Date: 20081121
Docket: T-478-08
Citation: 2008 FC 1304
Ottawa, Ontario, November 21,
2008
PRESENT: The Honourable Mr. Justice Barnes
BETWEEN:
PHILIP
ANISMAN
Applicant
and
CANADA BORDER SERVICES AGENCY
and THE MINISTER OF PUBLIC SAFETY
AND EMERGENCY PREPAREDNESS
Respondents
REASONS FOR ORDER AND ORDER
[1]
This
is a motion by the Respondents seeking an Order dismissing the underlying
application for judicial review on the ground that this Court lacks
jurisdiction. The Applicant has challenged the correctness of a decision made
by the Canada Border Services Agency (CBSA) to collect a Liquor Control Board
of Ontario (LCBO) mark-up of $537.13 on three bottles of wine he and his wife
imported from the United States on January 7, 2007. The Respondents argue
that in collecting a mark-up the CBSA was acting as an agent of the LCBO and
applying provincial law. The impugned decision, they say, was therefore not
one taken by a federal board, commission or other tribunal as that term is used
in s. 18 of the Federal Courts Act, R.S., 1985, c. F-7 to define this
Court’s jurisdiction.
[2]
The
Applicant has countered the Respondents’ motion with a cross-motion arguing
that the CBSA was not authorized by federal law to act as an agent of the
LCBO. He has also asked that the Court determine the merits of this claim to a
refund of the LCBO mark-up and, in effect, he is thereby seeking a form of summary
judgment.
[3]
I
must be mindful of the admonition of the Court of Appeal in David Bull
Laboratories (Can.) v. Pharmacia Inc., [1995] 1 F.C.
588, [1995] F.C.J. No. 1629 (C.A.) that a motion to summarily dismiss an
application for judicial review is only to be allowed in exceptional
circumstances and where the application is bereft of any possibility of
success: also see the John McKellar Charitable Foundation v. Canada (Revenue
Agency), 2006 FC 733, 46 Admin. L.R. (4th) 249 at paras. 10-14. Where such
a motion is brought on the strength of a clearly defined and readily resolvable
jurisdictional issue, this Court may, however, be inclined to entertain it.
[4]
There
is no question that in calculating and collecting the LCBO mark-up on the
Applicant’s wine, the CBSA was purporting to act as an agent of the LCBO under
provincial law. That is the clear intent of s. 3.1 of the Liquor Control
Act, R.S.O. 1990, c. L. 18 which states:
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3.1 The Board may enter into an
agreement with the Government of Canada, as represented by the Minister of
National Revenue, in relation to liquor referred to in that agreement that is
brought into Ontario from any place outside Canada,
(a) appointing officers, as defined in
subsection 2 (1) of the Customs Act (Canada), employed at customs offices
located in Ontario, as agents of the Board for
the purposes of,
(i) accepting, on behalf of the Board,
liquor brought into Ontario,
(ii) collecting, on behalf of the
Board, the mark-up set by the Board from time to time in relation to that
liquor,
(iii) selling and releasing, on behalf
of the Board, to the person bringing the liquor into Ontario, on the payment
of the mark-up, the liquor in relation to which the mark-up is paid, and
(iv) detaining the liquor on behalf of
the Board and releasing it to the Board where the mark-up is not paid by the
person bringing the liquor into Ontario;
(b) authorizing, in such circumstances
and on such conditions as may be specified in the agreement, the payment, on
behalf of the Board, to a person who has paid the mark-up, of a refund of any
or all of the mark-up collected in accordance with subclause (a) (ii) and the
agreement;
(c) requiring, in such manner and at
such time or times as may be specified in the agreement, the remittance to
the Board of the mark-up collected in accordance with subclause (a) (ii) and
the agreement;
(d) respecting forms to be used in relation
to liquor brought into Ontario; and
(e) respecting any other matter in
relation to liquor brought into Ontario.
1992, c. 28, s. 2.
