Domtar Inc. v. Canada

Domtar Inc. v. Canada
Court (s) Database
Federal Court Decisions
Date
2008-09-18
Neutral citation
2008 FC 1057
File numbers
T-216-07
Decision Content
Date: 20080918
Docket: T-216-07
Citation: 2008 FC 1057
Vancouver
,
British Columbia
, September 18, 2008
PRESENT: The Honourable Madam Justice Heneghan
BETWEEN:
DOMTAR INC. and DOMTAR INDUSTRIES INC.
Plaintiffs
and
HER MAJESTY THE QUEEN IN RIGHT OF
CANADA and THE ATTORNEY GENERAL OF
CANADA
Defendants
REASONS FOR ORDER AND ORDER
I. Introduction
[1] By a Statement of Claim issued on January 31, 2007, Domtar Inc. (“Domtar”) and Domtar Industries Inc. (“Domtar Industries”) (collectively “Domtar” or “the Plaintiffs”) challenge the constitutionality of section 18 of the Softwood Lumber Products Export Charge Act, 2006 S.C. 2006, c. 13 (the “SLPECA” or the “Act”). By an amended Statement of Claim, filed on February 13, 2007, the Plaintiffs added Her Majesty the Queen in Right of Canada as a Defendant, together with the Attorney General of Canada (collectively “the Defendants”).
[2] The Defendants now move to strike out the action and in their Notice of Motion filed on March 27, 2007, they seek the following relief:
a) An Order striking out the Amended Statement of Claim herein (the “Claim”) without leave to amend and dismissing the action, in whole or in part;
b) In the alternative, an Order removing the Attorney General of Canada as Defendant;
c) In the further alternative, in the event that any of paragraphs 17, 18, 20, 21, 22, 40 and 43 of the Claim are not struck out, an Order requiring the Plaintiffs to provide further and better particulars thereof within 30 days of the Order;
d) If necessary, an Order extending the time for serving and filing the Statement of Defence to 30 days from the production of further and better particulars or the final disposition of this motion;
e) An Order for costs of this motion; and,
f) Further and additional relief as counsel may request and this Court may deem appropriate.
[3] In this case, each party filed affidavits. The Defendants, the moving party, filed the Affidavits of Jacques Maheux and Elizabeth Macauley. The Plaintiffs filed the Affidavit of Patrick Belisle.
[4] Mr. Maheux deposed to the fact that the records of the Canada Revenue Agency show that on January 31, 2007, the Plaintiffs filed a return reporting and remitting $37,769, 575.41 in duties and that the return noted that the payment was made “under protest”. Mr. Maheux further deposed that based upon his review of the file, the Plaintiffs had not filed an application for refund of the monies paid, pursuant to subsection 41(3) of the SLPECA.
[5] Ms. Elizabeth Macauley, a paralegal with the Trade Law Bureau of the Department of Foreign Affairs and International Trade,
Canada
, also provided an affidavit. Attached as exhibits to her affidavit were the following documents:
(i) a true copy of the April 27, 2006 “Agreement in principle” entitled “Basic Terms of a Canada-United States Agreement on Softwood Lumber”, referred to in paragraph 14 of the Amended Statement of Claim;
(ii) a true copy of the text of the SLA as executed by
Canada and the
United States
on September 12, 2006;
(iii) a true copy of a amendment to the
SLA executed on October 12, 2006;
(iv) a letter dated October 12, 2006, by the Department of Foreign Affairs and International Trade, Canada concerning the entry into force of the SLA pursuant to Article 11.1; and
(v) a letter dated October 12, 2006, by the Ambassador of the
United States of America to
Canada concerning the entry into force of the
SLA pursuant to Article 11.1.
[6] In their responding motion record, the Plaintiffs filed the Affidavit of Patrick Belisle, Controller of Forest Products Division, Domtar Inc. He deposed that neither Domtar nor its wholly-owned subsidiary Domtar Industries had received an assessment under the SLPECA, but rather Domtar Inc. received a generic form from the Canada Revenue Agency. The form was to be completed by all companies who received refunds of duty deposits pursuant to the liability created by section 18 on the SLPECA. A copy of the form was attached as an exhibit. At paragraph 4 of his Affidavit, Mr. Belisle said the following:
As a result of the liability to pay imposed by section 18 of the SLPECA, Domtar Inc. paid to the Canadian government approximately 37 million (Cdn) based on the duty deposits received by Domtar Inc. and Domtar Industries Inc., in accordance with the formula set out in this form. The monies were not paid by mistake.
