Texada Mines Ltd. v. Attorney-General of British Columbia, [1960] SCR 713

Supreme Court of Canada

Texada Mines Ltd. v. Attorney-General of British Columbia, [1960] S.C.R. 713

Date: 1960-06-13

Texada Mines Limited (Plaintiff) Appellant;

and

The Attorney-General of British Columbia (Defendant) Respondent;

and

The Attorney-General of Ontario Intervenant.

1960: February 16, 17, 18; 1960: June 13.

Present: Kerwin C.J. and Taschereau, Locke, Cartwright, Fauteux, Abbott, Martland, Judson and Ritchie JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA

Constitutional law—Taxation—Validity of Mineral Property Taxation Act, 1957 (B.C.), c. 60 and Regulations—Tax on minerals in situ—Nature of legislation—Export tax—Reference to other related legislation and to history of subject-matter—The Iron Bounty Act, 1957 (B.C.) c. 9.

The Mineral Property Taxation Act, 1957 (B.C.), c. 60, provides that the Lieutenant-Governor in Council may declare any portion of the province to be a producing area in respect of designated minerals and that every owner of land including minerals therein or minerals within a producing area shall pay annually a tax computed on the value of the minerals, but not exceeding 10 per cent, of the value of the minerals, as assessed under the Act. This tax was in addition to any other tax imposed on land by any other Act. The plaintiff company owns iron ore mineral claims in an area declared to be a producing area in respect of iron ore, and is engaged in the business of mining iron ore which it sells exclusively for export.

Contemporaneously with the passing of this Act, the Legislature enacted the Iron Bounty Act, 1957 (B.C.), c. 9, which permitted the payment of a bounty in respect of certain classes of iron charged directly to a steel furnace from ore smelted within the province. The highest bounty was to be paid in respect of iron ore mined within the province and on which tax had been paid. There is no smelter on the west coast of the province.

The trial judge held that the Act was ultra vires, but this judgment was reversed by the Court of Appeal.

Held: The Act was invalid as imposing an export tax.

The true nature of an impugned statute is not necessarily to be determined alone from its language, and where other statutes of the Legislature on related subjects have been passed prior to or contemporaneously with it, their history and evidence as to their effect may properly be considered in determining what is the true nature of the statute. Reference re Alberta Legislation, [1939] A.C. 117.

The true nature and purpose of the legislation was not the raising of revenue for provincial purposes under head 2 of s. 92 of the B.N .A. Act. Its purpose was to encourage manufacturing activities in the

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province by the imposition of such a high rate of taxation upon iron ore in place as to either impede or render economically impossible the export of the ore, under the business conditions prevailing in 1958. The evidence showed that the properties in question, if taxed at that rate, could not be operated profitably unless a smelter were established thus enabling the recovery of the tax and a bounty of $5 in addition. It was significant that the Iron Bounty Act, passed contemporaneously, increased the maximum bounty from $3 to $5, thus pointing out to those engaged in iron mining, which had been singled out from other mining activities and subjected to a tax at this extraordinary rate, a way by which they could recoup themselves. The real nature of the tax was, therefore, an export tax, and as such, it was indirect and ultra vires of the Legislature. Reference re Alberta Legislation, [1939] A.C. 117; McDonald Murphy Lumber v. A.G. for British Columbia, [1930] A.C. 357, applied. C.P.R. v. A.G. for Saskatchewan, [1952] 2 S.C.R. 231, distinguished.

APPEAL from a judgment of the Court of Appeal for British Columbia[1], reversing a judgment of Sullivan J. Appeal allowed.

J. D. Arnup, Q.C., and A. B. Ferris, for the plaintiff, appellant.

M. M. McFarlane, Q.C., and G.S. Cumming, for the defendant, respondent.

E. R. Pepper, for the Attorney-General of Ontario, intervenant.

The judgment of the Court was delivered by

LOCKE J.:—In this action the present appellant asked for a declaration that the Mineral Property Taxation Act, being Chapter 60 of the Statutes of British Columbia for 1957, and certain regulations made under powers vested in the Lieutenant-Governor in Council of the Province by the said statute are ultra vires, and further for a declaration that the appellant is not liable to make certain returns demanded of it under the provisions of the regulations.

