Court headnote

Reference re Bowater's Pulp & Paper Mills Ltd.
Collection
Supreme Court Judgments
Date
1950-06-09
Report
[1950] SCR 608
Judges
Rinfret, Thibaudeau; Kerwin, Patrick; Taschereau, Robert; Rand, Ivan Cleveland; Kellock, Roy Lindsay; Estey, James Wilfred; Locke, Charles Holland
On appeal from
Newfoundland and Labrador
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
Reference re Bowater's Pulp & Paper Mills Ltd., [1950] S.C.R. 608
Date: 1950-06-09
IN RE BOWATER'S NEWFOUNDLAND PULP AND PAPER MILLS, LIMITED: Tax Exemptions Claimed Under Pre-Confederation Statutes of Newfoundland.
1950: February 27, 28, March 1; 1950: June 9.
Present: Rinfret C.J., and Kerwin, Taschereau, Rand, Kellock, Estey and Locke JJ.
Constitutional Law—Dominion and Provincial jurisdiction—Power of Parliament to (a) repeal, abolish or alter pre-Confederation Newfoundland law; (b) to bring into force Statutes of Canada in the Province of Newfoundland, by Act of Parliament or by proclamation and by such proclamation to provide for the repeal of certain laws of Newfoundland—The British North America Act, 1867 to 1949, ss. 91, 93, 146,—"An Act to approve the Terms of Union of Newfoundland with Canada", 1949 (Can.) 1st Sess., c. 1, Terms 8, 18 (1), (2), (3), (27)—"An Act to amend The Income Tax Act and the Income War Tax Act," 1949 (Can.) 2nd Sess. c. 25, s. 49.
Upon the passing of The British North America Act, 1949, 12-13 Geo. VI (Imp.), and "An Act to approve the Terms of Union of Newfoundland with Canada", 1949 (Can.) 1st Sess., c. 1, Newfoundland became a province of the Dominion of Canada. Thereupon the legislative powers theretofore possessed by Newfoundland became vested in the Parliament of Canada and the legislature of the Province of Newfoundland in accordance with sections 91 and 92 of the B.N.A. Act.
Between the years 1915 and 1947 the Government of Newfoundland entered into a series of agreements, subsequently in part confirmed and in part enacted by the Newfoundland Legislature, with Bowater's Pulp & Paper Mills Ltd., and their predecessors in interest, whereby that company was granted exemptions for a term of years (extending beyond the date of union with Canada) from customs duties and taxes on certain imports and exports and from other taxes including income tax. By "An Act to amend The Income Tax Act and the Income War Tax Act", 1949 (Can.) 2nd Sess., c. 25, s. 49, Parliament provided that notwithstanding any other law heretofore enacted by a legislative authority other than the Parliament of Canada (including a law of Newfoundland enacted prior to April 1, 1949) no person is entitled to
(a) any deduction, exemption or immunity from, or any privilege in respect of
(i) any duty or tax imposed by an Act of the Parliament of Canada, or
(ii) any obligation under an Act of the Parliament of Canada imposing any duty or tax, or
(b) any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods, unless provision for such deduction, exemption, immunity or privilege is expressly made by the Parliament of Canada.
Following the passing of the said Act, the Governor in Council under s. 55 of The Supreme Court Act referred to this Court the three questions, (which are fully set out in the reasons for judgment that follow), as to the effect of the said amendment on the said exemptions. Held: (Taschereau J. dissenting) that:—
(1) Bowater's Newfoundland Pulp & Paper Mills Ltd. is not entitled by reason of the certain Statutes of Newfoundland in question, to any deduction, exemption or immunity from or any privilege in respect of any duty or tax imposed by an Act of the Parliament of Canada.
(2) The company is not entitled by reason of the said Statutes of Newfoundland, to any deduction or exemption or immunity from, or any privilege in respect of any obligation under any Act of the Parliament of Canada imposing any duty or tax.
(3) The company is not entitled by reason of the said Statutes of Newfoundland, to any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods.
REFERENCE by His Excellency the Governor General in Council (P.C. 6510, dated December 29, 1949) to the Supreme Court of Canada for hearing and consideration pursuant to the authority of the Supreme Court Act, R.S.C., 1927, c. 35, s. 55 of the questions cited in full at the beginning of the reasons for judgment of the Chief Justice of this Court.
F. P. Varcoe, K.C and D. W. Mundell, K.C. for the Attorney General of Canada.
L. R. Curtis, K.C, Attorney General of Newfoundland, in person.
G. H. Steer, K.C, C F. H. Carson, K.C and C G. Reward, K.C, for Bowater's Newfoundland Pulp & Paper Mills Ltd.
The Chief Justice:—The following questions of law, touching the interpretation of the British North America Acts, 1867 to 1949, have been referred to the Supreme Court of Canada for hearing and consideration:
1. Is Bowater's Newfoundland Pulp & Paper Mills Ltd. entitled by reason of the Statutes of Newfoundland listed hereunder to any deduction, exemption or immunity from, or any privilege in respect of any duty or tax imposed by an Act of the Parliament of Canada?
2. Is Bowater's Newfoundland Pulp & Paper Mills Ltd. entitled by reason of the Statutes of Newfoundland listed hereunder to any deduction, exemption or immunity from, or any privilege in respect of any obligation under any Act of the Parliament of Canada imposing any duty or tax?
3. Is Bowater's Newfoundland Pulp & Paper Mills Ltd. entitled by reason of the Statutes of Newfoundland listed hereunder to any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods? List of Statutes referred to in the above questions:
Newfoundland 1. 6 Geo. V, c. 4 (1915)
2. 8 Geo. V, c. 3 (1917)
3. 9-10 Geo. V, c. 12 (1919)
4. 14 Geo. V, c. 1 (1923)
5. 15 Geo. V, c. 27 (1925)
6. 18 Geo. V, c. 4 (1927)
7. 25-26 Geo. V, c. 42 (1935)
8. 2 Geo. VI, c. 53 (1938)
9. 6 Geo. VI, c. 35 (1942)
10. 6 Geo. VI, c. 45 (1942)
11. 7 Geo. VI, c. 56 (1943)
12. 11 Geo. VI, c. 8 (1947)
Upon the reference, this court heard arguments from counsel representing the Attorney-General of Canada, the Attorney-General of Newfoundland and the Bowater's Newfoundland Pulp and Paper Mills, Ltd.
The statutes of Newfoundland referred to in the questions are all statutes enacted by the Governor, Legislative Council and House of Assembly of Newfoundland or the Governor by and with the advice of the Commission of Government before the union of Newfoundland with Canada. No question is raised as to the validity or effect of these statutes before the union.
Substantially all of these statutes are concerned with giving effect to and carrying out so-called agreements between a corporation and the government of Newfoundland. The 1915 to 1919 statutes were enacted in relation to the Newfoundland Products Corporation, Ltd. The name of this company was then changed to the Newfoundland Power and Paper Company Ltd. and the 1923 and 1925 statutes use this name. The 1927 statutes, amongst other things, confirm the substitution under the agreements of a new corporation for the earlier one, the new corporation being the International Paper Company of Newfoundland Ltd, Thereafter, the name of this corporation was changed on November 9, 1927, to "International Power and Paper Company of Newfoundland Ltd." and on August 18, 1938, to "Bowater's Newfoundland Pulp and Paper Mills Ltd., the present name of the company. Since all the statutes and agreements now relate to the last-named company, reference will be made only to the "company", by which is meant the last-named company. The original operations of the company were the utilization of water powers and mineral resources in Newfoundland for the manufacture of a fertilizer. Subsequently, the operations were extended to the generation of power for the manufacture of pulp and paper products. Later still, the operations of the company covered the cutting and export of timber and related activities. The executive government of Newfoundland and the company, apparently, from time to time conducted negotiations as to the operations of the company. The government was interested in promoting the development of industry in Newfoundland. The company was interested in obtaining water powers, lands, mineral rights, timber rights and concessions for its operations. It also, apparently, needed the financial support of the government by way of guaranteeing loans raised by the company. As a result of these negotiations these so-called agreements were arrived at between the company and the executive government.
