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Parliament cannot grant a lease of a bed of a provincial river, or even a license to fish, as a franchise or right apart from the ownership of the soil.

In 1883 arose the important question' whether lands escheated to the Crown for want of heirs belonged to the Dominion or to the province; and it was held by the Judicial Committee of the Privy Council that the words used in section 109 were wide enough to cover escheated lands, and that such lands belonged to the province.

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No land or property belonging to Canada or any province Public shall be liable to taxation. s. 125.


1 A. G. of Ontario v. Mercer, 8 App. Cas. 767.




A. G. for
Quebec v.

The above powers may be classified under the heads of (1) Public Debt, (2) Direct Taxation, and (3) Indirect Taxation.

Public Debt. The Public Debt of the Dominion is under the exclusive jurisdiction of the Dominion Legislature. By section 111 of the B.N.A. Act, Canada was made liable for the debts and liabilities of each province existing at the Union, and on the admission of British Columbia and Prince Edward Island the debts of these two provinces were taken


The provinces, however, were made liable to Canada for the amount by which their respective debts at the time of the Union exceeded the respective sums mentioned in the Act; and on such sums five per cent. interest is payable'; and on the other hand Canada undertook to pay British Columbia interest on the difference between its indebtedness and the indebtedness of Nova Scotia and New Brunswick, and to pay Prince Edward Island the difference between its indebtedness and a certain amount specified in the order in Council.

Direct Taxation. A province may raise a revenue by direct taxes for provincial purposes.

The meaning of " direct taxation" was discussed in A. G. for Quebec v. Queen Insurance Co.2

In 1875 an Act was passed by the Legislature of Quebec3
which enacted that every assurer carrying
assurer carrying on in the province
of Quebec, any business of assurance other than that of
marine assurance should take out a license every year,
and should pay for such license a certain percentage of every
premium by means of an adhesive stamp affixed to the policy
or receipt. In an action for penalties for not complying with
the terms of the statute, it was contended, that the above
Act was not within the powers conferred on the Legislature
of Quebec, as the tax imposed by the Act was neither a

1 B. N. A. Act, ss. 110-116.

2 L. R. 3 App. Cas. 1090; 1 Cart. 117. 3 39 Vic. c. 7.

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direct tax within the meaning of sect. 92, subsect. 2, nor a license within the meaning of subsect. 9. This view was taken by the Canadian Court, and was upheld by the Privy Council. Stress was laid on the fact that the Act did not require any payment to be made for the license, nor did it impose any penalty for not taking out the license-the penalty being incurred only if a policy was issued without the stamp. The Act was therefore a Stamp Act, and not a Licensing Act. Being a Stamp Act it was a method of indirect and not of direct taxation.

On the other hand a duty or stamp on exhibits filed in a Court in an action is an indirect tax, as the litigant, who in the first instance pays it, is not necessarily the person on whom the burden may ultimately fall1.


In a more recent case the Judicial Committee held Taxes on that a Quebec Act imposing a tax on banks and insurance companies, varying in the case of banks in proportion to paidup capital, and based in the case of insurance companies on a sum specified in the Act, was valid, on the ground that looking at the Act in question it was evident that it was the intention of the Legislature that the corporations from whom the tax was demanded should pay and finally bear it. Mill's definition was taken as a fair test of a direct tax, viz. "a direct tax is one which is demanded from the very persons who it is intended or desired should pay it. Indirect taxes are those which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another." It was also held in the same case that a province may levy a tax on a business in the province though some of the persons on whom the tax would fall were domiciled elsewhere, as sect. 92 (2) did not require the persons taxed to be domiciled in the province.

1A. G. of Quebec v. Reed, 10 App. Cas. 141.

• Bank of Toronto v. Lambe, L. R. 12 App. Cas. 575.

Tax on


It was suggested in Dow v. Black' that the clause only authorized direct taxation for the purpose of raising a revenue for general provincial purposes, that is, taxation incident on the whole province for the general purposes of the whole province. The Judicial Committee refused to adopt this view, and held that the clause was sufficiently wide to enable a provincial Legislature, whenever it should see fit, to impose direct taxation for a local purpose upon a particular locality within the province.

A provincial Legislature has no power either to impose itself or to authorize a municipality to impose a tax on the incomes of officers of the Dominion Government residing in the province. Such a power would conflict with the right given to the Dominion Government to fix and provide the salaries of the civil and other officers of the Government of Canada conferred by s. 91 (8) of the Act of 1867, inasmuch as a provincial tax would mean a reduction in the salaries fixed".

Indirect Taxation. Except in the case of certain licenses a province has no power to levy an indirect tax. The Dominion Parliament may impose indirect taxation, subject to the proviso that no protective duty can be imposed as between the different provinces.

The licenses above referred to as within provincial jurisdiction are "shop, saloon and other licenses in order to the raising of a revenue for provincial, local or municipal purposes."

"Shop licenses" refer to licenses for the retail of liquors in quantities not less than one quart in shops other than places of public entertainment; whilst "saloon" and "tavern" licenses apply to places of public entertainment.

The power given by this subsection is, notwithstanding the use of the words "and other licenses," limited to licenses

1 L. R. 6 P. C. 272; 1 Cart., p. 95.

2 Lephrohon v. City of Ottawa, 2 App. Rep. (Ont.) 522; 1 Cart. 592, and see Evans v. Hudon, O. 22 L. C. Jurist, 268; 2 Cart. 346.

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for objects strictly municipal or local in character, and does not extend to licenses on manufactures, such as brewers' licenses1.


A license is to a certain extent an interference with Licenses an inter"trade and commerce," but such right of interference is ference implied, and therefore a license tax on butchers keeping trade and stalls in the city of Montreal elsewhere than in the public market was held valid.



But to require a license from the person authorized by Interthe Dominion Parliament to sell goods under the Dominion with Insolvency Act was regarded as an interference with the ruptcy Dominion's power over "bankruptcy and insolvency"."


and insolvency."

In the earlier cases it was suggested that a province could legislate only in regard to licenses for the purpose indicated in clause 9; viz. the raising of a revenue, but in Regina v. Frawley' it was pointed out by Spragge, C. J., that clause 9 was cumulative to clause 8, relating to municipal institutions, and that a province had therefore power to legislate for the prevention of intemperance, the preservation of order, and other matters of police, and such legislation. might be carried into effect by means of licenses.



Under this head may be classified matters relating to (1) Public Safety, (2) Public Works and Means of Communication, (3) Marine Matters, (4) Matters of State Management, and (5) the Civil Service.

1. Public Safety.-The Dominion has sole jurisdiction Public


(a) The militia, military, and naval service and defence. s. 91 (7).

(b) Quarantine. s. 91 (11).

1 Severn v. The Queen, 2 Can. S. C. R. 70; 1 Cart. 414.

2 Angers v. City of Montreal, Q. 24 L. C. Jurist, 259; 2 Cart. 335.

3 Coté v. Watson, 3 Quebec L. R. 157; 2 Cart. 343.

O. 7, App. Rep. 246.



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