Massey-Ferguson Industries Ltd. et al. v. Government of Saskatchewan et al., [1981] 2 SCR 413

Supreme Court of Canada

Massey-Ferguson Industries Ltd. et al. v. Government of Saskatchewan et al., [1981] 2 S.C.R. 413

Date: 1981-10-06

Massey-Ferguson Industries Limited, White Motor Corporation of Canada Limited, International Harvester Company of Canada Limited, John Deere Limited, Allis-Chalmers, Rumley Ltd., Morris Rod Weeder Co. Ltd., Ford Motor Company of Canada Limited (Plaintiffs) Appellants;

and

The Government of Saskatchewan and the Minister of Agriculture of the Province of Saskatchewan (Defendants) Respondents;

and

The Attorney General of Canada, the Attorney General of Ontario and the Attorney General of Quebec Interveners.

1981: June 8; 1981: October 6.

Present: Laskin C.J. and Martland, Dickson, Estey, McIntyre, Chouinard and Lamer JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR SASKATCHEWAN

Constitutional law—Exercise of superior court powers—Indirect taxation—Provincial Board to award compensation for delays in farm machinery repair—Fund created by levy imposed on provincial distributors—Whether or not legislation ultra vires s. 96 of the B.N.A. Act—Whether or not levy indirect taxation contravening s. 92(2) of the B.N.A. Act—The Agricultural Implements Act, 1968, 1968 (Sask.), c. 1, (now R.S.S. 1978, c. A-10), ss. 6C, 6D, 6E, 6F, 6G, 29A, 29B, 31.

The appeal involved the determination of two constitutional issues which had been the subject of a declaratory action. Firstly, was the Saskatchewan Agricultural Implements Act, 1968 establishing the Agricultural Implements Board and empowering it to determine compensation as provided in the Act, ultra vires s. 96 of the B.N.A. Act. Secondly, did the levy on general provincial distributors, to establish and maintain the Agricultural Implements Compensation Fund, based upon a percentage of their gross sales or other rates or specific sums, amount to an indirect tax in violation of s. 92(2) of the B.N.A. Act. Only assessments determined under legislation in force in the period 1973-79 were contested.

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The trial judge found that, while the legislation was ultra vires s. 96 of the B.N.A. Act, the assessments amounted to indirect taxation and outside provincial competence. The Court of Appeal unanimously held the legislation and the assessments to be within the province’s powers.

Held: The appeal should be dismissed.

The Agricultural Implements Act, 1968 did not violate s. 96 of the B.N.A. Act. The Board was not a s. 96 court, either in its functions arising (under ss. 6 D & E) on receipt of an application for compensation or in the way in which those functions were discharged. The Board’s investigatory power was clear and independent; there was no limitation to legal considerations in the fixing of compensation and no lis inter partes. Even if the Board’s powers had been considered partly judicial and broadly conformable to a s. 96 court, the institutional setting in which it operated distinguished it markedly from those courts. The Board’s authority was integrated into a regulatory scheme which offered protection to farmers through what was essentially an insurance fund. The levy on distributors to establish and maintain the Compensation Fund was not a tax within s. 92(2) of the B.N.A. Act but rather liquidating premiums, used for the satisfaction of farmers’ claims, assessed in relation to the awards and administrative expenses, and collected and distributed independently of the Consolidated Revenue Fund. That the distributors were under an additional cost of doing business did not mean that they were being taxed in the constitutional sense. Even if the assessments were to be characterized as taxes, they were no less direct than employers’ assessments for the workmen’s compensation—assessments decided not to be indirect taxation.

Toronto Corporation v. York Corporation, [1938] A.C. 415; Attorney General for Ontario and Display Service Co. Ltd. v. Victoria Medical Bldg. Ltd., [1960] S.C.R. 32; Labour Relations Board of Saskatchewan v. John East Iron Works, Ltd., [1949] A.C. 134; Tomko v. Labour Relations Board (Nova Scotia), [1977] 1 S.C.R. 112; Royal Bank of Canada v. Workmen’s Compensation Board of Nova Scotia, [1936] S.C.R. 560; Ontario Boys’ Wear Ltd. v. Advisory Committee, [1944] S.C.R. 349; Shannon v. Lower Mainland Dairy Products Board, [1938] A.C. 708, referred to; Workmen’s Compensation Board v. Canadian Pacific Railway Company, [1920] A.C. 184; R. v. Caledonian Collieries Limited, [1928] A.C. 358; Re The Residential Tenancies Act, 1979, [1981] 1 S.C.R. 714, distinguished.

