Citation: 2011 TCC 83
Date: 2011 02 17
Docket: 2004-2266(GST)G
BETWEEN:
ÉDOUARD ROBERTSON,
Applicant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR ORDER
Tardif J.
[1]
This is an application for
interim costs in the amount of $100,000. The applicant, Édouard Robertson is an
Indian under the Indian Act. He is a member of the Mashteuiatsh Montagnaise
Band, in Pointe-Bleue, in the Lac Saint-Jean area.
[2]
Mr. Robertson operates
a business involving the manufacture and sale of furs and other garments, where
the raw material is not necessarily fur, which, furthermore, does not represent
the main part of the business’ overall sales.
[3]
The business’ clients
are primarily non‑Indian. The Robertson family has been associated with
and involved in the fur trade for six generations.
[4]
In the late 1990s, the
applicant acquired a portion of the business, then under the ownership of the
father. He then acquired it in full, except for the purchasing and sale of fur
skin or raw fur.
[5]
As part of his business
operations, the applicant never registered so as to be required to collect and
remit the G.S.T. and the Q.S.T. Nor did he ever receive a request to do so by
Revenu Québec. Under the Excise Tax Act, the applicant operated a
business whose activities were subject to the provisions of that same Act.
[6]
Therefore, Mr.
Robertson never collected, as an agent of the Crown, consumption taxes (G.S.T.
and Q.S.T.).
[7]
As an agent for the
Minister of National Revenue,
Revenu Québec issued, following a series of audits, notices of assessment for
substantial amounts to the applicant.
[8]
At the outset, the
applicant challenged any duty to collect and remit the taxes imposed and
enforced. Mr. Robertson has since then maintained, on the one hand, that by
virtue of his Indian status, he had no such duty, and claimed, on the other
hand, that if such a duty applied, it was owed not to the Quebec goverernment
or the federal government, but to his band, which, in his opinion, had sole
jurisdiction and authority to collect such taxes from Indians.
[9]
The applicant also
submitted that the Indian Act and the Excise Tax were in conflict.
[10]
During the audits and process
that led to the issuance of notices of assessment, the leaders of the
applicant’s band were in negotiations with the Government of Quebec with a view
to entering into an agreement respecting the band’s rights and tax jurisdiction.
In such a context, the applicant would have liked to have his Band intervene in
his case. To that end, he informed his band’s leaders and pressured them to intervene
in view of a settlement of this matter or at least do what was necessary to have
the initiatives of Revenu Québec suspended.
[11]
Despite the steps the
applicant took with his band, the process still evolved to the point where he
finally had to negotiate an agreement with the respondent under which he would
collect taxes in accordance with the laws and would proceed with the remission
of taxes until a decision was reached as to the merits of his legal arguments,
namely, his liability under the Excise Tax Act as part of the operation
of his business.
[12]
Since the amount of the
assessments made was still outstanding, the applicant was the subject of
various recovery attempts by the respondent; accordingly, he saw his business’
financial situation deteriorate considerably.
[13]
He took a number of
steps to gain financial support from both his community and several organizations
normally approached in this type of case; he also had to take steps to keep his
business in operation. He therefore had to take two steps, obtain the required
funds to pursue his objection before this Court and, funds to pursue his
business activities.
[14]
He was unable to secure
the required and necessary financial support from his band, other than the fact
that it agreed to assume the costs associated with the preparation of an expert
report to determine whether or not an Aboriginal right existed, a very important
element of his case, totalling $30,000. All other requests failed or were
rejected; he therefore came to the conclusion that he was not financially
capable of pursuing the legal proceedings commenced as part of his objection to
the assessments especially since the matter had already cost him a considerable
amount of money.
[15]
In support of his
application, the applicant has argued that although he has a valid case, he does
not have or no longer has the financial capacity to pursue the proceedings due to impecuniosity. The applicant also submits that the outcome of the
case has and will have major ramifications not only for many individuals, but
also for his band’s future.
[16]
In essence, the applicant
submits that he meets all the tests and criteria propounded over the years by
the case law, including and mainly Okanagan and
Little Sisters,
decisions of the Supreme Court of Canada.
[17]
Despite the importance and
public interest raised, in his view, by his case, the applicant submits that he
was unable to garner the necessary funds; hence, he was left alone to pursue the
legal battle; the Mashtewiatsh First Nation Band Council did not file any
application to intervene in the matter and its involvement was limited to bearing
the costs associated with the expert report in the amount of $30,000 and which
the applicant plans to use in support of his claims.
[18]
The parties recognize
the jurisdiction of the Tax Court of Canada to decide the merits of the application
for interim costs on the basis of the various tests and/or criteria propounded by
the case law, particularly that of the Supreme Court of Canada.
[19]
To that end, I am not
satisfied that the Tax Court of Canada has the necessary jurisdiction to hear
such an application; considering the parties’ position on that aspect, I will not
go beyond that comment.
[20]
The applicant argues
that he meets the applicable criteria and hence that his application must be granted.
To that end, the applicant states as follows:
·
He submits, on the one
hand, that he cannot bear the costs of pursing the matter before the court, after
having made multiple attempts and taken several initiatives to that effect with
a number of stakeholders.
