MCPHILLIPs,
J.A.
(dissenting)
:—The
constitutionality
of
the
following
statute
law
of
the
Legislature
of
British
Columbia
is
called
in
question
in
this
appeal—being
secs.
2,
5(1)
and
6,
the
Act
being
the
Fuel-oil
Tax
Act.
In
the
Supreme
Court
of
British
Columbia
by
a
judgment
of
the
Chief
Justice
of
that
Court
(Morrison,
C.J.,
ante,
p.
194)
the
legislation
was
held
to
be
ultra
vires
of
the
constitutional
powers
conferred
upon
the
Parliament
of
the
Province
under
the
B.N.A.
Act,
1867.
The
argument
addressed
to
this
Court
centered
around
the
principal
section
of
the
Act,
viz.,
sec.
2,
which
reads
as
follows
:—
"‘2.
For
the
raising
of
a
revenue
for
Provincial
purposes
every
person
who
consumes
any
fuel-oil
in
the
Province
shall
pay
to
the
Minister
of
Finance
a
tax
in
respect
of
that
fuel-oil
at
the
rate
of
one-half
cent
a
gallon.’’
The
learned
Chief
Justice
of
the
Court
below
concluded
his
reasons
for
holding
as
he
did
in
the
following
words
(p.
691)
:—
"‘In
short
the
Act
strikes
at
the
use,
enjoyment
or
consumption
of
this
commodity,
the
levying
of
imposition
upon
which
is
the
very
essence
of
an
excise
tax.
"
"
For
these
reasons
in
my
opinion
the
Province
is
under
a
constiutional
disability
to
impose
it.
The
action
is
dismissed
with
costs.”
It
may
be
stated
at
the
outset
that
the
power
to
pass
an
Excise
Act
by
the
Parliament
of
Canada
is
not
one
of
the
exclusive
legislative
powers
conferred
by
the
B.N.A.
Act
but
of
course
see.
91(3)
is
very
broad
in
its
terms
(‘‘
(3)
The
raising
of
Money
by
any
Mode
or
System
of
Taxation.”)
whilst
the
Legislature
of
the
Province
is
in
more
restricted
lines,
namely,
sec.
92(2)
:—
"92.
In
each
Province
the
Legislature
may
exclusively
make
Laws
in
relation
to
Matters
coming
within
the
Classes
of
Subjects
next
hereinafter
enumerated,
that
is
to
say
.
.
.
"‘2.
Direct
Taxation
within
the
Province
in
order
to
the
raising
of
a
Revenue
for
Provincial
Purposes.’’
Then
it
must
always
be
borne
in
mind
that
as
regards
the
powers
of
the
Parliament
of
Canada—that
the
concluding
paragraph
of
sec.
91
reads
as
follows
:—
‘*And
any
Matter
coming
within
any
of
the
Classes
of
Subjects
enumerated
in
this
Section
(92)
shall
not
be
deemed
to
come
within
the
Class
of
Matters
of
a
local
or
private
Nature
comprised
in
the
Enumeration
of
the
Classes
of
Subjects
by
this
Act
(B.N.A.
Act)
assigned
exclusively
to
the
Legislatures
of
the
Provinces.”
Further
under
sec.
92
there
is
specifically
enacted
by
subsec.
(16)
"‘Generally
all
Matters
of
a
merely
local
or
private
Nature.”
Then
there
is
sec.
92(13)
"Property
and
Civil
Rights
in
the
Province.
‘
‘
The
conception
of
the
framers
of
the
Act
was
not
to
give
the
Parliament
of
Canada
such
a
controlling
power
as
would
paralyze
the
Legislatures
of
the
Provinces—that
is
that
the
Legislatures
of
the
Provinces
would
be
within
the
Provinces
supreme
in
respect
of
‘‘
Matters
of
a
local
or
private
Nature.
‘
‘
Therefore
the
question
of
"local
or
private
Nature’’
becomes
a
most
important
enquiry
when
considering
the
impugned
legislation
and
so
far
held
to
be
ultra
vires.
The
fuel-oil
of
course
is
property,
personal
property,
and
it
cannot,
with
great
respect
to
all
contrary
opinion,
be
looked
upon
as
being
in
any
other
category.
The
property
is
locally
held
and
within
the
purview
of
the
Act
here
being
considered
is
personally
consumed
and
the
tax
is
imposed
(sec.
2)
upon
"‘every
person
who
consumes
any
fuel-oil
in
the
Province.”
It
is
not
capable
of
being
said
that
property
within
the
Province
is
not
taxable—in
fact
that
was
not
contended
for
at
this
Bar
but
that
it
was
an
invasion
of
the
exclusive
domain
of
the
Parliament
of
Canada—in
the
following
respects—(1)
an
indirect
tax
(2)
an
excise
tax
(3)
affects
trade
and
commerce.
However,
in
the
main
the
attack
on
the
legislation
revolved
around
the
submission
that
it
was
legislation
in
the
way
of
an
Excise
Act.
Approaching
the
matter
at
that
point
of
view
I
fail
to
see
that
there
is
any
authority
of
any
authoritative
nature
which
would
preclude
the
Legislature
of
a
Province
of
Canada
imposing
taxation
which
could
be
termed
an
Excise
Act
which
of
course
I
do
not
view
it
to
be.
In
England
of
course
the
Parliament
is
supreme
and
we
cannot
expect
to
get
any
authority
in
the
English
Courts
that
will
be
of
aid
or
assistance
in
the
matter
as
in
England
there
can
never
be
what
we
have
here—conflict
between
the
powers
of
the
Dominion
and
the
Provinces
as
to
the
respective
powers
of
the
Dominion
Parliament
and
the
Parliaments
of
the
Provinces.
Turning
to
Wharton’s
Law
Lexicon,
13th
ed.,
1925,
we
have
this
stated
:—
"‘Excise
[fr.
acciis,
Dut.;
excisum,
Lat.],
the
name
given
to
the
duties
or
taxes
laid
on
certain
articles
produced
and
consumed
at
home,
amongst
which
spirits
have
always
been
the
most
important;
but,
exclusive
of
these,
the
duties
on
the
licenses
of
auctioneers,
brewers,
etc.,
etc.,
and
on
the
licenses
to
keep
dogs,
kill
game,
etc.,
etc.,
are
included
in
the
excise
duties.”