[7] Mr. Belisle further deposed that Domtar Inc. paid approximately $37 million Cdn to the Canadian government and that the monies were not paid by mistake.
II. Allegations in the Statement of Claim
[8] Domtar is a producer of pulp and paper, lumber and other wood products. It is a publicly traded corporation operating in both
Canada and the
United States and has been exporting Canadian softwood lumber products into the
U.S.
for several decades. As a result of certain
U.S. trade measures, Domtar’s exports of softwood lumber products to the
U.S. were subject to approximately $160 million (
U.S.
) in anti-dumping (“AD”) and countervailing (“CV”) duties from 2002 to October 11, 2006.
[9] At all relevant times, Domtar Industries was, and continues to be, the importer of record for
U.S.
customs purposes. Although the duties are payable by the importer of record, Domtar paid the duties to U.S. Customs and Border Protection for both itself and Domtar Industries Inc.
[10] The circumstances giving rise to this imposition of the AD and CV duties was an international trade dispute between
Canada and the
United States
. On April 2, 2001, the U.S. Coalition for Fair Lumber Imports, representing
U.S.
softwood lumber producers, filed AD and CV duty petitions with the U.S. Department of Commerce (the “DOC”) and the U.S. International Trade Commission (the “ITC”). As a result, AD and CV Orders were made. These Orders remained in effect until October 12, 2006, resulting in liability for AD and CV duties on softwood lumber products from
Canada to the
U.S.
until October 12, 2006. During the period April 2001 until October 2006, approximately $5.4 billion (
U.S. ) was collected by the
U.S.
in AD and CV duties on Canadian softwood lumber imports.
[11] Canadian lumber producers and associations challenged the
U.S.
AD and CV Orders before the U.S. Courts and before bi-national panels established pursuant to the North American Free Trade Agreement (“NAFTA”). Canadian producers and associations also supported the Government of Canada in its recourse to the World Trade Organization (“WTO”), and NAFTA challenges to the measures undertaken by the
U.S.
[12] As a result of the proceedings before the U.S. Courts, and the WTO and NAFTA dispute panels, the imposition of the AD and CV duties were found to be contrary to both American law and to international treaty obligations. In spite of these successful challenges, the
U.S.
government refused to act in accordance with these rulings.
[13] In April 2006, the Canadian and American governments reached an agreement in principle to settle the continuing softwood lumber dispute. This agreement is known as the “Softwood Lumber Agreement” (the “
SLA ”). The SLA formally came into force on October 12, 2006, and terminated the U.S. Orders imposing the AD and CV duties on softwood lumber imports from
Canada
.
[14] As part of the SLA, the
U.S. agreed to return the AD and CV duties that had been collected, in the amount of approximately $5.4 billion (
U.S.
). The Canadian government agreed that it would pay $1 billion (
U.S. ) of the $5.4 billion (
U.S. ) refunds to
U.S.
softwood lumber interests. The money would be allocated to members of the Coalition for Fair Lumber Imports in the amount of $500 million (
U.S. ), and $450 million (
U.S. ) would be spent on “meritorious initiatives”, to be determined by the Unites States, in consultation with
Canada
. The balance of $50 million (
U.S.
) would be payable to the bi-national industry council.
[15] The
SLA was given effect in Canadian law by the SLPECA, which received Royal Assent on December 14, 2006. The provisions relevant to this dispute were deemed to come into effect on October 12, 2006.
[16] The preamble of the SLPECA states, among other things, that the purpose of the Act is to “impose a charge on the export of certain softwood lumber products to the
United States and a charge on the refunds of certain duty deposits paid to the
United States
…”.
[17] In order to implement these charges, two mechanisms were established under the Act: a voluntary duty refund mechanism and section 18 of the SLPECA. Under the voluntary duty refund mechanism, softwood lumber companies could assign their rights to duty deposit refunds to Export Development Canada (the “EDC”), a federal Crown Corporation. In return, the EDC would subsequently pay the producer 81.94% of the refund. The balance of 18.06% would be retained by the Government of Canada, through the EDC. The Canadian Government would pay the funds, amounting to 18.06%, to American softwood lumber interests. Those Canadian companies that did not assign their rights to the EDC in respect of the duty deposit refunds were subject to the section 18 charge.