The agreements, amongst other things, contained terms making special provision as to the taxation of the company and in respect of activities carried on by it. The agreement of 1927 appears to have supplanted, for practical purposes, earlier provisions for this purpose in the agreements of 1923 and 1915. Clause 2 of the 1927 agreement contains extensive provisions both new and by way of amendment to earlier provisions. Its provisions were also later amended by the 1938 agreement.
The effect of the taxation provisions of these agreements and statutes, still in force before the union of Newfoundland to Canada, may be stated generally speaking as follows:
(b) The stock and shares and the bonds, debentures, debenture stock, mortgage and other securities of the company, and all issues, transfers, sales and other dispositions of, purchases, holding and receipts of the same, and the dividends on such stock and shares and interest on such securities, and the receipt thereof by the holder other than holders (except the International Paper Company, a corporation of the State of New York, or any successor to substantially all its property and assets or any subsidiary of said International Paper Company or of its said successor) domiciled in Newfoundland, shall be exempt from taxation for a period of fifty years from the date hereof, provided that the company shall not be exempt from any fees payable upon the registration in the Registry of Deeds of a document, deed or instrument which apply to all documents, deeds and instruments generally. (1927 Agreement; cl. 2 para. (b) unamended; Case p. 60, 1. 12.)
(c) The company shall pay to the government in respect of its income for each year, beginning with the year 1928, and ending with the year 1973, before deduction of interest, depreciation and depletion, a tax of twenty per cent of such income, provided that if the tax in any year so calculated would exceed the maximum tax below defined the income applicable to the payment of interest and to depreciation and depletion shall be exempt from taxation to such extent as shall be necessary in order that the tax shall not exceed the maximum tax below defined, and provided further that if the tax so calculated after exempting all income applicable to the payment of interest and to depreciation and depletion would still exceed the maximum tax below defined, then the rate per cent for calculation of the tax shall be reduced to such extent as shall be necessary in order that the tax shall not exceed the maximum tax below defined. The maximum tax in respect of the income for each of the years 1928, 1929, 1930 and 1931 shall be $75,000, and for each of the years 1932 to 1973, inclusive, shall be $150,000. Dividends and interest received by the company shall be included in its income. Such tax shall be payable on or before March 31 of the succeeding year. And except as aforesaid and subject to Section 3 of the Act of 1915 the company shall be exempt from all taxation of every kind whatsoever other than duties (including Sales Tax) levied under the general laws of the colony on goods imported by the company and not otherwise exempt. Provided, however, that nothing in this clause contained shall be construed to exempt individual officers, shareholders or employees of the company from any taxation otherwise payable by them: Provided further that this clause shall remain in force during the period ending 30th June, 1973, and after that date shall cease to have effect in toto. (1923 Act, s. 13; Case p. 27, 1. 35 as amended by 1927 Agreement cl. 2, para. (c); Case p. 60, 1. 27.)
(d) All materials, articles and things required from time to time for construction, installation and equipping of the company's water power, hydro-electric, electrical, ground wood pulp, chemical pulp, cellulose, paper and barking mills, buildings, plants and works and all buildings and plants incidental thereto, wharves, docks, quays, piers, lights and buoys, warehouses, woods and logging operations, fire protection, transmission lines, railways, roads and towns (including all houses, buildings and structures, hospitals and laboratories erected by or for the company on any townsite or protective area around it owned or controlled by it, sewerage, water, heating and lighting systems, and any other public amenities or utilities which may be provided by the company), vessels, boats, mechanical transport for goods, aircraft, and telegraph and telephone equipment all for the company's own operations for original installation or for additions or extensions but not in substitution for old shall until the 2nd day of August, 1952, be admitted into Newfoundland, free of duties and taxes, subject however to any prohibition of general application against the importation of any articles and except as provided below in sub-clause (g) of this Clause 2. (1927 Agreement, cl. 2, para, (d), Case p. 61, 1. 51, as amended by 1938 Agreement, cl. 25, Case p. 99, 1. 22.)
(e) All materials not procurable in Newfoundland of quality and at prices which shall be satisfactory to the company required for the purposes of the manufacture of the products of the companies' and/or its subsidiary companies' electro-chemical, electro-metallurgical and other electric industries not concerned with pulp and paper making shall for the period of twenty (20) years calculated from the date of the entry into commercial operation of each of such industries be admitted into the colony free of taxes and duty. (1915 Agreement cl. 12, Case p. 19, 1. 19 as amended by 1923 Act, s. 6, Case, p. 26, 1. 16, as amended by 1927 Agreement, cl. 2, para (e) Case p. 61, 1. 33.)
(f) On materials, articles and things required by the company for renewals or replacements of or repairs to or for use in substitution for materials, articles and things imported free of duty or of or to or for materials, articles and things previously imported for renewals or replacements of or repairs to or for use in substitution for materials, articles or things imported free of duty (including materials, articles and things required for or in connection with carrying out or effecting such renewals, replacements, repairs or substitution) the company shall pay such import duties and taxes of general application (if any) as shall be in force from time to time under the general laws of Newfoundland provided that until the 2nd day of August, 1967, such import duties and taxes taken together shall not exceed 25 per centum of the value of the material, article or thing in question. (1927 Agreement, cl. 2, para (f), Case p. 61, 1. 35 as amended by 1938 Agreement, cl. 27, Case p. 100,1. 14.)
(g) Provided that no exemption in or to which are applicable the provisions of the foregoing sub-clauses (d), (e), and (f) shall apply to, and the company shall pay such import duties and taxes of general application (if any) as shall be in force from time to time under the general laws of the colony on, the following:
(1) Food, clothing, dry goods and hand-tools;
(2) Moveable articles of household and office furniture and equipment and camp utensils, including stoves other than furnaces;
(3) Articles and goods intended by the importer for the personal and private ownership of individuals;
(4) Lumber of sizes and qualities manufactured in Newfoundland from timber grown in Newfoundland, if such lumber can be obtained in Newfoundland as and when and of sizes and qualities required by the company from time to time; and
(5) Windows and doors, and casings therefor, sashes, mouldings, mantles, stairs, cupboards, ships, boats and barges made or constructed mainly or entirely of wood, of kinds, qualities and sizes manufactured in Newfoundland from timber grown in Newfoundland, if such windows and doors, and casings therefor, sashes, mouldings, mantles, stairs, cupboards, ships, boats and barges can be obtained in Newfoundland as and when and of qualities and dimensions required by the company from time to time; (6) Bricks, nails, and paints for use in town construction, of sizes and kinds manufactured in Newfoundland, if such bricks, nails and paints can be obtained in Newfoundland as and when and of the sizes and kinds required by the company from time to time;
(7) Ropes and twines and nets of kinds and sizes manufactured in Newfoundland. (1927 Agreement, cl. 2, para. (g), Case p. 62, 1. 6 as amended by 1927 Act, s. 8, Case p. 57, 1.15, and 1938 Agreement, cl. 28, Case p. 100, 1. 30.)
(ga) Baling wire, metal core caps, metal seals, metal strips and laminated heads to be used in binding or packing goods, sulphur, adhesives, silicate of soda, hessian, cores made of paper or other material, chlorine for industrial purposes shall be admitted free of taxes and duties.
(gb) The following materials if imported for use as bleaching materials or in connection with bleaching shall be admitted free of taxes and duties, namely, caustic soda, bleaching powder (calcium hypochlorite), chlorine, sodium thiosulphate, potassium permanganate, sulphuric acid and hydrochloric acid and such other bleaching materials as the company may from time to time show to the satisfaction of the government are to be used in the manufacture of bleached pulp. (1938 Agreement, cl. 29, Case p. 100, 1. 34.)
(h) On all goods, materials and articles, other than those specified in or to which are applicable the provisions of the foregoing sub-clauses (d) to (gb) imported into the colony and for use by the company in its business of manufacturing pulp or paper or operations incidental thereto, or its business of generating or transmitting electrical power or energy.
