Probe launched into allegations N.S. 'Mtis cards' used to buy tax-free cars and gas

The federal government has launched an investigation into allegations some members of a Yarmouth, N.S.-based organization are using their "Mtis cards" to get tax breaks on everything from gas to big-ticket items like snowblowers and vehicles.

The probe by Indigenous Services Canada follows criticism on social media of Eastern Woodland Mtis Nation Nova Scotia, and accusations it had encouraged its members to use their cards "illegally."

The allegations weremade over Twitter by Saint Mary's University associate professor Darryl Leroux, a critic of what he's called"new Mtis" and the sudden proliferation of self-reported Mtis in Eastern Canada.

The Twitter post included a screengrab of minutes from the Eastern WoodlandMtisNation's 2016 meeting.

It was posted following a CBCNews investigation intoa suspected tax scam in central Canada involving cards issued bythe Confederation of Aboriginal Peoples of Canada.

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Only people who are registered as Indians,holda federal-government issued Indian status card, and live on a reserve are entitled toHSTbreaks on purchases.

But the grand chief of the Eastern Woodland Mtis Nation Nova Scotia, Mary Lou Parker, acknowledges she's heard some members of her group are buying items tax-free with identification cards issued by the organization.

On a $50,000 vehicle, that's a savings of $7,500 in unpaid HST.

The organizationwas established in 1973and says it now has 30,000 members.WhileParkersays the group's card does not say it's for tax exemption use, she's not opposed to members using it for that reason and feels if any laws are being broken, it's by the retailer.

"We're telling them to show the card that they areMtis, and if the proprietor wants to accept that card and give them a break, it is entirely up to the proprietor, and I'm OKwith that," says Parker.

The organization is separatefrom theMtisNational Council, a group with governing members in Ontario, Manitoba, Saskatchewan, Alberta and B.C., and whichsigned anation-to-nationaccord with the federal government.

CBC News has requested a copy of anEastern Woodland MtisNation Nova Scotia membership card, but it has not been provided.

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The meeting minutes say members have shown their cards and "didn't have to pay taxes" on a snowblower at Eastern Turf locations in Dartmouth and Stewiacke, and on vehicles at O'Regans, Race Auto and Yarmouth Kia.

The document also says tax-exempt gas has been purchased at Treaty Gas, which is owned by Millbrook First Nation.

The Indigenous Services department says its investigation into whether the Eastern WoodlandMtisgroup was "mistakenly advising" members to obtain benefits intended for people with Indian status is still in its early stages.

No "cease and desist letter" is being issuedwhile the assessment is being carried out, Indigenous Services spokesperson Edith Pedneault said in a statement.

But the situation has long been on the radar of MillbrookChiefBob Gloade,particularly the claim that HST-free fuel has been purchased by Eastern WoodlandMtis membersat the band's Treaty Gasstation in Cole Harbour. In fact, the cards are rejected at the gas station.

He said Indigenous-rights holders are entitled to only "a few benefits."

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At Treaty Gas, a handwritten note taped to the credit card receipt machine states: "Metis Card Questions. Not Accepted Yet," along with the number for the Provincial Tax Commission.

Gloadesaid he's not taking a positionon whether they are Indigenousbut he said they are not treaty rights holders.

Given the ongoing challenges Mi'kmaq encounter, he said it's "frustrating" the Eastern WoodlandMtis are taking advantage of the limited opportunities that exist for rights holders. "Let's jump on that and try to get benefit," is how he assesses the situation.

That view enrages Parker.

"You can't print what I'd like to say," she said. "We're not after their money, we're not poor people. We are not a hands-out organization, we are a hands-up organization."

In Dartmouth atEastern Turf, a construction and farm equipment retailer,staff are surprised to hear the companyis named as onethat honours Mtiscards.

On its most expensive snowblower,which sells for$2,800, uncollected tax would be $420. The retailer is going through its records to verify whether it has in fact soldmachines to members of Eastern Woodland MtisNation.

For Ron MacLeod, who works in sales, a tax-free transaction would be an "honest mistake" about not knowing Mtis ID cards are not a substitute for Indian status cards.

He said in the last eight years, staff have only completed perhaps 10 sales to Indigenous customers.

He said staff would have followed standard procedure: photocopy the card presented, and attach it to the sales slip in case the books are audited.

MacLeodbelieves staff were "handed a piece of information that has shown that legally it looks correct" and they processed the saleas they would normally for registered status Indians.MacLeodsaid staff will now be trained on how to identify correct cards and "bad cards."

And he says if Eastern Turf is on the hook for uncollected taxes, the company will swallow the loss.

He's not impressed that the company is being mentioned as place to go for Eastern WoodlandMtistax breaks. Though the company is sales driven, "we want to do it in the right way. We don't want to use other people's cards that are wrong."

One retailer thathasn't been caught up in the Mtisbenefit controversy is located in the main stomping grounds of the Eastern Woodland Mtis.

At Yarmouth Kia, sales manager Marsha Deveau says at least once a month a potential customer asks about a tax breakforMtismembers, but staff are aware of the rules."Most feel as though they should able to purchase as a status Indian can, but they do understand that it's out of my control."

At Race Auto in Dartmouth, sales manager Joey Beazley says he's had to turn away Mtis card-bearing customers, and has "caught" potential sales to Mtis customers before they were completed.

O'Regans, one of the largest automotive groups in the region, did not agree to an interview. But the vice-president of marketing and communications, Susan Johnston, issued a statement that said the company follows tax laws and trains staff to ensure that anyone who'seligible for a tax exemption receives it, and "anyone who is notdoes not."

Retailers who are "knowingly or willfully accepting a false card" that is not a Indian status card may be chargedwith an offence under the Excise Tax Act and hitwitha penalty.

Butfor vendors who "erroneously relied [on identification provided] in good faith," the Canada Revenue Agency would use the exampletoeducate instead of assessing them for uncollected tax, CRA spokesperson Etienne Biram saidin a statement.

However, thepurchaser could end up in hot water. Knowingly usinga card that is not an Indian status card may result in a fine and up to six months in jail.

Suspicion about tax-law violations is a concern forParker, who saysher own Mi'kmaq and Passamaquoddy heritage goesback four generations.

But she says her group is"more Mtis" than the MtisNation in Western Canada, and she wants that recognized.

"I think that we should be entitled to tax-free anyway because we are Aboriginal. We are the first Aboriginals," she says.

That view is "an insult" to Gloade. "There's one tribe here in Nova Scotia and that's theMi'kmaqof Nova Scotia," he says. TheMtisare "not the original people to this territory."