·
He bases his submission
on serious legal arguments; in particular, he submits that the Excise Tax
Act is inconsistent with the Indian Act.
·
He also submits that
the community to which he belongs, that is to say, Montagnais of Lac
Saint-Jean, has an Aboriginal right to engage in the fur trade and in the
cognate activities; according to the applicant, such a right entitles him not
to collect the Q.S.T. and G.S.T. as part of his business activities arising out
of the exercise of such an Aboriginal right.
·
He also submits that
the relevant Aboriginal right confers on his self-governing community an exclusive
right to collect taxes in any form whatsoever.
·
He also argues that section 89
of the Indian Act is unconstitutional in the context of the Excise Tax
Act and thus that Indians are treated in a discriminatory manner, namely as
to the management of their property.
·
He states that the questions
of law arising out of his case are of significant interest and will also have a
major impact; hence, his case raises a so-called public interest, in particular
because such questions have yet to be addressed by the courts.
·
He submits that the
basis for his objection is serious and non-frivolous, thereby respecting
the condition that the rights at issue be prima facie, to the extent
where the chances of success are real.
·
Finally, he submits that
the dispute is of considerable interest, going far beyond his personal stake.
[21]
The respondent, for its
part, submits, on the basis of a number of cases, that the applicant does not
meet any of the test or criteria recognized by the case law. Quite interestingly,
the parties base their respective positions on essentially the same important cases.
[22]
The right of an appellant
to be awarded interim costs in a so-called “public interest” case is not only recognized,
but also defined in Okanagan where the Supreme Court of Canada observed:
The power to order interim costs is inherent in the nature of the
equitable jurisdiction as to costs, in the exercise of which the court may
determine at its discretion when and by whom costs are to be paid. This
broad discretion may be expressly referred to in a statute . . .
Even absent explicit statutory authorization, however,
the power to award interim costs is implicit in courts’ jurisdiction over costs
as it is set out in statutes such as the Supreme Court of British Columbia Rules
of Court, which provides that the court may make orders varying from the
usual rule that costs follow the event.
(Emphasis added.)
[23]
Section 147(1) of the Tax
Court of Canada Rules provides as follows as to costs:
The Court may determine the amount of the costs of all
parties involved in any proceeding, the allocation of those costs and the
persons required to pay them.
[24]
The Supreme Court, per
Lebel J., summarizes as follows the criteria for an award of interim costs:
1. The party seeking interim costs genuinely
cannot afford to pay for the litigation, and no other realistic option exists for
bringing the issues to trial—in short, the litigation would be unable to
proceed if the order were not made.
2. The claim to be adjudicated is prima
facie meritorious; that is, the claim is at least of sufficient merit
that it is contrary to the interests of justice for the opportunity to pursue
the case to be forfeited just because the litigant lacks financial means.
3. The issues raised transcend the individual
interests of the particular litigant, are of public importance, and have not
been resolved in previous cases.
[25]
In 2007, in Little
Sisters, the Supreme Court, again per Lebel J., reexamined an application
for interim costs and thereby narrowed even more the tests defined in Okanagan.
[26]
First, the tests are
reiterated, but the Court adds in a way a new test or at least narrows the
tests by stating that the case must be a special one, even rare and exceptional.
[27]
Indeed, Lebel J. notes
that it is only a "rare
and exceptional" case that is special enough to warrant an advance costs
award. As to the applicable tests, Okanagan
is, therefore, still good law, but the case must still be rare and exceptional.
[28]
This is in itself a
truly very meaningful test that transcends all other tests. One thing is for
certain, only this test makes it so that each test must be applied with
particular attention.
[29]
Thus, it is not sufficient
to meet the three criteria required to be entitled to and obtain interim costs.
It is important to also take into account what the Court stated in another
excerpt from that decision:
The rule in Okanagan arose on a
very specific and compelling set of facts that created a situation that
should hardly ever reoccur.
(Emphasis added.)
[30]
According to the
Supreme Court, it is important to look at each of the issues raised by the
applicant individually to determine whether they are meritorious. The Supreme Court
also ruled that the second and third Okanagan requirements are the most
significant and often inseparable during an analysis.
[31]
The Supreme Court has provided
guidance enabling a judge to determine whether a case is rare and exceptional. We
will also analyze the facts so as to determine whether the case is a special
and rare one, and even exceptional. The first requirement is as follows:
1. The party seeking interim costs genuinely
cannot afford to pay for the litigation, and no other realistic option exists for
bringing the issues to trial—in short, the litigation would be unable to
proceed if the order were not made.
[32]
A very important part
of the evidence was used to determine whether or not such a financial test was satisfied.
At the outset, it is obvious that the objection brought by the applicant
requires a substantial amount of money. Furthermore, to date, he has already
incurred major expenses.
