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tax on sale

vents'

But if what has just been submitted as to Lep- Prop. 61 rohon v. City of Ottawa be correct, a fortiori the decision in Coté v. Watson1 would now appear unsustainable, where it was held that the Quebec License Act, 1870, in so far as it sought to impose Provincial a tax on the sum realized from the sale of an of insolinsolvent's effects when made under the Insolvent effects. Act of 1869, 32-33 Vict., c. 16, D., (the said tax being in the form of a penalty recoverable against the assignee in insolvency for selling by auction the goods of the insolvent without taking out a license as prescribed by its provisions), was ultra vires,

customs.

government, namely the collector of customs for the port of Van- Provincial couver, was ultra vires, saying at p. 500:-"If the argument in favour tax on of this tax is valid in regard to civil officers of the Dominion, it is collector of equally valid as regards the officers and men of the military and naval forces stationed in the Dominion. To state the position in this way appears to me to answer the question raised, for it would certainly be treated as ultra vires if this tax was attempted to be collected from those who, in performance of a duty they owe to the State, are compelled to reside where ordered." It does not appear from the report that Bank of Toronto v. Lambe was cited or referred to in any way. See, also, per Davidson, J., in Heneker v. Bank of Montreal, R. J. Q., 7 S.C. at p. 265, (1895). ~ And in another recent case of Fillmore 7. Colburn, 28 N.S. 292, noted sub nom. Hillimore v. Colbourne, 32 C. L.J. 201, (1896), Leprohon v. City of Ottawa has been distinguished, the Supreme Court of Nova Scotia holding that a provincial Act requiring all the ratepayers of a section to perform statute labour on the highways or commute, was intra vires even when applied against a section man employed on the Intercolonial railway by the government of Provincial Canada, (McDonald, C.J., dissenting). It is remarked in the judg- tax on ments that a compliance with the Act did not necessarily involve the employee of absence of the defendant from his duty; that he could not be exempted nial railway. from the operation of the law merely because he happened to derive an income from a Dominion source; and that it was not as though a Dominion Act had been passed to exempt employees of the Dominion government from performance of labour on the highways. Such an Act it may be observed might perhaps be upheld on the principle of Proposition 37, q.v. It seems scarcely necessary to notice the case of Re The Toronto Harbour Commissioners, 28 Gr. at p. 195, 1 Cart. at p. 825, (1881), in which Spragge, C., points out that in any case Leprohon v. City of Ottawa would not apply to prevent provincial authorities granting compensation to the commissioners of Toronto harbour even though that harbour may be, under the British North America Act, the property of the Dominion of Canada, when as the fact was, the Crown as represented by the Dominion government had not itself fixed any compensation for the commissioners' services.

13 Q.L.R. 157, 2 Cart. 343, (1877).

Intercolo

Prop. 61 the judgment stating :-"If, in order to create a source of revenue, the provincial legislature has interfered directly or indirectly so as to restrict the operation of the Insolvent Act in the results which necessarily flow from that operation, it has usurped a jurisdiction outside of the special powers conferred on it by the British North America Act." So. Provincial too, it would seem must also fall, the decision ing Domin in Evans v. Hudon1 that a provincial legislature has no power to declare liable to seizure the salaries of employees of the Federal government; and also those in Ackman v. The Town of Moncton

Act render

ion salaries liable to seizure.

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and

In St. Catharines Milling and Lumber Co. v. The Queen, Burton, J.A., applied the principle acted on in Leprohon v. The City of Ottawa as it were conversely, and deduced therefrom a limitation to Dominion powers of legislation. Having expressed his view that certain lands there in question belonged to the province of Ontario under the British North America Act, subject to the Indian title, he says:-"Even, if I did not think the language of the British North America Act I have quoted, clearly conferred upon the provincial author

122 L.C.J. 268, 2 Cart. 346, (1877). In Dobie 7. The Temporalities Board, 3 L.N. at p. 248, 1 Cart. at p. 381, (1880), Ramsay, J., curiously remarks as to Evans v. Hudon, and Leprohon v. City of Ottawa, above referred to, that "these decisions can only be sustained on the ground that property in the subsection in question," (sc., No. 13 of section 92, 'property and civil rights in the province ')," does not include such property and civil rights as are necessary to the existence of a Dominion object." And see supra pp. 583-4-5·

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540 U.C.R. 478, 2 O.A.R. 522, 1 Cart. 592, (1877-8). Supra pp. 671-6.

power over

ities the power to extinguish the Indian title, the Prop. 61 same reasoning which compelled us to hold in Leprohon v. The City of Ottawa, that the local legislature had no power to tax the official income of a Dominion officer for provincial or municipal purposes, would compel us, in my opinion, to hold Provincial that the local governments alone must be the Indian title. judges of the extent to which lands belonging to them shall be set apart for the use or benefit of any tribe of Indians. If the Dominion government have the power, being in its nature unlimited, it might as was pointed out in that case, be so used as to defeat the provincial power and control over these lands altogether."