Sullivan J., by whom the action was tried, held the Act to be ultra vires. While it necessarily followed from this finding that the regulations based upon the statute were also beyond the powers of the Lieutenant-Governor in Council, this fact was declared in the formal judgment entered and it was further found that the demands referred to in the statement of claim were unauthorized and the appellant not liable to pay any tax in respect of iron or concentrates or other iron products under the Act.

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This judgment, in so far as it declared the statute itself to be ultra vires the Legislature, was set aside by the Court of Appeal but Davey and Sheppard JJ. A., a majority of the Court, were of the opinion that s. 4 of the regulations passed was invalid.

The Act in question by s. 3 provides that the Lieutenant-Governor in Council may from time to time by order declare that any portion of the province designated in such order constitutes a producing area for the purpose of the Act, and by such order or by a separate order designate the mineral or minerals in respect of which the portion of the province therein designated is constituted a producing area.

Section 4 provides that every owner of land including minerals therein or of minerals within a producing area is liable for and shall pay annually to the Minister of Finance for the use of Her Majesty in the right of the province a tax computed on the value of the minerals mentioned, and declares that "the Minister for the raising of a revenue for provincial purposes shall levy annually on every such owner" the said tax. The section provides that the tax shall be paid at such annual rate as the Lieutenant-Governor in Council may from time to time prescribe, not exceeding 10 per cent, of the value of the minerals as assessed under the Act, and that such taxes are due and payable on the 2nd day of July of the year in which the taxation roll on which they are shown has been prepared.

Section 5 provides that the assessor shall assess annually at their fair value all such minerals situate in a producing area and shall enter a description of the property assessed upon the assessment roll.

Section 8 provides that all taxes assessed or imposed by virtue of the Act shall be in addition to any other tax imposed on land by any other Act.

By s. 9, Parts VIII, IX, X and XI of the Taxation Act, R.S.B.C. 1948, c. 332, are deemed to be incorporated in the Act and are expressly made applicable to the provisions thereof.

By s. 10 the Lieutenant-Governor in Council is authorized to make such regulations, not inconsistent with the spirit of the Act, as are considered necessary or advisable, and such regulations shall have the same force and effect as if incorporated in it.

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Section 12 provides that, where under any Act of the Legislature an owner has paid to the Crown a royalty on any mineral or minerals, the amount paid by the owner on account of such royalty shall be deemed pro tanto as payment on account or in full of the tax payable under the Act.

At the same session of the Legislature the Iron Bounty Act was passed as chap. 9. By this Act the Minister of Mines, with the approval of the Lieutenant-Governor in Council, is permitted to enter into an agreement with any person whereby the Crown will pay to that person out of the Consolidated Revenue Fund a bounty on each ton of 2,000 lbs, of pig-iron, sponge-iron or fluid-iron charged directly to a steel furnace from ore smelted within the province. The statute restricts the payment of bounty to 100,000 tons of iron in any one year, or more than 1,000,000 tons of iron in the aggregate.

The maximum bounty which may be made payable under such an agreement is $5 per ton for ore mined within the province and on which a royalty or a tax under the Mineral Property Taxation Act has been paid to the Crown: $3 per ton on iron from ore mined within the province on which neither a royalty nor a tax under the said Act has been paid to the Crown, and $2 per ton on iron from ore mined out of the province.

By an order in council approved on October 30, 1957, regulations made pursuant to the provisions of the Act were approved. These declared an area comprised of Vancouver Island and adjacent islands included within the meaning divisions of Alberni, Nanaimo and Victoria, to be a producing area. The expression "mineral" where used in the regulations was declared to mean naturally occurring compounds of iron which are or may be used in the production of metallic iron, and "ore" to mean a natural mineral or mineral aggregate containing iron in such quantity, grade and chemical combination as to make extraction of the iron practicable. The information required from the owners of such minerals in a producing area referred to in s. 6 of the Act was specified, and it was directed that it should be given to the assessor on or before November 15 of each year commencing with the year 1957. A formula was prescribed for determining the assessed value of such mineral in the producing area and the annual rate of taxation was

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declared to be 8 per cent, of the assessed value as so ascertained. The assessor was directed to prepare the assessment roll, commencing with the assessment roll for the calendar year 1958, and that this should be done in each subsequent year.

Amendments were made to these regulations for the year 1959, describing in more detail the information to be given to the assessor, the nature of which it is unnecessary to consider in dealing with the questions to be determined.