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APPEAL from a decision of the Saskatchewan Court of Appeal[1], dismissing plaintiffs appeal from a decision of Hughes J. finding the legislation to be ultra vires and allowing defendant’s motion to vary the finding that the tax was indirect. Appeal dismissed.

W.T. Molloy and Gary Zabos, for the appellants.

George Taylor, Q.C., for the respondents.

T B. Smith, Q.C., and M. Ciavaglia, for the intervener the Attorney General of Canada.

Elizabeth Goldberg, for the intervener the Attorney General of Ontario.

Jean K. Samson and Jean-François Jobin, for the intervener the Attorney General of Quebec.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—This appeal, which is here by leave, involves the determination of two constitutional issues posed as follows:

1. Is the Saskatchewan Agricultural Implements Act, 1968, as amended, which establishes the Agricultural Implements Board and empowers it to determine compensation as provided in the Act, ultra vires section 96 of the British North America Act?

2. Does the levy on general provincial distributors, to establish and maintain the Agricultural Implements Compensation Fund, based upon a percentage of their gross sales or other rates or specific sums, amount to an indirect tax in violation of section 92(2) of the British North America Act?

These issues were the subject of a declaratory action by the appellants who are farm implement manufacturers and whose products are sold in Saskatchewan and elsewhere in Canada. Each is represented by an independent farm equipment dealer in Saskatchewan and some also sell their products through stores of their own in the province. All are designated as distributors under The Agricultural Implements Act, now R.S.S. 1978, c. A-10. The issues herein fall to be decided under the statute as enacted by 1968 (Sask.), c. 1 and as

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amended by 1973 (Sask.), c. 1 and 1976 (Sask.), c. 2.

It was the amendment of 1973 which established the Agricultural Implements Board and provided for the Agricultural Implements Compensation Fund and for contributions thereto by distributors. A change was made by 1979-80 (Sask.), c. 10, s. 6 in the way contributions to the Fund were to be assessed, and the appellants do not challenge the new mode of assessment. So far then as the second question is concerned, the appellants contest the validity of the assessments only for the period 1973 to 1979.

They succeeded on this point before the trial judge, Hughes J., who held against them, however, on the s. 96 question. A unanimous Court of Appeal, in reasons delivered by Culliton C.J.S., held against the appellants on both issues. In this Court, the Attorney General of Canada, as intervener, supported the appellants on the indirect tax issue but supported the respondents, the Government of Saskatchewan and the Minister of Agriculture, on the s. 96 point. The Attorneys General of Ontario and of Quebec, also interveners, supported the respondents on both issues.

II

The Agricultural Implements Act, 1968, as amended, has a history. It began life, in more modest form, as The Farm Implement Act, 1915 (Sask.), c. 28. The purpose of this Act was to provide for some control over contracts for the purchase of farm implements, directed to protection of the purchaser. The Act prescribed statutory forms of contract for the sale and purchase of farm implements, which were classified under the Act as large and small implements, separate contract forms being prescribed for each class. Sellers of implements were required to file annually a list of the implements they have for sale, with the prices thereof, both for cash and on credit and, in the latter case, the credit terms. A lien on implements sold to purchasers on credit (title remaining in the seller until full payment was made) depended upon

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a lien note being taken in compliance with relevant legislation. If there was repossession for default, arbitration was provided to fix the value of the repossessed implement if the seller and buyer were unable to agree on it, and accounts between them were to be settled on the basis of that value.

The Farm Implement Act, with amendments which did not change its essential character as indicated above, continued in force until 1958 when it was replaced by The Agricultural Machinery Act, 1958, 1958 (Sask.), c. 91. This Act established a government agency called the Agricultural Machinery Administration and also a board called the Agricultural Machinery Board whose duties were, mainly, to govern and direct the work of the Agricultural Machinery Administration. It was also empowered to conduct inquiries into the distribution and marketing of farm implements in Saskatchewan.

