Siemens v. Manitoba (Attorney General)

In 1999, the Government of Manitoba enacted local option legislation enabling municipalities to hold binding plebiscites on the prohibition of video lottery terminals (“VLTs”) in their communities. The legislation set out the procedure by which the plebiscites were to be initiated, held, and given effect. In addition, the legislation contained a specific section dealing with the Town of Winkler, which had held a non-binding plebiscite supporting a prohibition of VLTs the previous year. As a result of the legislation, VLTs were prohibited in Winkler until such time as a future binding plebiscite, held in accordance with the legislation, would permit their return to the municipality.

Both the Manitoba Court of Queen’s Bench and the Court of Appeal concluded that The Gaming Control Local Option (VLT) Act, S.M. 1999, c. 44 (“VLT Act”), either as a whole or s. 16 in particular, was neither ultra vires the provincial legislature nor did it violate the Canadian Charter of Rights and Freedoms . The appellants subsequently challenged the legislation before this Court on the grounds that s. 16, dealing specifically with Winkler, violates ss. 2(b) , 7 , and 15(1) of the Charter . They also argued that the legislation is ultra vires the provincial government because it is an affront to Parliament’s exclusive jurisdiction over criminal law. On October 31, 2002, the Court unanimously dismissed their appeal. These are the reasons for that decision.

The Manitoba Lotteries Corporation (“MLC”) is responsible for operating lottery schemes, including VLTs, in the province. The MLC enters into agreements with “siteholders” to place VLTs on the siteholders’ property. The siteholders then receive a percentage of the VLTs’ revenue. However, the VLTs remain the property of the MLC and, according to the terms of the siteholder agreement, can be removed at any time, with or without cause.

The appellants, David and Eloisa Siemens, are the sole shareholders of Sie-Cor Properties Inc., which purchased The Winkler Inn in 1993. They invested a considerable amount of money in the renovation and expansion of the Inn, and submitted that VLTs were an important consideration when making their investment. The appellants increased the number of VLTs from 8 to 10 when they first purchased The Winkler Inn, and then from 10 to 12 in the fall of 1994. Their mortgage payments roughly coincided with the monthly VLT revenue.

In August 1998, the Town of Winkler passed a resolution to hold a plebiscite regarding VLTs in the municipality. The plebiscite was held in conjunction with the October municipal elections. The question was:

Should the Town of Winkler request that the Provincial Government ban video lottery terminals in Winkler, which would result in the Town of Winkler losing its annual municipal VLT grant?

Approximately 50 percent of eligible voters participated in the plebiscite, including Mr. and Mrs. Siemens. A sizeable majority (77.8 percent) of the votes cast were in favour of requesting a ban on VLTs. In response to the plebiscite, the Town of Winkler passed a resolution in December 1998 to forward the results to the Government of Manitoba. Sie-Cor Properties Inc., in turn, filed an application in the Court of Queen’s Bench seeking a declaration that the resolution was invalid and an order of certiorari quashing it.

In July 1999, while Sie-Cor’s application was proceeding to a hearing, the Manitoba Government passed the VLT Act. The Act permits municipalities to hold binding plebiscites regarding the prohibition of VLTs within their jurisdictions. In addition, the government used the new legislation as an opportunity to give effect to the plebiscite that had already been held in Winkler. Specifically, s. 16 of the Act seeks to terminate the siteholder agreements in Winkler and deems that a resolution prohibiting VLTs was passed in accordance with the Act. Pursuant to this legislation, the siteholder agreement with The Winkler Inn was terminated effective December 1, 1999.

The Gaming Control Local Option (VLT) Act, S.M. 1999, c. 44