The appellant is incorporated under the laws of British Columbia and owns certain Crown granted lands and mineral claims on Texada Island, which lies off the West coast of the province between the mainland and Vancouver Island. It is thus included in the producing area declared by the order in council. The company was in the year 1957 engaged in the business of mining iron ore which was concentrated at the site and, at the relevant times, was sold in this form for export principally to Japan and Germany. No sales were being made in Canada. There was not during the period of these operations, and there is not now, a smelter for the treatment of iron ore on the West coast of British Columbia and, accordingly, no means whereby pig-iron, sponge-iron, fluid-iron or steel could be produced from the appellant's ore.

It was shown by the evidence of Allen D. Christensen, the president of the appellant company, that the iron content of the ore in the appellant's mine was only sufficient to yield a very narrow margin of profit on the available export market. During the year 1957 the average sale price had been $6.90 a ton of concentrates. The average cost of production at the property at the time of the hearing in June of 1958 was stated as being $6.75 to $6.80 a ton. It is the contention of the appellant that if the tax of 8 per cent, upon the assessed value of the property was added to the cost of production, the operation could not have been carried on at a profit and, presumably, would have been shut down in the year 1958, in the absence of an available smelter in the province where the ores produced could have been treated. If there had been such a smelter in the year 1958, with the assistance of the maximum bounty under the Iron Bounty Act it may be safely assumed that the operation would have been profitable.

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The appellant alleges that the purpose of the impugned legislation was to impose an export tax on iron ore or concentrates sold for export from the province and that such tax is an indirect tax. It is further said that the tax imposed by the Mineral Property Taxation Act is a tax upon the ore rather than upon the land from which it is mined and, as such and in the ordinary course, is added to the sale price of the commodity and, accordingly, is indirect.

The true nature of this legislation is not to be determined alone from the language of the statute and, as was done in this Court in the reference Re Alberta Statutes[2] and by the Judicial Committee on the appeal[3], where other statutes of the Legislature passed prior to and contemporaneously with the Act dealing with the taxation of banks were considered, statutes such as the Iron Bounty Act, the Taxation Act and the history of each of these statutes and evidence as to the effect of the legislation upon iron mining in the province may properly be considered in determining what is its true nature.

For more than forty years the Legislature of British Columbia has endeavoured by legislation to encourage the establishment of a smelter for the treatment of iron ore and the necessary facilities for the production of steel at the West coast. The first of the Iron Bounty Acts was c. 11 of the Statutes of 1918, which permitted the Lieutenant-Governor in Council to enter into an agreement for the payment of a bounty on pig-iron in a lesser amount than that provided by the statute of 1957. Later statutes provided for the payment of bounty on both pig-iron and steel in varying amounts.

Other legislation with the same end in view was introduced into the Taxation Act of the province in 1922. Chapter 75 of the statutes of that year repealed and replaced the Taxation Act, R.S.C. 1911, c. 222, and by s. 83 provided that, in addition to all other taxes imposed by the said Act or any other Act, there should be assessed, levied and collected quarterly from every owner of a mine a tax of .37 1/2 cts. per ton upon all iron ore removed from the property, but that the tax should not apply in respect of iron ore mined and used in the province as a flux for the smelting

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of ores or other metals. This section appeared as s. 47 in R.S.C. 1948, c. 332, and, with the remainder of the sections contained in Part III of the Taxation Act, was repealed by the Mineral Property Taxation Act in 1957. We are informed, however, that no attempt was ever made to enforce payment of the tax imposed by the Taxation Act. Apparently, the reason for this, at least from and after the year 1929, was that by the decision of the Supreme Court of British Columbia in the case of McDonald Murphy Lumber Company v. Attorney General for British Columbia[4], a tax apparently considered to have been of a similar nature imposed upon timber cut within the province was held to be ultra vires. The decision of Morrison C.J. was upheld by the judgment of the Judicial Committee[5].

