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“ The power which is vested in Ontario to raise money by direct taxation excludes, of course, as a general rule, the right to raise it by indirect taxation. But, by means of the powers, numbers 8 and 9, relating to licenses and to municipal institutions, it is plain that Ontario may, and does, by virtue of these powers, raise very large sums of money by indirect taxation. Power No. 2 must be read as qualified in its absoluteness, therefore, by powers No. 8 and 9.”
In Leprohon v. Ottawa (x), the late Chancellor Spragge expressed the opinion that a provincial legislature cannot confer upon a municipality of its own creation power to do what it cannot itself do; and if this be sound law, the powers of municipal corporations in the matter of taxation must be limited to direct taxation, if the powers of the province are so limited.
As to the powers under sub-section 9 of section 92, it may be said that the judgment of the Privy Council in Bank of Toronto v. Lambe establishes that license fees are "direct" taxation; so that the controversy would appear to be limited to those sub-sections of section 92 (y), which give provincial legislatures power to provide for the maintenance of certain institutions, and as to these it is submitted, the same limitations exist. The raising of money to maintain these institutions-courts, prisons, hospitals, etc.—would be for “provincial purposes,” as interpreted in Dow v. Black (2).
Following Atty.-Genl. v. Reed, the Court of Queen's Bench in Manitoba held in Plummer Wagon Co. v. Wilson (a), that the then existing provincial statutes requiring payment of fees by means of law stamps on proceedings in that court were ultra vires. Thereupon, acting upon the distinction suggested by the Committee, the Manitoba legis
(3) 2 0. A. R. 522; at p. 526.
lature passed an Act creating a special fund “solely for the maintenance of the administration of justice in the courts of this province,” to which fund the fees payable in stamps upon legal proceedings were appropriated. This Act was impugned, and in Dulmage v. Douglas (6), was upheld by Mr. Justice Dubuc, but, on appeal to the full court, this decision was reversed and the statute pronounced ultra vires. In the opinion of the court, the only exception to the limitation laid down in this sub-section 2 is that expressed in sub-section 9, but as the judgment of the Privy Council in Bank of Toronto v. Lambe (c), in effect holds that license fees are “direct taxation," no doubt the Manitoba Court would agree with the view we have ventured to express, that there is no exception to the rule laid down in this sub-section 2. The Manitoba legislature surmounted the difficulty by 49 Vic. c. 51, declaring law stamps to be a direct tax, and making good this declaration by enacting that such fees, so payable in stamps, are not to form any part of the costs of an action taxable between party and party, but are, in fact, to be borne once for all by the party actually paying them in the first instance. This Act was declared intra vires by the full court in Crawford v. Duffield (d).
We have already referred to that part of the judgment in Bank of Toronto v. Lambe which lays it down that the powers of taxation vested in the provincial legislatures by this sub-section are not to be curtailed, because possibly they may be abused or so exercised as to prejudicially affect corporations and institutions existing under Dominion laws (e). See also notes to section 91, sub-section 8, for a further reference to the case of Leprohon v. Ottawa (f), in
(6) 3 Man. L. R. 562; 4 ib. 495.
which it was held that provincial legislatures have no power to tax the salaries of members of the executive staff of the Dominion.
With regard to the meaning of the expression,“ within the province,” we may again refer to Bank of Toronto v. Lambe, which decides that it is not necessary that the persons to be taxed under a provincial law be domiciled, or even resident, in the province. It was urged in that case that the Bank of Toronto was an Ontario corporation, having its domicile in Toronto, and that the taxation must therefore fall on persons not within the province of Quebec; but to this it was answered :-"Any person found within the province may be legally taxed there. This Bank is found to be carrying on business there, and on that ground alone it is taxed.”
