The future of a native heritage museum on the Millbrook reserve in Truro, N.S., is in doubt after Ottawa stripped the museum of its charitable tax status over the weekend for participating in an alleged sham tax shelter.
The Canada Revenue Agency said the Glooscap Heritage Society exceeded its mandate to run a museum when it devoted a significant portion of its resources to the Global Learning tax shelter in 2008.
The society operates a museum with native artifacts.
The agency said the museum would issue a tax receipt for a donation and the donor would receive educational courseware valued at three times the cash outlay, which he or she would then donate to charity generating a second tax receipt.
It offered some donors more in tax refunds than they actually donated. The museum was even featured in a video promoting the scheme.
The Canada Revenue Agency contends the Glooscap Heritage Society brought in more than $13 million in cash, but only kept $900,000 of that amount for its own purposes, while $4 million went to the promoters of the tax shelter.
"It is our mandate to secure funding for day to day operations of our museum and going through the tax shelters allows us to do that," said Lloyd Johnson, chair of the society.
"We were at the whim of the tax shelter. We will take whatever they agree to give us because you have to understand once again, we're not funded by the federal government to run a museum. We're not funded by the provincial government to run a museum. So it's like desperate measures, you could call it, but following the rules."
The band has not committed to helping the society out finically.
Chief Robert Gloade said the society is independent of the band and its financial problems are not a band issue.
The museum is also facing an undetermined tax assessment. It has 90 days to appeal the ruling.