[18] Section 18 of the SLPECA creates a charge on the refunds of duty deposits paid by the American Government. According to the formula set out in subsection 18(1), the charge is applied at a rate of 18.06% of the duty deposit refunds. The charge applies to the “person that filed the documents and information required under the applicable
United States law in respect of the importation of any softwood lumber product into the
United States
during the period beginning on May 22, 2002 and ending on October 11, 2006.” The charge applies to a “specified person” as defined in section 2 of the Act.
[19] Pursuant to subsection 18(6) of the SLPECA, if a “specified person” sells or disposes of its rights to a duty deposit refund to a person other than Her Majesty the Queen in Right of Canada, that is if the specified person did not participate in the EDC mechanism, the specified person and the other person are “jointly and severally, or solidarily, liable” to pay the charge and any penalties and interest under the SLPECA relating to the charge.
[20] Subsection 68(1) of the SLPECA imposes a fine up to a maximum of $25,000.00 or imprisonment of up to one year, or both, for any person who fails to file a return relating to a section 18 charge.
[21] The Plaintiffs allege that the section 18 charge is unlawful on the grounds that it is ultra vires section 91 of the Constitution Act, 1867, (U.K.), 30 & 31 Vict., c. 3, reprinted in R.S.C. 1985, App. II, No. 5 (the “Constitution Act, 1867”). They claim that the charge represents an unconstitutional intrusion on provincial jurisdiction over property and civil rights within the provinces as authorized by subsection 92(13) of the Constitution Act, 1867. Further, they allege that the effect of section 18 is the unlawful interference with the management and sale of public lands belonging to the province of timber and wood pursuant to subsection 92(5) and generally, all matters of a merely local or private nature in the provinces pursuant to subsection 92(16) of the Constitution Act, 1867.
[22] The Plaintiffs further claim that section 18 constitutes a tax in relation to forestry resources in the provinces, contrary to subsection 92A(4) of the Constitution Act, 1867.
[23] The Plaintiffs claim that section 18 violates sections 102 and 106 of the Constitution Act, 1867 because the revenue raised is not for the Public Service of Canada. They allege that the provision violates the rights to enjoyment of property, due process of law and equality before the law as guaranteed by the Canadian Bill of Rights, S.C. 1960, c. 44, reprinted in R.S.C. 1985, App. III, (“Canadian Bill of Rights”). They submit that section 18 violates the Constitution and the law by being overbroad, disproportionate and arbitrary. The Plaintiffs also allege that the
SLA and the SLPECA were motivated by political considerations.
[24] In their response to the Defendants’ written submissions, the Plaintiffs consented to the removal of the Attorney General of Canada as a Defendant. They also stated they would not rely upon nor pursue the allegations respecting the Canadian Bill of Rights.
III. Submissions
i) The Defendants’ Submissions
[25] The Defendants raise two broad arguments. First, they argue that this Court lacks jurisdiction to entertain this action on the grounds that the statutory scheme set out in the Act, together with section 18.5 of the Federal Courts Act, R.S.C. 1985, c. F-7, as amended, means that the Tax Court of Canada possesses exclusive jurisdiction over the Plaintiffs’ claim.
[26] Second, the Defendants submit that the Amended Statement of Claim discloses no reasonable cause of action. They argue that the Plaintiffs’ challenge to the constitutionality of section 18 of the SLPECA cannot succeed since that section represents a proper and lawful exercise of Parliament’s jurisdiction over international trade and commerce, pursuant to subsection 91(2) of the Constitution Act, 1867. According to the Defendants, the Plaintiffs’ claim relative to improper and unlawful intrusion by Parliament into the sphere of provincial jurisdiction is answered by the body of jurisprudence that deals with the division of powers between the federal and provincial governments, including the doctrine of incidental effect, the broad power of Parliament to legislate for the purposes of taxation including indirect taxation, and the federal authority to expend monies other than for public purposes.
[27] As well, the Defendants submit that the Act, including section 18, represents the exercise by Parliament of its treaty-making power. Since such exercise is an aspect of the prerogative powers of Parliament and immune from review in any court, the Defendants argue the Plaintiffs’ claim in that regard are doomed to failure.
[28] Further, in the alternative, the Defendants submit that the claims advanced in paragraphs 17, 18, 20, 21, 22, 40 and 43 are non-justiciable since they purport to challenge Parliament’s motivation or rationale in enacting the Act or section 18 of the Act and such motivation is beyond review.
[29] With respect to the alleged lack of jurisdiction over the Plaintiffs’ claims, the Defendants rely on the scheme set out in the Act that addresses the recovery of money. The Defendants submit that in essence, the Plaintiffs’ action is for the recovery of the money that they paid to the Canadian government in the approximate amount of $37 million (Cdn), in satisfaction of the charge created by section 18.