Now
what
is
the
position
of
matters
in
the
Province
of
British
Columbia
today?
It
is
a
very
large
producer
of
coal
and
coal
is
taxed—a
large
producer
of
lumber
and
lumber
is
taxed—
then
let
us
come
precisely
to
fuel-oil—this
is
produced
in
Canada,
it
is
true
not
in
as
great
volume
as
in
the
United
States
of
America,
but
Canada
admits
of
the
entry
of
crude
oil
into
Canada
without
duty
from
which
fuel-oil
is
produced.
In
Ontario
there
are
oil
wells
in
operation
for
nearly
a
century
and
still
operating
and
there
are
large
oil
wells
in
the
Province
of
Alberta—the
Turner
Valley—and
fuel
oil
is
produced
from
these
wells
and
there
are
many
other
oil
fields
in
various
portions
of
the
Dominion
of
Canada
that
will
in
the
early
future
be
in
operation.
Is
it
to
be
said
that
this
property
when
in
the
Province
and
consumed
in
the
Province
shall
be
free
from
taxation
in
the
Province?
I
cannot
follow
the
reasoning
advanced
in
the
matter.
It
would
seem
to
be
the
negation
of
all
powers
or
authority
in
the
Province
to
tax
any
personal
property.
We
are
of
course
familiar
with
all
the
cases
that
have
gone
to
the
Privy
Council
and
the
Supreme
Court
of
Canada
upon
the
question
of
whether
the
tax
is
a
direct
or
indirect
tax.
Here
fuel
oil
is
no
different
in
my
view
for
taxation
purposes
than-any
other
personal
property
of
any
person
resident
in
the
Province
such
as
furniture,
motor
cars
etc.,
all
of
which
property
is
capable
of
being
sold—for
instance
the
stock-in-trade
of
the
merchant
actually
being
sold
yet
all
this
property,
in
truth
all
personal
property,
is
subject
to
taxation
and
has
been
the
subject
of
taxation
by
the
Provinces.
It
is
true
no
matter
what
may
be
one’s
individual
opinion
the
Court
must
bow
to
the
decision
of
the
ultimate
Court
of
Appeal
and
loyally
obey
it.
In
A.-G.
B.C.
v.
C.P.R.
[1927]
4
D.L.R.
113,
96
L.J.P.C.
149,
their
Lordships
of
the
Privy
Council
decided,
as
set
forth
in
the
L.J.P.C.
headnote,
that
:—
“The
British
Columbia
Fuel
Oil
Tax
Act,
1923,
is
ultra
vires
the
Legislature
of
the
Province,
inasmuch
as
it
does
not
impose
direct
taxation
within
the
meaning
of
sec.
92,
subsec.
2
of
the
British
North
America
Act,
1867.
‘‘The
Act
of
1923
provided
that
every
person
who
should
purchase
within
the
Province
fuel-oil,
sold
for
the
first
time
after
its
manufacture
in
or
importation
into
the
Province,
should
pay
a
tax
thereon,
and
the
vendor
was
to
collect
the
tax
and
pay
it
over
to
the
Government
:—Held,
that
the
tax
so
provided
for
was
not
a
direct
tax
and
was
invalid,
applying
the
test
laid
down
as
to
what
was
a
direct
and
what
an
indirect
tax
in
Att.-Gen,
for
Manitoba
v.
Att.-Gen.
for
Canada
.
.
..
[1925]
2
D.L.R.
691.
"‘Decision
of
the
Supreme
Court
of
Canada
.
.
.
.
[1927]
2
D.L.R.
257
affirmed.
4
"
Cases
referred
to:
Att.-Gen.
for
Manitoba
v.
Att.-Gen.
for
Canada
.
.
.
.
[supra
I
«Att.-Gen.
for
Quebec
v.
Reed
(1884)
54
L.J.P.C.
12;
10
App.
Cas.
141.
<(
Bank
of
Toronto
v.
Lambe,
(1887)
56
L.J.P.C.
87;
12
App.
Cas.
575.
i(
Brewers
and
Malsters
Association
of
Ontario
v.
Att.-Gen.
for
Ontario
[1897]
A.C.
231.”
It
might
be
said
though
that
the
present
case
has
entirely
different
features.
The
taxation
imposed
here
is
not
such
as
it
was
there—as
against
"
1
every
person
who
should
purchase
within
the
Province
fuel-oil,
sold
for
the
first
time
after
its
manufacture
in
or
importation
into
the
Province,
should
pay
a
tax
thereon,
and
the
vendor
was
to
collect
the
tax
and
pay
it
over
to
the
Government.
‘
‘
Here
the
tax
is
only
imposed
upon
the
taxpayer
‘
‘
who
consumes
any
fuel-oil
in
the
Province.”
No
question
of
indirect
taxation
it
would
seem
to
me
is
open.
The
only
persons
who
are
capable
of
being
taxed
are
the
consumers.
They
are
persons
certain—the
actual
consumers—and
what
they
have
consumed
is
personal
property
which
in
its
genus
can
be
nothing
other
than
personal
property.
The
present
case
is
not
one,
I
submit,
which
can
be
definitely
stated
to
be
controlled
by
the
decision
last
referred
to.
It
was
laid
down
by
the
Board
in
A.-G.
Man.
v.
A.-G.
Can.
[1925]
2
D.L.R.
691,
at
p.
694,
"‘that
a
direct
tax
is
one
that
is
demanded
from
the
very
person
who
it
is
intended
or
desired
should
pay
it.
An
indirect
tax
is
that
which
is
demanded
from
one
person
in
the
expectation
and
with
the
intention
that
he
shall
indemnify
himself
at
the
expense
of
another.
Of
such
taxes
excise
and
customs
are
given
as
examples.’’
In
À.
G.
Man.
v.
Manitoba
Licence
ders’
Ass
9
n
[1902]
A.
C.
73,
we
have
the
headnote
reading
:
e—
"
"
The
Manitoba
Liquor
Act
of
1900
for.
the
suppression
of
the
liquor
traffic
in
that
province
is
within
the
powers
of
the
provincial
legislature,
its
subject
being
and
having
been
dealt
with
as
a
matter
of
a
merely
local
nature
in
the
province
within
the
meaning
of
British
North
America
Act,
1867,
sec.