(1) the company shall, for a period of twenty years from the date hereof, pay import duties and taxes of general application (if any) in force from time to time under the general laws of the colony, provided that, in cases where under the general laws of the colony now in force a duty or tax is payable, the company shall not pay duties or taxes in excess of those so payable under the. general laws now in force, and in cases where under the general laws of the colony now in force no duty or tax is payable, the company shall not pay duties or taxes, and provided further that on kerosene and gasolene such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of five cents a gallon and on coal such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of fifty cents a ton and on crude petroleum and fuel oil such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of such per cent of the value thereof as fifty cents per ton bears to the delivered price at the mills of the company in Newfoundland of coal of the quality and from the source ordinarily used in such mills; and
(2) the company shall, for a further period of twenty (20) years, pay import duties and taxes of general application (if any) in force from time to time under the general laws of the colony, provided that in cases where under the general laws of the colony now in force a duty or tax is payable the company shall not pay duties and taxes aggregating more than the sum of (i) those so payable under the general laws now in force, and (ii) ten per cent of the value of the goods, materials or articles in question, and in cases where under the general laws of the colony now in force no duty or tax is now payable, the company shall not pay duties and taxes aggregating more than ten per cent of the value of the goods, materials or articles in question, and provided further that on kerosene and gasolene such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of five cents a gallon plus ten per cent of the value thereof and on coal such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of fifty cents a ton plus ten per cent of the value thereof and on crude petroleum and fuel oil such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of such per cent of the value thereof as fifty cents per ton plus ten per cent of the value thereof bears to the delivered price at the mills of the company in Newfoundland of coal of the quality and from the source ordinarily used in such mills. (1927 Agreement, cl. 2(h), Case p. 62, 1. 32, as amended by 1938 Agreement, cl. 29(2) and (3), Case p. 101, 1. 13.)
(i) Wherever under any provision of the foregoing sub-clauses of this Clause 2, and for the period that, any goods, materials or articles are exempt from import duties or taxes and are imported into the colony in containers or wrappings, such containers or wrappings, shall be admitted free of duties and taxes; and wherever under any provision of the foregoing sub-clauses of this Clause 2, and for the period that, any goods, materials or articles are subject to limited duties or taxes and are imported into the colony in containers or wrappings, such containers and wrappings shall be subject to import duties and taxes of general application aggregating not more than such per cent of the value thereof as the aggregate of the duties and taxes on the goods, materials or articles in such containers or wrappings bears to the value of such goods, materials, or articles.
(j) Wherever the company shall have imported any article or goods free of duties or taxes or subject to limited duties or taxes under the provisions of this Clause 2 and shall sell, give or otherwise transfer the same to any person or corporation not entitled to import such article or goods free of duty or taxes or subject to such limited duties or taxes, it shall be the duty of the vendor, donor or transferor to notify the Customs Department forthwith of such sale, gift or transfer, and to pay such duties and taxes, if any, as shall be necessary, in addition to any duties and taxes already paid thereon, to make up the full amount of the import duties and taxes, if any, which would be payable on such article or goods by such vendee, donee or transferee under the Customs Act and Tariff in force at the time of such sale, gift or transfer, upon the basis of the value for duty of such article or goods at that time. (k) The company shall be deemed to have guaranteed payment of duty to the government in the cases in the foregoing sub-clause (j) provided for, and shall be secondarily liable for such duties and shall pay the same if the Minister of Finance and Customs shall have been unable to collect the same from the person or corporation primarily liable.
(l) The expression "company" wherever used in the foregoing sub-clauses (b) to (k), inclusive, or in the sections of the Act of 1923 or clauses of the agreement of 1923 to which the foregoing sub-clauses (c) and (e) apply, shall include the company's subsidiary companies engaged in the business of generating or transmitting electrical power or energy or of manufacturing pulp or paper or operations incidental thereto or in any business of the nature to which the provisions of the foregoing sub-clause (e) apply; the expression "import duties and taxes of general application" wherever used in the foregoing sub-clauses (f), (g), (h) and (i) shall mean import duties and taxes (including sales taxes on imports) applicable to all importers into the colony of the goods, materials or articles in question, provided that the existence of special reductions, exemptions or rebates lawfully created in favour of fishermen shall not of itself prevent a duty or tax from being deemed of general application; the expression "now in force" wherever used in the foregoing sub-clause (h) shall mean in force prior to the present session of the Legislature; and the expression "value", wherever used in the foregoing sub-clauses (f), (h) and (i) shall mean the current domestic value of the article or material in question in the principal markets of the country whence and at the time when the same was exported directly to this colony. (1927 Agreement, cl. 2 (i), (j), (k) and (l), Case p. 64, 1. 8.).
In addition to amending the provisions of the 1927 Agreement, the 1938 Agreement added the following new provisions:
24. All property of the company within the area of any towns or settlements established by the company shall be exempt from municipal taxation. (Case p. 99, 1. 14).
26. If within five years from the completion respectively of the extensions referred to in Clause 2 of this Agreement or the increase referred to in Clause 3 of this Agreement the company wishes to instal any plant of a type contemplated in the original design of such extensions or increase as the case may be which the company was unable to instal at the time of the original construction for reasons beyond its control, such plant shall be treated as part of the original installation and be admitted free under Clause 2(d) of the Agreement of 1927 as amended by Clause 25 of this Agreement. (Case p. 100, 1. 3).
30. Notwithstanding the provisions of Clause 2(h) of the Agreement of 1927 the company shall be entitled to import coal for the operation of the extensions to its sulphite plant and the increase in the paper capacity of its mills hereinbefore referred to free of duties and taxes. For the purpose of giving effect to this provision it shall be assumed (a) that the coal consumed by the company in its Corner Brook mills in each year up to but not exceeding 20,000 tons is coal imported otherwise than for such operation as aforesaid and the same shall accordingly be liable to payment of duty under Clause 2(h) of the Agreement of 1927 and (b) that the coal consumed by the company as aforesaid in each year in excess of 20,000 tons is coal imported for such operations as aforesaid and the same shall accordingly be free of duties and taxes.
31. Save as mentioned in the foregoing clauses of this agreement no unmanufactured timber exported by the company under this agreement shall be subject to the payment of any tax duty or charge.
32. The government agrees that it will not impose on the company nor shall the company be liable to pay at any time hereafter any taxes, duties or charges of a special or discriminatory nature. (Case p. 101, 1. 20).
The Act of 1927 relating to the 1927 Agreement provided as follows:
1. The agreement made between His Excellency Sir William Lamond Allardyce, G.C.M.G., Governor of Newfoundland and its Dependencies, in Council, of the one part, and International Paper Company of Newfoundland, Limited, of the other part, dated the 2nd day of August, A.D., 1927, and forming the schedule to this Act, is hereby approved, confirmed and adopted, and all and singular the several clauses and provisions thereof are hereby declared to be valid and binding upon the said parties thereto and each of them respectively, and to have the force and effect of law, and all and singular the several acts, matters and things therein provided to be done or performed by or on the part of the parties respectively are hereby declared to be proper and lawful, and the parties and each of them shall have full power and authority from time to time to do and perform or omit to do and perform all and singular the several acts, matters and things in and by the said agreement provided to be done or not to be done, as the case may be, in the manner and with the effect and under the conditions stipulated and provided in the said agreement. (Case p. 55, 1. 17).
The remaining provisions amended various provisions of the agreement or dealt with related matters. (Case pp. 56-7).
The Act of 1938 relating to the 1938 Agreement provides as follows:
1. The agreement made between His Excellency Sir Humphrey Thomas Walwyn, K.C.S.I., C.B., D.S.O., Governor of Newfoundland and its Dependencies in Commission of the one part and Bowater's Newfoundland Pulp and Paper Mills Limited, a company incorporated under the laws of Newfoundland and having its registered office at Corner Brook in the Island of Newfoundland of the other part, dated the 29th day of November, A.D. 1938, and forming the schedule to this Act is hereby approved and confirmed and declared to be valid and binding upon the parties thereto.
