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______________________________________________________________________________Stewart McKelveyDoing Business in Atlantic CanadaServices provided to an aboriginal person living on reserve and which are performed entirely on reservewill be considered to have been situated on the reserve. As such, they are not subject to sales andservices tax.Various other tax exemptions exist for certain commodities purchased by Indians. For example, provincialgasoline taxes and tobacco taxes may not be imposed when these items are purchased by Indians onreserve. Tax exemptions will not generally extend to Indians who live off-reserve if they do not consumethe goods or services on reserve.It is also notable that Indian Bands may make their own taxation by-laws for people and businesses onreserve.Businesses should always seek professional tax advice before dealing with situations involving taxexemptions.FinancingAboriginal people and bands living on reserve often experience considerable difficulty in obtainingfinancing. This is mainly due to the fact that pursuant to section 89 of the Indian Act, the real andpersonal property of Indians or Bands located on reserve cannot be used as security or collateral, nor canit be seized by anyone other than an Indian or a Band.Section 90 of the Indian Act also exempts from seizure personal property which was given to Indians orBands by the Crown pursuant to a treaty or agreement between a Band and the Crown. The courts haveruled that modern treaties and land claims agreements are covered by this section, meaning that anypersonal property conveyed by the Crown to an aboriginal group under such a treaty or agreement will beexempt from seizure.Accordingly, Indians living on reserve may have a difficult time providing security for loans without theassistance of government or corporate guarantees.There are however a number of exceptions which businesses should be aware of:• Leasehold interests in land designated by an aboriginal community for leasing purposes cansometimes be mortgaged;• Personal property purchased under a conditional sales contract can be seized as ownershipremains with the vendor until receipt of payment;• Indians or Bands may act as assignees or trustees, for a non-Indian financier; and• Corporate property is not exempt from seizure. As such, an Indian person who seeks financingmay be asked to incorporate a company. It should be noted, however, that the corporation istaxable.Page 85