92,
subsec.
16,
notwithstanding
that
in
its
practical
working
it
must
interfere
with
Dominion
revenue,
and
indirectly
at
least
with
business
operations
outside
the
province.
Attorney-General
for
Ontario
v.
Attorney-General
for
the
Dominion
[1896]
A.C.
348,
followed.’’
Where
the
tax
is
fixed
upon
the
actual
consumer
of
the
fuel-oil
—and
that
is
the
only
person
capable
of
being
taxed—I
fail
to
see
how
it
is
possible
of
being
said
that
the
tax
is
capable
of
being
passed
on.
The
taxation
can
only
be
imposed
when
the
fuel-oil
has
been
consumed
and
whoever
consumes
it
is
the
only
person
who
can
be
taxed.
I
can
readily
understand
why
possibly
the
Legislature
in
its
wisdom
did
not
think
it
fair
or
just
to
impose
this
taxation
on
this
species
of
property
save
only
after
consumption.
This
will
be
borne
into
one’s
mind
the
more
clearly
when
large
consumers
of
fuel-oil
have
to
keep
very
heavy
stocks
of
fuel-oil
on
hand—such
as
railway
companies,
steamship
companies,
large
industrial
concerns,
etc.,
and
money
would
only
come
in
consequent
on
consumption
in
their
business
operations.
Therefore
the
law-making
authority
has
said
by
legislation,
«You
will
only
be
taxed
as
you
consume
the
fuel-oil."
This
is
a
most
considerate
action
upon
the
part
of
the
Legislature.
I
would
again
refer
to
the
question
so
strongly
urged
at
this
Bar
and
which
was
the
burden
of
the
argument—that
the
Act
here
to
be
dealt
with
was
an
Excise
Act—and
that,
as
such,
was
ultra
vires
of
the
provincial
Legislature.
I
do
not
agree
that
if
it
could
be
called
an
Excise
Act
that
perforce
then
it
was
beyond
the
scope
of
provincial
legislation.
In
Bank
of
Toronto
v.
Lambe,
12
App.
Cas.,
at
pp.
581-3,
Lord
Hobhouse
who
delivered
the
judgment
of
their
Lordships
of
the
Privy
Council
considered
the
governing
principle
as
to
what
may
be
said
to
be
a
direct
tax
and
I
think
it
well
to
quote
what
Lord
Hobhouse
said
:—
"First,
is
the
tax
a
direct
tax?
For
the
argument
of
this
question
the
opinions
of
a
great
many
writers
on
political
economy
have
been
cited,
and
it
is
quite
proper,
or
rather
neces-
sary,
to
have
careful
regard
to
such
opinions,
as
has
been
said
in
previous
cases
before
this
Board.
But
it
must
not
be
forgotten
that
the
question
is
a
legal
one,
viz.,
what
the
words
mean,
as
used
in
this
statute
;
whereas
the
economists
are
always
seeking
to
trace
the
effect
of
taxation
throughout
the
community,
and
are
apt
to
use
the
words
‘direct,’
and
‘indirect,’
according
as
they
find
that
the
burden
of
a
tax
abides
more
or
less
with
the
person
who
first
pays
it.
This
distinction
is
illustrated
very
clearly
by
the
quotations
from
a
very
able
and
clear
thinker,
the
late
Mr.
Fawcett,
who,
after
giving
his
tests
of
direct
and
indirect
taxation,
makes
remarks
to
the
ffect
that
a
tax
may
be
direct
or
indirect
by
the
position
of
the
taxpayers
or
by
private
bargains
about
its
payment.
Doubtless,
such
remarks
have
their
value
in
an
economical
discussion.
Probably
it
is
true
of
every
indirect
tax
that
some
persons
are
both
the
first
and
the
final
payers
of
it;
and
of
every
direct
tax
that
it
affects
persons
other
than
the
first
payers;
and
the
excellence
of
an
economists
definition
will
be
measured
by
the
accuracy
with
which
it
contemplates
and
embraces
every
incident
of
the
thing
defined.
But
that
very
excellence
impairs
its
value
for
the
purposes
of
the
lawyer.
The
legislature
cannot
possibly
have
meant
to
give
a
power
of
taxation
valid
or
invalid
according
to
its
actual
results
in
particular
cases.
It
must
have
contemplated
some
tangible
dividing
line
referable
to
and
ascertainable
by
the
general
tendencies
of
the
tax
and
the
common
understanding
of
men
as
to
those
tendencies.
‘
After
some
consideration
Mr.
Kerr
chose
the
definition
of
John
Stuart
Mill
as
the
one
he
would
prefer
to
abide
by.
That
definition
is
as
follows:—
‘{
‘Taxes
are
direct
or
indirect.
A
direct
tax
is
one
which
is
demanded
from
the
very
persons
who
it
is
intended
or
desired
should
pay
it.
Indirect
taxes
are
those
which
are
demanded
from
one
person
in
the
expectation
and
intention
that
he
shall
indemnify
himself
at
the
expense
of
another;
such
are
the
excise
or
customs.
“
The
producer
or
importer
of
a
commodity
is
called
upon
to
pay
a
tax
on
it,
not
with
the
intention
to
levy
a
peculiar
contribution
upon
him,
but
to
tax
through
him
the
consumers
of
the
commodity,
from
whom
it
is
supposed
that
he
will
recover
the
amount
by
means
of
an
advance
in
price.’
[2
Mill
on
Political
Economy,
Book
v,
c.
3,
p.
367.]
“It
is
said
that
Mill
adds
a
term—that
to
be
strictly
direct
a
tax
must
be
general;
and
this
condition
was
much
pressed
at
the
bar.
Their
Lordships
have
not
thought
it
necessary
to
examine
Mill’s
works
for
the
purpose
of
ascertaining
precisely
what
he
does
say
on
this
point;
nor
would
they
presume
to
say
whether
for
economical
purposes
such
a
condition
is
sound
or
unsound;
but
they
have
no
hesitation
in
rejecting
it
for
legal
purposes.
It
would
deny
the
character
of
a
direct
tax
to
the
income
tax
of
this
country,
which
is
always
spoken
of
as
such,
and
is
generally
looked
upon
as
a
direct
tax
of
the
most
obvious
kind
;
and
it
would
run
counter
to
the
common
understanding
of
men
on
this
subject,
which
is
one
main
clue
to
the
meaning
of
the
legislature.
