statutes and judicial utterances, as depending on the Prop. 66 quantity sold.1 Thus they lend additional confir mation to the dictum of Townshend, J., in The 2 and retail. Queen v. McDougall, that :-"The distinction be- Wholesale tween wholesale and retail so far as making it a test of the respective powers of the two legislatures under the British North America Act has been abandoned."3 That dictum at the time it was uttered rested upon the decision of the Board in the matter 1 What would seem to be the more essential difference between wholesale and retail trade, namely, that the wholesale merchant supplies the trade, whereas the retailer deals directly with the general public, and whether any line of severance of legislative power can be founded on this distinction, does not appear to have been discussed in any of the cases, except so far as the wholesale merchant in this sense may be identified with the manufacturer, as to whom, in the Liquor Prohibition Appeal, 1895, [1896] A.C. 348, as we have seen, (supra p. 657), the Privy Council expressed the opinion that under certain circumstances the provincial legislatures might have power to control his business in the absence of conflicting legislation by the parliament of Canada. They do not hold that the mere fact that he is a wholesale manufacturer and not a retail dealer determines under which legislative jurisdiction he falls. 222 N.S. at p. 491, (1889). 3Cf. also, per Weatherbe, J., S. C. at p. 477; per McDonald, C.J., 'Wholesale S.C. at pp. 472-3; per Sedgewick, I., in In re Prohibitory Liquor and 'retail Laws, 24 S.C.R. at pp. 251-2: per King, J., S.C., at p. 262; and per Maclaren, Q.C., arguendo, S.C. 24 S. C. R. at p. 180. The distinction had been inade such a test in the earlier cases. Thus in Severn v. The Queen, 2 S.C.R. 70, 1 Cart. 414, (1878), the majority of the judges held that a tax upon brewers did not come within No. 9 of section 92, whereas, of course, a tax upon retail shop, saloon and tavern keepers did. In this case, moreover, the view was expressed by Strong, J., 2 S.C.R. at pp. 105-6, 1 Cart. at p. 449, and apparently concurred in by Ritchie and Taschereau, J. J., 2 S.C. R. at pp. 100-2, 115, 1 Cart. at pp. 443-6, 458, though a point not necessary to be decided for the disposition of the case, that the wholesale trade in liquor was not a proper subject of police regulation, though the retail trade of course is. See as to this infra pp. 728, n. 5, 730, n. I. Cf., also, as to the supposed quasi-national, rather than municipal, character of the wholesale trade, and as to its being the trade and commerce of the country in some fuller sense than the retail trade, per Richards, C. J., in Slavin v. The Village of Orillia, 36 U.C. R. at p. 180, 1 Cart. at p. 707, (1875); per Wilson, J, in Regina v. Taylor, 36 U.C. R. at pp. 195-8, (1875); per McDonald, C. J., in The Queen v. McDougall, 22 N.S. at pp. 471, 5, 6, (1889); per Ritchie, J., S.C. at p. 488. And see per Boyd, C., in Regina v. Halliday, 21 O.A. R. at pp. 44-5, (1893); per Prop. 66 of the Dominion License Acts, 1883-4,1 wherein Townshend, J., says that both sides conceded, and the Court concurred with them, that no distinction, in reality, exists between wholesale and retail licenses, and consequently in the power of regulating both by provincial legislatures. The Dominion License Acts there in question, as has been seen in an earlier part of this work, were concerned rather with regulation of the liquor trade, than with raising a revenue by taxation, though license fees were imposed; and whereas the Supreme Court had held Wholesale their provisions intra vires as to wholesale and vessel and retail.' licenses, while ultra vires as to retail licenses, the 3 4 Privy Council held them ultra vires in respect to all the licensing provisions alike. And so Weatherbe, J., in The Queen v. McDougall, says of that case: "Though I have paid attention to all that has been said before the Supreme Court of Canada and the Privy Council, I am unable to see that the words. 'wholesale and retail' are anything but mere arbitary terms adopted for convenience." Thus, as Osler, J. A., S.C., ibid. at pp. 47-8; per Ritchie, C.J., in Molson v. Lambe, 15 S.C. R. at p. 259, 4 Cart. at p. 339, (1888); per Fournier, J., S.C., 15 S.C. R. at p. 565, 4 Cart. at p. 343; per Dorion, C.J., S.C., M. L.R. 2 Q.B. at p. 403, 4 Cart. at pp. 367-8; The Queen v. McDougall, 22 N.S. 462, (1889); Lepine v. Laurent, 17 Q.I.R. at p. 236, (1891); Fortier v. Lambe, R.J.Q. 5 S.C. 47, 355, 25 S.C.R. 422, (1895). 