Chair, vice-chairs, and committee members, thank you very much for inviting us to appear before your committee today to provide evidence and answer any questions you have on the taxation of Hutterite colonies in Canada.
Hutterites live very private lives in the rural prairie provinces, and as such, there are a lot of misconceptions concerning them. If you look at the cover of the brief that we have provided, that's what a colony looks like. Hutterites live on these colonies. There are approximately 40,000 Hutterites in Canada on 375 colonies, with 15 to 20 families and 75 to 150 members. These colonies are each separate economic entities.
Hutterites are deeply religious people who follow the life and teachings of Jesus Christ and live together and share all things in common. Hutterites are a wonderful example of successful family farms. They have large diversified businesses; however, on a per capita or per family basis, they are, in fact, very small.
Hutterites are successful financially because the individuals work very hard, and they live very simple, humble lives. Everyone, including the children, contributes to the common well-being, and in return, the colonies provide for their every need from cradle to grave.
Colonies are very innovative. They have solar power, wind power, robotics, and geothermal energy. They're leading in manufacturing and agriculture.
In the 1960s it was determined that Hutterites should be taxed in Canada. The third session of the 30th Parliament of the Senate of Canada, on November 30, 1977, said that Hutterites should be taxed in the same manner as their non-Hutterian neighbours; that is, favourably, but not more favourably than all other taxpayers.
The taxation challenge arises from the fact that the income from a colony does not belong to any individual member; it belongs to all members, so a method needed to be developed in order to reach this fairness. As such, the act creates a fictional or a deemed trust in order to accomplish this.
The 1977 notice of ways and means motion in acting section 143 of the act, which is the part of the act that taxed Hutterite colonies, specifically said that a communal organization should be given the option of calculating its tax payable as the aggregate of the total taxes that would have been calculated had the income from its organization been taxed in all of the families' hands.
It's very clear. Everyone wanted Hutterites to be taxed the same way as every other taxpayer. Hutterites are clearly business people and farmers. There is no doubt about this. In fact, in order to fall into section 143 of the act, they must have income from a business. The confusion arises because of these deemed or fictional trusts that are created as well as the lack of clarity of the wording in section 143 over income retaining its source.
The working income tax benefit is a refundable tax that was created in 2007 in our Income Tax Act. It has very clear criteria on who an eligible person is and what they need to have in order to receive it.
Mr. Chair, if I could ask you to pretend to be a rural farmer for a minute, I could provide an example. Are you 19 years of age or older? Do you have income from farming? Does it fall within the range of $3,000 to $27,000?