2. In Clause 5 of the agreement forming the schedule to this Act there shall be inserted after the words "riots or civil commotions" the words "or by adverse commercial or economic conditions existing in any season or seasons which the company shall show to the satisfaction of the government make it reasonable for the company not to comply with such obligations in whole or in part" and the figures and words "25 cents" shall be struck out and the words "two dollars" substituted therefor 3. Subject to the amendments above set forth, all and singular the several clauses and provisions of the said agreement set forth in the schedule hereto are hereby declared to have the force and effect of law for all purposes as if expressly enacted herein.
4. Subject to the amendments above set forth, the parties and each of them shall have full power and authority from time to time to do and perform or omit to do and perform all and singular the several acts, matters, things and agreements in and by the said schedule provided to be done or not to be done, as the case may be, in the manner and with the effect and under the conditions stipulated and provided in the said schedule. (Case p. 84).
Sections 49 and 50 of "An Act to amend The Income Tax Act and the Income War Tax Act", c. 25, S. of C. 1949 (2 Sess.) provide as follows:
49. For greater certainty it is hereby declared and enacted that, notwithstanding any other law heretofore enacted by a legislative authority other than the Parliament of Canada (including a law of Newfoundland enacted prior to the first day of April nineteen hundred and forty-nine), no person is entitled to
(a) any deduction, exemption or immunity from, or any privilege in respect of,
(i) any duty or tax imposed by an Act of the Parliament of Canada, or
(ii) any obligation under an Act of the Parliament of Canada imposing any duty or tax, or
(b) any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods, unless provision for such deduction, exemption, immunity or privilege is expressly made by the Parliament of Canada.
50. Notwithstanding anything contained in this or any other Act an exemption from taxation provided for in an international treaty or international agreement binding on Newfoundland before the union of Newfoundland with Canada may be extended by regulation of the Governor in Council to taxation by or under any Act of the Parliament of Canada.
The Attorney General of Canada submits that the answer to each of the three questions referred to the Court should be in the negative because:
(1) The statutes referred to in the questions ceased to operate at the time of the Union of Newfoundland with Canada;
(2) Even if these statutes continued in operation after the Union they do not apply in respect of Acts of the Parliament of Canada extended to Newfoundland pursuant to the Union to confer any deduction, exemption, immunity or privilege in respect of a duty, tax, obligation or requirement imposed thereunder;
(3) Even if these statutes continued in operation and any of the provisions thereof apply in respect of Acts of the Parliament of Canada to confer any deduction, exemption, immunity or privilege in respect of a duty, tax, obligation or requirement under an Act of the Parliament of Canada, they have been overridden by section 49 of the "Act to amend The Income Tax Act and the Income War Tax Act" (Ch. 25, Statutes of Canada, 1949—Second Session), which is validly enacted by Parliament within its authority under the British North America Acts, 1867-1949.
The Terms of Union of Newfoundland with Canada approved and given force of law by the British North America Act, 1949, are Terms 3 and 18:
3. The British North America Acts, 1867 to 1946, shall apply to the Province of Newfoundland in the same way, and to the like extent as they apply to the provinces heretofore comprised in Canada, as if the Provice of Newfoundland had been one of the provinces originally united, except in so far as varied by these terms and except such provisions as are in terms made or by reasonable intendment may be held to be specially applicable to or only to affect one or more and not all of the provinces originally united.
18. (1) Subject to these terms, all laws in force in Newfoundland at or immediately prior to the date of Union shall continue therein as if the Union had not been made, subject nevertheless to be repealed, abolished, or altered by the Parliament of Canada or by the Legislature of the Province of Newfoundland according to the authority of the Parliament or of the Legislature under the British North America Acts, 1867 to 1946, and all orders, rules, and regulations made under any such laws shall likewise continue, subject to be revoked or amended by the body or person that made such orders, rules or regulations or the body or person that has power to make such orders, rules, or regulations after the date of Union, according to their respective authority under the British North America Acts, 1867 to 1946.
(2) Statutes of the Parliament of Canada in force at the date of Union, or any part thereof, shall come into force in the Province of Newfoundland on a day or days to be fixed by Act of the Parliament of Canada or by proclamation of the Governor General in Council issued from time to time, and any such proclamation may provide for the repeal of any of the laws of Newfoundland that
(a) are of general application;
(b) relate to the same subject-matter as the statute or part thereof so proclaimed; and
(c) could be repealed by the Parliament of Canada under paragraph one of this term.
(3) Notwithstanding anything in these terms the Parliament of Canada may with the consent of the Legislature of the Province of Newfoundland repeal any law in force in Newfoundland at the date of Union.
(4) Except as otherwise provided by these terms all courts of civil and criminal jurisdiction and all legal commissions, powers, authorities, and functions, and all officers and functionaries, judicial, administrative, and ministerial, existing in Newfoundland at or immediately prior to the date of Union, shall continue in the Province of Newfoundland as if the Union had not been made, until altered, abolished, revoked, terminated, or dismissed by the appropriate authority under the British North America Acts, 1867 to 1946.
The effect of Terms 3 and 18 of the Terms of Union of Newfoundland is first that the British North America Acts, 1867 to 1946, will apply to the Province of New- foundland in the same way and to the like extent as they apply to the provinces heretofore comprised in Canada, as if the Province of Newfoundland had been one of the provinces originally united. The only exceptions are if they are varied by the Terms, or if they are in the provisions which may be held to be specially applicable to or only to affect one or more and not all of the provinces originally united.
Furthermore, subject to the Terms of Union of Newfoundland with Canada, all laws in force in Newfoundland at or immediately prior to the date of union continued therein "as if the union had not been made".
Those laws, nevertheless, may be repealed, abolished or altered by the Parliament of Canada or by the Legislature of the Province of Newfoundland according to the authority of the Parliament or of the Legislature under the British North America Acts, 1867 to 1946.
In addition, all orders, rules and regulations made under any such laws continued, subject to be revoked or amended by the body or person that made such orders, rules or regulations, or the body or person that has power to make such orders, rules or regulations after the date of union according to their respective authority under the British North America Acts, 1867 to 1946.
In my opinion, the "authority" referred to in Term 18(1) is the authority which is given jurisdiction on the respective subject-matters enumerated in Sections 91 and 92 of the British North America Act, that is to say, that by force of Term 18(1) the Parliament of Canada is thereby given the authority to repeal, abolish or alter any and all laws in force in Newfoundland at or immediately prior to the date of union, which deal with the subject-matters in Section 91, and the Legislature of the Province of Newfoundland is given authority to repeal, abolish or alter all laws in force in Newfoundland at or immediately prior to the date of union which deal with the subject-matters in Section 92 of the Act.
That proposition is further supported by subsection (2) of Term 18, which gives to the Parliament of Canada power to put in force, either by Act of the Parliament or by proclamation of the Governor General in Council, all Statutes of Canada in force at the date of union which are of general application, or which relate to the same subject-matter as the statute or part thereof so proclaimed, and which could be repealed by the Parliament of Canada under paragraph 1 of Term 18.
Likewise subsection (2) authorizes the Parliament of Canada to repeal any of the laws of Newfoundland thus mentioned in that subsection. It is to be noted that subsection (1) of Term 18 is slightly different, for example, from the corresponding terms in the Acts of Union with Alberta and Saskatchewan.
It is said here that the laws of Newfoundland shall remain in force "as if the union had not been made" which means, to my mind, that notwithstanding that those laws may be dealing with subject-matters rightly coming under the jurisdiction of the Parliament of Canada under Section 91 of the British North America Act, they might nevertheless not cease to operate immediately upon the date of the union until they are repealed, abolished or altered by the Parliament of Canada. But I do not think that we need consider that possible interpretation for the purpose of answering the three questions submitted to the court and which refer only to Bowater's Newfoundland Pulp and Paper Mills, Limited.
I wish, therefore, to make it well understood that any general proposition laid down in the present opinion is strictly limited to that company and to the questions as they are submitted.
