Simpsons-Sears Ltd. v. Provincial Secretary (N.B.) et al., [1978] 2 S.C.R. 869 (1978)

Supreme Court of Canada

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Simpsons-Sears Ltd. v. Provincial Secretary (N.B.) et al., [1978] 2 S.C.R. 869 (1978)

Supreme Court of Canada

Simpsons-Sears Ltd. v. Provincial Secretary (N.B.) et al., [1978] 2 S.C.R. 869

Date: 1978-01-19

Simpsons-Sears Limited Appellant;

and

The Provincial Secretary of the Province of New Brunswick and The Minister of Justice of the Province of New Brunswick Respondents;

and

The Attorney General for Ontario, The Attorney General for British Columbia and The Attorney General for Alberta Intervenants.

1977: May 30, 31; 1978: January 19.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE SUPREME COURT OF NEW BRUNSWICK, APPEAL DIVISION

Constitutional law-Taxation-Provincial sales tax-Catalogues distributed free-Social Services and Education Tax Act, R.S.N.B. 1973, c. S-10, ss. 4, 5, 7.

The appellant is a large national retail merchandising company with head office in Toronto. It carries on business in several Provinces of Canada through its retail stores, of which there are three in New Brunswick, and by means of catalogues which the company distributes to prospective customers for use in ordering through its sales offices, of which there were nineteen in New Brunswick in 1972. Each year the company prepares, issues and distributes two major catalogues in the Atlantic region. These are prepared and printed in Toronto. Some are sent by mail to known customers in New Brunswick and others are distributed by home-delivery from the sales offices and retail stores in the Province. The question is whether or not the free distribution of the catalogues in New Brunswick is "consumption" of the catalogues within the meaning of the Social Services and Education Tax Act, R.S.N.B. 1973, c. S-10, so as to make the appellant a consumer of goods consumed in the Province. The tax imposed by s. 4 of the statute as originally enacted was a sales tax upon "goods purchased at retail sale" within the Province and it was made payable by the purchaser. In 1957 the present s. 4 was substituted therefor with the difference that the tax imposed at that time was "computed at the rate of 3 per centum of the fair value ?". Barry J. of the Queen's Bench Division set aside the tax assessment imposed in respect of the catalogues as invalid on the grounds that it was beyond the purview of the Act and beyond the powers of the Government of New Brunswick to impose constitutionally. The Appeal Division however reversed.

Held (Martland, Pigeon, Beetz and de Grandpré JJ. dissenting): The appeal should be allowed.

Per Laskin C.J. and Judson, Ritchie, Spence and Dickson JJ.: Reading the section as amended in the context of the statute as a whole the tax remains in the case of a retail sale within the Province a sales tax payable by the purchaser. Both ss. 5(1) and 7(1) relate to cases of such a retail sale within the Province and when read together can only be construed as imposing a tax payable by the consumer when he purchases goods at such a sale. The tax referred to in ss. 5(1) and 7(1) is obviously the tax imposed by s. 4 and the "consumption"...

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