‘“Their
Lordships
then
take
Mill
‘s
definition
above
quoted
as
a
fair
basis
for
testing
the
character
of
the
tax
in
question,
not
only
because
it
is
chosen
by
the
Appellant’s
counsel,
nor
only
because
it
is
that
of
an
eminent
writer,
nor
with
the
intention
that
it
should
be
considered
a
binding
legal
definition,
but
because
it
seems
to
them
to
embody
with
sufficient
accuracy
for
this
purpose
an
understanding
of
the
most
obvious
indicia
of
direct
and
indirect
taxation,
which
is
a
common
understanding,
and
is
likely
to
have
been
present
to
the
minds
of
those
who
passed
the
Federation
Act.”
It
will
be
observed
that
the
contention
made
that
the
submission,
p.
082,
"‘that
to
be
strictly
direct
a
tax
must
be
general”?
was
rejected
and
further
on,
at
p.
582,
Lord
Hobhouse
said:—
°
It
would
deny
the
character
of
a
direct
tax
to
the
income
tax
.
.
.
generally
looked
upon
as
a
direct
tax
of
the
most
obvious
kind.”
In
the
result
in
the
Lambe
case
taxes
imposed
by
the
Quebee
Legislature
on
certain
commercial
corporations
carrying
on
business
in
the
Province
was
held
to
be
legislation
intra
vires
of
the
provincial
Legislature—being
direct
taxation.
What
is
the
position
of
matters
here?
The
consumer
is
the
one
directly
taxed.
There
is
no
difficulty
in
determining
who
the
consumer
is
and
once
consumed
the
article
or
commodity
of
course
is
gone
and
the
consumer
is
the
very
person
who
it
is
intended
or
desired
should
pay
it
and
once
consumed
there
can
be
no
trafficking
with
the
article
or
commodity.
Therefore
it
is
utterly
impossible
in
the
construction
of
the
Act
before
us
to
bring
the
language
into
play
defining
indirect
taxes
at
p.
582:—
"‘Indirect
taxes
are
those
which
are
demanded
from
one
person
in
the
expectation
and
intention
that
he
shall
indemnify
himself
at
the
expense
of
another;
such
are
the
excise
or
customs.
’
Here
we
have
the
consumers
of
the
commodity
taxed
and
not
until
the
commodity
is
consumed
does
the
tax
take
effect,
1.e.,
thé
incidence
occurs,
the
tak
attaches
upon
the
person
consuming
and
falls
upon
no
other,
no
opportunity
or
possibility
for
any
recoupment
by
the
consumer
"fat
the
expense
of
another.’’
I
»pIu,
passing.
it
might
be
said
that
the
income
tax,
which
18
admitted
legal
taxation
on
the.
part
of
the
provincial
Legislatures,
is:
in.
principle
the
same
as
the
present
tax
under
consideration—
the
itaxpayer
pays
on
income
which
in
effect
he
has
consumed
;
he,
has.
destroyed
his
personal
proprietorship
of
the
money;
he
received
the
money
and
paid
it
away
in
the
expense
of
living
for
himself
and
family.
Here
we
have
the
fuel
oil
and
its
consumption.
Once
consumed
nothing
remains.
There
can
be
no
possible
indemnification.
I
would
refer
to
what
Lord
Moulton
said
in
Cotton
v.
The
King
(1913)
15
D.L.R.
283,
at
pp.
289-90:—
"The
language
of
this
provision
of
the
British
North
America
Act,
1867,
marks
an
important
stage
in
the
history
Of
the
fiscal
legislation
of
the
British
Empire.
Until
that
date
the
division
of
taxation
into
direct
and
indirect
belonged
solely
‘to
the
province
of
political
economy,
so
far
as
the
taxation
in
Great
Britain
or
Ireland
or
in
any
of
our
Colonies
is
concerned;
and,
although
all
the
authors
of
standard
treatises
on
the
subject
recognized
the
existence
of
the
t
wo
types
of
taxation,
there
cannot
be
said
to
have
existed
any
recognized
definition
of
either
class
which
was
universally
accepted.
Each
individual
writer
gave
his
own
description
of
the
characteristics
of
the
two
classes,
and
any
difference
in
the
descriptions
so
given
by
different
writers
would
necessarily
lead
to
differences
in
the
delimitation
of
the
two
classes,
so
that
one
authority
might
hold
a
tax
to
be
direct
which
another
would
class
as
indirect.
But,
so
long
as
the
terms
were
used
only
in
connection
with
the
theoretical
treatment
of
the
subject,
this
‘state
of
things
gave
rise
to
no
serious
inconvenience.
The
British
North
America
Act
changed
this
entirely.
‘Direct
!
taxation
‘
is
employed
in
that
statute
as
defining
the
sphere
of
provincial
legislation,
and
it
became
from
that
moment
essen-
»
dial
that
the
Courts
should,
for
the
purpose
of
that
statute,
.-
ascertain
and
define
the
meaning
of
the
phrase
as
used
in
such
legislation.
‘
‘
No
indefiniteness
here
exists
as
to
who
is
to
pay—always
the
consumer.
There
can
be
no
passing
on
of
a
tax
upon
property
which
has
been
consumed.
Looked
at
in
its
reality
no
tax
is
imposed
on
fuel-oil
existent—the
tax
is
upon
fuel-oil
non-existent
consumed
by
the
taxpayer.
Once
the
fuel-oil
is
within
the
Province
it
cannot
be
said
that
any
magic
attaches
to
it
or
that
it
is
immune
from
provincial
taxation,
being
property
it
must
be
sub-
ject
to
the
incidence
of
taxation
and
the
taxation
here
imposed,
under
the
Act
being
considered,
is
direct
taxation
being
property
consumed.
The
Legislature
so
enacts
and
in
Bank
of
Toronto
v.
Lambe
12
App.
Cas.,
at
p.
585,
Lord
Hobhouse
said:—
4
Their
Lordships
.
.
.
hold
.
.
.
as
regards
direct
taxation
within
the
province
to
raise
revenue
for
provincial
purposes,
that
subject
falls
wholly
within
the
jurisdiction
cf
the
provincial
legislatures.’’