1Cas, Dig. S.C. 509, 4 Cart. 342, n. 2. See supra pp. 289-90. $22 N.S. at p. 495. 3 Supra pp. 403-6. 422 N.S. at p. 477. 5 The Dominion License Act, 1883, 46 Vict. c. 30, s. 7, (d), defined wholesale as consisting in sales of over two gallons. In the argument before the Privy Council in this matter of the Dominion Liquor License Acts, Mr. Horace Davey, as he then was, is reported as saying "I agree that no logical distinction whatever can be drawn between wholesale and retail licenses,—that there is no logical distinction between regulating the power of a shop-keeper to sell a dozen bottles at a time, and regulating the power of a tavern-keeper to sell in the Brewers and Maltsters Association case where Prop. 66 the main object of the Act before them was to raise a revenue for provincial purposes,1 so in the matter of the Dominion Liquor License Acts 1883-4, where the object of the legislation was rather regulation of the liquor traffic, the Privy Council finds nothing turns, so far as legislative power is concerned, upon the fact that those affected by the statutory provisions dealt in wholesale quantities, and not in retail Wholesale quantities. And in the recent Liquor Prohibition Appeal, 1895, they, in like manner, draw no distinction whatever between the sellers of liquors in wholesale quantities, and other sellers, and say of the Canada Temperance Act, 1886 :-" They draw an arbitrary line at eight gallons in the case of beer, and at ten gallons in the case of other intoxicating 2 one bottle at a time, or half a bottle, or a pint. 'Wholesale licenses' may be a convenient expression in the Act, but it is really retail trade." Whereupon the following took place : Sir Montague Smith: "Whether he sells one bottle or twelve he is selling by retail.' Mr. Davey: "Yes, and there is no logical distinction between the two. It is a different kind of retail trade." and 'retail. Sir Montague Smith: "It is a convenient phrase to express the 'Wholesale meaning instead of repeating every time the number of bottles:" and 'retail." Printed transcript from Marten & Meredith's shorthand notes at p. 137. A little later on Mr. Davey says: "I entirely accept and agree with what was so forcibly put by my friend, Sir Farrer Herschell, that the Dominion parliament cannot arrogate to itself the power and give itself jurisdiction by giving its own definition to wholesale,' and that you must look really to the substance of the matter:" ibid. at p. 138. See, also, ibid. at pp. 90-1; and see per Townshend, J., in the Queen v. McDougall, 22 N.S. at p. 496. In In re Prohibitory Liquor Laws, 24 S.C. R. at p. 204, (1895), Strong, J., says: "I do not think any statutory definition of the terms wholesale' and retail' is requisite, but if legislation is required for such purpose, it is vested in the Dominion as appertaining to the regulation of trade and commerce. In Regina v. Halliday, 21 O.A. R. at p. 44, (1893), Boyd, C., says that the regulation of the liquor traffic, both wholesale and retail, must now be considered to be a matter of provincial competence. See an article on Legislation and Liquor Dealers, 32 C.L.J. at pp. 439-42; also, some remarks in 5 C.L.T. at pp. 161-3. 1[1897] A.C. 231. [1896] A.C. 348, at pp. 367-8. Prop. 66 liquors, with the view of discriminating between wholesale and retail transactions."1 Powers of taxation. Wholesale licenses. Sect. 124, 2 Returning to the general subject under discussion of provincial powers of taxation, No. 2 and No. 9 of section 92 of the British North America Act, are, as has been already stated, the only clauses in the Act, excepting section 124 concerning New Brunswick lumber dues, which give express powers of taxation to provincial legislatures, and both of them relate to direct taxation. If then the provinces have any powers at all of indirect taxation, a question which it is proposed presently to consider, it can only be such indirect taxation as is of 'a merely local n. 2. 