Swipe cards response to HST
A point-of-sale swipe card that would exempt First Nations residents from provincial sales tax under the upcoming HST is part of a potential pilot project between Akwesasne and the Ontario government.
First Nations leaders and residents have been protesting that the new blended tax that takes effect July 1 infringes on their treaty rights. But the new card is seen as a compromise that would maintain the PST exemption currently available to native residents with Indian Status ID, while providing governments with more detailed information on purchases.
"This is something that if proven successful, it could remain in place and may become available for other First Nations communities in Ontario," said Brendan White, spokesperson for the Mohawk Council of Akwesasne.
A report released Wednesday estimated the HST will cost First Nations residents from $85 million to $120 million in its first year. White said the local council has discussed the swipe card concept during technical briefings with the Ministry of Revenue and the Ministry of Aboriginal Affairs. The groups, he said, are working towards an agreement.
"The government was interested in their secure card technology presentation and agreed to learn more about it and explore this further with them as matters develop," said Scott Cavan, spokesperson for Aboriginal Affairs Minister Chris Bentley. "We will continue to call on the federal Minister of Finance to sit down and have a meaning-f
ul conversation with First Nations and Ontario in order to maintain Ontario's current point-of-sale exemption."
The local council said its developing the new card with technology company Siemens Canada and other experts in secure financial cards and identity management.
"Efforts are being directed towards a chip-based solution that will identify individuals as a First Nations citizen, recognize their tax exemption status and allow the vendor to immediately discount the provincial portion of the HST from the final sale price at the point of purchase," White stated
At this point, White said the pilot project will be funded solely by Akwesasne, though the Six Nations of the Grand River have also agreed to take part.
The main difference between the swipe card and the existing status card is that the new swipeable version will be able to capture data that will be useful to both the provincial and federal governments under the upcoming 13% harmonized tax.
In a Feb. 1 letter to Premier Dalton McGuinty, Prime Minister Stephen Harper referenced the need to record more information under the complexities of the HST.
"I understand that Ontario's current approach would be difficult to accurately measure for the purpose of determining its impact on provincial revenues," Harper wrote.
Harper added that the current system could affect the federal government's ability to determine payment amounts to the province.
"Should you wish to continue the exemption," Harper wrote, "I would encourage your officials to develop administrative options for addressing these measurement issues that are consistent with the terms of the CITCA."
CITCA refers to the Comprehensive Integrated Tax Co-ordination Agreement between the Government of Canada and the Government of Ontario. It primarily relates to the fact that Ontario has agreed to pay HST on all of its purchases of goods and services.
Akwesasne Grand Chief Mike Mitchell first raised the swipe card concept with McGuinty in December 2009.
"The Mohawks of Akwesasne are opposed to any interference with our preferred means of exercising our right to be tax exempt," Chief Mitchell stated in a news release Thursday.
Posted By: Anthony Jay Henhawk Jr.
To: Members in First Nations & Aboriginal Rights