Judgment of the Court — La Forest J.
The judgment of the Court was delivered by
La Forest J.‑‑Two issues were raised in this case:
(1) Is the permit fee set out in Maple Ridge Soil Removal By‑law No. 2681 authorized by s. 930(d) of the Municipal Act, R.S.B.C. 1979, c. 290?
(2) (2) If so, does such fee constitute a tax or levy that is beyond the legislative competence of the province?
(2) If so, does such fee constitute a tax or levy that is beyond the legislative competence of the province?
Section 930(d) reads as follows:
930. The Council may by by‑law regulate or prohibit...
(d) the removal of soil, sand, gravel rock or other substance of which land is composed from any land in the municipality, or in any area in the municipality, and require the holding of a permit for the purpose and fix a fee for the permit, and different regulations and prohibitions may be made for different areas;
Purporting to act under this provision, the District of Maple Ridge ("the municipality") enacted By‑law 2681 which provides for comprehensive regulations for soil removal in the municipality and, in particular, prohibits soil removal from certain designated areas unless a permit is obtained for the purpose. A permit fee of 20 per cubic metre of soil removed during the term of the licence is set. This can amount to a significant sum, running in the tens of thousands of dollars annually.
The amount of the fee appears to have been tailored to defray the costs of the gravel pit operations within the boundaries of the municipality, including road reconstruction, maintenance, repair and related administrative costs. Evidence adduced on behalf of the municipality indicated that the roads referred to were truck hauling routes that directly service the gravel pits, not other roads in the municipality.
By petition dated August 14, 1980, the appellant sought to have the by‑law quashed on the ground that it was ultra vires the municipality and the province and because it contained invalid delegations of power. Murray J., who heard the petition, ordered that the by‑law be quashed, but his decision was reversed by the British Columbia Court of Appeal. While the question of delegation was discussed, the courts below principally focussed on the second issue mentioned above, i.e. whether the by‑law in effect constituted indirect taxation which is beyond the power of the province, and hence a municipality, to impose by virtue of s. 92(2) of the Constitution Act, 1867 , or whether it could be justified as a "genuine" licence under s. 92(2) or as a regulatory charge under the combined operation of s. 92(9), (13) and (16). Before getting into this issue, however, one must first examine whether s. 930(d) of the Municipal Act is in its terms capable of covering the licensing scheme established by the by‑law.
Traditionally, there has been a strong tendency to confine powers of municipalities strictly within the limits granted by the legislature. This was particularly true of powers of taxation, which themselves are generally strictly construed. See Rogers, The Law of Canadian Municipal Corporations (2nd ed. 1971), at pp. 388‑89, 690‑92. This philosophy has been reflected in judicial decisions (see, for example, R. v. Stronach (1928), 3 D.L.R. 216 (Ont. S.C. App. Div.)) and in the manner in which municipal statutes were drafted. There is some basis for thinking that a broader view might be taken by the courts, at least in other regulatory areas, where a power to levy licence fees is given in broad terms and there is no indication in the statute favouring a restricted approach. Thus in Procureur général du Canada v. La Compagnie de Publication La Presse, Ltée, [1967] S.C.R. 60, a majority of this Court held that a power given by the Radio Act to the Governor in Council to prescribe a tariff of fees to be paid for licences for broadcasting stations authorized that body to impose a fee based on the gross revenue of the station and to impose differing rates based on the amount of such revenue.
That case, however, is far removed from the manner in which a court must examine a municipal statute that doles out taxing powers and sets forth with some precision how those powers are to be exercised. The contrast between the two situations can be seen from the decision of this Court in City of Montreal v. Civic Parking Center Ltd., [1981] 2 S.C.R. 541. There the Charter of the city of Montreal, 1960, empowered the City to impose special taxes on, inter alia, the operation of private grounds as parking lots and to collect them by means of permits, such taxes to be in such amounts as City Council might determine. This Court concluded that this power did not authorize the City to calculate the tax by the square foot; only a fixed amount could be imposed. In coming to this conclusion, my colleague, Chouinard J., carefully reviewed various other provisions of the Act, which indicated that when the legislature wished to add modalities to the special tax or to make it variable, it said so expressly. Though it did not particularly figure in the case, I might note that the City in that case also had power to regulate private parking grounds as well as to tax them.
In my view, the Civic Parking case governs the present case. One begins with the notion that the power given by s. 930(d) to "fix a fee for the permit" (or licence, which is synonymous) ordinarily refers to a flat fee of some kind, as opposed to an increasing amount based on the measure of activities conducted under the licence. This is particularly so in light of the restrictive interpretation given detailed municipal statutes like the one in question here. That the permit contemplated by s. 930(d) was originally applied in this fashion can be seen from a reading of Re LaFarge Concrete Ltd. and District of Coquitlam (1972), 32 D.L.R. (3d) 459, (B.C.C.A.)
The foregoing approach is strongly fortified by the terms of other taxing and licensing provisions in the Act. Thus utility companies who have pole lines, pipelines, machinery and structures in a municipality are "taxed annually at a rate of 1%" on gross rentals or on the amount received in the second preceding year (s. 407). Under s. 493(1) a municipal council may impose a business tax in an amount equal to a designated percentage, not exceeding 10%. Section 496(1) authorizes a council to impose on the possessor of a liquor licence who operates a dining room or lounge in the municipality "an amount not exceeding 20% of the amount of the annual licence fees". Frontage taxes are based in part on the actual frontage (s. 481(1)). Under s. 612(2), a council may vary the charge for sewerage or combined sewerage and drainage facilities in accordance with a number of outlets served and the quantity of water delivered. Development cost charges "may vary in respect of different defined or specified areas ... uses, capital costs ..., and sizes or number of units or lots ..." (s. 719(5)). Municipal councils are even empowered to vary the amount of the fees for dog licences according to sex, age, size or breed (s. 524). Flat fees have been set for many other licences (ss. 505(1), 520(1)). Even in s. 930(d) itself, the legislature adverted to the need for differential treatment in certain circumstances. It provided for different regulations and prohibitions for different areas. In the light of this, it is significant that it did not provide for differential fees on the basis of use.
Under these circumstances, a passage from the judgment of Chouinard J. in the Civic Parking case, supra, at p. 553, is as relevant to s. 930(d) as it was to art. 803 of the Charter of the city of Montreal, 1960, in that case. It reads:
I conclude from the foregoing that when the legislator wished to authorize the City to add modalities to a special tax provided for in art. 803 or to make it variable, he said so expressly, and this was not done in para. w. It follows that the City did not have, merely by virtue of this paragraph, a power to impose a tax on the operation of private land as public grounds for the parking of motor vehicles at the rate of $0.12 a square foot.
In short, here as in that case, only a fixed amount can be imposed.
Having arrived at this conclusion, it becomes unnecessary to enter into the constitutional question, and in particular to consider whether or not the LaFarge case, supra, upon which the Court of Appeal relied, was correctly decided.
I would allow the appeal with costs and restore the order quashing the by‑law made by the judge who heard the application.
Cases cited
- R. v. Stronach 3 D.L.R. 216 ¶ 6
- Procureur Général du Canada v. La Compagnie de Publication La Presse, Ltée scr-1967-60 ¶ 6
- City of Montreal v. Civic Parking Center Ltd. et al. item-5616-1981-12-17 ¶ 7
- Re LaFarge Concrete Ltd. and District of Coquitlam 32 D.L.R. (3d) 459 ¶ 8, ¶ 11
- the Civic Parking the Civic Parking case, supra, at p. 553 p. 553 ¶ 10