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3.1
La Régie peut conclure avec le gouvernement du Canada, représenté par le
ministre du Revenu national, au sujet des boissons alcooliques qui y sont
précisées et qui sont introduites en Ontario en provenance d’un endroit situé
hors du Canada, un accord qui :
a) désigne à titre de mandataires de la
Régie les agents, au sens du paragraphe 2 (1) de la Loi sur les douanes
(Canada), qui sont employés dans les bureaux de douane situés en Ontario, aux
fins suivantes :
(i) la réception, pour le compte de la
Régie, des boissons alcooliques introduites en Ontario,
(ii) la perception, pour le compte de
la Régie, de la marge bénéficiaire sur ces boissons alcooliques que fixe de
temps à autre la Régie,
(iii) la vente et la remise, pour le
compte de la Régie, à la personne qui introduit les boissons alcooliques en
Ontario, sur paiement de la marge bénéficiaire, des boissons alcooliques à
l’égard desquelles la marge bénéficiaire est acquittée,
(iv) la retenue des boissons
alcooliques pour le compte de la Régie et leur remise à cette dernière
lorsque la personne qui les introduit en Ontario n’acquitte pas la marge
bénéficiaire;
b) autorise, dans les circonstances et
aux conditions précisées dans l’accord, le paiement à la personne qui a
acquitté la marge bénéficiaire, pour le compte de la Régie, du remboursement
total ou partiel de la marge bénéficiaire perçue conformément au sous-alinéa
a) (ii) et à l’accord;
c) exige, de la manière et aux moments
précisés dans l’accord, la remise à la Régie de la marge bénéficiaire perçue
conformément au sous-alinéa a) (ii) et à l’accord;
d) traite des formules à utiliser pour
les boissons alcooliques introduites en Ontario;
e) traite de toute autre question
relative aux boissons alcooliques introduites en Ontario. 1992, chap. 28,
art. 2.
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In accordance with the above statutory
provision, an agreement (Agreement) was reached between the Government of
Canada (represented by the Minister of National Revenue) and the LCBO on January 19, 1993. The
relevant articles to that Agreement are set out below:
6.
The
purpose of this Agreement is to confer responsibility on the Minister of
National Revenue for the collection, on behalf of the Board, of the markup on a
specified quantity of liquor that an individual brings, or causes to be
brought, into Ontario from outside Canada.
[…]
8.
Where the
markup is in accordance with Canada’s international obligations and Canada
collects the tax imposed on the liquor under Division III of Part IX of the Excise
Tax Act, Canada will, on behalf of the Board, at its customs offices in
Ontario, with respect to the quantity of liquor set out in Annex A that is
brought, or caused to be brought, into Ontario by an individual,
a) accept the
consignment of the liquor from the individual;
b) carry out the sale
of the liquor from the Board to the individual;
c) collect the markup on the
liquor;
d) detain the liquor, where the
markup is not paid;
e) release the liquor
to the individual upon payment of the markup.
The Board will notify Canada of any change in the quantity
of liquor set out in Annex A. Any such change will take effect on the date
indicated in the notice, or two calendar weeks after the notice is received,
whichever is later.
[…]
11. Canada’s responsibilities under
article 8 commence on the latest of
(a) February 1, 1993,
(b) the date on which
legislation authorizing Canada to carry out the provisions
of article 8 comes into force, and
(c) the effective date of the
by-law.
12.
The markup
to be collected by Canada will be calculated in
accordance with the Board by-law which may be amended from time to time by the
Board.
The by-law will be made available to Canada at all times. Canada may
disclose such by-law to anyone, at Canada’s
discretion.
[…]
14. An officer as
defined in section 2 of the Customs Act is authorized to carry out the
provisions of article 8, pursuant to paragraph 3.1(a) of the Liquor Control
Act.
[5]
An
LCBO by-law created in accordance with article 12 above provides for a mark-up
on the value of any wine imported into Ontario by an
individual.
[6]
While
the Applicant concedes that the CBSA is authorized to act as an agent for the
LCBO under provincial law, he contends that there is no equivalent authority
under federal law. In the result, he says that the CBSA acted unlawfully and
without authority when it demanded and collected a mark-up on his wine.
[7]
There
are a number of provisions in federal legislation which now authorize federal/provincial
agreements of the sort entered into here. The provision that appears to me to
be the most apt is ss. 13(2) of the Canada Border Services Agency Act, 2005,
c. 38, C-1.4 which provides:
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13. (2) The Agency may, for the
purposes of carrying out its mandate,
(a) enter into an arrangement with a
foreign state or an international organization; or
(b) enter into an agreement or
arrangement with the government of a province, a department or agency of the
Government of Canada or any person or organization.