[30] The Defendants argue that sections 39 through 44 address the process to be followed in seeking the refund of money paid under the Act. Section 39 of the Act provides as follows:
Statutory recovery rights
39. Except as specifically provided under this Act or the Financial Administration Act, no person has a right to recover any money paid to Her Majesty in right of Canada as or on account of, or that has been taken into account by Her Majesty in right of Canada as, an amount payable under this Act.
Droits de recouvrement créés par une loi
39. Il est interdit de recouvrer de l’argent qui a été versé à Sa Majesté du chef du Canada au titre d’une somme exigible en vertu de la présente loi ou qu’elle a pris en compte à ce titre, à moins qu’il ne soit expressément permis de le faire en vertu de la présente loi ou de la Loi sur la gestion des finances publiques.
[31] Section 41 of the Act also deals with refunds and provides as follows:
Refund of payment
41. (1) If a person has paid an amount as or on account of, or that was taken into account as, a charge, a penalty, interest or other obligation under this Act in circumstances where the amount was not payable by the person, whether the amount was paid by mistake or otherwise, the Minister shall, subject to subsections (2) and (3), pay a refund of that amount to the person.
Restriction
(2) A refund in respect of an amount shall not be paid under subsection (1) to a person to the extent that the Minister has assessed the person for the amount under section 50.
Application for refund
(3) A refund in respect of an amount shall not be paid under subsection (1) to a person unless the person files, in the prescribed manner, an application for the refund in prescribed form and containing prescribed information within two years after the day on which the amount was paid by the person.
One application per reporting period
(4) Subject to subsection (5), not more than one application for a refund under this section may be made by a person in any reporting period.
Application by branches and divisions
(5) If a person who is entitled to a refund under this section is engaged in one or more activities in separate branches or divisions and is authorized under subsection 30(2) to file separate returns in relation to a branch or division, the person may file separate applications under this section in respect of the branch or division but not more than one application for a refund under this section in respect of the branch or division may be made by the person in any reporting period.
Remboursement d’une somme payée par erreur
41. (1) Le ministre rembourse à toute personne la somme qu’elle a payée au titre des droits, pénalités, intérêts ou autres obligations en vertu de la présente loi, ou qui a été prise en compte à ce titre, alors qu’elle n’était pas exigible, qu’elle ait été payée par erreur ou autrement.
Restriction
(2) Le remboursement n’est pas effectué dans la mesure où le ministre a établi une cotisation à l’égard de la personne pour cette somme en application de l’article 50.
Demande de remboursement
(3) Le remboursement n’est effectué que si la personne présente, dans les deux ans suivant le paiement, une demande en la forme, selon les modalités et accompagnée des renseignements déterminés par le ministre.
Une demande par période de déclaration
(4) Sous réserve du paragraphe (5), la personne ne peut présenter plus d’une demande de remboursement par période de déclaration.
Demandes par succursales ou divisions
(5) La personne qui a droit au remboursement, qui exerce des activités dans des succursales ou divisions distinctes et qui est autorisée par le paragraphe 30(2) à présenter des déclarations distinctes relativement à des succursales ou divisions peut présenter des demandes de remboursement distinctes au titre du présent article relativement aux succursales ou divisions, mais ne peut en présenter plus d’une par période de déclaration relativement à la même succursale ou division.
[32] The Defendants argue that, similar to the statutory scheme provided under the Excise Tax Act, R.S.C. 1985, c. E-15, the Act provides the opportunity for a person seeking a refund of money to follow a process of filing an objection, then pursuing an appeal, ultimately before the Tax Court of Canada. The Defendants note that the jurisdiction of the Tax Court of Canada, in relation to matters arising under the Act, was expressly addressed in an amendment to the Tax Court of Canada Act, R.S.C. 1985, c. T-2, following the coming into force of the Act. Subsection 12(1) of the Tax Court of Canada Act provides as follows:
Jurisdiction
12.(1) The Court has exclusive original jurisdiction to hear and determine references and appeals to the Court on matters arising under the Air Travellers Security Charge Act, the Canada Pension Plan, the Cultural Property Export and Import Act, Part V.1 of the Customs Act, the Employment Insurance Act, the Excise Act, 2001, Part IX of the Excise Tax Act, the Income Tax Act, the Old Age Security Act, the Petroleum and Gas Revenue Tax Act and the Softwood Lumber Products Export Charge Act, 2006 when references or appeals to the Court are provided for in those Acts.