The Agricultural Machinery Administration, subject to the direction of the Board, was invested with power to administer the Act, to test and appraise, under actual working conditions, implements sold or offered for sale in the province, to undertake development work to improve and develop implements for use in Saskatchewan and to publish reports, pamphlets and bulletins. It introduced the “general provincial distributor”, being an agent of a manufacturer or person selling or offering to sell implements in Saskatchewan and required that every such manufacturer or person be represented in the province by one or more general provincial distributors. Those who were not manufacturers and who sold at retail only were excluded from this requirement. However, retail sellers of farm implements had to be licensed to sell implements and such licensees were limited to selling only implements obtainable from or through a general provincial distributor. The limitation did not extend to second hand implements or second hand parts.

General provincial distributors were required to file annually statements showing the name and

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location of every vendor who obtained or would obtain implements from or through general provincial distributors. A list of large and small implements offered for sale by each provincial distributor was to be filed annually along with illustrations and descriptions, the maximum intended retail price, both for cash and on credit and the usual credit terms and the rate of interest. They were also required to maintain a sufficient supply of repairs for their implements on pain of a summary conviction penalty. So too were licensed sellers on similar pain of a penalty. Liability to penalties was also imposed for default in required filings and failure to satisfy the licensing requirements.

The Agricultural Machinery Act, 1958 continued the prescription of statutory forms of contract in the predecessor Act, including trial periods to enable the purchaser to determine whether the machinery works. The lien or conditional sale provisions of the earlier Act were also continued and so were the repossession provisions and as well the provisions for arbitrating the value in the case of large implements if the parties were unable to agree on it.

What is clear is that there was a tightening of the statutory and administrative controls over the sale of farm implements in Saskatchewan and over the distributors and sellers of such implements. The Agricultural Machinery Act, 1958 was amended by 1965 (Sask.), c. 12, the main change being the dropping of the Agricultural Machinery Administration and the Agricultural Machinery Board; otherwise, the Act remained substantially the same.

The Agricultural Machinery Act, 1958 was replaced in 1968 by The Agricultural Implements Act, 1968 and it is this Act, as amended in 1973 and 1976, which as indicated at the beginning of these reasons, is the focus of the two constitutional questions which were before the courts below and are now before this Court.

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The Act as amended in 1973 established an Agricultural Implements Board whose members were to be appointed by the Lieutenant Governor in Council. Administration of the Act was confided to the Board under the direction of the Minister and in accordance with regulations which the Lieutenant Governor in Council was authorized to make under s. 31, as amended by 1970 (Sask.), c. 2, s. 5 and 1973 (Sask.), c. 1, s. 6 and 1976 (Sask.), c. 2, s. 19. The 1976 amendment also changed the designation of “general provincial distributors” (as introduced in the 1958 Act) to “distributors” and replaced the term “vendor”, used in the predecessor Acts by the term “dealer”.

It is unnecessary to examine in any detail those provisions of the 1968 Act which required filings by distributors and dealers and which provided for licensing of dealers. They continued a pre-existing policy with some additional provisions for obtaining information from distributors. Inspection provisions found in previous legislation were also continued and so too were the central provisions which prescribed statutory contracts and delineated repossession procedures. For present purposes, the key terms are those respecting the Board’s powers, the regulation-making authority and the provisions respecting assessments for the compensation fund and respecting claims upon the fund.

The Board’s powers are set out in s. 6C as enacted by 1973 (Sask.), c. 1, s. 3 and it reads as follows:

6C.—(1) The board shall, under the direction of the minister and in accordance with regulations, administer this Act.

(2) Without limiting the generality of subsection (1), the board may:

(a) receive and investigate complaints made to it under this Act;

(b) take such action as may be necessary to reduce or correct unreasonable delays in the delivery of repairs and unreasonable charges for them or recommend to the minister appropriate action to alleviate such problems;

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(c) make recommendations to the minister respecting standardization of repairs and accessory equipment for agricultural implements;

(d) review and consider contracts between vendors and general provincial distributors;

(e) conduct surveys and make investigations as to the adequacy of repair service and the cost of repairs in the province or in any area or areas of the province;

(f) make recommendations to the minister with respect to safety requirements of implements;

(g) hold public meetings or hearings.