1There is nothing in this at variance with the previous decision of the Ontario Court of Appeal in Re Local Option Act, 18 O.A. R. 572, (1891). All that was there decided was that on the proper construction of the Ontario enactment in question, the prohibition contemplated was one of sale by retail only, and that this was intra vires. The Court, however, rested this on No. 8 of section 92, as to which see supra p. 398, Since the Privy Council decision in the matter of the Dominion Liquor License Acts, it has been unanimously held by the Supreme Court in O'Danaher v. Peters and O'Regan v. Peters, 17 S.C.R. 44, 4 Cart. 425, (1889), that the New Brunswick Liquor License Act, 1887, was intra vires in imposing the necessity of taking out a license on wholesale sellers of liquor. No mention is made of No. 9 of section 92 of the British North America Act, and it would seem that the Act was viewed in the light rather of police regulation. Taschereau, J. there remarks: "Whether he sold wholesale or retail is immaterial, it is not because he sold a large quantity that he can claim to have the action against him dismissed." And Patterson, J., says: "The power of the local legislatures to provide for the issuing of licenses for the sale of spirituous liquors, either in large or small quantities, to limit the number of licenses, and to prohibit, under penalties, the sale of such liquors without a license, cannot now be treated as an open question.' It would seem, therefore, that as under the American decisions cited by Ritchie, E.J., in Keefe v. McLennan, 2 R. & C. at p. 12, 2 Cart. at p. 410, so in Canada, the power of police regulation extends to wholesale trade, though in Severn v. The Queen, 2 S.C. R. at pp. 105-6, 1 Cart. at p. 449, Strong, J., had expressed an opinion the other way. And see the citations supra p. 427, n. 3. 2In Attorney-General of Quebec v. Reed, 26 L.C.J. at p. 355, 3 B.N.A. Act. Cart. at p. 216, (1882), Dorion, C.J., points out that the right thus reserved to New Brunswick by section 124 to collect existing lumber dues, coupled, however, with the condition that they should not be increased, is an exception to the general rule that provincial legislatures have no power of indirect taxation. See as to it, further, Debates on Confederation, at p. 377. or private nature in the province,' within the mean- Prop. 66 ing of No. 16, or such indirect taxation as is incidental to the exercise of the other express powers conferred by section 92. And moreover, any such provincial power of indirect taxation is obviously immensely restricted by section 121, which provides that all articles of the growth, produce or manufacture of any one of the provinces shall, from and after the Union, be admitted free into each of the other provinces', and by section 122 which places customs and excise laws under the Dominion jurisdiction. Thus these two sections place beyond provincial Powers of control the main field of indirect taxation, and speaking generally it may therefore be, without doubt, correctly said that the provinces are confined to direct taxation. And it would seem in this general sense that the Privy Council were speaking when they said in Bank of Toronto v. Lambe,1 referring to the provinces: "There are obvious reasons for confining their power to direct taxes and licenses, because the power of indirect taxation would be felt all over the Dominion." And so also in St. Catharines Milling and Lumber Co. v. The Queen, 2 where : 112 App. Cas. at p. 586, 4 Cart. at p. 22 (1887). Cf. per Wurtele, J., in Lamonde v. Lavergne, R.J.Q., 3 Q.B. at p. 314, (1894) :"The Confederation Act, by the second paragraph of section 91, places the regulation of trade and commerce under the exclusive control of the parliament of the Dominion, and when we remember that the bulk of indirect taxes consists in customs and excise duties, the reason for the provision which restricts the taxing powers of the provincial legislatures to direct taxation, becomes apparent. The imposition of taxes by the provincial legislatures on commouities might interfere with the movement of trade between the various provinces of the Dominion and seriously obstruct commercial transac tions, and might affect indirectly the provisions made by the Parliament for the regulation of trade and commerce. It would seem therefore that the purpose of the restriction is to prevent the occurrence of such a state of things." 214 App. Cas. at p. 57,4 Cart. at p. 121, (1888). Cf. also Dow v. Black, L.R. 6 P.C. at p. 282, 1 Cart. at p. 108, (1875), as to which see infra pp. 739-40. So likewise in Severn v. The Queen, 2 S. C. R. 70, 1 Cart. 414, (1878), some of the Supreme Court judges speak as though provincial taxation. |