February 12th, 2025

Authors: Alexander Qanbery and Blaise Matlock

Indigenous governments require resources to provide services to their communities. While, in Canada, some funding for services in Indigenous communities comes from federal and provincial governments, these transfers typically have strings attached: colonial ideas about how the funds can be spent and the year-to-year political whims of settler governments.

In recent years, many Indigenous nations have begun to explore how they might raise the resources necessary for governance themselves. Two approaches to doing so are imposing taxes through an Indigenous Nation’s inherent jurisdiction, and establishing tax-like relationships directly with ‘taxpayers’ that involve mutual responsibility.

What Is Inherent Jurisdiction?

Inherent jurisdiction is authority that derives from Indigenous legal orders. This authority is ‘inherent’ because Indigenous Nations possess it without any delegation of power from colonial governments.

Inherent jurisdiction to tax takes many forms, depending on the laws of the Indigenous Nation. One Nation’s relationship with the land may entitle them to use the resources of the land, which could manifest as a right to tax natural resource projects. Another Nation’s customary resource redistribution could manifest as something akin to an income tax.

Do Indigenous Nations have a taxation power according to Canadian law?

For the Canadian constitution to protect the rights of Indigenous nations, they must be classified as ‘Aboriginal rights’ by a test laid out in R. v. Van der Peet. Specifically, the ‘Aboriginal right’ must be “an element of a practice, custom, or tradition” practiced prior to contact with Europeans that is “integral to the distinctive culture of the [Indigenous] group claiming the right.” Put more simply, a practice must be “central and significant” to the culture of an Indigenous group.

Canadian courts will only recognize the smallest ‘Aboriginal right’ possible to resolve a case. In R. v. Pamajewon, two First Nations claimed they had an ‘Aboriginal right’ to self-government which included regulating gambling on their reserves. The Supreme Court avoided the self-government question, and instead focused on whether the First Nations had an ‘Aboriginal right’ to regulate gambling on reserve.

Limitations of Inherent Jurisdiction

The inherent rights of Indigenous Nations do not need to be recognized by the Canadian courts to be valid. However, there may be practical difficulties with enforcing a taxation scheme without the support of the Canadian legal system. Obtaining this recognition from Canadian courts may be difficult. They may reject taxation-like practices as not being “significant” enough to the culture, or may reject them by ignoring the broader context of the right to self-government and the financial powers such a right requires. 

Relational approaches to taxation

Approaching taxation as mutual support

Instead of focusing solely on economics, a relational orientation looks to build respectful and harmonious relationships. Relationality sees the world as a web of connection, where nothing exists on its own. Some responsibilities within these relationships can look and feel like taxes.

This perspective, common within Indigenous communities, makes land a living and integral aspect of relationships, which connect us to others. Adopting this approach more broadly could allow for settler relationships with Indigenous communities and their territories to move past simple transactions towards living connections with the community and the land. In this way, relationality emphasizes respecting and upholding the land’s natural and intrinsic worth. Through this relational lens, Indigenous legal traditions can be woven into agreements by recognizing that land isn’t just property or something to exploit. Instead, it’s seen as a relative and a source of life that deserves care and respect.

Relationality in Practice – Te Urewera Friendship Agreements

Relationality models are employed globally, with a successful example found in Aotearoa New Zealand with the Te Urewera friendship agreements. Te Urewera, once a national park, was granted legal personhood in 2014 under New Zealand law, recognizing it as a living entity with intrinsic rights.

In Te Urewera, settlers working on the land are given friendship agreements. These act like licenses but are based on mutual respect and understanding. They lay out how people can work in Te Urewera in ways that honour its personhood and Tūhoe values. Instead of setting rules for outsiders, these agreements create legal responsibilities to the land itself. They focus on cooperation, respect, and shared care.

These agreements create legal responsibilities to care for the land and the community, rather than framing the relationship as fully contained in a financial transaction.  This approach can serve as a framework for agreements with third parties, respecting Indigenous nations’ authority while ensuring shared obligations. It allows for economic benefits to flow back into local communities by creating a relationship that honours Indigenous inherent jurisdiction and their ability to tax rather than simply permitting access. This new relational approach allows for Indigenous communities to attach revenue models such as user fees that go directly to the local community as a portion of the responsibilities towards the land and the community.