4. The establishment and tenure of Provincial offices and the appointment and payment of Provincial officers.
This sub-section is the guarantee for the continuance of “responsible government." It covers the entire executive department of provincial government—with the sole excep: : tion of the Lieutenant-Governor, and of those judges mentioned in section 96 of the B. N. A. Act-and ensures that the people of the province, through the provincial assembly, shall always be able to make the members—high and low—of the provincial executive staff feel responsibility. In the third chapter of this book we have endeavored to make clear the intimate connection which exists between “tenure of office" and the power to “withhold supplies,” and have there pointed out that the grant to colonial legislatures of the latter power necessarily carried with it that the tenure of office in the colony should be at their “pleasure.”
With reference, however, to the existence of dual government in Canada, it has been laid down (g) that the
(9) 2 0. A. R. 522.
provincial legislatures cannot impose burdens—e.g., a municipal income tax-upon the “instruments ” by which the Dominion government is carried on. Whether this judgment can stand in the face of Bank of Toronto v. Lambe (h) is, perhaps, questionable. The impossibility of applying the principle, conversely, to relieve provincial officers from the burden of federal tariffs rather tends to weaken the ab inconvenienti argument.
It has been held that a provincial legislature is within its powers in appointing officers entrusted with the enforcement of The Canada Temperance Acts of 1864 (i) and 1878 (j) in municipalities where either of them had been adopted. In the last case the ground for the decision is thus put by the present Chancellor of Ontario:
“ The general law as to prohibition respecting all Canada, which can only be enacted by the Dominion, being localized by municipal suffrages, its enforcement becomes also a matter of local importance in the province within the meaning of the B. N. A. Act, section 92, item 16. The enforcement of the Act in the adopting municipalities involves questions of local police regulation. For the purpose of ensuring uniformity and efficiency of action, the prosecution of offenders may be properly relegated to the hands of provincial officers, for the appointment and pay. ment and governance of whom laws may be made under the B. N. A. Act, section 92, item 4. The expense of carrying the Act into effect within the adopting county is a burden to be borne by the ratepayers of that locality. So that the legislation now questioned may also fall within the scope of the B. N. A. Act, section 92, item 8, as pertaining to municipal institutions within the province."
With much misgiving, we venture to question the correctness of these decisions. The “local option ” character
(h) 12 App. Cas. 575.
(i) License Commissioners v. Prince Edward, 26 Gr. 452–per Spragge, C., (1879).
(j) License Commissioners v. Frontenac, 14 O. R. 741--per Boyd, C., (1887).
of the Canada Temperance Act-its localization by municipal suffrages—was much pressed in argument in Russell v. The Queen, as shewing the subject matter of that Act to be within the legislative competence of a provincial legislature only. The argument was rejected by the Privy Council, and it appears to us that, so long as that decision stands, the enactment of laws for the enforcement of the provisions of that Act cannot be said to be a matter of a merely local or private nature in the province. Laws “ in relation to" any subject matter must come in their entirety from that legislature to which the subject matter is committed. It is the question over again of the necessary connection between legislature and executive. It is, of course, open to the Dominion parliament to utilize existing provincial machinery (k), or to confer upon “ boards” or boilies of provincial creation powers and authorities in relation to the enforcement of Dominion laws, but, quoad the duties imposed by Dominion legislation, the members of the municipal bodies or “boards" are not provincial officers. The above cases, however, did not involve consideration of the power of the Dominion legislature to delegate its authority or to adopt existing institutions, but of the power of a provincial legislature to supplement Dominion legislation upon a matter admittedly within the exclusive ken of the latter, by the appointment of an executive staff to carry it out.
5. The Management and Sale of the Public Lands belonging to the Province and of the timber and wood thereon.
“It must always be kept in view that, wherever public land with its incidents is described as the property of' or as belonging to' the Dominion or a province, these expressions merely import that the right to its beneficial use, or to its proceeds, has
(k) See ante, p. 417, as to their adoption of provincial laws as to jurors; and ante, p. 232, as to the trial of (Dominion) election petitions by provincial courts.