However, in Confédération des syndicats nationaux v. Canada (Attorney General), 2008 SCC 68 released by the Supreme Court today, the old Constitution was sufficient to strike down statutory provisions related to Employment Insurance premiums.
The argument, simplified, is that the premium rates were unrelated to actual insurance needs, and were not set by Parliament. Thus, the premiums were a tax, because they were not related to a service provided, and the tax was not set by Parliament. Since all money bills, or taxes, within the federal power, must be set by Parliament, the rates sought were unconstitutional.
There is still scope to argue under the old Constitution.
See below for some of the decision
[79] Thus, following those statutory amendments, premiums no longer constituted a regulatory charge within the meaning of Westbank and Connaught. Rather, they became a levy on payrolls and wages. They were transformed into a tax. If this is the case, the Attorney General of Canada argues, the tax was validly imposed pursuant to Parliament's general taxation power under the Constitution Act, 1867.
[80] The scope of Parliament's taxing power is well known. Parliament may tax by any means. However, if a levy is a tax, it must be imposed in accordance with the Constitution. Section 53 of the Constitution therefore poses a problem.
K. Violation of Section 53
[81] The Constitution Act, 1867 provides that Parliament alone has the power to impose a tax and that the legislation must originate in the House of Commons:
53. Bills for appropriating any Part of the Public Revenue, or for imposing any Tax or Impost, shall originate in the House of Commons.
[82] This Court has confirmed that s. 53 reflects the ancient, but fundamental, principle of our democratic system that there should be no taxation without representation: Westbank, at para. 19, and Connaught, at para. 4. According to this principle, a tax can be imposed only by Parliament or a clearly authorized delegate of Parliament (J. E. Magnet, Constitutional Law of Canada (9th ed. 2007), vol. 1, Federalism / Aboriginal Peoples, at p. 626).
...
[87] Iacobucci J., writing for a unanimous Court, noted that the delegation of the imposition of a tax is constitutional if the legislation provides expressly and unambiguously for the delegation. The delegation of the imposition of a tax is constitutional if express and unambiguous language is used in making the delegation. The animating principle is that only the legislature can impose a new tax ab initio. But if the legislature expressly and clearly authorizes the imposition of a tax by a delegated body or individual, then the requirements of the principle of "no taxation without representation" will be met. In such a situation, the delegated authority is not being used to impose a completely new tax, but only to impose a tax that has been approved by the legislature. [Emphasis added; para. 74.]
[88] According to Professor Hogg, it would be difficult to interpret Ontario English Catholic Teachers' Assn. as relating to the delegation of control over the details and mechanism of taxation (at p. 14‑8), since "that phrase was never referred to". Yet Iacobucci J. had quoted the relevant passage from Eurig (para. 71 of Ontario English Catholic Teachers' Assn.). The position taken by the Court in Eurig therefore remains valid. According to it, the taxing authority of Parliament or of a legislature may not be delegated unless that body clearly and unambiguously expresses its intent to delegate the authority.
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[92] In short, in this case concerning employment insurance, only Parliament may impose a tax ab initio. According to this Court's decisions, taxing authority must be delegated expressly and unambiguously. Once this requirement is met, the delegate may exercise the power to establish the details and mechanisms of taxation.
[93] The relevant provisions of the Employment Insurance Act must therefore be examined to determine whether, as in Ontario English Catholic Teachers' Assn., they are consistent with the principles laid down in this Court's decisions. The provisions in question, ss. 66.1 and 66.3, do not state that Parliament is delegating taxing authority to the Governor General in Council. The nature of the levy remains ambiguous. It is unclear whether Parliament still considered that it was exercising the authority to impose a regulatory charge in enacting those provisions. At the time Parliament delegated the power to collect employment insurance premiums to the Commission and the Governor General in Council, the legislation contained no statement either that its purpose was to collect a tax or that Parliament's taxing authority was being delegated to the Governor General in Council. The delegation concerned a charge that was no longer a levy for specific purposes but had become a levy for general purposes with the meaning of Westbank, but it was not specified in the Act that Parliament intended to delegate its taxing authority as such. Parliament would have had to state that it was delegating that authority to the Governor General in Council. Owing to the ambiguous nature of the levy, whether Parliament intended to delegate its taxing authority remained uncertain.
[94] I accordingly conclude that the version of s. 66.1 of the Employment Insurance Act that applied in 2002 and 2003 is invalid. This means that employment insurance premiums were collected unlawfully, without the necessary legislative authorization. The same conclusion must be reached as regards the version of s. 66.3 that applied in 2005 and the premiums collected that year. In the circumstances of this case, which involves the improper exercise of a power conferred on Parliament, I would suspend the declaration of invalidity to allow the consequences of that invalidity to be rectified. I would dismiss the appellants' other claims and affirm the judgments of the Court of Appeal and the Quebec Superior Court with respect to them.
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