The power to make regulations was specified in s. 31, as amended, in the following terms:

31. For the purpose of carrying out the provisions of this Act according to their intent, the Lieutenant Governor in Council may make such regulations as are ancillary thereto and are not inconsistent therewith; and every regulation made under and in accordance with the authority granted by this section has the force of law; and without restricting the generality of the foregoing, the Lieutenant Governor in Council may make regulations:

(a) prescribing the form and contents of applications for licences to be issued to vendors under this Act and for renewals of such licences, the form of licences, the conditions to which licences may be subject, their duration, and the fees payable for licences and renewals of licences;

(b) prescribing the standards to be met by manufacturers, general provincial distributors and vendors with respect to repair parts, stocks and service facilities;

(c) excluding any type of implement, equipment or machine from the operation of this Act;

(d) prescribing the manner of giving notice and the persons to whom notice shall be given with respect to unlicensed vendors pursuant to subsection (4) of section 9;

(e) relating to any matter mentioned in section 29A or 29B;

(f) prescribing the manner of giving notice to farmers, vendors and general provincial distributors respecting the hearings of applications for compensation pursuant to section 6D;

(g) authorizing and governing the investigation by the board of claims for compensation made to the board;

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(h) authorizing and governing the auditing of the books and records of general provincial distributors;

(i) relating to any other matter respecting the operations and functions of the board;

(j) prescribing the form and content of sales contracts mentioned in section 16 and, without limiting the generality of the foregoing, prescribing the terms, conditions, commitments, warranties and use of such contracts;

(k) defining any word or expression used in this Act but not defined in this Act;

(l) defining normal rental rates of implements under subsection (10) of section 14A.

Sections 29A and 29B referred to in s. 31(e) above are as follows:

294.—(1) In this section and in section 29B:

(a) ‘agreement’ means a written or oral agreement between a vendor and a supplier that is in force on or after the first day of December, 1969;

(b) ‘notice to purchase’ means the notice to purchase mentioned in subsection (6);

(c) ‘supplier’ means a general provincial distributor or a manufacturer.

(2) Where an agreement expires or is otherwise terminated by the vendor or the supplier for any reason, the supplier shall, subject to this Act and the regulations, purchase from the vendor all unused implements or unused parts or unused implements and unused parts secured by that vendor from the supplier.

(3) A supplier shall pay to a vendor:

(a) for each unused implement, one hundred per cent of the invoice price together with the transportation costs paid by the vendor from the point of manufacture of the implement to the vendor’s place of business;

(b) for each unused part, eighty-five per cent of the current net price;

together with interest on any amount payable, calculated from the first day of the second month following the day the amount becomes due and owing.

(4) The amount payable by a supplier for an unused implement or unused part becomes due and owing:

(a) on the day that immediately follows the expiry of ninety days after the day the supplier receives the notice to purchase from the vendor; or

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(b) on the day that the supplier removes the unused implement or unused part from the possession of the vendor;

whichever day first occurs.

(5) In addition to any other method available to him:

(a) a vendor may recover an amount owing to him by a supplier by deduction from any amount he owes to the supplier;

(b) a supplier may recover an amount owing to him by a vendor by deduction from any amount he owes to the vendor.

(6) A vendor shall, within ninety days after the day an agreement expires or is terminated:

(a) personally serve on the supplier or an officer of the supplier; or

(b) send by prepaid registered mail to the supplier;

a written or printed notice to purchase containing a request by the vendor that the supplier purchase the unused implements or unused parts or unused implements and unused parts secured from the supplier; and where the vendor has not complied with this subsection the supplier is not required to purchase unused implements or unused parts or unused implements and unused parts from the vendor.

(7) A supplier is not required to purchase:

(a) an unused part that is not clearly identified either by means of a ticket or tag or box or other container or by an imprint on the part itself; or

(b) an unused part that is not listed in a supplier’s current price list.

(8) A vendor is responsible for the care and custody of an unused implement or unused part until:

(a) the day the supplier removes it from his possession; or

(b) the day following the expiry of ninety days after the day the supplier receives the notice to purchase from the vendor;

whichever day first occurs; and thereafter the supplier is responsible.

(9) The Bulk Sales Act does not apply to a sale to a supplier under this section.