Compétence
12.(1) La Cour a compétence exclusive pour entendre les renvois et les appels portés devant elle sur les questions découlant de l’application de la Loi sur le droit pour la sécurité des passagers du transport aérien, du Régime de pensions du Canada, de la Loi sur l’exportation et l’importation de biens culturels, de la partie V.1 de la Loi sur les douanes, de la Loi sur l’assurance-emploi, de la Loi de 2001 sur l’accise, de la partie IX de la Loi sur la taxe d’accise, de la Loi de l’impôt sur le revenu, de la Loi sur la sécurité de la vieillesse, de la Loi de l’impôt sur les revenus pétroliers et de la Loi de 2006 sur les droits d’exportation de produits de bois d’oeuvre, dans la mesure où ces lois prévoient un droit de renvoi ou d’appel devant elle.
[33] The Defendants refers to decisions made pursuant to the Excise Tax Act, including the decisions in Riverside Concrete Ltd. v. Canada, [1995] 2 F.C. 309 (T.D.), Federated Co‑operatives Ltd. v. Canada, [1999] F.C.J. No. 1028, 165 F.T.R. 135 (F.C.T.D.) and Scott Paper Ltd. v. Canada (2006), 355 N.R. 378 (F.C.A.); leave to appeal denied (2008), 370 N.R. 400 in support of their contention that Canadian courts have recognized that the Excise Tax Act provides a procedural code for the recovery of monies paid under that legislation, with a right of appeal lying to the Tax Court. They argue that, by analogy, the SLPECA provides a similar process and again, that jurisdiction in respect of a claim for recovery of money falls within the exclusive jurisdiction of the Tax Court of Canada, at first instance.
[34] Relying on this foundation, the Defendants submit that pursuant to section 18.5 of the Federal Courts Act, this Court is without jurisdiction to adjudicate the Plaintiffs’ claim. Section 18.5 of the Federal Courts Act provides as follows:
Exception to sections 18 and 18.1
18.5 Despite sections 18 and 18.1, if an Act of Parliament expressly provides for an appeal to the Federal Court, the Federal Court of Appeal, the Supreme Court of Canada, the Court Martial Appeal Court, the Tax Court of Canada, the Governor in Council or the Treasury Board from a decision or an order of a federal board, commission or other tribunal made by or in the course of proceedings before that board, commission or tribunal, that decision or order is not, to the extent that it may be so appealed, subject to review or to be restrained, prohibited, removed, set aside or otherwise dealt with, except in accordance with that Act.
Dérogation aux art. 18 et 18.1
18.5 Par dérogation aux articles 18 et 18.1, lorsqu'une loi fédérale prévoit expressément qu'il peut être interjeté appel, devant la Cour fédérale, la Cour d'appel fédérale, la Cour suprême du Canada, la Cour d'appel de la cour martiale, la Cour canadienne de l'impôt, le gouverneur en conseil ou le Conseil du Trésor, d'une décision ou d'une ordonnance d'un office fédéral, rendue à tout stade des procédures, cette décision ou cette ordonnance ne peut, dans la mesure où elle est susceptible d'un tel appel, faire l'objet de contrôle, de restriction, de prohibition, d'évocation, d'annulation ni d'aucune autre intervention, sauf en conformité avec cette loi.
[35] The Defendants argue that, having regard to the true nature of the Plaintiffs’ claim, that is the recovery of money paid under the SLPECA, the combined effect of the specialized process set out in that legislation and the exclusionary effect of section 18.5 of the Federal Courts Act, it is “plain and obvious” that this Court lacks jurisdiction over the within action and that the action should be struck out. In this regard, the Defendants rely on the decision in Roitman v. Canada (2006), 353 N.R. 75.
[36] The second substantive ground upon which the Defendants base their motion to strike the Statement of Claim herein is that the Plaintiffs’ claim regarding the alleged unconstitutionality of section 18 of the Federal Courts Act is without merit since it is plain and obvious that that statutory provision relates to the regulation of international trade, a subject clearly within the legislative competence of Parliament pursuant to subsection 91(2) of the Constitution Act, 1867.