In that case s. 58 of the Forest Act 1924 imposed a tax upon all timber cut within the province, except that upon which a royalty was payable, but provided that in the case of timber used or manufactured in the province there should be a rebate of almost the entire amount of the tax. The Act prohibited the export of any timber without an accompanying certificate that the tax due in respect of it had been paid. It was contended by the paintiff in that action that the legislature was invalid on the ground that the tax imposed was an export tax and so fell within the category of duties of customs and excise which Parliament had exclusive power to impose by virtue of s. 122 of the British North America Act and, further, that it was indirect taxation and therefore not within the legislative power of the province under head 2 of s. 92. It was shown in evidence that the insignificant part of the tax imposed which was not rebated had not in practice been collected by the province, which appeared to demonstrate, if further demonstration was needed, that the true nature of the levy was an export tax. While, as the record in this case shows, it was also contended that the legislation trespassed upon the jurisdiction of Parliament under head 2 of s. 91 as being in relation to the regulation of trade and commerce, that question was not dealt with.

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At the trial of this action Sullivan J. considered the earlier legislation in arriving at the conclusion that the statute itself was invalid as being an attempt, under the guise of imposing a direct tax upon an interest in land, to regulate or restrain the export of ore and concentrates from the province. While that learned judge, in the course of his judgment, referred to certain statements purporting to have been made by the Premier of the Province and the Minister of Mines to the effect that the legislation was designed to discourage the export of iron ore so that eventually an integrated steel industry could be established in the province, he made it clear that he came to his conclusion without reference to this. That such statement had been made was not proven at the trial and had the evidence been tendered it would, no doubt, have been rejected as inadmissible.

In the Court of Appeal, O'Halloran J. A. found that the tax being upon the minerals in place was a direct tax and referred to the decision of this Court in Canadian Pacific Railway v. Attorney General of Saskatchewan[6]; as determining that question. That learned judge said in part:

This Court is now relieved of the necessity of examining the many constitutional decisions wherein an ultra vires indirect tax has been held to exist where the subject matter upon which the tax was imposed was not a tax upon land, since the Supreme Court of Canada in the above mentioned Saskatchewan case (1952) 2 S.C.R. 231, applied to substantially similar legislation (the similarity will be examined later), the reasoning of the Judicial Committee in the Esquimalt and Nanaimo Railway case above mentoned.

And again:

The first accepted principle is that if a Statute is found in its pith and substance to be land tax, then the Court is no longer concerned with whether it has many of the indicia of an indirect tax (which it might if it were not a land tax), or of an excise or export tax in the sense that is described in a variety of high constitutional decisions wherein the tax under consideration was not a land tax.

A passage from the judgment of the Judicial Committee in Attorney General of British Columbia v. Esquimalt and Nanaimo Railway[7], is then referred to, in which Lord Greene said in part:

Their Lordships think an intention must not in the absence of clear words, be ascribed to a responsible Legislature of enacting a provision which would be a deliberate and unworthy sham.

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Concluding that the true nature of the Mineral Property Taxation Act was taxation upon an interest in land, O'Halloran J. A. found the statute to be intra vires.

Sheppard J.A. was of the opinion that the true nature of the taxation was a direct tax upon the minerals in situ and neither a tax on the income derived from it nor on the commodities produced. He considered, therefore, that it was distinguishable from such cases as that of The King v. Caledonian Collieries Ltd.[8], where the tax was a levy upon the gross revenue received by the owner from the sale of coal from his mine. While mentioning the decision of the Judicial Committee in the McDonald Murphy Lumber Company case, he did so only to point to that part of the judgment of Lord MacMillan, at p. 365 of the report, where it is said that a tax levied on personal property, no less than a tax levied on real property, may be a direct tax where the taxpayer's personal property is selected as the criterion of his ability to pay, but that a tax like the one in question, levied on a commercial commodity on the occasion of its exportation, cannot be described as a tax whose incidence is, by its nature, such that normally it is finally borne by the first payer, and is not susceptible of being passed on.

I am unable, with great respect, to agree with the conclusions of these judgments.

The question to be determined is not whether a tax upon minerals in the ground is a tax upon land and prima facie a direct tax, a proposition which no one would contest, but rather is whether the Mineral Property Taxation Act is an enactment in the exercise of the provincial power to raise a revenue for provincial purposes by direct taxation, or legislation the true nature of which is to impose an export tax upon the export of ore and concentrates from the Province and an indirect tax and which trespasses upon the legislative authority of Parliament as to the regulation of trade and commerce.

The argument in the Saskatchewan case was confined to the question as to whether the tax was indirect and, in my opinion, the decision, other than upon that aspect of the matter, does not touch the issues to be decided here.

