“There shall be maintained in the Department an Indian Register in which shall be recorded the name of every person who is entitled to be registered as an Indian under this Act.”

– Subsection 5(1) of the Indian Act (Canada)

In the tax and business community, we are used to seeing targeted government programs for various groups to provide support. Examples include (but are not limited to) support for:

• Low income
• Seniors
• Students
• Young families
• Single parents
• Northern Residents
• Farming and Fishing
• Technology sector
• Investment in Environment-friendly areas
• etc.

The above list are described usually by specific definitions of what the terms mean. Age, industry type, geographic location, education status, marital status, dependant status, energy consumption/efficiency, etc.

We occasionally see other support for things like (again, not an all inclusive list)

• Women in business
• Small businesses
• People with Disabilities
• Indigenous supports

Require a little more clarification of the definitions on gender vs sex, size of business (number of staff, amount of revenue, etc), ownership, disabilities, and of course an example I led with – a definition of ethnic background.

So the recent announcement of creating additional support for “Black Entrepreneurs” while the intent would be to be help those that need it – the definitions are yet to be determined – which is where the problem lies.

I started this article by quoting from legislation called the Indian Act. This legislation is far from perfect, has many problems, not the least of which is the creation of a list of a type of people.

However, as flawed as the legislation is, it has attempted to create a definition of what an Indian (the word defined in Subsection 2(1) of the Indian Act) is.

Canada does not have a “Black Register” or a list of “Black-status” individuals. It does not have a legal definition of the word “Black”.

Now please don’t take things out of context.

I applaud anything that will help small business owners, and hope that this program will work as well. However, with my experience in tax legislation and interpretation I can already see the problems that can arise when layman words are used instead of legally defined terms.

What classifies as a “Black-owned Business” or a “Black Entrepreneur” for this program? This has yet to be defined.

In a country as diverse as Canada, we have many different backgrounds from all over the world living side-by-side in (relative) “peace” (by comparison to other conflict regions in the world).

But what does it mean to be “Black” for the purposes of this program?

Now I know that I am not likely to meet the future legislated definition of what it means to be “Black”. I’m of european descent on both sides, as far back (that I know of), and I’m sure the announcement by the government is not intending for me to get this support as an entrepreneur.

There may be simplicity in those situations that are, like me, of 100% “non-Black descent”. But, like the Indian Act has tried to do – and has been challenged in court for decades – it is not that easy to define someone’s ethnic background.

How do I advise my business-owning client, that has one “Black parent”, and one “White parent”? Do they qualify for the program because they have one “Black parent” – or do they get disqualified because they have one “White parent”?

What about one grandparent?

How far back to we look? Great-Grandparents? Does ancestral place of birth matter? etc.

How will they assess eligibility?

Is it solely based on skin pigment? How would that be fair to those that may otherwise meet the criteria, but don’t look “Black”?

Will there be blood tests?

I know you are thinking to yourself, ‘Cory, that’s pretty extreme’ … you’re right and that is my point.

I really do want this program to succeed, and I will help my clients that qualify for it to get it, but do you have a concrete suggestion for how to define what “Black” actually means for this program?

Every government program has the devil in the details, and without a clear definition of what a “Black Entrepreneur” is, we can expect the administrators and financial institutions implementing such a program to be in a nightmare from the beginning.

We’ve already seen the problems with the Canada Emergency Business Account (CEBA) when they expanded the program but went away from defined terms like amount of 2019 payroll, and moved towards subjective terms like “non-deferrable expenses”.

When you open things up to subjective interpretation, things become less clear and you end up with a lot of “grey area” as a layer of complexity not wanted.

The Indian Act has been around since 1876 as a combining of the Gradual Civilization Act (1857) and the Gradual Enfranchisement Act (1869).

Scholars more intelligent than myself have battled with this flawed piece of legislation but this is the closest we have in Canada to a prior government attempt to define a race of people.

I want support for entrepreneurs that need it, however when my client asks me on whether or not they qualify for this vague announcement I want to be able to give them a simple “Black” or “White” answer.

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Note: I used “quotation marks” throughout this commentary to emphasize the lack of a standard legal definition for any of these terms.

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Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the founder of CGL Strategic Business & Tax Advisors (CGLtax.ca). Cory is an advocate for small business; converts legislation into layman terms; and provides Canadian tax advisory services to other CPA firms and their clients across Canada.

Biography of Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr can be found here.