Mohawks Face Government Opposition to Tax-Free Status

23 November 1999
The Kahnawake Tribe's intention to develop a first-class Internet gaming licensing body included plans for opening a bank and securities exchange to create a tax-free shelter similar to those offered by Caribbean nations. Those plans may be nixed by the Canadian government, reported the Montreal Gazette in a story last week.

"The exemption from taxes that the aboriginal Canadians have on a reserve does not apply to non-aboriginals, so the concept would not work," Finance Minister Paul Martin said in the article. The plans for opening their own bank were under fire, too. "There is a bank act in Canada and it applies. ... That's not a point of debate," an official in Martin's office told the Gazette. Some officials in Martin's office think this may hurt the tribe's ability to attract licensees.

Chief Davis Rice, head of Mohawk Internet Technologies (MIT), told the Gazette "Obviously, we are at a difference of opinion. If (this) proves to be something we choose to go forward with, then it's pretty obvious that we have some discussions that need to take place." Tribal officials indicated that they were going to keep up with their plans, whether or not the government approves.

The taxation and banking eruption follow extensive work by the Kahnawake to establish their tribal sovereignity, allowing them to create a gambling licensing regulatory in the heart of Canada that is not under Canadian regulation.