[33]
With respect to the
first Okanagan requirement, the Supreme Court states as follows in Little
Sisters:
The applicant must explore
all other possible funding options. These include, but are not limited to,
public funding options like legal aid and other programs designed to assist
various groups in taking legal action. . . . An applicant must also be able to
demonstrate that an attempt, albeit unsuccessful, has been made to obtain private
funding through fundraising campaigns, loan applications, contingency fee
agreements and any other available options. If the applicant cannot
afford all costs of the litigation, but is not impecunious, the applicant must
commit to making a contribution to the litigation;
The question of impecuniosity
will not even arise where a case is not otherwise special enough to merit this
exceptional award.
[34]
The applicant described
the steps he took and explained the difficulties he met with in trying to seek
funding from both public and private organizations. He lost his line of credit
with the Bank of Montréal after Revenu Québec began collection
proceedings against him.
[35]
From the outset, the
applicant attempted to engage and involve the leaders of his community, wanting
and hoping that the community take up his cause and become involved in the
matter. Despite the applicant’s repeated efforts to obtain assistance from his
Band Council, they did not materialize, although the Board did agree to pay for
the expert report by Claude Gélinas in the amount of $30,000.
[36]
The applicant also
sought funding from various organizations such as the Court
Challenges Program of Canada, Industries Canada, Canada Economic Development for Quebec Regions, the Department
of Indian and Northern Affairs’ Test Case Funding Program as well as the Aboriginal
Business Canada.
[37]
Besides the explanations
and financial statements filed in support of his arguments, the applicant also
submitted a sworn statement by his former accountant that it was impossible for
him to obtain funding following notices of assessment and the poor financial position of his business.
[38]
André Benoit, management
and business development consultant who has been working for the Corporation
de Développement Économique Montagnaise for 22 years, also indicated as
follows in his sworn statement:
[Translation]
7 – In my view, the analysis of his financial statements,
taking into account the impact of the departments’ claim, demonstrates that the
business could technically be considered to be in bankruptcy by a lending
institution;
8 - The business of Édouard Robertson has neither the funds to
discharge such a claim, nor any security to obtain funding for the payment, as
a request for funding to satisfy that type of debt is usually not received
favourably;
12 – The cost of defending his rights depleted the financial
reserves he accumulated over the years, and the possibility, in the present
circumstances, of obtaining new funding is, for all intents and purposes, null;
[39]
At the time of the
application, the applicant had already spent considerable amounts of money; moreover,
the total amount of unpaid fees he still owed was over $50,000 based on
his counsel’s last invoice; since then, other fees have been added. Given the
situation and the fact that the preparation and presentation of his case at a
future trial will require even more significant amounts of money, he believes
he is entitled to receive financial support from the opposing party.
[40]
The evidence also
established that the applicant works for the Société de Développement
Économique Ilnu and receives a tax free salary of $75,000 a year, which
must be taken into account in analyzing his financial means.
[41]
In keeping with the
facts and comments of the Supreme Court in Little Sisters, it appears to
me that while the applicant has demonstrated a measure of financial hardship, he
is not without resources as his business and the fur trade are not his sole
means of support.
[42]
It is evident that the
objection to the assessments nevertheless leads and will lead to substantial
costs; in that respect, the evidence is clear and determinative. It is also
obvious that the parties to the objection have considerably disproportionate
means, which, in the applicant’s view, constitutes in itself an important,
determinative factor in support of his application. Hence, such an interpretation
could mean that any legal recourse against the Crown could entitle the
applicant to interim costs.
[43]
I do not believe that
the case law supports such an interpretation or attaches as determinative an importance
to that factor. While it is clearly a factor and a consideration, it is not in
itself sufficient. The financial dimension must be assessed in a more global
context.
[44]
As the financial
criterion must be assessed from the perspective of the so-called special, rare
and exceptional case, I believe it is pertinent to note that no intervenors or witnesses
have been able to explain how the case could be of public interest, while
justifying at the same time their disinterest in terms of financial
participation.
[45]
Who should bear the
costs of such a debate? The applicant submits that he has depleted all of his
resources and that he unsuccessfully took all steps to obtain the necessary
support, thereby qualifying him for interim costs by emphatically pointing to
the unreasonably disproportionate paying capacity
of the parties in question.
[46]
That is clearly indisputable;
however, should a finding of eligibility to interim costs be automatically
rendered where there is an imbalance in the paying capacity of either party to
a dispute? Once again, such an approach would entitle applicants in all
recourses against the Crown to interim costs.
[47]
On the one hand, I do
not believe that inequality of financial capacity is in itself a determinative
test; on the other hand, I believe it is pertinent to note that if the quality
of the remedy, the interests at stake and their potential future benefits are
present, obvious and compelling factors, it is surprising in this case to observe
the total indifference of all potential intervenors. Is that not a very obvious
indication that the only interests at stake are those of the applicant?
[48]
The second Okanagan
requirement reads as follows:
The claim to be adjudicated is prima facie meritorious;
that is, the claim is at least of sufficient merit that it is contrary to the
interests of justice for the opportunity to pursue the case to be forfeited
just because the litigant lacks financial means.