[37] Subsection 91(2) of the Constitution Act, 1867 provides as follows:
91. It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces; and for greater Certainty, but not so as to restrict the Generality of the foregoing Terms of this Section, it is hereby declared that (notwithstanding anything in this Act) the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,--
…
2. The Regulation of Trade and Commerce.
91. Il sera loisible à la Reine, de l'avis et du consentement du Sénat et de la Chambre des Communes, de faire des lois pour la paix, l'ordre et le bon gouvernement du Canada, relativement à toutes les matières ne tombant pas dans les catégories de sujets par la présente loi exclusivement assignés aux législatures des provinces; mais, pour plus de garantie, sans toutefois restreindre la généralité des termes ci-haut employés dans le présent article, il est par la présente déclaré que (nonobstant toute disposition contraire énoncée dans la présente loi) l'autorité législative exclusive du parlement du Canada s'étend à toutes les matières tombant dans les catégories de sujets ci-dessous énumérés, savoir :
…
2. La réglementation du trafic et du commerce.
[38] Section 18 of the SLPECA provides as follows:
Definitions
18. (1) The following definitions apply in this section.
“covered entry”
« importation non tarifée »
“covered entry” means an entry that, on October 12, 2006, has not been liquidated and in respect of which a duty deposit has been made.
“duty deposit”
« dépôt douanier »
“duty deposit” means an amount deposited under a
United States
duty order.
“duty deposit refund”
« remboursement »
“duty deposit refund” of a specified person means the refund of a duty deposit and all interest on that deposit accrued under United States law up to the earlier of
(a) the day on which the refund is issued to the specified person or a designate of the specified person, and
(b) the day on which the specified person sells the rights to the refund to Her Majesty in right of
Canada
.
“revocation”
« révocation »
“revocation” means a revocation of a
United States
duty order including any direction to end any suspension of liquidation of a covered entry or to refund any duty deposit.
“specified person”
« intéressé »
“specified person” means a person that filed the documents and information required under the applicable
United States law in respect of the importation of any softwood lumber product into the
United States
during the period beginning on May 22, 2002 and ending on October 11, 2006.
“specified rate”
« taux applicable »
“specified rate” means the rate determined by the formula
A/B
where
A is US$1,000,000,000; and
B is the total, expressed in
United States dollars, of all duty deposits and all interest accrued on them under
United States
law as of October 12, 2006.
“
United States
duty order”
« décret douanier américain »
“
United States
duty order” means
(a) the Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Softwood Lumber Products from
Canada
, 67 Fed. Reg. 36,068 (May 22, 2002), as amended; or
(b) the Notice of Amended Final Affirmative Countervailing Duty Determination and Notice of Countervailing Duty Order: Certain Softwood Lumber Products from
Canada
, 67 Fed. Reg. 36,070 (May 22, 2002), as amended.
Rounding
(2) The specified rate shall be expressed as a decimal fraction rounded off to four digits after the decimal point, but if the fifth digit is five or greater, the fourth digit is increased by one.
Imposition of charge on duty deposit refund
(3) Every specified person in respect of whom a covered entry is to be liquidated as a result of a revocation shall pay to Her Majesty in Right of Canada a charge at the specified rate on the amount of any duty deposit refund that relates to the covered entry.
Liability for charge
(4) The charge under subsection (3) is payable by the specified person even if the refund is issued to a designate of the specified person.
When charge payable
(5) The charge under subsection (3) becomes payable by the specified person on the later of
(a) the day on which this Act is assented to, and
(b) the day that is the earlier of
(i) the day on which the duty deposit refund is issued to the specified person or a designate of the specified person, and
(ii) the day on which the specified person sells the rights to the duty deposit refund to Her Majesty in right of
Canada
.
Joint and several or solidary liability
(6) If, at any time after September 18, 2006, a specified person sells or otherwise disposes of the rights to a duty deposit refund to a person other than Her Majesty in right of Canada, the specified person and the other person are jointly and severally, or solidarily, liable to pay the charge under subsection (3) and any penalties and interest payable under this Act in relation to that charge.
Définitions
18. (1) Les définitions qui suivent s’appliquent au présent article.
« décret douanier américain »
“United States duty order”
« décret douanier américain » Selon le cas :
a) le texte intitulé Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Softwood Lumber Products from
Canada
, 67 Fed. Reg. 36,068 (22 mai 2002), avec ses modifications;
b) le texte intitulé Notice of Amended Final Affirmative Countervailing Duty Determination and Notice of Countervailing Duty Order: Certain Softwood Lumber Products from
Canada
, 67 Fed. Reg. 36,070 (22 mai 2002), avec ses modifications.
« dépôt douanier »
“duty deposit”
« dépôt douanier » Somme donnée en dépôt au titre du décret douanier américain.
