McLachlin J.
McLachlin J. --
This case requires the Court to rule whether Indians living in New Brunswick were required to pay provincial sales tax on goods purchased off the reserve for consumption on the reserve.
Prior to April 1, 1993, Indians in New Brunswick were generally exempt from paying provincial sales tax under the Social Services and Education Tax Act, R.S.N.B. 1973, c. S-10. The exemption was repealed in 1993 and the New Brunswick Sales Tax Commissioner issued sales tax notices that status Indians were only exempt from sales tax on goods and services purchased on or delivered by the vendor to reserve lands. The respondent Indians bring a test case challenging this. They argue that s. 87 of the Indian Act , R.S.C., 1985, c. I-5 , which exempts Indians from taxation on “property . . . situated on a reserve”, prohibits taxation on off-reserve sales where the property is intended to be used on a reserve.
II. Judgments Below
II. Judgments Below
At trial ((1994), 148 N.B.R. (2d) 351), Savoie J. concluded that s. 87 applies only to property actually situated on a reserve. The sales tax is charged and collected at the point of sale. At this point, the property is not on a reserve. It follows that the tax is not prohibited by s. 87 of the Indian Act .
The majority of the New Brunswick Court of Appeal ((1996), 178 N.B.R. (2d) 1), per Bastarache J.A. (as he then was) rejected Savoie J.’s conclusion that s. 87 applies only to property located on a reserve. It held that s. 87 confers on Indians the right to use or consume personal property on the reserve without taxation. Since most property consumed or used on-reserve in New Brunswick is purchased off-reserve, the right would be meaningless without the right to purchase goods off-reserve tax-free. Therefore, s. 87 must extend to purchases off the reserve. Hoyt C.J. (Turnbull J.A. concurring) dissented, holding that the only purpose of s. 87 was to protect Indians from being dispossessed of their on-reserve personal property by taxation.
III. Statutory Provisions
Indian Act , R.S.C., 1985, c. I-5