29B. A supplier shall, upon the request of the minister, furnish the minister in accordance with the request, with:

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(a) a copy of each or any franchise or other agreement in effect between a supplier and a vendor;

(b) particulars of each or any unwritten agreement with any or all vendors;

(c) a copy of a written agreement or particulars of an unwritten agreement with any or all vendors with respect to the return of implements or parts to the supplier.

Section 6D referred to in s. 31(f) above is as follows:

6D.—(1) A farmer who feels himself aggrieved, or who considers he has incurred a loss, due to an unreasonable delay in the availability of a repair or who considers he has incurred a loss due to the vendor or the general provincial distributor not fulfilling the conditions or warranties as set out in this Act or in a conditional sales contract, in respect of an implement purchased by him or by a person who transferred the implement to him, may apply to the board for an award of compensation for the damages or loss he has suffered.

(2) Upon receipt of an application under subsection (1), the board may, subject to the regulations with respect to notice of the hearing to interested parties and the conduct of the hearing, dismiss the application or make compensation to the applicant farmer out of the Agricultural Implements Compensation Fund.

(3) The decisions and findings of the board upon all questions of law and fact are final and conclusive.

(4) Where a farmer has suffered loss, within the meaning of subsection (1), the farmer may claim compensation under this section or alternatively he may commence an action in any court of competent jurisdiction.

(5) Where an application is made to the board under this section it shall act as a bar to any court action with respect to the matters affected thereby.

(6) Compensation shall not be awarded to a farmer under this section in respect of damages or losses unless notice of the damages or losses is given to the general provincial distributor, the vendor and the board within six months after the damages or losses were alleged to have been incurred and the notice shall set out the name and address of the farmer and shall be sufficient if it states in ordinary language the cause of the damages or losses and where they were incurred.

(7) The notice may be given:

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(a) to the general provincial distributor and the vendor by delivering it at or sending it by registered mail addressed to their respective places of business;

(b) to the board by delivering it to or sending it by registered mail addressed to the board.

(8) Failure to give the prescribed notice or any defect or inaccuracy in a notice does not bar the right to compensation if the board is of opinion that the claim to compensation is a just one and ought to be allowed.

Section 6E is an important provision respecting the Agricultural Implements Board’s power to deal with applications for compensation. As enacted in 1973 and as amended in 1976, it reads as follows:

6E.—(1) A farmer desirous of claiming compensation under section 6D shall within six months after the damages or losses were allegedly incurred file with the board an application for the compensation and such further or other evidence of his claim as may be required by the board.

(2) No action lies for the recovery of compensation under section 6D from the board but all claims for compensation shall be heard and determined by the board.

(3) An award for compensation to a farmer under section 6D shall not exceed five thousand dollars.

(4) Compensation payable to farmers in amounts determined by the board and the expenses of investigating and hearing claims for compensation shall be paid out of the Agricultural Implements Compensation Fund.

I come now to the statutory provisions respecting the Agricultural Implements Compensation Fund (referred to in ss. 6D(2) and 6E(4)) out of which farmers’ claims, made pursuant to ss. 6D and 6E, are payable. Sections 6F and 6G are in these terms:

6F.—(1) The Agricultural Implements Compensation Fund is hereby established and contributions to the Fund shall be made by general provincial distributors in accordance with this section.

(2) The Board shall each year assess and levy upon the general provincial distributors such percentage of their gross sales or other rates, or such specific sums, as it considers sufficient to pay during the current year compensation to farmers, to defray the expenses of investigating and hearing claims for compensation under

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this Act and to maintain a reserve fund to pay compensation that may become payable in the future.

(3) An assessment under subsection (2) may if the board sees fit be levied provisionally upon the estimate of gross receipts of a distributor reported to the board by the general provincial distributor or upon an estimate of those gross receipts as may be fixed by the board, and where an assessment is levied provisionally, the assessment shall be levied on the actual gross receipts of the general provincial distributor as soon as the actual gross receipts of the general provincial distributor have been ascertained by the board; and the amount to be paid by the general provincial distributor as a result of the levy may, if the board considers it reasonable, be paid in instalments in sums to be determined by the board.