In this case, the Parliament of Canada by section 49 of an Act to amend The Income Tax Act and the Income War Tax Act, assented to 10th December, 1949, has legislated that, "notwithstanding any other law heretofore enacted by a legislative authority other than the Parliament of Canada (including a law of Newfoundland enacted prior to the first day of April nineteen hundred and forty-nine), no person is entitled to
(a) any deduction, exemption or immunity from, or any privilege in respect of,
(i) any duty or tax imposed by an Act of the Parliament of Canada, or
(ii) any obligation under an Act of the

Court headnote

Reference re Bowater's Pulp & Paper Mills Ltd. Collection Supreme Court Judgments Date 1950-06-09 Report [1950] SCR 608 Judges Rinfret, Thibaudeau; Kerwin, Patrick; Taschereau, Robert; Rand, Ivan Cleveland; Kellock, Roy Lindsay; Estey, James Wilfred; Locke, Charles Holland On appeal from Newfoundland and Labrador Subjects Constitutional law Decision Content Supreme Court of Canada Reference re Bowater's Pulp & Paper Mills Ltd., [1950] S.C.R. 608 Date: 1950-06-09 IN RE BOWATER'S NEWFOUNDLAND PULP AND PAPER MILLS, LIMITED: Tax Exemptions Claimed Under Pre-Confederation Statutes of Newfoundland. 1950: February 27, 28, March 1; 1950: June 9. Present: Rinfret C.J., and Kerwin, Taschereau, Rand, Kellock, Estey and Locke JJ. Constitutional Law—Dominion and Provincial jurisdiction—Power of Parliament to (a) repeal, abolish or alter pre-Confederation Newfoundland law; (b) to bring into force Statutes of Canada in the Province of Newfoundland, by Act of Parliament or by proclamation and by such proclamation to provide for the repeal of certain laws of Newfoundland—The British North America Act, 1867 to 1949, ss. 91, 93, 146,—"An Act to approve the Terms of Union of Newfoundland with Canada", 1949 (Can.) 1st Sess., c. 1, Terms 8, 18 (1), (2), (3), (27)—"An Act to amend The Income Tax Act and the Income War Tax Act," 1949 (Can.) 2nd Sess. c. 25, s. 49. Upon the passing of The British North America Act, 1949, 12-13 Geo. VI (Imp.), and "An Act to approve the Terms of Union of Newfoundland with Canada", 1949 (Can.) 1st Sess., c. 1, Newfoundland became a province of the Dominion of Canada. Thereupon the legislative powers theretofore possessed by Newfoundland became vested in the Parliament of Canada and the legislature of the Province of Newfoundland in accordance with sections 91 and 92 of the B.N.A. Act. Between the years 1915 and 1947 the Government of Newfoundland entered into a series of agreements, subsequently in part confirmed and in part enacted by the Newfoundland Legislature, with Bowater's Pulp & Paper Mills Ltd., and their predecessors in interest, whereby that company was granted exemptions for a term of years (extending beyond the date of union with Canada) from customs duties and taxes on certain imports and exports and from other taxes including income tax. By "An Act to amend The Income Tax Act and the Income War Tax Act", 1949 (Can.) 2nd Sess., c. 25, s. 49, Parliament provided that notwithstanding any other law heretofore enacted by a legislative authority other than the Parliament of Canada (including a law of Newfoundland enacted prior to April 1, 1949) no person is entitled to (a) any deduction, exemption or immunity from, or any privilege in respect of (i) any duty or tax imposed by an Act of the Parliament of Canada, or (ii) any obligation under an Act of the Parliament of Canada imposing any duty or tax, or (b) any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods, unless provision for such deduction, exemption, immunity or privilege is expressly made by the Parliament of Canada. Following the passing of the said Act, the Governor in Council under s. 55 of The Supreme Court Act referred to this Court the three questions, (which are fully set out in the reasons for judgment that follow), as to the effect of the said amendment on the said exemptions. Held: (Taschereau J. dissenting) that:— (1) Bowater's Newfoundland Pulp & Paper Mills Ltd. is not entitled by reason of the certain Statutes of Newfoundland in question, to any deduction, exemption or immunity from or any privilege in respect of any duty or tax imposed by an Act of the Parliament of Canada. (2) The company is not entitled by reason of the said Statutes of Newfoundland, to any deduction or exemption or immunity from, or any privilege in respect of any obligation under any Act of the Parliament of Canada imposing any duty or tax. (3) The company is not entitled by reason of the said Statutes of Newfoundland, to any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods. REFERENCE by His Excellency the Governor General in Council (P.C. 6510, dated December 29, 1949) to the Supreme Court of Canada for hearing and consideration pursuant to the authority of the Supreme Court Act, R.S.C., 1927, c. 35, s. 55 of the questions cited in full at the beginning of the reasons for judgment of the Chief Justice of this Court. F. P. Varcoe, K.C and D. W. Mundell, K.C. for the Attorney General of Canada. L. R. Curtis, K.C, Attorney General of Newfoundland, in person. G. H. Steer, K.C, C F. H. Carson, K.C and C G. Reward, K.C, for Bowater's Newfoundland Pulp & Paper Mills Ltd. The Chief Justice:—The following questions of law, touching the interpretation of the British North America Acts, 1867 to 1949, have been referred to the Supreme Court of Canada for hearing and consideration: 1. Is Bowater's Newfoundland Pulp & Paper Mills Ltd. entitled by reason of the Statutes of Newfoundland listed hereunder to any deduction, exemption or immunity from, or any privilege in respect of any duty or tax imposed by an Act of the Parliament of Canada? 2. Is Bowater's Newfoundland Pulp & Paper Mills Ltd. entitled by reason of the Statutes of Newfoundland listed hereunder to any deduction, exemption or immunity from, or any privilege in respect of any obligation under any Act of the Parliament of Canada imposing any duty or tax? 3. Is Bowater's Newfoundland Pulp & Paper Mills Ltd. entitled by reason of the Statutes of Newfoundland listed hereunder to any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods? List of Statutes referred to in the above questions: Newfoundland 1. 6 Geo. V, c. 4 (1915) 2. 8 Geo. V, c. 3 (1917) 3. 9-10 Geo. V, c. 12 (1919) 4. 14 Geo. V, c. 1 (1923) 5. 15 Geo. V, c. 27 (1925) 6. 18 Geo. V, c. 4 (1927) 7. 25-26 Geo. V, c. 42 (1935) 8. 2 Geo. VI, c. 53 (1938) 9. 6 Geo. VI, c. 35 (1942) 10. 6 Geo. VI, c. 45 (1942) 11. 7 Geo. VI, c. 56 (1943) 12. 11 Geo. VI, c. 8 (1947) Upon the reference, this court heard arguments from counsel representing the Attorney-General of Canada, the Attorney-General of Newfoundland and the Bowater's Newfoundland Pulp and Paper Mills, Ltd. The statutes of Newfoundland referred to in the questions are all statutes enacted by the Governor, Legislative Council and House of Assembly of Newfoundland or the Governor by and with the advice of the Commission of Government before the union of Newfoundland with Canada. No question is raised as to the validity or effect of these statutes before the union. Substantially all of these statutes are concerned with giving effect to and carrying out so-called agreements between a corporation and the government of Newfoundland. The 1915 to 1919 statutes were enacted in relation to the Newfoundland Products Corporation, Ltd. The name of this company was then changed to the Newfoundland Power and Paper Company Ltd. and the 1923 and 1925 statutes use this name. The 1927 statutes, amongst other things, confirm the substitution under the agreements of a new corporation for the earlier one, the new corporation being the International Paper Company of Newfoundland Ltd, Thereafter, the name of this corporation was changed on November 9, 1927, to "International Power and Paper Company of Newfoundland Ltd." and on August 18, 1938, to "Bowater's Newfoundland Pulp and Paper Mills Ltd., the present name of the company. Since all the statutes and agreements now relate to the last-named company, reference will be made only to the "company", by which is meant the last-named company. The original operations of the company were the utilization of water powers and mineral resources in Newfoundland for the manufacture of a fertilizer. Subsequently, the operations were extended to the generation of power for the manufacture of pulp and paper products. Later still, the operations of the company covered the cutting and export of timber and related activities. The executive government of Newfoundland and the company, apparently, from time to time conducted negotiations as to the operations of the company. The government was interested in promoting the development of industry in Newfoundland. The company was interested in obtaining water powers, lands, mineral rights, timber rights and concessions for its operations. It also, apparently, needed the financial support of the government by way of guaranteeing loans raised by the company. As a result of these negotiations these so-called agreements were arrived at between the company and the executive government. The agreements, amongst other things, contained terms making special provision as to the taxation of the company and in respect of activities carried on by it. The agreement of 1927 appears to have supplanted, for practical purposes, earlier provisions for this purpose in the agreements of 1923 and 1915. Clause 2 of the 1927 agreement contains extensive provisions both new and by way of amendment to earlier provisions. Its provisions were also later amended by the 1938 agreement. The effect of the taxation provisions of these agreements and statutes, still in force before the union of Newfoundland to Canada, may be stated generally speaking as follows: (b) The stock and shares and the bonds, debentures, debenture stock, mortgage and other securities of the company, and all issues, transfers, sales and other dispositions of, purchases, holding and receipts of the same, and the dividends on such stock and shares and interest on such securities, and the receipt thereof by the holder other than holders (except the International Paper Company, a corporation of the State of New York, or any successor to substantially all its property and assets or any subsidiary of said International Paper Company or of its said successor) domiciled in Newfoundland, shall be exempt from taxation for a period of fifty years from the date hereof, provided that the company shall not be exempt from any fees payable upon the registration in the Registry of Deeds of a document, deed or instrument which apply to all documents, deeds and instruments generally. (1927 Agreement; cl. 2 para. (b) unamended; Case p. 60, 1. 