« importation non tarifée »
“covered entry”
« importation non tarifée » Importation pour laquelle un dépôt douanier a été fait et à l’égard de laquelle les droits n’ont pas été déterminés au 12 octobre 2006.
« intéressé »
“specified person”
« intéressé » Personne qui a présenté les documents et renseignements exigés par la législation américaine pour l’importation, aux États-Unis, de produits de bois d’oeuvre durant la période commençant le 22 mai 2002 et se terminant le 11 octobre 2006.
« remboursement »
“duty deposit refund”
« remboursement » S’agissant de l’intéressé, le remboursement de tout dépôt douanier et des intérêts afférents courus, selon le droit applicable aux États-Unis, jusqu’au premier en date des jours suivants:
a) le jour où le remboursement est fait à l’intéressé ou à la personne désignée par celui-ci;
b) le jour où l’intéressé cède à titre onéreux son droit au remboursement à Sa Majesté du chef du Canada.
« révocation »
“revocation”
« révocation » S’agissant de tout décret douanier américain, sont assimilées à la révocation l’instruction de mettre fin à toute suspension de la tarification des importations non tarifées et celle de rembourser tout dépôt douanier.
« taux applicable »
“specified rate”
« taux applicable » Taux obtenu par la formule suivante :
A / B
où :
A représente 1 milliard de dollars américains;
B le total, en dollars américains, de tous les dépôts douaniers et des intérêts afférents courus, selon le droit applicable aux États-Unis, jusqu’au 12 octobre 2006.
Arrondissement
(2) Le taux applicable, exprimé en nombre décimal, est arrêté à la quatrième décimale, les résultats qui ont au moins cinq en cinquième décimale étant arrondis à la quatrième décimale supérieure.
Droit sur les remboursements de dépôts douaniers
(3) Tout intéressé à l’égard duquel une importation non tarifée sera tarifée, pour cause de révocation, est tenu de payer à Sa Majesté du chef du Canada le droit au taux applicable sur le montant de tout remboursement relatif à l’importation non tarifée.
Obligation de payer
(4) Le droit est exigible de l’intéressé même si le remboursement est fait à la personne que celui-ci a désignée.
Paiement du droit
(5) Le droit devient exigible à celle des dates ci-après qui est postérieure à l’autre :
a) la date de sanction de la présente loi;
b) la date du remboursement à l’intéressé ou à la personne désignée par lui ou, si elle lui est antérieure, la date à laquelle l’intéressé a cédé à titre onéreux son droit au remboursement à Sa Majesté du chef du Canada.
Solidarité
(6) L’intéressé qui, après le 18 septembre 2006, cède son droit au remboursement à toute autre personne que Sa Majesté du chef du Canada est solidairement responsable avec cette personne du paiement du droit prévu au paragraphe (3) et des intérêts et pénalités visés par la présente loi à cet égard.
[39] The Defendants refer and rely upon the decision of the Supreme Court of Canada in Ward v. Canada (Attorney General), [2002] 1 S.C.R. 569, where the Supreme Court identified the first step in addressing the “pith and substance” analysis of legislation when its constitutional validity is challenged. At para. 17, the Supreme Court said the following:
17. The first task in the pith and substance analysis is to determine the pith and substance or essential character of the law. What is the true meaning or dominant feature of the impugned legislation? This is resolved by looking at the purpose and the legal effect of the regulation or law: see Reference re Firearms Act, supra, at para. 16. The purpose refers to what the legislature wanted to accomplish. Purpose is relevant to determine whether, in this case, Parliament was regulating the fishery, or venturing into the provincial area of property and civil rights. The legal effect refers to how the law will affect rights and liabilities, and is also helpful in illuminating the core meaning of the law: see Reference re Firearms Act, supra, at paras. 17-18; Morgentaler, supra, at pp. 482-83. The effects can also reveal whether a law is "colourable", i.e. does the law in form appear to address something within the legislature's jurisdiction, but in substance deal with a matter outside that jurisdiction?: see Morgentaler, supra, at p. 496. In oral argument, Ward expressly made clear that he is not challenging the law on the basis of colourability.
[40] The Defendants submit that having regard to the core of section 18 of the SLPECA, it is plain and obvious that that provision is related to the regulation of international trade. The Act is intended to implement some of
Canada ’s obligations under the SLA, an agreement that ended the softwood lumber dispute with the
United States
. According to the Defendants, section 18 is important for the purpose of that Agreement since the provision deals with the raising of money to pay the amount of $1 billion (
U.S. ) from the customs duties returned to
Canada
’s exporters.