[49]
On that aspect, the
Supreme Court indicated that an applicant must prove that the interests of justice would not be
served if a lack of resources made it necessary to abort the litigation. In other words, the fact that the appellant’s
application would not be
dismissed summarily is
not sufficient to establish that interim costs should be awarded to make it
possible to proceed with the case;
Hugessen J. of the Federal Court adds as follows in Joseph v. Canada:
In my view it is enough for me to find, as I do,
that they have a reasonable chance of obtaining at least some of what they seek.
[50]
In the light of those comments,
financial incapacity is not only not sufficient to obtain interim costs, but
also requires the issue in dispute to be one that should appropriately
be dealt with
at least in part in favour of
the applicant. Thus, it becomes necessary to question the relevance of the
issues raised by the applicant with respect to what needs to be analyzed based
on incomplete evidence at this stage of the proceedings if the applicant raises
questions of law that would allow the Court to find in his favour, at the very
least in part, especially with respect to the constitutionality of section 89
of the Indian Act and the compatibility of the Indian Act with the
Excise Tax Act.
[51]
Recently, in Gilles
Caron,
the Supreme Court of Canada stated as follows at paragraphs 21, 22 and 23:
[21] The
provincial court was confronted with a potential failure of justice once the
unexpected length of the trial had exhausted Mr. Caron's financial resources.
By that time, substantial trial time and costs had already been expended,
including the substantial public monies provided under the Court Challenges
Program. In mid-trial the provincial court, so to speak, had a tiger by the
tail. The Crown insisted on pursuing the prosecution in provincial court; Mr.
Caron insisted on his French language defence. Neither side expressed any
interest in a stay of proceedings.
[22] The
courts in Alberta were clearly concerned lest
the Crown achieve, by pressing on with the prosecution in the provincial court,
an unfair advantage ("lop-sided", Ritter J.A. called it) over the
accused in the creation of the crucial factual record on which an important
constitutional issue would be determined. A lopsided trial would not have put
the languages issue to rest. Mr. Caron's challenge was considered by the courts
below to have merit and in their view it was in the interest of all Albertans
that the challenge be properly dealt with.
[23] I
should make it clear that the present decision does not constitute a general
invitation for applications to fund the defence of ordinary criminal cases
where constitutional (including Charter) issues happen to be raised. In
those cases the gravamen is truly the criminal offence. Here the traffic court
context is simply background to the constitutional fight. A more appropriate
analogy, as will be discussed, is the Okanagan/Little Sisters (No. 2)
paradigm for public interest funding in a civil case.
[52]
The applicant argues
that the Indian Act is discriminatory within the meaning of section 15 of
the Charter. Particularly, section 89 of the Indian Act, which,
in fact, prevents an Indian from giving security against his property, would
be discriminatory within the context of the application of the Excise Tax
Act.
[53]
Indeed, section 89 precludes
Indians from trading under their name and requires them to incorporate for the
purposes of carrying on a business and precludes them from giving security
against their property, which denies them the tax exemption provided for in
section 87 of the Indian Act.
[54]
Section 89 provides
that the real and personal
property of an Indian situated on a reserve is not subject to charge, pledge,
mortgage, attachment, levy, seizure, distress or execution in favour or at the
instance of any person other than an Indian or a band. It is therefore a provision the essential objective
of which is the safeguarding of the heritage of persons with Indian status.
[55]
Now, section 15 of the Charter
provides that:
(1) Every individual is equal before and
under the law and has the right to the equal protection and equal benefit of
the law without discrimination and, in particular, without discrimination based
on race, national or ethnic origin, colour, religion, sex, age or mental or
physical disability.
(2) Subsection (1) does not preclude any law,
program or activity that has as its object the amelioration of conditions of
disadvantaged individuals or groups including those that are disadvantaged
because of race, national or ethnic origin, colour, religion, sex, age or
mental or physical disability.
[56]
In a recent case, Ermineskin,
the Supreme Court considered the constitutionality, under section 15 of the Charter,
of sections 61 to 68 of the Indian Act.
[57]
The facts were as
follows. The Crown held money
in trust for the bands, composed mainly of royalties derived from the oil and
gas reserves found beneath the surface of reserves in Alberta. Interest was paid on that money by the Crown pursuant to Orders in Council made under
the Indian Act. According to the Band Councils, the Crown's fiduciary obligations required
it to invest oil and gas royalties received on behalf of the bands as a prudent
investor would, that is, to invest the royalties in a diversified portfolio. They also argued as follows:
If this Court finds that those provisions [sections
61 to 68 of the Indian Act] preclude the Crown
from investing the royalties in the manner of a common law trustee, the result
is discriminatory. They argue that because they are Indians, they have been
deprived by the Indian Act of the rights that are available to non‑Indians
whose property is held in trust by the Crown.
[58]
The Bands’ appeal was
dismissed. As to whether a provision of the Indian Act is discriminatory,
the Supreme Court stated as follows:
This Court’s equality jurisprudence makes it clear that not all
distinctions are discriminatory. Differential treatment of different
groups is not in and of itself a violation of s. 15(1). As this Court
stated in Andrews v. Law Society of British Columbia, [1989] 1 S.C.R.
143, at p. 182 (restated in R. v. Kapp, 2008 SCC 41, [2008] 2 S.C.R.