12.) (c) The company shall pay to the government in respect of its income for each year, beginning with the year 1928, and ending with the year 1973, before deduction of interest, depreciation and depletion, a tax of twenty per cent of such income, provided that if the tax in any year so calculated would exceed the maximum tax below defined the income applicable to the payment of interest and to depreciation and depletion shall be exempt from taxation to such extent as shall be necessary in order that the tax shall not exceed the maximum tax below defined, and provided further that if the tax so calculated after exempting all income applicable to the payment of interest and to depreciation and depletion would still exceed the maximum tax below defined, then the rate per cent for calculation of the tax shall be reduced to such extent as shall be necessary in order that the tax shall not exceed the maximum tax below defined. The maximum tax in respect of the income for each of the years 1928, 1929, 1930 and 1931 shall be $75,000, and for each of the years 1932 to 1973, inclusive, shall be $150,000. Dividends and interest received by the company shall be included in its income. Such tax shall be payable on or before March 31 of the succeeding year. And except as aforesaid and subject to Section 3 of the Act of 1915 the company shall be exempt from all taxation of every kind whatsoever other than duties (including Sales Tax) levied under the general laws of the colony on goods imported by the company and not otherwise exempt. Provided, however, that nothing in this clause contained shall be construed to exempt individual officers, shareholders or employees of the company from any taxation otherwise payable by them: Provided further that this clause shall remain in force during the period ending 30th June, 1973, and after that date shall cease to have effect in toto. (1923 Act, s. 13; Case p. 27, 1. 35 as amended by 1927 Agreement cl. 2, para. (c); Case p. 60, 1. 27.) (d) All materials, articles and things required from time to time for construction, installation and equipping of the company's water power, hydro-electric, electrical, ground wood pulp, chemical pulp, cellulose, paper and barking mills, buildings, plants and works and all buildings and plants incidental thereto, wharves, docks, quays, piers, lights and buoys, warehouses, woods and logging operations, fire protection, transmission lines, railways, roads and towns (including all houses, buildings and structures, hospitals and laboratories erected by or for the company on any townsite or protective area around it owned or controlled by it, sewerage, water, heating and lighting systems, and any other public amenities or utilities which may be provided by the company), vessels, boats, mechanical transport for goods, aircraft, and telegraph and telephone equipment all for the company's own operations for original installation or for additions or extensions but not in substitution for old shall until the 2nd day of August, 1952, be admitted into Newfoundland, free of duties and taxes, subject however to any prohibition of general application against the importation of any articles and except as provided below in sub-clause (g) of this Clause 2. (1927 Agreement, cl. 2, para, (d), Case p. 61, 1. 51, as amended by 1938 Agreement, cl. 25, Case p. 99, 1. 22.) (e) All materials not procurable in Newfoundland of quality and at prices which shall be satisfactory to the company required for the purposes of the manufacture of the products of the companies' and/or its subsidiary companies' electro-chemical, electro-metallurgical and other electric industries not concerned with pulp and paper making shall for the period of twenty (20) years calculated from the date of the entry into commercial operation of each of such industries be admitted into the colony free of taxes and duty. (1915 Agreement cl. 12, Case p. 19, 1. 19 as amended by 1923 Act, s. 6, Case, p. 26, 1. 16, as amended by 1927 Agreement, cl. 2, para (e) Case p. 61, 1. 33.) (f) On materials, articles and things required by the company for renewals or replacements of or repairs to or for use in substitution for materials, articles and things imported free of duty or of or to or for materials, articles and things previously imported for renewals or replacements of or repairs to or for use in substitution for materials, articles or things imported free of duty (including materials, articles and things required for or in connection with carrying out or effecting such renewals, replacements, repairs or substitution) the company shall pay such import duties and taxes of general application (if any) as shall be in force from time to time under the general laws of Newfoundland provided that until the 2nd day of August, 1967, such import duties and taxes taken together shall not exceed 25 per centum of the value of the material, article or thing in question. (1927 Agreement, cl. 2, para (f), Case p. 61, 1. 35 as amended by 1938 Agreement, cl. 27, Case p. 100,1. 14.) (g) Provided that no exemption in or to which are applicable the provisions of the foregoing sub-clauses (d), (e), and (f) shall apply to, and the company shall pay such import duties and taxes of general application (if any) as shall be in force from time to time under the general laws of the colony on, the following: (1) Food, clothing, dry goods and hand-tools; (2) Moveable articles of household and office furniture and equipment and camp utensils, including stoves other than furnaces; (3) Articles and goods intended by the importer for the personal and private ownership of individuals; (4) Lumber of sizes and qualities manufactured in Newfoundland from timber grown in Newfoundland, if such lumber can be obtained in Newfoundland as and when and of sizes and qualities required by the company from time to time; and (5) Windows and doors, and casings therefor, sashes, mouldings, mantles, stairs, cupboards, ships, boats and barges made or constructed mainly or entirely of wood, of kinds, qualities and sizes manufactured in Newfoundland from timber grown in Newfoundland, if such windows and doors, and casings therefor, sashes, mouldings, mantles, stairs, cupboards, ships, boats and barges can be obtained in Newfoundland as and when and of qualities and dimensions required by the company from time to time; (6) Bricks, nails, and paints for use in town construction, of sizes and kinds manufactured in Newfoundland, if such bricks, nails and paints can be obtained in Newfoundland as and when and of the sizes and kinds required by the company from time to time; (7) Ropes and twines and nets of kinds and sizes manufactured in Newfoundland. (1927 Agreement, cl. 2, para. (g), Case p. 62, 1. 6 as amended by 1927 Act, s. 8, Case p. 57, 1.15, and 1938 Agreement, cl. 28, Case p. 100, 1. 30.) (ga) Baling wire, metal core caps, metal seals, metal strips and laminated heads to be used in binding or packing goods, sulphur, adhesives, silicate of soda, hessian, cores made of paper or other material, chlorine for industrial purposes shall be admitted free of taxes and duties. (gb) The following materials if imported for use as bleaching materials or in connection with bleaching shall be admitted free of taxes and duties, namely, caustic soda, bleaching powder (calcium hypochlorite), chlorine, sodium thiosulphate, potassium permanganate, sulphuric acid and hydrochloric acid and such other bleaching materials as the company may from time to time show to the satisfaction of the government are to be used in the manufacture of bleached pulp. (1938 Agreement, cl. 29, Case p. 100, 1. 