[41] The Defendants argue that a charge will be considered as part of a regulatory scheme if it is “necessarily incidental” to such scheme. In this regard, they rely on the decisions in Reference Re: Proposed Federal Tax on Exported Natural Gas, [1982] 1 S.C.R. 1004 and Westbank First Nation v. British Columbia Hydro and Power Authority, [1999] 3 S.C.R. 134.
[42] The Defendants concede that section 18 has incidental effects on property and civil rights but submit that such incidental impact does not impair its constitutional validity. They rely upon the decision of the Supreme Court of Canada in Fédération des producteurs de volailles du Québec v. Pelland, [2005] 1 S.C.R. 292 at paragraph 31 when the Court said the following:
This analysis underlies the concern expressed by Laskin C.J. in the Egg Reference, and it arises whenever there is overlapping jurisdiction. Laws enacted under the jurisdiction of one level of government often overflow into or have incidental impact on the jurisdiction of the other governmental level. That is why a reviewing court is required to focus on the core character of the impugned legislation, as this Court did in Carnation; Attorney-General for Manitoba v. Manitoba Egg and Poultry Assn., [1971] S.C.R. 689; the Egg Reference; Canadian Industrial Gas & Oil Ltd. v. Government of Saskatchewan, [1978] 2 S.C.R. 545; and Central Canada Potash Co. v. Government of Saskatchewan, [1979] 1 S.C.R. 42.
[43] The Defendants also rely on the decision in Murphy v. Canadian Pacific Railway Company, [1958] S.C.R. 626 where Locke J. found that some impact on property and civil rights is inevitable, saying the following at pp. 631-632:
… it appears to me to be too clear for argument that the Canadian Wheat Board Act in so far as its provisions relate to the export of grain from the province for the purpose of sale is an Act in relation to the regulation of trade and commerce within the meaning of that expression in s. 91. As pointed out by the learned Chief Justice of Manitoba, it has been long since decided that the provinces cannot regulate or restrict the export of natural products such as grain beyond their borders. …
This being so, in my opinion the fact that of necessity it interferes with property and civil rights in the province of the nature referred to in head 13 of s. 92 is immaterial. For reasons which have been stated in a great number of cases decided in the Judicial Committee as well as in this Court, it has been decided that if a given subject-matter falls within any class of subjects enumerated in s. 91 it cannot be treated as covered by any of those in s. 92 … It is, of course, obvious that it would be impossible for parliament to fully exercise the exclusive jurisdiction assigned to it by head 2 and many others of the heads of s. 91 without interfering with property and civil rights in some or all of the provinces.
[44] The Defendants argue that paragraphs 37 and 38 of the Amended Statement of Claim should be struck since they purport to challenge the wisdom of the
SLA .
[45] Paragraphs 37 and 38 of Amended Statement of Claim say the following:
Section 18 of the SLPECA is ultra vires section 91 of the Constitution Act, 1867, as it deals with matters assigned solely to provincial jurisdiction. More specifically, the section 18 charge does not involve “the raising of Money by any Mode or System of Taxation”, as assigned to the Federal Government under subsection 91(3). Rather, the section 18 charge is a regulatory charge applied to monies owed by a foreign government to Canadian companies, to be collected for the sole purpose of re-distributing those monies to foreign interests.
The section 18 regulatory charge relates to “Property and Civil Rights in the Province”, as assigned to provincial jurisdiction under subsection 92(13). In addition or in the alternative, the charge relates to
(a) “the Management and
Sale
of the Public Lands belonging to the Province and of the Timber and Wood thereon”, as assigned to provincial jurisdiction under subsection 92(5); and/or
(b) “Generally all Matters of a merely local or private Nature in the Province”, as assigned to provincial jurisdiction under subsection 92(16); and /or
(c) “the raising of money by any mode or system of taxation in respect of …forestry resources in the province and the primary production therefrom”, as assigned to provincial jurisdiction under subsection 92A(4).
[46] The Defendants submit that the wisdom or benefits of the
SLA per se cannot be the subject of litigation. The allegations made in paragraphs 37 and 38 do not “detract from the self-evident trade-related character” of the
SLA and related legislation. The Defendants refer to the decision in Reference Re:Firearms Act (Can), [2000] 1 S.C.R. 783 at paragraph 18 where the Supreme Court said the following:
Determining the legal effects of a law involves considerin