Cape Breton Beverages Ltd. et al. v. Nova Scotia (Attorney General), (1997) 158 N.S.R.(2d) 132 (SC)

• Judge: Hall, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: November 18, 1996
• Jurisdiction: Nova Scotia
• Citations: (1997), 158 N.S.R.(2d) 132 (SC)

Cape Breton Bev. v. N.S. (A.G.) (1997), 158 N.S.R.(2d) 132 (SC);

    466 A.P.R. 132

MLB headnote and full text

Cape Breton Beverages Limited and Burt Stonehouse (plaintiffs) v. The Attorney General of Nova Scotia, representing Her Majesty the Queen in Right of the Province of Nova Scotia (defendant)

(1996 No. S.H. 238607)

Indexed As: Cape Breton Beverages Ltd. et al. v. Nova Scotia (Attorney General)

Nova Scotia Supreme Court

Hall, J.

March 6, 1997.

Summary:

The Solid Waste Resource Management Regulations created a deposit-refund sys­tem for beverage containers sold in Nova Scotia. As the system operated, distributors collected deposits from retailers and remitted them to the Resource Recovery Fund Board. Retailers collected deposits from con­sumers, who received a refund. Retailers were credited for any unsold prod­ucts. Any sur­plus revenue was used accord­ing to the objectives of the Environ­ment Act and the Regulations. The plain­tiffs sought an order declaring that ss. 15 and 16 and sche­dule C of the Regula­tions created an indirect tax and were there­fore ultra vires the prov­ince under s. 92 of the Constitution Act. At issue was whether the portion of the deposit retained by the Board constituted a regula­tory charge, an indirect tax or a direct tax.

The Nova Scotia Supreme Court held that the deposit-refund scheme was ancil­lary to a valid regulatory scheme for the control and management of solid waste within the prov­ince pursuant to ss. 92(13) and (16) of the Constitution Act. Alterna­tively, the deposit was a direct tax which the province could levy under s. 92(2) of the Constitution Act.

Constitutional Law - Topic 6822

Provincial jurisdiction (s. 92) - Direct taxation within the province - What con­stitutes a tax - The Solid Waste-Resource Management Regulations cre­ated a deposit-refund system for bever­age con­tainers sold in Nova Scotia - Distributors collected deposits from retailers and remitted them to the Resource Recovery Fund Board - Retailers collected deposits from con­sumers, who received a refund - The plaintiffs argued that the Regulations created an indirect tax and were ultra vires under s. 92 of the Constitution Act - The Nova Scotia Supreme Court held that the system was not a tax, but a charge ancil­lary to a valid regulatory scheme for the control and management of solid waste within the province under ss. 92(13) and (16) of the Constitution Act - Revenues were expended only in carrying out the Funds' purposes - Any surplus was not used for ulterior pur­poses - The payors were the scheme's beneficiaries - See paragraphs 30 to 32.

Constitutional Law - Topic 6824

Provincial jurisdiction (s. 92) - Direct taxation within the province - What con­stitutes a direct tax - The Solid Waste-Resource Management Regula­tions created a deposit-refund system for beverage containers sold in Nova Scotia - Distribu­tors collected deposits from retailers and remitted them to the Resource Recovery Fund Board - Retailers collected deposits from con­sumers, who received a refund - The plaintiffs argued that the Regulations created an indirect tax and were ultra vires under s. 92 of the Consti­tution Act - The Nova Scotia Supreme Court held that the system was not a tax, but was a valid regulatory charge under ss. 92(13) and (16) of the Constitution Act - Alternatively, the deposit was a direct tax - The system, analogous to the double collection pro­cedure, was an efficient effective collection method - Further­more, the Board relieved distributors and retailers from losses re­sult­ing from unpaid deposits by crediting future sales - See paragraphs 33 to 39.

Constitutional Law - Topic 7300.2

Provincial jurisdiction (s. 92) - Property and civil rights - Regulatory statutes - Pollution control - [See Constitutional Law - Topic 6822 and Constitutional Law - Topic 6824 ].

Cases Noticed:

Ontario Home Builders' Association et al. v. Board of Education of York Region et al., [1996] 2 S.C.R. 929; 201 N.R. 81; 93 O.A.C. 241; 137 D.L.R.(4th) 449, refd to. [para. 20].

Allard Contractors Ltd. et al. v. Co­quitlam (District) et al., [1993] 4 S.C.R. 371; 160 N.R. 249; 35 B.C.A.C. 241; 57 W.A.C. 241, refd to. [para. 20].

Lawson v. Interior Tree Fruit & Veg­etable Committee of Direction, [1931] S.C.R. 357, refd to. [para. 23].

Quebec (Attorney General) v. Reed (1884), 10 App. Cas. 141 (P.C.), refd to. [para. 24].

Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy Ltd., [1933] A.C. 168 (P.C.), refd to. [para. 26].

Agricultural Products Marketing Act, R.S.C. 1970, Farm Products Marketing Agencies Act, S.C. 1972, Farm Pro­ducts Marketing Act, R.S.O. 1970, Re, [1978] 2 S.C.R. 1198; 19 N.R. 361, refd to. [para. 26].

Shannon v. Lower Mainland Dairy Prod­ucts Board, [1938] A.C. 708 (P.C.), refd to. [para. 26].

Ontario Boys' Wear Ltd. v. Advisory Committee (Ont.), [1944] S.C.R. 349, refd to. [para. 26].

Reference Re Farm Products Marketing Act (Ont.), [1957] S.C.R. 198, refd to. [para. 26].

LaFarge Concrete Ltd. v. Coquitlam (Dis­trict), [1973] 1 W.W.R. 681 (B.C.C.A.), refd to. [para. 26].

R. v. Johnson (S.G.) (1993), 120 N.S.R.(2d) 414; 332 A.P.R. 414 (C.A.), refd to. [para. 36].

R. v. Murdock (M.) and Johnson (S.G.) (1996), 154 N.S.R.(2d) 1; 452 A.P.R. 1 (C.A.), refd to. [para. 36].

Chehalis Indian Band v. British Colum­bia (Motor Fuel Tax Act Director) (1988), 53 D.L.R.(4th) 761 (B.C.C.A.), refd to. [para. 36].

Tseshaht Indian Band v. British Colum­bia (1992), 15 B.C.A.C. 1; 27 W.A.C. 1; 94 D.L.R.(4th) 97 (C.A.), refd to. [para. 36].

Statutes Noticed:

Environment Act Regulations (N.S.), Solid Waste-Resource Management Regulations, sect. 15, sect. 16, Schedule C [para. 13].

Solid Waste-Resource Management Regu­lations - see Environment Act Regula­tions (N.S.).

Counsel:

Joel Fichaud, Q.C., for the plaintiffs;

Louise Walsh Poirier, for the defendant.

This case was heard on November 18, 1996, before Hall, J., of the Nova Scotia Supreme Court, who delivered the follow­ing decision on March 6, 1997.