34.) (h) On all goods, materials and articles, other than those specified in or to which are applicable the provisions of the foregoing sub-clauses (d) to (gb) imported into the colony and for use by the company in its business of manufacturing pulp or paper or operations incidental thereto, or its business of generating or transmitting electrical power or energy. (1) the company shall, for a period of twenty years from the date hereof, pay import duties and taxes of general application (if any) in force from time to time under the general laws of the colony, provided that, in cases where under the general laws of the colony now in force a duty or tax is payable, the company shall not pay duties or taxes in excess of those so payable under the. general laws now in force, and in cases where under the general laws of the colony now in force no duty or tax is payable, the company shall not pay duties or taxes, and provided further that on kerosene and gasolene such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of five cents a gallon and on coal such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of fifty cents a ton and on crude petroleum and fuel oil such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of such per cent of the value thereof as fifty cents per ton bears to the delivered price at the mills of the company in Newfoundland of coal of the quality and from the source ordinarily used in such mills; and (2) the company shall, for a further period of twenty (20) years, pay import duties and taxes of general application (if any) in force from time to time under the general laws of the colony, provided that in cases where under the general laws of the colony now in force a duty or tax is payable the company shall not pay duties and taxes aggregating more than the sum of (i) those so payable under the general laws now in force, and (ii) ten per cent of the value of the goods, materials or articles in question, and in cases where under the general laws of the colony now in force no duty or tax is now payable, the company shall not pay duties and taxes aggregating more than ten per cent of the value of the goods, materials or articles in question, and provided further that on kerosene and gasolene such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of five cents a gallon plus ten per cent of the value thereof and on coal such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of fifty cents a ton plus ten per cent of the value thereof and on crude petroleum and fuel oil such import duties and taxes of general application payable by the company shall not in the aggregate be in excess of such per cent of the value thereof as fifty cents per ton plus ten per cent of the value thereof bears to the delivered price at the mills of the company in Newfoundland of coal of the quality and from the source ordinarily used in such mills. (1927 Agreement, cl. 2(h), Case p. 62, 1. 32, as amended by 1938 Agreement, cl. 29(2) and (3), Case p. 101, 1. 13.) (i) Wherever under any provision of the foregoing sub-clauses of this Clause 2, and for the period that, any goods, materials or articles are exempt from import duties or taxes and are imported into the colony in containers or wrappings, such containers or wrappings, shall be admitted free of duties and taxes; and wherever under any provision of the foregoing sub-clauses of this Clause 2, and for the period that, any goods, materials or articles are subject to limited duties or taxes and are imported into the colony in containers or wrappings, such containers and wrappings shall be subject to import duties and taxes of general application aggregating not more than such per cent of the value thereof as the aggregate of the duties and taxes on the goods, materials or articles in such containers or wrappings bears to the value of such goods, materials, or articles. (j) Wherever the company shall have imported any article or goods free of duties or taxes or subject to limited duties or taxes under the provisions of this Clause 2 and shall sell, give or otherwise transfer the same to any person or corporation not entitled to import such article or goods free of duty or taxes or subject to such limited duties or taxes, it shall be the duty of the vendor, donor or transferor to notify the Customs Department forthwith of such sale, gift or transfer, and to pay such duties and taxes, if any, as shall be necessary, in addition to any duties and taxes already paid thereon, to make up the full amount of the import duties and taxes, if any, which would be payable on such article or goods by such vendee, donee or transferee under the Customs Act and Tariff in force at the time of such sale, gift or transfer, upon the basis of the value for duty of such article or goods at that time. (k) The company shall be deemed to have guaranteed payment of duty to the government in the cases in the foregoing sub-clause (j) provided for, and shall be secondarily liable for such duties and shall pay the same if the Minister of Finance and Customs shall have been unable to collect the same from the person or corporation primarily liable. (l) The expression "company" wherever used in the foregoing sub-clauses (b) to (k), inclusive, or in the sections of the Act of 1923 or clauses of the agreement of 1923 to which the foregoing sub-clauses (c) and (e) apply, shall include the company's subsidiary companies engaged in the business of generating or transmitting electrical power or energy or of manufacturing pulp or paper or operations incidental thereto or in any business of the nature to which the provisions of the foregoing sub-clause (e) apply; the expression "import duties and taxes of general application" wherever used in the foregoing sub-clauses (f), (g), (h) and (i) shall mean import duties and taxes (including sales taxes on imports) applicable to all importers into the colony of the goods, materials or articles in question, provided that the existence of special reductions, exemptions or rebates lawfully created in favour of fishermen shall not of itself prevent a duty or tax from being deemed of general application; the expression "now in force" wherever used in the foregoing sub-clause (h) shall mean in force prior to the present session of the Legislature; and the expression "value", wherever used in the foregoing sub-clauses (f), (h) and (i) shall mean the current domestic value of the article or material in question in the principal markets of the country whence and at the time when the same was exported directly to this colony. (1927 Agreement, cl. 2 (i), (j), (k) and (l), Case p. 64, 1. 8.). In addition to amending the provisions of the 1927 Agreement, the 1938 Agreement added the following new provisions: 24. All property of the company within the area of any towns or settlements established by the company shall be exempt from municipal taxation. (Case p. 99, 1. 14). 26. If within five years from the completion respectively of the extensions referred to in Clause 2 of this Agreement or the increase referred to in Clause 3 of this Agreement the company wishes to instal any plant of a type contemplated in the original design of such extensions or increase as the case may be which the company was unable to instal at the time of the original construction for reasons beyond its control, such plant shall be treated as part of the original installation and be admitted free under Clause 2(d) of the Agreement of 1927 as amended by Clause 25 of this Agreement. (Case p. 100, 1. 3). 30. Notwithstanding the provisions of Clause 2(h) of the Agreement of 1927 the company shall be entitled to import coal for the operation of the extensions to its sulphite plant and the increase in the paper capacity of its mills hereinbefore referred to free of duties and taxes. For the purpose of giving effect to this provision it shall be assumed (a) that the coal consumed by the company in its Corner Brook mills in each year up to but not exceeding 20,000 tons is coal imported otherwise than for such operation as aforesaid and the same shall accordingly be liable to payment of duty under Clause 2(h) of the Agreement of 1927 and (b) that the coal consumed by the company as aforesaid in each year in excess of 20,000 tons is coal imported for such operations as aforesaid and the same shall accordingly be free of duties and taxes. 31. Save as mentioned in the foregoing clauses of this agreement no unmanufactured timber exported by the company under this agreement shall be subject to the payment of any tax duty or charge. 32. The government agrees that it will not impose on the company nor shall the company be liable to pay at any time hereafter any taxes, duties or charges of a special or discriminatory nature. (Case p. 101, 1. 20). The Act of 1927 relating to the 1927 Agreement provided as follows: 1. The agreement made between His Excellency Sir William Lamond Allardyce, G.C.M.G., Governor of Newfoundland and its Dependencies, in Council, of the one part, and International Paper Company of Newfoundland, Limited, of the other part, dated the 2nd day of August, A.D., 1927, and forming the schedule to this Act, is hereby approved, confirmed and adopted, and all and singular the several clauses and provisions thereof are hereby declared to be valid and binding upon the said parties thereto and each of them respectively, and to have the force and effect of law, and all and singular the several acts, matters and things therein provided to be done or performed by or on the part of the parties respectively are hereby declared to be proper and lawful, and the parties and each of them shall have full power and authority from time to time to do and perform or omit to do and perform all and singular the several acts, matters and things in and by the said agreement provided to be done or not to be done, as the case may be, in the manner and with the effect and under the conditions stipulated and provided in the said agreement. (Case p. 55, 1. 17). The remaining provisions amended various provisions of the agreement or dealt with related matters. (Case pp. 56-7). The Act of 1938 relating to the 1938 Agreement provides as follows: 1. The agreement made between His Excellency Sir Humphrey Thomas Walwyn, K.C.S.I., C.B., D.S.O., Governor of Newfoundland and its Dependencies in Commission of the one part and Bowater's Newfoundland Pulp and Paper Mills Limited, a company incorporated under the laws of Newfoundland and having its registered office at Corner Brook in the Island of Newfoundland of the other part, dated the 29th day of November, A.D. 1938, and forming the schedule to this Act is hereby approved and confirmed and declared to be valid and binding upon the parties thereto. 