The
imposition
in
my
opinion
is
in
its
nature
a
direct
tax
upon
property
and
being
that
how
ean
it
be
said
to
trench
upon
"‘the
regulation
of
trade
and
commerce
?‘‘
In
Citizens
Ins.
Co.
v.
Parsons
(1881)
7
App.
Cas.
96,
it
is
shown
that
there
may
be
cases
where
the
statute
law
relates
to
property
and
civil
rights
and
it
cannot
be
held
to
be
an
attempt
on
the
part
of
the
Legislature
of
the
Province
to
affect
trade
and
commerce
and
I
would
refer
to
a
decision
of
this
Court
of
Little
v.
A.-G.
B.C.
(1922)
65
D.L.R.
297,
at
pp.
298,
800-1,
31
B.C.R.
84,
at
pp.
86,
97-8.
I
would
refer
to
what
Lord
Atkinson
said
in
delivering
the
judgment
of
their
Lordships
of
the
Privy
Council
in
Montreal
v.
Montreal
Street
R.
Co.
(1912)
1.
D.L.R.
681,
at
pp.
686-7
:—
"‘It
has,
no
doubt,
been
decided
many
times
by
this
board
that
the
two
sees.
91
and
92
are
not
mutually
exclusive,
that
their
provisions
may
overlap,
and
that
where
the
legislation
of
the
Dominion
Parliament
comes
into
conflict
with
that
of
a
provincial
Legislature
over
a
field
of
jurisdiction
common
to
both
the
former
must
prevail;
but
on
the
other
hand,
it
was
laid
down
in
Attorney-General
of
Ontario
v.
Attorney-General
of
the
Dominion.
.
.
.
[1896]
A.C.
348:
"‘(1)
That
the
exception
contained
in
sec.
91,
near
its
end,
was
not
meant
to
derogate
from
the
legislative
authority
given
to
provincial
Legislatures
by
the
16th
subsec.
of
sec.
92,
save
to
the
extent
of
enabling
the
Parliament
of
Canada
to
deal
with
matters,
local
or
private,
in
those
cases
where
such
legislation
is
necessarily
incidental
to
the
exercise
of
the
power
conferred
upon
that
Parliament
under
the
heads
enumerated
in
see.
91;
""
(2)
That
to
those
matters
which
are
not
specified
amongst
the
enumerated
subjects
of
legislation
in
see.
91
the
exception
at
its
end
has
no
application,
and
that
in
legislating
with
respect
to
matters
not
so
enumerated
the
Dominion
Parliament
has
no
authority
to
encroach
upon
any
class
of
subjects
which
is
exclusively
assigned
to
the
provincial
Legislature
by
see.
92;
1
"
(3)
That
these
enactments,
secs.
91
and
92,
indicate
that
the
exercise
of
legislative
power
by
the
Parliament
of
Canada
in
regard
to
all
matters
not
enumerated
in
sec.
91
ought
to
be
strictly
confined
to
such
matters
as
are
unquestionably
of
Canadian
interest
and
importance,
and
ought
not
to
trench
upon
provincial
legislation
with
respect
to
any
classes
of
subjects
enumerated
in
sec.
92
;
"(4)
That
to
attach
any
other
construction
to
the
general
powers
which,
in
supplement
of
its
enumerated
powers,
are
conferred
upon
the
Parliament
of
Canada
by
sec.
91
would
not
onlly
be
contrary
to
the
intendment
of
the
Act,
but
would
practically
destroy
the
autonomy
of
the
provinces;
"‘And
lastly,
that
if
the
Parliament
of
Canada
had
authority
to
make
laws
applicable
to
the
whole
Dominion
in
relation
to
matters
which
in
each
province
are
substantially
of
local
or
private
interest,
upon
the
assumption
that
these
matters
also
concern
the
peace,
order,
and
good
government
of
the
Dominion,
there
is
hardly
a
subject
upon
which
it
might
not
legislate
to
the
exclusion
of
provincial
legislation.
The
same
considerations
appear
to
their
Lordships
to
apply
to
two
of
the
matters
enumerated
in
sec.
91—namely,
the
regulation
of
trade
and
commerce.’’
We
have
Lord
Haldane
in
delivering
the
judgment
of
their
Lordships
of
the
Privy
Council
in
Workmen’s
Compensation
Bd.
v.
C.P.R.
(1919)
48
D.L.R.
218,
at
p.
221:—
"‘It
is
not
in
dispute
that
the
persons
employed
by
the
respondent
company
with
reference
to
whose
dependents
the
present
question
is
raised,
come
within
the
conditions
under
which
the
enactment
purported
to
be
applicable
to
them.
Nor
can
it
be
successful
contended
that
the
Province
had
not
a
general
power
to
impose
direct
taxation
in
this
form
on
the
respondents
if
for
provincial
purposes.
In
Bank
of
Toronto
v.
Lambe
(1887)
12
App.
Cas.
575,
it
was
decided
by
the
Judicial
Committee
that
a
Province
could
impose
direct
taxes
in
aid
of
its
general
revenue
on
a
number
of
banks
and
insurance
companies
carrying
on
business
within
the
Province,
and
none
the
less
that
some
of
them
were,
like
the
respondents,
incorporated
by
Dominion
Statute.
The
tax
in
that
case
was
not
a
general
one,
and
it
was
imposed,
not
on
profits
nor
on
particular
transactions
but
on
paid-up
capital
and
places
of
business.
The
tax
was
held
to
be
valid,
notwithstanding
that
the
burden
might
fall
in
part
on
persons
or
property
outside
the
province.”
In
A.-G.
B.C.
v.
Macdonald
Murphy
Lbr.
Co.
[1930]
2
D.L.R.
721
at
p.
725,
Lord
Macmillan,
in
delivering
the
judgment
of
their
Lordships,
said
:—
"
"
While
it
is
no
doubt
true
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,
a
tax
which,
like
the
tax
here
in
question,
is
levied
on
a
commercial
commodity
on
the
occasion
of
its
exportation
in
pursuance
of
trading
transactions,
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.
On
the
contrary,
the
existence
of
an
export
tax
is
invariably
an
element
in
the
fixing
of
prices,
and
the
question
whether
it
is
to
be
borne
by
seller
or
purchaser
in
whole
or
in
part
is
determined
by
the
bargain
made.
