said.

Benedict’s call is not the only one to come forward since the government’s announcement last week. Premiers in Saskatchewan, Alberta and Ontario have all asked for natural gas and other home heating fuels to be exempted as well.

Natural Resources Minister Jonathan Wilkinson said Tuesday that the government is not planning any other changes to how the carbon tax is collected.

“There will be no more carve-outs coming.”

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