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13.
(2) The Agency may, for the purposes of carrying out its mandate,
(a) enter into an arrangement with a
foreign state or an international organization; or
(b) enter into an agreement or arrangement
with the government of a province, a department or agency of the Government
of Canada or any person or organization.
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The above provision is consistent with s. 5
of the CBSA Act which authorizes the CBSA to implement agreements with foreign
states, provincial governments or other public bodies performing a function of
government either in a foreign state or in Canada to carry out
activities, to promote services or to administer a tax or a program. These
provisions are sufficient to now authorize the CBSA to enter into a mark-up
agreement with the LCBO of the sort that is in issue in this proceeding.
[8]
The
problem is that it is not entirely clear to me whether in 1993 there was any
statutory authority for the federal government to enter into the Agreement as
stipulated by Article 11 therein. It is apparent that the federal government
at the time proceeded to execute the Agreement on the strength of s. 7 of the Federal-Provincial
Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions
Act, R.S.C. 1985, c. F-8 (Fiscal Arrangements Act), which provides for
federal/provincial agreements for the collection of a tax. Subsequent
authority has, however, held that the collection of a provincial mark-up on
liquor is not a tax: see DFS Ventures Inc. v. The Manitoba Liquor Control
Commission et al., 2001 MBQB 245, 159 Man. R. (2d) 55 at paras. 57 to 61,
aff’d., 2003 MBCA 33, 173 Man. R. (2d) 76 (C.A.). As far as I can tell from
the supplementary submissions of the parties, there was no other federal
statutory authority in place in 1993 to support the Agreement. The current
legislative authority would provide sufficient support today but those
provisions all appear to post-date the Agreement. It is at least debatable
whether the current legislative authority could give life to an agreement
executed some years before. That may be the effect of Article 11 of the
Agreement which provides that “Canada’s responsibility under article 8 commences
on the latest of…(b) the date on which legislation authorizing Canada to carry
out the provisions of article 8 comes into force”. That article may be legally
sufficient to authorize the Agreement on the strength of s. 5 and s. 13 of the
CBSA Act and their statutory antecedents but because neither party addressed
this point in their submissions to the Court, I am not prepared to resolve the motions
on that basis. In short, I do not accept that the David Bull test has
been met with respect to this issue.
[9]
Because
the Applicant has brought a motion effectively seeking judgment on the merits for
the return of the monies paid, I will, nevertheless, deal with the issue of whether
the CBSA decision to collect a mark-up from the Applicant falls within the
scope of this Court’s jurisdiction as fixed by s. 18 of the Federal Courts
Act. On the undisputed facts of this case, I do not believe that it does.
[10]
While
federal law provides for the CBSA to act on behalf of Ontario in
calculating and collecting a liquor mark-up, it is clear that the statutory
foundation for doing so is found in the Liquor Control Act, above. That
is the statutory source for the collection and remittance activity carried out
by the CBSA as agent for the LCBO. That is also the statutory basis for the
LCBO to enter into an agreement under which the formula to calculate the
mark-up is fixed.
[11]
It
is obvious that the resolution of the substantive arguments in this case would
require this Court to interpret the provisions of provincial law and the
relevant contractual instruments that establish and define the right to collect
the LCBO mark-up. In my view, it is not the role of this Court to interpret
and enforce provincial law all the more so where, as here, neither the Province
nor the LCBO is a party to the proceeding. While the Applicant argues that the
Province could intervene that is not the point. If the interpretation and
application of provincial law is at the root of a proceeding, the Province or
its interested agencies should be involved as of right and the appropriate
forum for hearing the case on the merits is the Superior Court of the
Province. In short, this is not a task which falls within the jurisdictional
confines of s. 18 of the Federal Courts Act. For this proposition, I
rely upon the analysis of Justice Danièle Tremblay-Lamer in Canadian
Restaurant and Foodservices Assn. v. Canadian Dairy Commission, 2001 FCT 34,
200 F.T.R. 138 at paras. 46-50:
46 As noted at the outset the only
issue to be determined is whether or not this Court has jurisdiction to review
the exercise of powers by the CMSMC. Pursuant to subsection 18.1(3) of the
Federal Court Act, on application for judicial review, this Court may:
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(a) order a federal board, commission
or other tribunal to do any act or thing it has unlawfully failed or refused
to do or has unreasonably delayed in doing; or
(b) declare invalid or unlawful, or
quash, set aside or set aside and refer back for determination in accordance
with such directions as it considers to be appropriate, prohibit or restrain,
a decision, order, act or proceeding of a federal board, commission or other
tribunal.