The
present
tax
thus
exhibits
the
leading
characteristic
of
an
indirect
tax
as
defined
by
authoritative
decisions.
‘
‘
There,
as
stated,
it
was
held
to
be
an
indirect
tax”
but
in
the
present
case
in
accordance
with
the
language
of
Lord
Macmillan
I
think
it
is
well
indicated
it
is
a
direct
tax—note—
4
While
it
is
no
doubt
true
that
a
tax
levied
on
personal
property,
no
less
than
a
tax
levied
on
real
property,
may
be
a
direct
tax.
.
.
.”
Here
in
effect
it
is
a
tax
on
personal
property
but
it
is
levied
only
upon
that
property
consumed,
2.e.,
fuel-oil,
and
being
consumed
in
the
language
of
Lord
Macmillan
‘‘is
not
susceptible
of
being
passed
on’’.
In
my
opinion
the
Act
to
be
considered
here
is
plainly
a
tax
upon
personal
property
and
is
a
direct
tax.
The
manner
and
form
of
the
imposition
of
the
tax
matters
not
if
it
be
clear,
as
I
think
it
is
upon
the
frame
of
the
statute—
the
imposition
of
a
tax
upon
personal
property
of
the
tax
payer
—property
which
he
has
consumed—the
intention
of
the
Legislature
is
plain
that
it
is
a
direct
tax
upon
the
person
having
and
consuming
fuel-oil,
the
consumption
having
taken
place.
All
these
questions
of
nicety,
as
to
whether
it
is
direct
or
indirect
taxation,
are
at
an
end
as
in
the
language
of
Lord
Macmillan,
already
quoted,
the
fuel-oil
so
taxed
and
consumed
‘‘is
not
susceptible
of
being
passed
on’’.
I
am
of
the
opinion
that
the
Act
is
intra
vires
legislation
of
the
Legislature
of
the
Province
of
British
Columbia
and
being
of
that
opinion
I
would
allow
the
appeal.
Macdonald,
J.A.:—I
have
given
full
consideration
to
the
arguments
submitted
(and
the
cases
and
statutes
cited)
and
have
reached
a
firm
conclusion
that
this
is
an
excise
tax.
An
appeal
is
about
to
be
taken
to
the
Judicial
Committee
for
the
final
determination
of
the
questions
involved
and
because
of
the
limited
time
at
my
disposal,
and
to
avoid
delay,
I
will
briefly
outline
my
views.
The
submission
is
that
the
Fuel-oil
Tax
Act,
1930
(B.C.),
c.
71,
is
ultra
vires
of
the
provincial
Legislature.
Sec.
2
reads
as
follows
:—
‘
‘For
the
raising
of
a
revenue
for
Provincial
purposes
every
person
who
consumes
any
fuel-oil
in
the
Province
shall
pay
to
the
Minister
of
Finance
a
tax
in
respect
of
that
fuel-oil
at
the
rate
of
one-half
cent
a
gallon/‘
One
must
scrutinize
the
whole
Act
to
determine
its
true
character.
Sec.
5
prevents
any
one
from
keeping
fuel-oil
for
sale
without
a
licence
(subject
to
cancellation
for
infraction
of
the
Act)
for
each
place
of
business
where
so
kept.
Powers
of
inspection
and
interrogation
are
given
by
sec.
6(1)
and
by
sec.
6(2)
failure
to
produce
for
inspection,
or
to
permit
inspection,
of
books
and
records
or
of
receptacles
or
tanks
containing
fuel-oil,
exposes
the
offender
to
a
penalty.
By
sec.
7(1)
all
who
consume
fuel-oil,
sell
it,
or
keep
it
for
sale
must
keep
books
and
records
and
make
such
returns
as
may
be
prescribed
by
regulations.
By
subsec.
(2),
making
false
or
deceptive
entries
is
an
offence.
These
sections
indicate
that
while
sec.
2
imposes
the
tax
on
the
“person
who
consumes’’
the
dealer
and
distributor
are
brought
within
the
purview
of
the
Act.
It
would
be
illegal
to
tax
the
dealer;
he
could
pass
it
on
to
the
purchaser.
He
is
however
affected
by
the
legislation.
An
attempt
to
tax
fuel-oil
by
former
legislation
(1923
(B.C.),
c.
71)
was
unsuccessful.
It
is
now
hoped
that
pitfalls
then
encountered
may
be
avoided.
The
Act
is
so
framed
that
the
wholesaler,
retailer
or
distributor,
as
the
commodity
passes
on
the
way
to
the
consumer,
pay
no
tax.
When
sold
by
the
retailer
to
the
householder
or
consumer,
the
submission
is,
it
still
remains
untaxed,
but
when
burnt
the
person
using
it
for
heating
purposes
must
pay
a
tax
on
every
gallon
consumed.
It
is
suggested
therefore
that
as
the
impost
cannot
be
passed
on
it
is
a
direct
tax.
This
tax,
it
is
urged,
is
not
imposed
on
a
commercial
commodity,
but
as
in
the
case
of
income
tax,
is
levied
on
the
person
and
his
ability
to
pay
is
measured
by
the
amount
he
consumes,
as
income
tax
is
measured
by
the
amount
one
earns.
We
must
however
"‘ascertain
the
real
nature
of
the
tax’’
(A.-G.
B.C.
v.
Macdonald
Murphy
Lbr.
Co.
[1930]
2
D.L.R.
at
p.
723)
and
base
conclusions,
not
on
form
but
on
substance.
Fuel-oil
is
a
product
of
crude
oil,
the
latter
not
produced
in
commercial
quantities
in
this
Province.
It
is
imported
from
foreign
countries
(some
produced
in
Alberta
and
Ontario)
free
of
duty,
distilled
here
in
refineries,
other
more
valuable
products
(including
gasoline)
extracted
leaving
fuel-oil
as
a
residue
arising
in
the
process
of
manufacturing.
It
is
therefore
a
product
refined
in
the
Province
although
at
times
limited
amounts
may
be
imported.
Coal,
a
competitive
product,
is
extensively
produced
in
British
Columbia
and
the
free
use
of
oil
as
a
fuel
limits
the
production
and
use
of
coal.
It
was
submitted
by
respondent
that
the
primary
purpose
of
the
Act
is
to
protect
the
coal
industry.