483, at para. 28), a complainant must show “not only that he or she is not
receiving equal treatment before and under the law or that the law has a
differential impact on him or her in the protection or benefit accorded by law
but, in addition, must show that the legislative impact of the law is
discriminatory” (emphasis added). The analysis, as established in Andrews,
consists of two questions: first, does the law create a distinction based on an
enumerated or analogous ground; and second, does the distinction create a
disadvantage by perpetuating prejudice or stereotyping.
(Emphasis added.)
[59]
Section 89 does not put
Indians at a disadvantage; quite the opposite. Indeed, the purpose of the provision
is the protection of their property. It is true that section 89 could cause
difficulties for Aboriginal business contractors, however such contractors do
not require the protection of section 89 as they could always get around
the application of the Indian Act by incorporating so as to carry on
business activities with non-Aboriginals. I fail to see how the fact of doing
business through a distinct legal entity would cause them to lose their
Aboriginal identity.
[60]
One thing is certain, I
hardly see, if at all, how section 89 of the Indian Act causes prejudice
to the applicant. It is at best a very small irritant that also affects all
those who operate a business covered by, or subject to the Excise Tax Act. The
irritant does not stem from the individual’s status, but from his decision to
operate a business subject to the Act.
[61]
The applicant also
submits that Indians cannot be forced to collect, as agents of the Crown
exercising fiduciary obligations, the G.S.T. and Q.S.T., as that would be contrary
to and irreconcilable with the duties, as fiduciary and agent, that the Crown
itself has toward Indians owing to their special status established by the Indian
Act.
[62]
Indeed, the Indian
Act creates a special status for Indians that derogate from the general law.
Indians are considered to be a ward of the state. For instance, it
should be noted that Indians cannot give security against their property under
section 89, as mentioned earlier, and that they are exempt from taxation under
section 87 of the Indian Act.
[63]
As a result, in the
applicant’s view, section 221 ETA, which imposes on merchants
a duty to collect and remit taxes to Her Majesty in right of Canada, is inconsistent with the legal capacity of Indians
set out in the Indian Act.
[64]
According to the applicant,
on the one hand, it would be inconsistent to prevent Indians from giving
security against their property and on the other, to impose on them the burden
of withholding and remitting consumption taxes.
[65]
I do not understand how
that would be inconsistent; the legal capacity required to carry out basic administrative
activities in operating a business is not in issue.
[66]
Collecting and remitting
taxes does not require the ability to deal or the power to dispose. They are
essentially administrative and management operations.
[67]
While such a legislative
system may appear prima facie illogical or unfair in the applicant’s
eyes, it is certainly not prima facie illegal or unconstitutional. The appropriate
forum in such circumstances is the House of Commons, not the Court.
[68]
Also according to the
applicant, seeing as section 221 ETA is inconsistent with the legal
status of Indians, it must be declared unenforceable as section 88 of the Indian
Act provides as follows:
Subject to the terms of any treaty and any other Act
of Parliament, all laws of general application from time to time in force in
any province are applicable to and in respect of Indians in the province,
except to the extent that those laws are inconsistent with this Act. . . .
[69]
The applicant’s
submissions also face another reality that is equally insurmountable. Section 88
of the Indian Act relates to provincial legislation and not federal legislation
such as the Excise Act. The revelancy of such a section, in a challenge
of federal legislation by Indians, is therefore dubious, if not highly
debatable. Even if one were to assume that section 88 is applicable, once again,
it would have no impact as to the applicant’s submissions, as the Supreme Court
interpreted the section as follows:
I believe that a distinction should be drawn between two categories
of provincial laws. There are, on the one hand, provincial laws which can be
applied to Indians without touching their Indianness, like traffic legislation;
there are on the other hand, provincial laws which cannot apply to Indians
without regulating them qua Indians.
Laws of the first category, in my opinion, continue to apply to
Indians ex proprio vigore as they always did before the enactment of s.
88.
[70]
The duty to collect the
GST and remit it to the appropriate government authorities is one of general
application, which, prima facie, does not affect Indianness. It is a duty that applies solely in business exchanges
with non-Aboriginals.
[71]
It is true that Indians
enjoy special status under the Indian Act. Such a special status is
aimed at protecting Indians, but it does not make them out to be incapable
persons with inferior capacities.
[72]
Was his legal capacity
to act alone as an appellant in the case questioned? Thus, it is not because
the applicant is deprived of certain rights on a personal level, of which the
purpose is exclusively to protect his heritage, that he does not possess the
intellectual capacities to collect consumption taxes on sales to non-Indians.
[73]
Moreover, Indians involved
in business activities who feel penalized by the Indian Act can always incorporate
to properly conduct their business, without anyone’s authorization.
[74]
Also, nothing in the Indian
Act or the case law, to our knowledge, specifies that Indians are not
required to collect consumption taxes from non-Indians in operating a business
where clients are part Indian and part non‑Indian.
[75]
The absence of
authority on what the applicant describes or characterizes as being very fundamental
is undoubtedly experienced on a daily basis by hundreds, if not thousands of
people with Indian status.