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tax on

licensed by

ion.

To return to the leading Proposition under dis- Provincial cussion, in view of the Dominion power over the brewers regulation of trade and commerce, its principle may the Dominbe said to be illustrated by the recent decision of the Privy Council in The Brewers and Malster's Association of Ontario v. The Attorney-General of Ontario, wherein they held, affirming the decision of the Ontario Court of Appeal, that an Ontario Act, R.S.O.,c. 194, s. 51, subs. 2, requiring every brewer, distiller, or other person, though duly licensed by the government of Canada for the manufacture and sale of fermented, spirituous and other liquors, to take out licenses to sell the liquors manufactured by them, and pay a license fee therefor, was intra vires. And the same may be said of the decision of the Supreme Court in Fortier v. Lambe, holding intra vires a Que

1See supra p. 593, n. 2.

2[1897] A.C. 231.

January 14th, 1896, unreported. Their lordships followed their prior decision in Regina v. Halliday, 21 O.A. R. 42, (1893), supra p. 361, n. 2.

*25 S.C.R. 422, (1895). For the case below see R. J.Q., 5 S.C. 47, 355. This case also decided, illustrating thereby the latter portion of

Prop. 61 bec Act imposing a license fee on every trader doing business in Montreal by wholesale, or by wholesale and retail. In both cases the tax in question was held to be a direct tax, 1Bank of Toronto v. Lambe, being specially cited and relied upon. At p. 430 of the Provincial latter case, Taschereau, J., says: " If this is a direct tax, cadit quæstio, this statute is intra vires; the fact that it might involve in a certain degree a regulation of trade and commerce cannot deprive a provincial legislature of the right to raise a revenue by means of direct taxation, or impair such right in any way.3

right of

direct taxation.

And if the conclusions above arrived at are sound, it would seem incorrect to deny to the provincial legislatures jurisdiction to prohibit the manufacture of spirituous liquors in the province, or the importation of them into the province, merely for the reason that prohibition to that extent would affect the revenue of the Dominion derived from the

the leading Proposition, that the want of uniformity or equality in the apportionment of the tax is not a ground for declaring it unconstitutional.

1As to what are direct taxes, see Proposition 66, and the notes thereto.

212 App. Cas. 575, 4 Cart. 7, (1887).

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3 But as to the meaning of regulation of trade and commerce,' in No. 2 of section 91, of the British North America Act, see supra p. 551, et seq. In Severn v. The Queen, 2 S.C.R. 70, 1 Cart. 414,(1878), all the Supreme Court judges had agreed that to impose a license fee on brewers for purposes of provincial revenue, was ultra vires of the province as falling within No. 2 of section 91. In that case, too, (2 S. C. R. at pp. 120-1, 126-7, 1 Cart. at pp. 464-6, 471-2), Fournier, J., regards as applicable to the Dominion the reasoning of Marshall, C. J., in Brown v. State of Maryland, 12 Wheat. 419, where the latter held that a State law requiring importers of foreign merchandise, or such other persons as should sell by wholesale such merchandise, to take out licenses before selling the same, was void, because it came into conflict with the power of Congress to regulate exterior commerce. Cf. per Gray, J., in Tai Sing v. McGuire, 1 B.C. (Irving) at p. 106, (1882). Sed quære. If, as it would seem, such taxation would be direct taxation, it appears clear on the Privy Council decision in Bank of Toronto v. Lambe, that it would be within the provincial power. And sees upra p. 361, n. 2, and the notes to Proposition 66.

powers of

sale and

of intoxicat

customs and excise duties. Yet this is the view Prop. 61 expressed by two of the judges of the Supreme Court in the recent Liquor Prohibition case.1 But on appeal to the Privy Council, their lordships expressed the opinion that provincial legislatures would have jurisdiction so to prohibit the manufacture, "if it were shown that the manufacture was carried on under such circumstances and conditions as to make its prohibition a merely local matter in the province."" And though, in answer to the question :-'Has a provincial legislature jurisdiction Provincial to prohibit the importation of such liquors into the probibiting province,' they reply that "it appears to them manufacture that the exercise by the provincial legislature of such ing liquors. jurisdiction, in the wide and general terms in which it is expressed, would probably trench upon the exclusive authority of the Dominion parliament,"s it seems clear enough from certain observations in the course of the argument already referred to in the notes to Proposition 59, that the view they took was that such legislation, because it interfered with Dominion revenue and excise, among other reasons, could not be said to relate to 'matters of a merely local or private nature in the province,' within the meaning of No. 16 of section 92 of the British North. America Act, on which it was necessary to found the right so to legislate if such right existed. The interference with Dominion revenue and excise was not in their lordships' view, it seems clear, a ground for denying the power to provincial legislatures if such

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1 Per Strong, C.J., in In re Prohibitory Liquor Laws, 24 S.C.R. at p. 204; per King, J., S.C. at p. 262, (1895).

[1896] A. C. at p. 371.

3 Ibid.

*Supra pp. 656-7.

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