(4) The board shall determine and fix the sum or provisional sum, whether calculated as a percentage or other rate for which each general provincial distributor is assessed under this section, and each general provincial distributor shall, within one month, or such other time as the board may fix, after notice of the assessment and of the sum or provisional sum to be paid has been served upon him, pay to the board the sum or provisional sum fixed by the board or, where the sum is to be paid in instalments pay the first instalment within such time as the board may specify and the remaining instalment or instalments within such time as may be so specified and, in the case of a provisional sum pay, according to terms and at times prescribed by the board, any increased amount resulting from the adjustment in the levy on the actual receipts of the general provincial distributor.

(5) The notice may be served upon the general provincial distributor by sending it to him by registered mail, postage prepaid, and shall be deemed to have been served on the general provincial distributor on the day on which the notice was mailed.

(6) Where at any time it appears that a statement or estimate of gross receipts upon which an assessment or provisional amount of assessment is based, is too low, the general provincial distributor shall upon demand pay to the board such sum, to be fixed by the board, that shall in the opinion of the board be sufficient to bring the payment to the proper amount, and payment of such sum may be enforced in the same manner as the payment of any amount levied by the board may be enforced.

(7) The sum whether calculated as a percentage or other rate determined and fixed by the board under

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subsection (4) shall be published in the Gazette forthwith after being fixed.

6G. For the purpose of assessing general provincial distributors, the board may classify general provincial distributors and assess different rates for any class or classes of general provincial distributors.

III

The complex of statutory provisions, directed to close control of the agricultural implements industry involving especially contractual regulation and licensing, is quite within provincial competence, being limited to transactions and operations in Saskatchewan. However, this does not mean that other provisions, which would per se be unconstitutional, may be mounted on the valid provisions and be sustained on that basis alone. There is a line of decisions to this effect, reflected in such cases as Toronto Corporation v. York Corporation[2] and in Attorney General for Ontario and Display Service Co. Ltd. v. Victoria Medical Bldg. Ltd.[3] Nonetheless, if the challenged authority or function is so integrated with the valid regulatory regime as to take on an altered character, it will be upheld accordingly. Examples of this are found in Labour Relations Board of Saskatchewan v. John East Iron Works, Ltd.[4] and in Tomko v. Labour Relations Board (Nova Scotia)[5].

The powers of the Agricultural Implements Board, as prescribed by s. 6C, are of a general administrative nature and do not approach any violation of s. 96 of the British North America Act. It is contended, however, that the position is different under ss. 6D and 6E which confer power upon the Board to make awards of “compensation” to farmers in stated circumstances and up to a limit of five thousand dollars. Section 6E(2) excludes actions for the recovery of compensation; whether compensation will be given and in what amount up to the fixed limit is entirely for the Board. However, an aggrieved farmer is given the option under s. 6D(4) to claim compensation or to

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sue for his loss or damage in a court of competent jurisdiction. Correlatively, if a farmer pursues a claim for compensation, court action with respect to the claim is precluded. Is then the Board in no different position from a court in determining whether compensation should be granted? If so, is there a collision in this respect with s. 96?

The grounds upon which compensation may be claimed are those set out in s. 6D(1). A claim to compensation, which is payable out of the Agricultural Implements Compensation Fund and not by any individual distributor or vendor or dealer, may be made by a farmer “who feels himself aggrieved, or who considers he has incurred a loss, due to an unreasonable delay in the availability of a repair or who considers he has incurred a loss due to the vendor or the general provincial distributor, not fulfilling the conditions or warranties as set out in this Act or in a conditional sales contract, in respect of an implement purchased by him or by a person who transferred the implement to him”. The Board, in dealing with a claim for which the required notice has been given (and it may consider a claim even if there is a failure to give the prescribed notice or the notice is defective or inaccurate), may investigate the claim and must hold a hearing to determine what, if anything, should be allowed by way of compensation. Although legal considerations may be involved in assessing the validity of a claim, the Board is not limited to them and, certainly, what it may allow as compensation need not be governed by strictly legal limitations governing the assessment of damages. The statement in s. 6D(3) that the Board’s decisions and findings on all questions of law and fact are final and conclusive does not, of course, insulate the Board from review on questions of jurisdiction, but it does lend support to the wide, even discretionary authority of the Board to charge the Compensation Fund with awards of compensation. It is evident from the terms of s. 6D(1) that claims on the Fund may result from loss or damage which is not attributable to any person’s fault in a legal sense. The key to the award of compensation is that there be loss or damage arising from any of the circumstances mentioned in s. 6D(1). Although legal factors intrude, as, for example, in

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respect of alleged breach of conditions or warranties associated with the sale and purchase of agricultural implements, they will not necessarily be present where a claim is made for loss owing to unreasonable delay in the availability of a repair part.