[76]
Where are those people?
How does one explain their indifference or apparent lack of interest? I will
venture two answers, either the applicant did not do his homework in seeking
financial support or the applicant’s submissions do not have the legal ingredient
or characterization he attributes to them. Regardless of the answer or
assumption made, the outcome is the same. The applicant’s application does not
meet the public interest requirement as what is at stake here is essentially the
applicant’s interest.
[77]
It is also possible
that the negotiations in the course of the framework agreement will provide
further answers. But again, it is not for this Court to predict the possible
outcome of such negotiations or even assume what the applicant’s hopes and
expectations are in that respect. The assessment and analysis must be carried
out on the basis of the available elements and not in view of assumptions or
speculations that have no reasonable basis.
[78]
In the meantime, the Crown
must balance both the interests of Canada’s Aboriginal
and non-Aboriginal communities. As the Supreme Court stated in Ermineskin,
[t]he Crown has responsibilities to all Canadians, and some
balancing inevitably must be involved.
[79]
To conclude, such arguments
are based more on speculations than on the rights arising out of the Indian
Act. The applicant’s submissions do not show prima facie that the
issues raised with respect to inconsistency between the Indian Act and the
Excise Tax Act are meritorious.
[80]
Although the conclusions
drawn today do not prejudice any future decisions on the merits, the facts are
in my view sufficiently clear and abundant to conclude that the chances of
success on this aspect are low, if not very low at least on the basis of the
evidence adduced.
Aboriginal
rights
[81]
From the outset, the
issue of Aboriginal rights is a very important one as it can give rise to very
important entitlements; it is an issue that has generated a number of major decisions.
Despite the abundant case law, there is still no easy recipe to determine their
existence. The decisions are unanimous, to the effect that each case is unique.
[82]
In the case at bar, the
issue of Aboriginal rights involves two different components. One consists in claiming
that the community to which the applicant belongs enjoys Aboriginal
self-governance; the other is to the effect that his community engaged in fur
trade practices, in accordance with the customs that were in existence when the
Europeans arrived. In that respect, the applicant submits that the economic
activities giving rise to the assessment, which he appeals, is an activity that
is directly related to the Aboriginal right in issue.
[83]
Although, it is not a
matter of Aboriginal rights, general or universal, the applicant submits that
the right claimed lies in and stems from the widespread practices of the customs
and/or traditions forming an integral part of the particular culture of the
applicant’s community prior to the arrival of the Europeans and subsequently with
them.
[84]
Although the issue of
Aboriginal rights is an important component as the basis of the applicant’s
claims both in terms of the expectations of his rights and obligations, as to
the Excise Tax Act and the issue of self-governance, particularly where
taxation is concerned, I prefer to exclude it from my analysis as it would be
dangerous to draw any conclusions to that effect on the sole basis of the expert
report*
filed in the docket and rather superficial explanations discussed above.
[85]
However, assuming that
such a right exists, with respect for the contrary opinion, I do not believe
that it supports or confirms the appellant's submission that he is not subject
to the Excise Tax Act, even with respect to business activities with non‑Indians.
[86]
Furthermore, in the
case of an unequivocal recognition of an Aboriginal right, would such a
recognition uphold the applicant’s objection?
[87]
I note that the bases
of the claimed Aboriginal right involves fur. Although the courts have clearly
indicated that analyses aimed at determining whether or not there is an
Aboriginal right must take into account changes over time, evolution and
everything else that could have occurred over time. In other words, some changes
in the exercise of the right did not put an end to the right claimed. I recall,
however, that the right claimed is related to the fur trade which brought
considerable benefits to the applicant’s ancestral community.
[88]
However, in this case, the
evidence clearly established that, on the one hand, the fur component was of a
rather marginal significance, and that on the other, the clients were
predominantly non‑Indian. Finally, only the applicant’s immediate family
operated the business.
[89]
Those are factors that render
the possible outcome more speculative than reasonable as to the impact of a possible
Aboriginal right to trade in fur unless fur today means all apparel necessary
to clothe oneself outside the summer season, which would be rather surprising.
[90]
The issues of Aboriginal
rights involve the Mashteuiastsh Nation as a whole. However, it would appear
as though that community prefers negotiation. There is in fact an
agreement-in-principle of general nature, dated March 31, 2004, between the two
levels of government and the Mashteuiatsh Nation to which the applicant belongs.
The agreement-in-principle aims at settling issues pertaining to Aboriginal
rights.
[91]
The following excerpts
from the agreement’s preamble
and treaty’s draft preamble
are revealing of the parties’ intentions and surely explain why the Band
Council did not apply to intervene in the proceeding:
Whereas the
highest courts have repeatedly asserted that the reconciliation of the
legitimate constitutional interests of Aboriginal peoples and of the Crown are
more a matter of policy than of law and can only be achieved if the Parties
agree to make mutual concessions during the negotiating process, which process
is essentially political in nature;
Whereas in
the current legal context, it cannot be said with certainty which Innu entity
is the holder of aboriginal rights, including aboriginal title, and the Parties
agree upon determining, for the future, which Innu entity shall exercise the
rights recognized, affirmed and protected by the Treaty;
Whereas the Parties are aware that the reconciliation of the
legitimate constitutional rights of the aboriginal peoples and of the Crown
belongs to the political rather than the judicial realm and that the Parties
have made concessions to realize this reconciliation;
Whereas the Parties agree to ensure by way of treaty rather
than by judicial means the recognition, confirmation and continuation of the
aboriginal rights of the First Nations of Mamuitun and the First Nation of
Nutashkuan, including aboriginal title, and not their extinguishment;
(Emphasis added.)