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It is to be remembered that in the Saskatchewan case the taxation imposed upon lands found to be within a producing area was at a rate not exceeding 10 mills on the dollar of the assessed value. The present legislation authorizes an annual tax of 10 per cent, of the assessed value, or ten times the rate which might be imposed in Saskatchewan, a material matter to be considered. This point is not mentioned in the judgments delivered in the Court of Appeal. The extent of the tax imposed was one of the decisive matters that were considered in holding the Bank Taxation Act of Alberta invalid, both in the judgments of this Court delivered by Sir Lyman Duff[9] and of the Judicial Committee on the appeal[10].

In the Alberta case, that the Bank Taxation Act was ultra vires as being in relation to banks and banking was considered to have been made clear by the fact that the taxation while in form direct was so excessive as to be in effect prohibitive, and that to operate a bank in the province, created under Dominion power, would have been financially impossible.

No one would seriously contend, since the judgment of the Judicial Committee in Bank of Toronto v. Lambe[11], that it was not within provincial powers under head 2 of s. 92 to impose direct taxes upon banks operating within the province for the purposes mentioned, but that was not the question. Sir Lyman Duff said (p. 127) that the question there to be determined was as to whether it was an enactment in exercise of the provincial power to raise a revenue for provincial purposes by direct taxation, or was it legislation which in its true character related to the incorporation of banks and banking. The answer to this question, he said, was to be found by ascertaining the effect of the legislation in the known circumstances to which it was to be applied.

There were at the time of the enactment of the Act here in question three small iron mines operating, or which had recently operated, in the producing area containing Vancouver and Texada Islands and, apparently, none elsewhere in the province. Of these three the property of the appellant had been operating since 1952 and, up to the time

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of the trial in June of 1958, some 1,600,000 tons of iron concentrates had been produced from the ore in the claims. According to the evidence of A. D. Christensen, the price realized over this six year period had fluctuated between $6.90 and $8.40 a ton and, as stated, during 1957 had averaged approximately $6.90. These were all apparently marginal properties and one of them on Vancouver Island had been shut down at the end of 1956. One of them was described by this witness as a "break even proposition."

It is stated in the factum of the appellant that the tax at the rate of 8 per cent, would amount to .55 cts. a ton—presumably a ton of concentrates—but this appears to have been calculated by taking 8 per cent, either of the average cost of production or the selling price, which is not the manner contemplated by the Act. It was, however, shown that in the assessment notice sent by the Provincial assessor to the appellant for the year 1958 the minerals were valued for assessment purposes at $973,200. A tax at the rate levied for the year 1958 would on this basis amount to something in excess of $77,000. If fixed at the maximum rate authorized by the Act it would exceed $97,000. While there is no evidence as to the tonnage of ore or concentrates produced during the year 1957, if it be assumed that the mine production was substantially the same for the years 1952 to 1957 inclusive, the average annual production would be approximately 265,000 tons. Taking the assessor's figure for the year 1958 and assuming the tonnage to be the same, the tax levied would amount to something over .29 cts. a ton which, in view of the scant margin of profit, would be prohibitive. To impose taxation at this rate upon the appellant's operation and upon the operation on Vancouver Island which was currently showing no profit would, presumably, result in both of these mines being shut down.

Since 1896, mines and minerals in British Columbia have been regarded for the purpose of taxation as a separate class of property and, since 1897 and until the passing of the Mineral Property Taxation Act of 1957, the assessment and taxation thereof have been regulated either under the Assessment Act or the Taxation Act.

The rate of tax imposed upon all persons operating mines by s. 8 of c. 46 of the Statutes of 1896 was 1 per cent, of the assessed value of the ore removed during the taxation

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year. This tax at the same rate was continued by s. 10 of the Assessment Act, R.S.B.C. 1897, c. 179. In the revision of 1911 the same tax at the rate of two per cent, was imposed by s. 155 of the Taxation Act, R.S.B.C. 1911, c. 22, on the assessed value of the ore mined, other than coal, during the taxation year. The tax on coal was fixed at .10 cts. per ton shipped, exported or delivered. The Taxation Act, R.S.B.C. 1924, c. 254, by s. 79 imposed a tax of 2 per cent, on the income from, or the output of, a mine (other than a gold mine) of 2 per cent, and a tax at the same rate on coal. By s. 59 of the Taxation Act, R.S.B.C. 1936, c. 282, the tax on the output of any mine (not excluding a gold mine) was continued at 2 per cent, on the assessed value of the ore removed during the taxation year, or a tax on the owner's income from the mine under the Income Tax Act, whichever tax was greater in amount. The special tax on iron ore of 37 1/2 cts. a ton above mentioned, which was first imposed in 1922, was continued by s. 62 of the Taxation Act, in the revision of 1936. The same rate of 2 per cent, upon the output or the owner's income from the mine under the Income Tax Act was continued in s. 44 of c. 332 of R.S.B.C. 1948, and this formed part of the Part III of the Act which was repealed in 1957 by the statute under consideration.