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a) ordonner à l'office fédéral en cause
d'accomplir tout acte qu'il a illégalement omis ou refusé d'accomplir ou dont
il a retardé l'exécution de manière déraisonnable;
b) déclarer nul ou illégal, ou annuler,
ou infirmer et renvoyer pour jugement conformément aux instructions qu'elle
estime appropriées, ou prohiber ou encore restreindre toute décision,
ordonnance, procédure ou tout autre acte de l'office fédéral.
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47 Thus, this Court will have
jurisdiction if the CMSMC is a "federal board, commission or other
tribunal" as defined by subsection 2(1) of the Federal Court Act:
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"federal board, commission or
other tribunal" means any body or any person or persons having,
exercising or purporting to exercise jurisdiction or powers conferred by or
under an Act of Parliament or by or under an order made pursuant to a
prerogative of the Crown, other than any such body constituted or established
by or under a law of a province or any such person or persons appointed under
or in accordance with a law of a province or under section 96 of the
Constitution Act, 1867.
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"office fédéral" Conseil,
bureau, commission ou autre organisme, ou personne ou groupe de personnes,
ayant, exerçant ou censé exercer une compétence ou des pouvoirs prévus par
une loi fédérale ou par une ordonnance prise en vertu d'une prérogative
royale, à l'exclusion d'un organisme constitué sous le régime d'une loi
provinciale ou d'une personne ou d'un groupe de personnes nommées aux termes
d'une loi provinciale ou de l'article 96 de la Loi constitutionnelle de 1867.
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48 It is irrelevant for the purpose
of determining the jurisdiction of this Court, if the CMSMC exercised
policy-making functions or other functions, as stated by the authors Brown and
Evans:
In the result, the source of a tribunal's
authority, and not the nature of either the power exercised or the body
exercising it, is the primary determinant of whether it falls in the
definition. The test is simply whether the body is empowered by or under
federal legislation or by an order made pursuant to a prerogative power of the
federal Crown.
49 The words in the definition of
"federal board, commission or other tribunal" suggest certain
essential components.
50 The body will be within the prima
facie jurisdiction of the Federal Court by virtue of it having, exercising or
purporting to exercise jurisdiction or powers conferred by or under an Act of
Parliament. Further, it is nonetheless excluded from the jurisdiction of the
Federal Court by being a body constituted or established by or under a law of a
province.
[Footnotes omitted]
Also see Cree Regional Authority v. Canada (Federal
Administrator), [1991] 3 F.C. 533, 81 D.L.R. (4th) 659 (C.A.) at para.
34.
[12]
I
also do not agree with the Applicant that the determination of this Court’s
jurisdiction over a substantive matter involving only provincial law is
particularly nuanced. If as stated in Canadian Restaurant, above, the
source of a decision-maker’s authority is provincial law, that will usually be
enough to oust the jurisdiction of this Court whether or not the decision-maker
for other purposes is a creature, in whole or in part, of federal law.
Conclusion
[13]
The
Applicant’s argument that the Agreement is not legally valid because it is not
supported by federal legislation requires further and better submissions and
argument from the parties. That issue and its potential legal ramifications,
if any, are the only points which remain in issue on this application. I would
add that, even if there was and continues to be an absence of statutory
authority for the federal government to act as an agent for the Province in the
collection of a liquor mark-up, a question still remains as to whether that
would make any difference to the return of the Applicant’s money. If the money
was lawfully payable to the Province (an assumption that this Court would have
to make) the fact that the party collecting it may have lacked the authority to
do so may not lead to a financial recovery by the Applicant. This, too, is an
issue that the parties have failed to address in argument.
[14]
In
the result, both the Respondents’ motion to dismiss the Applicant’s application
for judicial review on jurisdictional grounds and the Applicant’s motion for
judgment are dismissed. Because of the divided success on these motions, there
will be no costs awarded to either party.
ORDER
THIS COURT ORDERS that the Respondents’ motion and the Applicant’s cross-motion are
dismissed without costs payable to the either party.
“ R. L. Barnes ”
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