A farmer whose loss or damage may be far in excess of five thousand dollars would ordinarily be expected to take court action, in which case he would proceed against a named party or parties and his claim would depend on applicable principles of liability and of proof. In the case of a claim for compensation out of the Fund there are no “defendants” in any formal sense, although notice of the claim has been given (as provided) to a distributor or vendor as well as to the Board. Since distributors are those who are assessed for the Fund, they have, of course, an interest in the number and size of awards made out of it, and vendors would also have an interest, albeit less direct, in view of their relationship to distributors.

What The Agricultural Implements Act does is to provide an insurance fund to cushion farmers, who purchase and use agricultural implements, against certain loss or damage up to a stated limit, and without necessarily obliging them to establish a legal foundation for claims of compensation, so long as they can bring themselves within s. 6D(1) as administered by the Board.

I do not find in this scheme any violation of s. 96. The Board is not a s. 96 court in the functions assigned to it under ss. 6D and 6E and in respect of the way in which those functions are to be discharged. In Re The Residential Tenancies Act, 1979[6], in which the judgment of this Court was delivered by Dickson J. on May 28, 1981, a three-fold test was suggested for determining compatibility with s. 96 of the British North America Act. Dickson J.’s three-step test may be summa-

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rized as follows:

1. Does the challenged power or jurisdiction broadly conform to the power or jurisdiction exercised by Superior, District or County Courts at the time of Confederation?

2. Is the function of the provincial tribunal within its institutional setting a judicial function, considered from the point of view of the nature of the question which the tribunal is called upon to decide or, to put it in other words, is the tribunal concerned with a private dispute which it is called upon to adjudicate through the application of a recognized body of rules and in a manner consistent with fairness and impartiality?

3. If the power or jurisdiction of the provincial tribunal is exercised in a judicial manner, does its function as a whole in its entire institutional context violate s. 96?

It is clear to me that even if (and I do not think it to be so) the powers of the Agricultural Implements Board are broadly conformable to powers exercised by superior, district or county courts at or after Confederation, and even if there is a judicial component in the manner in which the power is exercised: (at least in respect of required notice and hearing and in determining entitlement to compensation), the Board’s functions in the institutional setting in which it operates distinguish it markedly from a s. 96 court. There is no limitation to legal considerations in fixing compensation, although they may be present in some cases; there is no lis inter partes in the traditional sense in which one exists in an action, and the Board has a clear investigatory function, independently of what may be brought before it by others, unlike the neutral process of a court. The Board’s authority is integrated into a regulatory scheme, itself beyond constitutional challenge, and under it offers limited protection to farmers through what is essentially an insurance fund.

Re The Residential Tenancies Act, 1979, in which the s. 96 argument succeeded, was quite a different case. There, this Court was concerned with the power of a provincially-appointed tribunal to make eviction orders against tenants and com-

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pliance orders against either landlords or tenants according to the nature of their respective legal obligations under particular tenancy agreements or leases. It was conceded by the proponent of the legislation, the Attorney General of Ontario, that the tribunal’s powers did not differ from those theretofore exercised by the courts when seized of landlord and tenant disputes. Essentially, the tribunal’s authority was exercisable in the context of a lis inter partes, and that is not so under The Agricultural Implements Act. Dickson J. pointed out in the Residential Tenancies Reference that the chief role of the tribunal was to adjudicate and not to carry out a policy or discharge an administrative function. There was, in short, merely a transfer to a tribunal of the same powers that had been previously exercised by s. 96 courts. The present case is far different, as the references to the powers of the Agricultural Implements Board reveal.

