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AGREEMENT ON FISCAL MATTERS
CONSUMER GOODS AND SERVICES
BETWEEN QUÉBEC
AND KAHNAWAKE

WHEREAS Quebec and Kahnawake have signed a Statement of Understanding and Mutual Respect and a Framework Agreement which provides for the negotiation of sectoral agreements in a number of areas, including fiscal matters;

AND WHEREAS the Mohawks of Kahnawake have the right to the tax exemptions described in the Indian Act. (R.S.C. (1985) c. I-5).

AND WHEREAS the present situation with regard to taxation of consumer goods and services is not satisfactory and has resulted in misunderstandings which have caused conflicts between the parties;

AND WHEREAS the parties wish to conclude an agreement for the purpose of establishing certain principles and procedures that will resolve these misunderstandings and avoid future conflicts between themselves;

AND WHEREAS the parties are intended to sign a complementary agreement on fiscal matters related to consumer goods and services.

NOW THEREFORE THE PARTIES AGREE TO THE FOLLOWING:

Part 1

OBJECT OF THE AGREEMENT


1. The purpose of this Agreement is to identify the principles and procedures that will define the relationship between the parties in fiscal matters regarding consumer goods and services.

2. The Territory of Kahnawake (hereinafter referred to as the "Territory") is, for the purpose of this Agreement, the territory over which the Mohawk Council of Kahnawake (hereinafter referred to as the "Council") has jurisdiction.

3. The Preamble is an integral part of this Agreement.

4. The following Schedules are an integral part of this Agreement:

  1. Definitions;
  2. Monitoring of the general level of prices;
  3. Reimbursement process and record keeping;
  4. List of tax-exempt goods.

    5. The taxes covered by this Agreement are the Quebec sales tax (QST) under Title I of the Act respecting the Québec Sales Tax (R.S.Q, c. T-0.1) and the Goods and Services tax (GST) under Part IX of the Excise Tax Act (R.S.C. (1985) c.E-15), hereinafter referred to collectively as " sales taxes ";

    If an agreement cannot be concluded with Canada for the inclusion of the GST in this Agreement, the parties reserve the right to review this Agreement.

    6. The parties agree that the fiscal regime defined in this Agreement applies only to Mohawks of Kahnawake who ordinarily reside on the Territory, hereinafter referred to individually or collectively as " beneficiary" or "beneficiaries".

    Part 2

    PURCHASES MADE BY BENEFICIARIES

    Supply of Goods and Services on the Territory


    7. The supply on the Territory to a beneficiary of goods for personal use or consumption or of services remain exempt from sales taxes at the time and place of supply.

    Supply of goods outside the Territory

    8. The supply outside the Territory to a beneficiary of goods for personal use or consumption in the Territory is exempt from sales taxes at the time and place of supply, on the mandatory presentation to the merchant of the identification card the form and content of which will be acceptable to the parties.

    9. The goods covered by section 8 are those coming within the categories listed in Schedule 4.

    This Schedule may be amended with the consent of the parties.

    10. The parties may agree to set maximum amounts or other limits for the goods supplied outside the Territory and beyond which the identification card referred to in section 8 cannot be used.

    Notwithstanding the foregoing, the parties may agree on a process for reimbursing the sales taxes paid by a beneficiary on the supply of goods for personal consumption in the Territory and for which the card referred to in section 8 cannot be used because of the application of the first paragraph.

    Supply of Services Outside the Territory

    11. The sales taxes paid on the supply outside the Territory to a beneficiary of services designated by the parties or which are related to a personally owned moveable or immoveable good, situated in the Territory, may be reimbursed under the terms and conditions agreed upon by the parties.

    The parties may also agree that the supply of certain designated services shall be exempt from sales taxes at the time and place of supply on the mandatory presentation of the identification card referred to in section 8.

    Part 3

    PURCHASES MADE BY NON BENEFICIARIES


    12. The parties agree that in the event the retail price of the goods or services supplied in the Territory to persons who are not beneficiaries are not within the prevailing market prices in the surrounding region, it shall not be attributable to the operation of this Agreement.

    13. For the application of sections 12 and 20, the Council may replace the sales taxes by a charge or fee the proceeds of which shall remain in Kahnawake, and the amount of which shall be harmonized with the amount of the QST and the GST.

    Part 4

    RETAIL BUSINESS


    14. A supply of goods or services made to a recognized Mohawk merchant for the purpose of use, consumption or supply in the course of that Mohawk merchant's retail business in the Territory, is exempt from the sales taxes.

    For the purposes of this section, Kahnawake agrees to implement a procedure for identifying all Mohawk merchants carrying on retail businesses in the Territory and differentiating them from the Mohawk merchants carrying on wholesale or manufacturing businesses in the Territory.

    Part 5

    PURCHASES BY COUNCIL


    15. Goods and services supplied for its own use to the Council or to an entity of the Council to which the latter has delegated powers, or to any other entity of a public nature jointly designated by the parties, shall be exempt from sales taxes at the time and place of supply.

    Part 6

    ASSESSMENT MECHANISMS

    Establishment of an Office


    16. Kahnawake will establish and maintain an Office (hereafter referred to as the "Office") to manage the identification card system and the reimbursement process.