[92]
It is possible that the
agreement-in-principle will eventually lead to an acceptable compromise for all
parties. However, it is highly unlikely that such a compromise will be in
favour of Indians and to the detriment of non‑Indians to the point where
Indians will be able to do business with non‑Indians, in such a way as to
create serious prejudice to non‑Indians who have chosen to be involved in
the same type of economic activity.
[93]
When the Supreme Court
of Canada indicated that the Crown had obligations to all Canadians and that a
weighing of the various interests at stake was inevitable, it is obvious that
our scenario is in keeping with that reality and logic.
[94]
In the case at bar, the
applicant would like to benefit exclusively from what is to his advantage and do
away with what he does not personally agree with or that which proves to be a
minor irritant.
[95]
Generally, an Indian who
operates a business must collect and remit the taxes on sales to non‑Indians,
just as a non-Indian merchant must provide for in their accounting records a percentage
of sales to Indians generally exempted from taxation.
[96]
In the case at bar, the
applicant’s arguments show that he wants to benefit exclusively from the
provisions that work to his advantage and do away with everything that is irritating
to him.
[97]
The third Okanagan requirement
reads as follows:
The issues raised transcend the individual interests of the
particular litigant, are of public importance, and have not been resolved in
previous cases?
[98]
Although I am of the
view that I have given an answer to the question, I would nevertheless like to
complete it with an excerpt from Little Sisters, a Supreme Court
decision :
No injustice can arise if the matter at issue could be
settled, or the public interest could be satisfied, without an advance costs
award.
Is the applicant’s appeal a rare and
exceptional case?
[99]
Even if the Court were
of the view that the three Okanagan requirements are met it is still
necessary that the case be a special, rare and exceptional one?
[100]
The applicant cited a
number of decisions, including Quebec (Attorney
General) v. Corneau. In
that case, a number of Métis claimed that they had Aboriginal rights including
that of maintain camps on the public land they occupied. They applied for
interim costs to pursue the proceedings. The judge allowed the application. The
following facts, according to the judge, show that the case was of public
interest:
[Translation]
For this reason, the respondents will not be the only ones to
benefit from a favourable judgment, if any. If the Aboriginal rights they are
claiming were recognized, the impact of the case law would also be beneficial
to the members of the intervening community, which has over 3,000 members.
The case, as it stands, also shows that other disputes of the same
nature are being raised and could benefit, favourably or not, from the outcome
of that under review. The latent cases identified are
in Bas-Saint-Laurent (Métis-4), Basse-Côte-Nord (Métis-5), Outaouais (Métis-6)
and Beauce (Métis-7).
Finally, it can be usefully pointed out that the steps taken by the
intervening community, for the recognition of the existence of a Métis
community on the territory of Saguenay-Lac-Saint-Jean, has been receiving the
support of 22 municipal political bodies, including the Ville de Saguenay, since
2005 (Exhibit R-19).
The case being dealt with therefore present characteristics of
public interest that are evident and important.
[101]
Clearly, this case does
not raise the same passion for Aboriginal and non-Aboriginal communities across
the country, the province or even the Lac-St-Jean region, as the Band Council
the applicant belongs to refused to become involved, other than agreeing to
assume the inherent costs related to the preparation of an expert report it wished
to benefit from in the context of its own concerns to validate its own claims
in its negotiations.
[102]
In Okanagan, four
Indian bands began logging on
Crown land in B.C. without authorization. The
harvested timber was to be used for the construction of new housing. The Bands claimed that they had aboriginal title to the lands in
question and were entitled to log them. The Indian communities were facing grave social problems, including high unemployment rates,
lack of housing, inadequate infrastructure, and they were forced to run deficits to finance their day-to-day operations. Considering their very limited financial
means, the bands applied to the British Columbia Supreme Court for interim
costs. Lebel J. ruled as follows:
The issues sought to be raised at trial are of profound importance
to the people of British Columbia, both aboriginal and non‑aboriginal,
and their determination would be a major step towards settling the many
unresolved problems in the Crown-aboriginal relationship in that
province. In short, the circumstances of this case are indeed special,
even extreme.
[103]
The facts in Okanagan
illustrate that the decision of the Court would have a major impact on the
entire community. They needed timber to build housing and it was a necessity
for the community’s survival. Moreover, it seemed important that the Court implement
a proper land claim settlement method.
[104]
The Supreme Court also
stated in Little Sisters:
This means that a litigant whose
case, however compelling it may be, is of interest only to the litigant will be
denied an advance costs award. It does not mean, however, that every case of
interest to the public will satisfy the test.
