Somewhat surprisingly, the answer is yes.
See today's decision in Procter & Gamble Inc. v. Ontario (Finance), 2010 ONCA 149.
Here Procter & Gamble Inc. had obtained a declaration of the Superior Court of Justice on August 30, 2006 that it was exempt from retail sales taxes. The legislature amended the Retail Sales Tax Act to over rule that decision and made the amendment retroactive to May 7, 1997.
The Court held:
[54] No doubt P&G had hoped, by departing the tax arena and obtaining a declaration interpreting the RSTA, that it could use the declaration to its advantage in its assessment appeals. The law, however, can change, as Dickson J. pointed out in Gustavson Drilling (1964) Ltd. v. M.N.R., [1977] 1 S.C.R. 271 at pp. 282-283:
No one has a vested right to continuance of the law as it stood in the past; in tax law it is imperative that legislation conform to changing social needs and governmental policy. A taxpayer may plan his financial affairs in reliance on the tax laws remaining the same; he takes the risk that the legislation may be changed.
The mere right existing in the members of the community or any class of them at the date of the repeal of a statute to take advantage of the repealed statute is not a right accrued...
[55] To the extent that P&G regards the result as unfair, Major J. explained at some length in British Columbia v. Imperial Tobacco Canada Ltd., [2005] 2 S.C.R. 473 that retroactive legislation often appears unjust. He wrote as follows at paras. 74-75:
The first is Air Canada [v. British Columbia, [1989] 1 S.C.R. 1161]. In it, a majority of this Court affirmed the constitutionality of 1981 amendments to the Gasoline Tax Act, 1948, R.S.B.C. 1960, c. 162, that retroactively taxed certain companies in the airline industry. The amendments were meant strictly to defeat three companies' claims, brought in 1980, for reimbursement of gasoline taxes paid between 1974 and 1976, the collection of which was ultra vires the legislature of British Columbia. ...
The second is Authorson v. Canada (Attorney General), [2003] 2 S.C.R. 40, 2003 SCC 39, in which this Court unanimously upheld a provision of the Department of Veterans Affairs Act, R.S.C. 1985, c. V-1, aimed specifically at defeating certain disabled veterans' claims, the merits of which were undisputed, against the federal government.
[56] While these outcomes may appear unfair or unjust, it is the legislature's prerogative to determine tax policy, not this court's. Given the clear intent of the legislature to retroactively amend the RSTA, this court must give it effect.
James Morton
1100-5255 Yonge Street
Toronto, Ontario
M2N 6P4
416 225 2777
www.jmortonmusings.blogspot.com
3 comments:
"A parliament can do anything but make a man a woman, and a woman a man" - Henry Herbert, 2nd Earl of Pembroke, 1534-1601.
The article i read is really good and helpful too.
Are their limits on the amounts that may retroactively collected? Or even constraints? Lets take for example a hypothetical situation where the government placed a 50% capital gains tax on residential property. Prior to the enacting legislation, some persons may have bought property as an investment with related expectation. If the new tax climate had the effect of lowering property values by 25% or more, could an argument be made that there was/is a reliance that changes would While I agree with the notion of not being able to rely on present legislation, can new legislation make such a material change that it is unreasonable?
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