I
would
suggest
that
is
an
important
secondary
consideration,
the
primary
purpose
being
to
obtain
much-needed
revenue.
The
Act
is
defended
under
sec.
92(2)
of
the
B.N.A.
Act
(direct
taxation)
subsec.
(13)
(property
and
civil
rights)
and
subsec.
(16)
(as
a
matter
of
a
merely
local
or
private
nature
in
the
Province)
and
attacked
on
the
ground
that
it
is
an
excise
tax
embodied
in
a
statute
framed
purposely
with
a
facade
to
conceal
its
real
character.
In
A.-G.
B.C.
v.
C.P.R.
[1927]
2
D.L.R.
257,
at
p.
258,
the
late
Chief
Justice
of
Canada,
referring
to
sec.
6
of
the
former
Fuel-oil
Act,
1923
(B.C.),
c.
71,
already
referred
to,
said
:—
"‘Had
sec.
6
been
the
only
provisions
imposing
the
tax
it
would
probably
be
difficult
for
the
respondent
to
maintain
its
inapplicability
to
the
fuel-oil
in
its
possession
from
time
to
time,
or
successfully
to
challange
its
validity.’’
This
is
not
a
final
opinion,
nor
was
it
necessary
for
the
decision
of
the
case.
It
is
only
dealt
with
in
the
judgment
of
Viscount
Haldane
in
delivering
the
judgment
of
the
Judicial
Committee
on
appeal
([1927]
4
D.L.R.
113,
at
p.
116)
by
saying
that
sec.
6
“has
to
be
read
with
reference
to
sec.
3’’.
No
opinion
therefore
was
expressed
on
the
effect
of
sec.
6
standing
alone.
The
authority
to
impose
an
excise
tax
is
found
in
sees.
122
and
91(3)
of
the
B.N.A.
Act—“The
raising
of
Money
by
any
Mode
or
System
of
Taxation.’’
Customs
duties
may
be
levied
with
the
dual
purpose
of
regulating
trade
and
commerce,
by
protecting
native
industries
and
of
raising
revenue
by
indirect
taxation,
while
an
excise
tax,
although
affecting
trade,
is
imposed
primarily
for
revenue.
purposes.
It
is
under
the
control
of
the
Inland
Revenue
Department
of
the
Government.
There
is
therefore
a
distinction
between
an
excise
tax
and
a
customs
duty.
They
have
this
feature
in
common
that
both
are
restrictive
of
trade
but
not
equally
in
manner
or
degree.
It
is
said
that
an
excise
tax
is
‘‘A
duty
charged
on
home
goods
(as
distinguished
from
customs
duties
on
imported
or
exported
goods)
either
in
the
process
of
their
manufacture
or
before
their
sale
to
the
home
consumers:’’
Oxford
Dictionary,
vol.
3,
p.
3/9.
This
definition
is
not
sufficiently
comprehensive
for
the
lawyer.
It
is
a
tax
on
a
commodity
paid
by
the
consumer
and
its
essential
character
is
not
changed
by
delay
in
collecting
it
or
by
any
conditions
relating
to
time
or
manner
of
payment.
It
was
submitted
that
an
‘‘excise
tax”
as
used
in
1867,
did
not
include
a
tax
on
the
consumer
and
that
a
search
of
English
statutes
from
1660
to
1867
suports
this
view.
True
it
was
usually
a
tax
on
goods
but
paid
by
the
consumer
or
the
purchaser
of
the
commodity.
By
sec.
19BB(3)
of
the
Special
War
Revenue
Act,
1915
(Can.),
¢.
8,
as
enacted
by
1920
(Can.),
ce.
71,
sec.
2(1),
it
is
provided
that,
“The
excise
taxes
imposed
by
the
preceding
subsections
shall
be
paid
by
the
purchaser
to
the
vendor
at
the
time
of
sale
and
delivery
for
consumption
or
use
.
.
.
.”
It
would
make
no
difference
if,
as
a
matter
of
policy,
it
was
made
payable
after
consumption.
The
Dominion
Parliament
could
place
an
excise
tax
on
this
fuel-oil.
It
chose
to
exempt
from
taxation
"‘oil
for
illuminating
or
heating
purposes’’
in
the
Special
War
Revenue
Act
of
1915
as
amended
in
1920,
thus
asserting
the
right
to
tax.
If
the
present
Act
is
intra
vires,
as
contended,
a
levy
may
be
made
by
the
Provinces
on
sugar,
boots,
beer
and
countless
commodities
manufactured
in
the
Province
payable
after
consumption
or
use
and
the
only
difference
between
this
and
Dominion
excise
imposts
on
the
same
commodities
would
be
in
the
method
of
collection.
While
usually
the
result
of
a
judicial
decision
should
not
be
considered
as
decisive
yet
in
determining
division
of
authority
under
the
B.N.A.
Act
this
consideration
should
at
least
be
kept
in
mind
to
avoid
confusion.
Further,
the
Provinces
in
levying
taxes
on
commodities
subject
to
similar
imposts
(or
customs
duties)
by
the
Dominion
Parliament
might
seriously
interfere,
as
submitted,
with
the
commercial
policy
of
the
Federal
Parliament
in
domestic
and
foreign
affairs
(e.g.,
in
framing
treaties).
It
is
a
principle
that
when
a
right
in
conferred
it
involves
all
necessary
protection
in
the
exercise
of
that
right.
True
the
same
submission
might
be
made
in
respect
to
a
personal
property
tax
(usually
regarded
as
within
local
authorit
)
where
the
taxpayer’s
personal
property
is
subject
to
a
tax
using
it
as
a
criterion
of
his
ability
to
pay
but
not
in
the
same
way
or
to
the
same
degree.
If,
however,
it
is
intra
vires
of
the
provincial
Legislature
by
an
Act
to
gauge
the
ability
of
a
consumer
to
pay
a
tax
by
the
amount
of
fueloil
he
consumes
and
to
apply
this
method
of
taxation
to
all
commodities
manufactured
in
the
Province
where
the
raw
material
is
imported
from
abroad
it
would
impair
the
free
exercise
of
the
right
of
the
Dominion
Parliament
to
regulate
trade
and
commerce
and
to
pursue
consistent
commercial
policies.
Our
judgment
however
may
rest
on
the
view
that
this
is
an
"‘excise
tax’’
none
the
less
so
because
of
the
wording
of
sec.