[105]
More recently, the
Supreme Court of Canada in R. v. Caron, stated as follows at
paragraphs 44 and 45:
[44] The
public importance aspect of the Okanagan test has three elements, namely
that "[t]he issues raised transcend the individual interests of the
particular litigant, are of public importance, and have not been resolved in
previous cases" (para. 40). Not every constitutional case meets these criteria,
as it could not be said in each and every case that it is "sufficiently
special that it would be contrary to the interests of justice to deny the
advanced costs application" (Little Sisters (No. 2), para. 37).
What is "sufficiently special" about this case is that it constitutes
an attack of prima facie merit (as that term is used in Okanagan)
on the validity of the entire corpus of Alberta's unilingual statute books. The
impact on Alberta legislation, if Mr. Caron
were to succeed, could be extremely serious and the resulting problems ought,
if it becomes necessary to do so, to be addressed as quickly as possible. A
lopsided contest in which the challenger, by reason of impecuniosity, had to
abandon his defence in the midstream of the trial would not lay the issue to
rest. The result of Mr. Caron's collapse at the final stage of the trial would
simply be that the costs and judicial resources already expended on resolving
this issue by the public, as well as by Mr. Caron, would be thrown away.
[45] The
injury created by continuing uncertainty about French language rights in
Alberta transcends Mr. Caron's particular situation and risks injury to the
broader Alberta public interest. The Alberta courts have taken the view
that the status and effect of the 1869 Proclamation was not fully dealt with in
the previous litigation. It is in the public interest that it be dealt with
now. This makes the case "sufficiently special" under the Okanagan/Little
Sisters (No. 2) criteria, in my opinion.
[106]
The applicant is the
only member of the community to be actively engaged in the fur trade. That
activity is not a business that is essential to the survival of the Mashteuiastsh
community as logging may have been for the Indian community of Okanagan. The
trial issue therefore is of interest to him, but no evidence was adduced to the
effect that the decision of the Court would have major repercussions on his community
or other persons or groups, or at least no one attested to that.
[107]
The laws of
a society are not a large menu where a person can pick and choose what is to
their advantage or not under the pretext that there is inconsistency. In that
same vein, those same rules must also apply to all those who decide to play by
them.
[108]
Another decision cited
by the applicant is Joseph v. Canada,
which presents rare and exceptional circumstances that are not found in the
applicant’s appeal. In that case, the Aboriginal band had unaided supported this litigation from
the very beginning. It was a small band with virtually no resources and
dependant upon funds provided by the government. Moreover, for over 25 years the government never stopped promising that the
situation would be remedied.
[109]
In the case at bar, the
circumstances are not comparable to the facts of the decisions mentioned above.
Accordingly, in my view, it is not appropriate to characterize the applicant’s
case as special, rare and exceptional.
[110]
After having heard the
applicant’s submissions and having reread two or more times certain passages from
the transcription, it is in my opinion quite obvious that he goes all over the
map without ever reaching a destination. My finding, severe as it is, is even
more warranted when the case is viewed in its global context.
[111]
The applicant
submits that he meets the required criteria with respect to public interest
while not having the required financial resources to assert his rights. Theoretically,
the appellant’s case raises an issue that could have significant consequences
on a great number of Canadians as well.
[112]
Could all
Indians operating an economic activity subject to the Excise Tax Act eventually
become exempt from its application? In the affirmative, why have they not
expressed an interest? Why have they not been solicited? The answers to those
two questions undoubtedly stem from the disputable merits of his argument.
[113]
Indeed, the obligations
imposed by the Excise Tax Act are not as monstrous as suggested by the
applicant. They are rather simple and, in this case, only concern business
conducted with non‑Indians.
[114]
From the outset, the applicant
has insisted on taking justice into his own hands and the problem was amplified
with his bravado, to the point where he had to accept the obvious, that
conducting business with non‑Indians required that he respect certain rules
of the game.
[115]
At that moment, the situation
deteriorated considerably, to the point where he is currently in a situation where
he does not have the means for his ambition and would like to bring the Crown
into his rash venture, of which the chances of success are for all intents and
purposes very low. Furthermore, there is no determinative evidence that the
issue or issues in dispute are limited to the applicant’s sole interests.
[116]
The applicant demonstrated
a certain financial incapacity, but is not impecunious; his
business and the fur trade are not his only means of support.
[117]
On the whole, the
applicant’s case does not present the special, or even rare and exceptional characteristics
warranting the award of interim costs. His application should be dismissed on
that ground alone.
[118] Therefore, the application for interim
costs is dismissed, with costs in
favour of the respondent. The
requirements established by the Supreme Court are not met. As to the issues relating
to the inconsistency between the Indian Act and the Excise Tax Act,
tha applicant has no reasonable chances of success, as it is not in the
interest of justice and the public that the issue of Aboriginal rights is being
dealt with by the court at this stage.
Signed at Ottawa, Canada, this 17th day of February 2011.
“Alain Tardif”
Translation certified true
On this 6th day of April 2011
François Brunet,
Revisor
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