Red Sun Gas Bar using status card numbers to sell tax-exempt gas and cigarettes to non-status customers
APTN Investigates | Feb 10, 2017
Carolyn Bennett came out swinging when confronted with an APTN Investigates hidden camera report that shows a Manitoba gas bar surreptitiously using status card numbers of some customers to sell tax-exempt gas and cigarettes to non-status customers.
“I’m appalled,” said the minister, who is touring Iqaluit with Prime Minister Justin Trudeau. “It’s totally unacceptable. This issue of rights is hugely important and (the tax-exempt right) is for Indigenous people. Anybody in the business allowing this — it’s not right. It’s fraud.”
In a separate APTN Investigates episode ‘Where There’s Smoke’ revealed her department has allowed the gas bar in question to operate on the Roseau River First Nations urban reserve for the past 10 years, despite community opposition and in violation of the department’s own rules that require reserve land to be designated for commercial lease.
Where the gas bar sits was rejected for such use in a 2008 referendum. But INAC never bothered to enforce the result.
A management and sublease agreement between the band and businessman David Doer sees him pay a $10 a year lease to run the gas station and in exchange, he gets half of Roseau River’s tobacco rebate – a status Indian right under Section 87 of the Indian Act. It amounts to about $80,000 a month for each Roseau and Doer.
Bennett said she was unaware of the controversy but added, “I’m happy to look into it and get back to (APTN).”
Coun. Cecil James says her words are what he and others have been waiting for, for a decade.
“It’s better late than never. I’m very happy,” said James.
He’s part of a group that’s been trying to get Indigenous and Northern Affairs Canada to intervene to get non-Indigenous businessmen out of the Red Sun Gas Bar, which is located on their urban reserve just outside of Winnipeg.
A deal was struck in 2007 between David Doer, who is the band’s former third party manager, and then-chief Terry Nelson along with his daughter Kathy. Some $2.1 million of Roseau’s trust money went into developing the site where the gas bar sits. Many band members feel they should get more benefit from their investment, and want Doer out.
If they ran Red Sun and kept all the profits and tobacco rebate, it would be a cash injection of more than $1-million a year for the impoverished community, James believes. He’s one of two councillors who opposed the deal. This past summer Chief Alfred Hayden and two other councillors restarted the clock with Doer by inking a new 20-year deal to keep him at Red Sun.
“That’s money that’s now flowing out of the community and it would have gone a long way in addressing our housing and infrastructure needs,” James said.
He has formally asked Manitoba Finance Minister Cam Friesen to intervene, given the potential loss of tax revenue for the Manitoba government if regular customers are getting tax-exempt gas and cigarettes. Friesen hasn’t responded.
As for Doer, he denied that he or any other manager sanctioned the practice of giving non-status customers tax-free merchandise by misusing other customers’ status cards. He declined an interview request but sent an email from his lawyer, Dean Giles.
“Mr. Doer is not inclined to submit to an interview or otherwise reply to the allegations that have been made.” his email stated in part. “It is made absolutely clear to all Red Sun employees that all non-treaty customers must pay tax on purchases made at the store. In the past, Red Sun has terminated employees for using their own treaty numbers in connection with sales to non-aboriginal customers or otherwise engaging in conduct of the sort.”
The contract states that Doer must pay 10 per cent of his proceeds to a community fund. But James says he has not been able to access the fund’s books.