Is income earned off a reserve exempt from income tax?

In Clarke v. M.N.R., [1997] 3 C.T.C. 157 (F.C.A.), income earned off a reserve was considered to be closely connected to the reserve and therefore situated on the reserve and exempt from income tax because the employee resided on the reserve and the hospital where she worked, although technically off the reserve, attended to the needs of the reserve community.

In Southwind v. The Queen, 1998 CanLII 7300 (FCA), [1998] 1 C.T.C. 265 (F.C.A.) income was considered to be situated off the reserve and subject to income tax because all services performed by the business earning the income were off the reserve. The source of the income was off the reserve and the business was considered to be in the commercial mainstream as it dealt with persons off the reserve.