    17. Quebec recognizes the Office as a Kahnawake Mohawk institution charged with the implementation of this Agreement, including the administration of reimbursement demands.

    Use of Identification Card

    18. Kahnawake shall provide for regular controls of the identification card system.

    19. A list of all Mohawks to which this Agreement applies shall be transmitted to the Minister of Revenue for his information. This list shall identify the beneficiaries who are temporarily absent from the Territory and shall be updated on a regular basis.

    The Minister of Revenue shall keep this information strictly confidential and shall not use it without the consent of the Council for any purpose other than matters identified in this Agreement.

    Price Structure Monitoring

    20. The parties agree to set up a joint mechanism for the monitoring of the general price levels in the Territory and in the surrounding region as provided in Schedule 2.

    Exchange of Information

    21. The parties agree regularly to exchange all the information, data and statistics required for each party to be in a position to appraise the implementation of this Agreement. Each party will respect the confidentiality of such information and use it, in accordance with applicable laws, for no other purpose than matters identified in this Agreement.

    22. In the event the parties cannot agree on the nature of the information, data or statistics to be exchanged, the matter will be submitted to the Liaison Committee referred to hereinafter.

    Part 7

    COOPERATION


    23. The parties to this Agreement recognize the need to cooperate and to combine their efforts to achieve the purposes of this Agreement.

    24. Quebec will assist the Office, its members and the employees charged by the Council to implement this Agreement in order to facilitate the application of the tax exemption and reimbursement system contemplated in this Agreement.

    Implementation

    25. The chief of the Office and the deputy-minister of Revenue are responsible for the application and implementation of this Agreement. Each of them may delegate to any person of the Office or the Department the power to implement any section of this Agreement.

    26. Quebec agrees to take, as quickly as possible, whatever measures are necessary to ensure the implementation of this Agreement.

    27. Kahnawake agrees to take, as quickly as possible, whatever measures are necessary to ensure the implementation of this Agreement.

    Liaison Committee

    28. A Liaison Committee is formed as an advisory body in charge of supervising the application of this Agreement and of a complementary agreement on the taxation of tobacco, petroleum and alcohol products.

    29. The Liaison Committee shall be composed of an equal number of representatives from each party.

    30. The Liaison Committee shall meet as often as required.

    31. The Liaison Committee shall have the power to make joint recommendations to the parties concerning any matter relative to the implementation of this Agreement.

    Part 8

    FINAL PROVISIONS

    Duration of the Agreement


    32. This Agreement shall take effect on the date of its signing by both parties and remain in effect for a period of five years, subject to the provisions of this Agreement.

    However, section 8, 12, 13, 14,16, 18 and 20 shall come into effect on the date agreed upon in writing by the parties.

    33. The parties may agree on an agenda for the progressive implementation of this Agreement and, if necessary, on transitional arrangements.

    Amendment of the Agreement

    34. The parties may, by written agreement, amend this Agreement or conclude supplementary agreements by an exchange of letters with respect to the implementation of this Agreement on matters not specified herein.

    Difficulties of application

    35. The parties agree to submit to the Liaison Committee any disagreement or situation that may hinder the application of any or all the provisions of this Agreement.

    36. Should the difficulty remain unresolved at the expiry of a delay of thirty (30) days from the date it was submitted to the committee, the party that submitted it may address the other party a written resiliation notice as provided in section 37.

    Cancellation of the Agreement

    37. This Agreement is canceled at the expiry of a delay of sixty (60) days from the date a written resiliation notice is forwarded by either of the parties, unless the parties agree on different terms before the end of such delay.

    38. In case of cancellation, the Liaison Committee shall recommend to the parties the transitional or final arrangements to be made.

    Renewal of the Agreement

    39. This Agreement is renewed automatically unless one of the parties gives the other a written notice of termination. This Agreement remains in effect for a maximum period of sixty (60) days after its expiry unless the parties agree otherwise.

    In the event of non renewal of this Agreement, section 38 applies.

    40. This Agreement is not intended to be an agreement or a treaty as contemplated in section 35 of the Constitution Act, 1982 nor is it to be interpreted in any way as abrogating, derogating, negating or recognizing any aboriginal, treaty or other rights, except to the extent that it recognizes the right of the Mohawks to tax exemptions.

    41. Nothing in this Agreement affects the rights of a person who is not a beneficiary to benefit from the tax exemptions provided for in the Indian Act.

    42. Should any provision of this Agreement be declared null or void by a competent tribunal, the parties undertake to remedy this nullity or invalidity as quickly as possible so that the purposes of this Agreement can be achieved.

    IN WITNESS WHEREOF the parties have signed this _____ day of _____ 1999:

    On behalf of Québec,

    _______________
    Guy Chevrette
    Ministre délégué aux Affaires autochtones

    On behalf of Kahnawake,

    _______________
    Joseph Tokwiro Norton
    Grand Chief
    Mohawk Council of Kahnawake

    _______________
    Rita Dionne-Marsolais
    Ministre du Revenu

    _______________
    Bernard Landry
    Vice-Premier ministre
    Ministre d'État à l'Économie et aux Finances
    Ministre de l'Industrie et du Commerce
    Ministre des Finances

Signature gouvernementale
Secrétariat aux affaires autochtones
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