2.
It
is
a
tax
on
the
person
in
respect
to
a
commodity
as
all
taxes
are.
Properties
do
not
pay
taxes
of
any
kind;
individuals
pay
the
levy.
It
is
an
over-refinement
therefore
to
say
that
where
a
tax
is
imposed
on
the
consumer,
rather
than
on
the
thing
consumed,
different
results:
follow.
When
a
duty
is
imposed
on
goods
it
means,
if
fully
expressed,
that
a
duty
is
levied
on
the
person
in
respect
to
the
importation
of
goods
‘just
as
a
property
tax
is
usually,
though
not
necessarily,
a
tax
on
persons
in
respect
of
their
property
:’’
A.-G.
N.S.W.
v.
Collector
of
Customs
(1908)
5
Com.
L.R.
818
at
p.
854,
referred
to
in
A.-G.
B.C.
v.
A.-G.
Can.
[1923]
4
D.L.R.
669
at
p.
671.
Indeed
it
is
not
at,
all
clear
that
by
sec.
2
the
tax
may
not
be
directly
imposed
on
the
commodity
before
consumption
having
regard
to
a
free
translation
of
the
words
"‘who
consumes’’.
It
was
found
necessary
by
subsecs.
3,
6
and
7
to
place
restrictions
on
those
who
sell
or
keep
fuel-oil
for
sale
to
the
extent
that
a
licence
must
be
obtained
and
records
kept
showing
the
difficulty,
in
fact
the
impossibility,
of
keeping
in
separate
compartments,
so
to
speak,
the
person
and
the
commodity.
These
provisions
are
characteristic
of
all
Excise
Acts.
The
case
of
Halifax
v.
Fairbanks
[1927]
4
D.L.R.
945
is
con-
elusive.
There
a
business
tax
payable
by
every
person
occupying
real
property,
although
the
taxpayer
might
seek
to
pass
it
on
to
others,
was
held
to
be
a
direct
tax
because
before
Confederation
certain
taxes
were
then
universally
recognized
as
falling
within
one
or
the
other
category.
A
tax
on
commodities
produced
and
consumed
in
the
country
were
known
as
excise
taxes
long
before
Confederation
and
must
be
assigned
to
federal
jurisdiction
without
regard
to
any
theory
as
to
the
ultimate
incidence
of
the
tax.
This
is,
of
course,
a
tax
on
a
commodity
produced
and
consumed
in
this
country.
In
1
Stephen’s
Commentaries
on
the
Laws
of
England,
17th
ed.,
the
author,
at
p.
272,
says:—
"
Excise
Duties,
which
are
also
controlled
by
the
Commissioners
of
Customs
and
Excise,
are
those
duties
which
are
imposed
by
Parliament
upon
commodities
produced
and
consumed
in
this
country.
They
are
directly
opposite
in
their
nature
to
the
customs
duties;
for
they
are
an
inland
imposition,
paid
sometimes
on
the
consumption
of
the
commodity,
frequently
upon
the
retail
sale.
Inasmuch
as
this
duty
is
peculiarly
liable
to
evasion,
the
officers
of
the
revenue
have
a
power
to
enter
and
search
the
places
of
business
of
such
as
deal
in
exisable
commodities,
at
any
hour
of
the
day,
and,
in
the
presence
of
a
constable,
of
the
night
also.’’
As
stated,
they
are
paid
‘‘sometimes
on
the
consumption
of
the
commodity’’.
One
may
trace
legislation
since
the
reign
of
Charles
II
to
the
present
day
and
find
that
excise
duties
were
imposed
on
consumable
commodities.
As
we
approach
the
Confederation
period
we
find
an
Act
of
the
year
1867
(1867*
(Imp.),
ec.
5)
amending
a
similar
Act
of
an
earlier
date
imposing
a
Duty
of
Excise
on
Dogs.
A
licence
had
to
be
obtained
and
an
annual
duty
of
five
shillings
was
payable
by
the
owner.
Sec.
4
provides
that
:—
"‘The
said
Duties
and
Licences
shall
be
Excise
Duties
.
.
.
.’’
This
tax
is
not
imposed
on
dealers
but
on
the
owners.
I
refer
also
to
1869
(Imp.),
c.
14,
subsees.
16
to
18
under
Part
V
under
the
heading
‘‘
As
to
Assessed
Taxes
and
Excise
Licenses’’.
Duties,
through
licences,
were
imposed
on
male
servants,
carriages,
horses,
mules,
armorial
bearings,
etc.,
to
be
paid
by
the
owner,
proprietor
or
employer.
Licences
had
to
be
procured
and
by
sec.
18,
‘‘Such
duties
and
licences
shall
be
excise
duties
and
licences,
and
shall
be
under
the
management
of
the
Commissioners
of
Inland
Revenue
.
.
.
.”
Regardless
of
the
history
or
setting
of
the
particular
statutes
referred
to
we
have
before
Confederation
a
long
series
of
Acts
showing
that
a
definite
meaning
was
assigned
to
the
word
“excise”
and
‘‘fuel-oil’’
if
then
used
could
readily
be
added
to
the
list.
Turning
to
Dominion
Statutes
we
find
(1867
(Can.),
c.
8)
an
Inland
Revenue
Act.
Certain
individuals
were
prevented
from
carrying
on
any
business
subject
to
excise
without
a
licence.
An
exception
was
made
by
sec.
3(3)
and
(4)
in
respect
to
utensils
used
for
brewing
beer
for
family
use;
also
as
to
growers
of
tobacco
on
the
owner’s
land
and
the
manufacture
of
it
for
private
use
and
not
for
sale,
indicating
a
liability
to
such
a
tax
if
not
exempted.
An
excise
tax,
therefore,
could
be
imposed
on
these
utensils
and
appliances
in
the
hands
of
the
user
or
consumer.
In
fact
the
Dominion
Inland
Revenue
Act
of
1868
(Can.),
ce.
50,
an
excise
tax,
similar
in
nature
to
the
tax
under
review,
was
imposed
on
refined
petroleum
(sec.
7.
It
follows
that
on
the
principle
enunciated
in
Halifax
v.
Fairbanks,
supra,
this
Act
is
ultra
vires
and
the
appeal
should
be
dismissed.
Appeal
dismissed.
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