In comparing the quantum of these taxes which have been imposed upon minerals since 1896 and those imposed upon iron ore by the Act in question, it is to be remembered that the taxes imposed by these earlier Taxation Acts were upon the assessed value of the ore removed in the taxation year, while the annual taxation imposed under the Mineral Property Taxation Act is upon the assessed value of all of the minerals on the property, a very different matter.

While there are very extensive mining activities carried on in British Columbia, it is significant that in administering the Act the order in council has been restricted to iron ore alone. Gold, silver, lead, zinc, copper and various other precious and base metals are mined, but none of these minerals in place have been subjected to any taxation under the Act in question. The very high rate of the tax authorized, which would in ten years' time impose in the aggregate an amount of tax equal to the assessed value of the minerals, indicates, in my opinion, that the true nature and purpose of the legislation is something other than the

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raising of revenue for provincial purposes under head 2 of s. 92. Section 8 of the Act expressly provides that the taxation imposed under it shall be in addition to any other tax imposed on land by any other Act, but the iron mines alone bear this heavy additional burden.

It appears to me to be clear that the section which imposed the tax of 37 1/2 cts. per ton on iron ore removed from the premises of a mine in 1922, but exempted such ore as was mined and used in the province as a flux in the smelting of ores and other metals, was passed with the same end in view as was s. 58 of the Forest Act which was found to be ultra vires in the McDonald Murphy Lumber Company case. Both were designed to encourage manufacturing activities in British Columbia by imposing what was found to be in the case concerning s. 58 a tax on export. That this was the true nature and purpose of the tax imposed by the amendment of 1922 appears to have been recognized by the provincial taxation authorities, as no attempt was ever made to enforce it.

In my opinion, the impugned legislation which repealed s. 44 of the Taxation Act seeks to accomplish the same purpose indirectly by the imposition of such a high rate of taxation upon iron ore in place as to, under the conditions prevailing in 1958, either impede or render impossible from a business standpoint the export of the ore or concentrates produced from the only iron mines in the province. Upon the evidence it would appear that the properties cannot be operated profitably if taxation at the rate either authorized or levied in respect of the year 1958 be imposed, unless a smelter be established at the West coast and the appellant thus enabled to recover the tax and a very substantial bounty in addition. If there were such a smelter, the appellant would apparently qualify for the maximum bounty of $5 per ton if it paid the tax under the Mineral Property Taxation Act.

It is not without significance that the Iron Bounty Act of 1927, passed contemporaneously with the Mineral Property Taxation Act, increased the maximum bounty which might have been paid under c. 32 of R.S.B.C. 1948 from $3 to $5 per ton. To those engaged in iron mining which

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had been singled out from other mining activities and subjected to a tax at this extraordinary rate it was thus pointed out the means by which they could recoup themselves.

Since the Judicial Committee based their finding that s. 58 of the Forest Act was ultra vires on the ground that the real nature of the tax was an export tax and the further ground that, as such, it was indirect, it was apparently regarded as unnecessary to deal with the question as to whether it was also invalid as infringing upon the exclusive power of Parliament to legislate in relation to the regulation of trade and commerce. For the same reason, it is not necessary for the determination of this appeal to deal with that issue.

I would allow this appeal and direct that judgment be entered declaring that the Mineral Property Taxation Act, being c. 60 of the Statutes of British Columbia for 1957, is ultra vires the legislature of that province. The appellant is entitled to its costs in this Court.

Appeal allowed with costs.

Solicitors for the plaintiff, appellant: Davis, Hossie, Campbell, Brazier & McLorg, Vancouver.

Solicitors for the defendant, respondent: Lawrence, Shaw, McFarlane & Stewart, Vancouver.