IV

An attack has also been mounted against the levy on distributors to establish and maintain the Compensation Fund. It is submitted that the formula for fixing the levy results in the imposition of an indirect tax which, as such, is beyond provincial competence to impose. There are two issues involved in this submission; first, is the levy a tax within s. 92(2) of the British North America Act and, second, if it is a tax is it indirect. It is the Board which assesses under s. 6F in order to create a fund which will satisfy existing and anticipated compensation awards and Board expenses for investigating and hearing claims. The assessment upon the distributors is annual and is upon “such percentage of their gross sales or other rates or such specific sums” as the Board considers sufficient for the above-mentioned purposes. Under s. 6G, distributors may be classified and different rates may be assessed for any class or classes of them.

The contention of the appellants that the levies for the Compensation Fund are taxes and that as such they are indirect is founded upon a conjoint reliance on Workmen’s Compensation Board v.

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Canadian Pacific Railway Company[7] and R. v. Caledonian Collieries, Limited[8]. The former is relied on to support the submission that the levies are taxes (no less than the assessments upon employers for workmen’s compensation) and the latter is relied on to show that a tax on gross sales is necessarily indirect. It must be noted, however, that the Board here is given choices in measuring the levies and is not limited to assessments on gross receipts, except where it assesses provisionally. The ultimate annual assessment may be on a different formula, and emphasis is lent to this by the provision for classifying distributors and fixing different rates for the various classes.

In my opinion, if the assessments are taxes they are no less direct than the assessment upon employers for workmen’s compensation in Workmen’s Compensation Board v. Canadian Pacific Railway Company, supra. Unlike the Caledonian Collieries case, the assessments here are not necessarily related to trading transactions. In the Workmen’s Compensation Board case, the Privy Council was concerned, inter alia, with an accident fund created by assessment of employers and administered by a board for the benefit of injured employees. Although there was also an exaction from employees (through a deduction from wages), it was nominal. The Judicial Committee made short shrift of the direct-indirect tax issue by saying (at p. 190):

Nor can it be successfully contended that the Province had not a general power to impose direct taxation in this form on the respondents [employers] if for provincial purposes.

This Court considered the same question in Royal Bank of Canada v. Workmen’s Compensation Board of Nova Scotia[9]. There, according to the majority of the Court, it was admitted by the

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appellant that employer assessments for workmen’s compensation were taxes and it was held that they were without doubt direct taxes upon the employers. No reference was made, however, to the Privy Council’s judgment but it appears from the concurring reasons of Davis J. that the Court raised the question whether the workmen’s compensation assessments were taxes and, if so, whether they were indirect. On the assumption that they were taxes, Davis J. was satisfied that they were direct and within provincial competence.

I am not persuaded that the assessments to create and maintain a compensation fund should be characterized as taxes within s. 92(2) of the British North America Act. The levies, as monetary exactions, are liquidating premiums to satisfy farmers’ claims under s. 6D and the policy of the Act is to relate the assessments to the compensation awards and to administrative expenses. They are designed to support a limited form of insurance for the benefit of farmers who purchase agricultural implements, related to their use of such implements. There is here no collection of money to go into a consolidated revenue fund which is then chargeable with satisfying awards of compensation. Although the scheme is a public one, created under a public statute, its beneficiaries and obligors are circumscribed by the particular activity or enterprise in which they are engaged.

It is true that previous cases which have considered whether a levy is or is not a tax have had a different focus than the present case, as, for example, in facing the question whether a compulsory levy to defray administration expenses is better characterized as a service charge rather than as a tax: see Ontario Boys’ Wear Ltd. v. Advisory Committee[10] and Shannon v. Lower Mainland Dairy Products Board[11]. Although the levy here is

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intended to meet administrative expenses of the Board, its chief purpose is, as I have already said, to create a limited insurance fund. The distributors who are subject to the levy are under an additional cost of doing business in Saskatchewan, but this does not mean that they are being taxed in a constitutional sense.

V

In the result, the two questions in this appeal should be answered “no”. The appeal therefore fails and should be dismissed with costs. There will be no costs to or against any of the interveners.

Appeal dismissed with costs.

Solicitors for the appellants: MacDermid & Company, Saskatoon.

Solicitors for the respondents: Goldenberg, Taylor, Randall, Buckwold & Holstead, Saskatoon.

Solicitor for the intervener the Attorney General of Canada: Roger Tassé, Ottawa.

Solicitor for the intervener the Attorney General of Ontario: H. Allan Leal, Toronto.

Solicitor for the intervener the Attorney General of Quebec: René Dussault, Quebec.