2. In Clause 5 of the agreement forming the schedule to this Act there shall be inserted after the words "riots or civil commotions" the words "or by adverse commercial or economic conditions existing in any season or seasons which the company shall show to the satisfaction of the government make it reasonable for the company not to comply with such obligations in whole or in part" and the figures and words "25 cents" shall be struck out and the words "two dollars" substituted therefor 3. Subject to the amendments above set forth, all and singular the several clauses and provisions of the said agreement set forth in the schedule hereto are hereby declared to have the force and effect of law for all purposes as if expressly enacted herein. 4. Subject to the amendments above set forth, the parties and each of them shall have full power and authority from time to time to do and perform or omit to do and perform all and singular the several acts, matters, things and agreements in and by the said schedule provided to be done or not to be done, as the case may be, in the manner and with the effect and under the conditions stipulated and provided in the said schedule. (Case p. 84). Sections 49 and 50 of "An Act to amend The Income Tax Act and the Income War Tax Act", c. 25, S. of C. 1949 (2 Sess.) provide as follows: 49. For greater certainty it is hereby declared and enacted that, notwithstanding any other law heretofore enacted by a legislative authority other than the Parliament of Canada (including a law of Newfoundland enacted prior to the first day of April nineteen hundred and forty-nine), no person is entitled to (a) any deduction, exemption or immunity from, or any privilege in respect of, (i) any duty or tax imposed by an Act of the Parliament of Canada, or (ii) any obligation under an Act of the Parliament of Canada imposing any duty or tax, or (b) any exemption or immunity from any provision in an Act of the Parliament of Canada requiring a licence, permit or certificate for the export or import of goods, unless provision for such deduction, exemption, immunity or privilege is expressly made by the Parliament of Canada. 50. Notwithstanding anything contained in this or any other Act an exemption from taxation provided for in an international treaty or international agreement binding on Newfoundland before the union of Newfoundland with Canada may be extended by regulation of the Governor in Council to taxation by or under any Act of the Parliament of Canada. The Attorney General of Canada submits that the answer to each of the three questions referred to the Court should be in the negative because: (1) The statutes referred to in the questions ceased to operate at the time of the Union of Newfoundland with Canada; (2) Even if these statutes continued in operation after the Union they do not apply in respect of Acts of the Parliament of Canada extended to Newfoundland pursuant to the Union to confer any deduction, exemption, immunity or privilege in respect of a duty, tax, obligation or requirement imposed thereunder; (3) Even if these statutes continued in operation and any of the provisions thereof apply in respect of Acts of the Parliament of Canada to confer any deduction, exemption, immunity or privilege in respect of a duty, tax, obligation or requirement under an Act of the Parliament of Canada, they have been overridden by section 49 of the "Act to amend The Income Tax Act and the Income War Tax Act" (Ch. 25, Statutes of Canada, 1949—Second Session), which is validly enacted by Parliament within its authority under the British North America Acts, 1867-1949. The Terms of Union of Newfoundland with Canada approved and given force of law by the British North America Act, 1949, are Terms 3 and 18: 3. The British North America Acts, 1867 to 1946, shall apply to the Province of Newfoundland in the same way, and to the like extent as they apply to the provinces heretofore comprised in Canada, as if the Provice of Newfoundland had been one of the provinces originally united, except in so far as varied by these terms and except such provisions as are in terms made or by reasonable intendment may be held to be specially applicable to or only to affect one or more and not all of the provinces originally united. 18. (1) Subject to these terms, all laws in force in Newfoundland at or immediately prior to the date of Union shall continue therein as if the Union had not been made, subject nevertheless to be repealed, abolished, or altered by the Parliament of Canada or by the Legislature of the Province of Newfoundland according to the authority of the Parliament or of the Legislature under the British North America Acts, 1867 to 1946, and all orders, rules, and regulations made under any such laws shall likewise continue, subject to be revoked or amended by the body or person that made such orders, rules or regulations or the body or person that has power to make such orders, rules, or regulations after the date of Union, according to their respective authority under the British North America Acts, 1867 to 1946. (2) Statutes of the Parliament of Canada in force at the date of Union, or any part thereof, shall come into force in the Province of Newfoundland on a day or days to be fixed by Act of the Parliament of Canada or by proclamation of the Governor General in Council issued from time to time, and any such proclamation may provide for the repeal of any of the laws of Newfoundland that (a) are of general application; (b) relate to the same subject-matter as the statute or part thereof so proclaimed; and (c) could be repealed by the Parliament of Canada under paragraph one of this term. (3) Notwithstanding anything in these terms the Parliament of Canada may with the consent of the Legislature of the Province of Newfoundland repeal any law in force in Newfoundland at the date of Union. (4) Except as otherwise provided by these terms all courts of civil and criminal jurisdiction and all legal commissions, powers, authorities, and functions, and all officers and functionaries, judicial, administrative, and ministerial, existing in Newfoundland at or immediately prior to the date of Union, shall continue in the Province of Newfoundland as if the Union had not been made, until altered, abolished, revoked, terminated, or dismissed by the appropriate authority under the British North America Acts, 1867 to 1946. The effect of Terms 3 and 18 of the Terms of Union of Newfoundland is first that the British North America Acts, 1867 to 1946, will apply to the Province of New- foundland in the same way and to the like extent as they apply to the provinces heretofore comprised in Canada, as if the Province of Newfoundland had been one of the provinces originally united. The only exceptions are if they are varied by the Terms, or if they are in the provisions which may be held to be specially applicable to or only to affect one or more and not all of the provinces originally united. Furthermore, subject to the Terms of Union of Newfoundland with Canada, all laws in force in Newfoundland at or immediately prior to the date of union continued therein "as if the union had not been made". Those laws, nevertheless, may be repealed, abolished or altered by the Parliament of Canada or by the Legislature of the Province of Newfoundland according to the authority of the Parliament or of the Legislature under the British North America Acts, 1867 to 1946. In addition, all orders, rules and regulations made under any such laws continued, subject to be revoked or amended by the body or person that made such orders, rules or regulations, or the body or person that has power to make such orders, rules or regulations after the date of union according to their respective authority under the British North America Acts, 1867 to 1946. In my opinion, the "authority" referred to in Term 18(1) is the authority which is given jurisdiction on the respective subject-matters enumerated in Sections 91 and 92 of the British North America Act, that is to say, that by force of Term 18(1) the Parliament of Canada is thereby given the authority to repeal, abolish or alter any and all laws in force in Newfoundland at or immediately prior to the date of union, which deal with the subject-matters in Section 91, and the Legislature of the Province of Newfoundland is given authority to repeal, abolish or alter all laws in force in Newfoundland at or immediately prior to the date of union which deal with the subject-matters in Section 92 of the Act. That proposition is further supported by subsection (2) of Term 18, which gives to the Parliament of Canada power to put in force, either by Act of the Parliament or by proclamation of the Governor General in Council, all Statutes of Canada in force at the date of union which are of general application, or which relate to the same subject-matter as the statute or part thereof so proclaimed, and which could be repealed by the Parliament of Canada under paragraph 1 of Term 18. Likewise subsection (2) authorizes the Parliament of Canada to repeal any of the laws of Newfoundland thus mentioned in that subsection. It is to be noted that subsection (1) of Term 18 is slightly different, for example, from the corresponding terms in the Acts of Union with Alberta and Saskatchewan. It is said here that the laws of Newfoundland shall remain in force "as if the union had not been made" which means, to my mind, that notwithstanding that those laws may be dealing with subject-matters rightly coming under the jurisdiction of the Parliament of Canada under Section 91 of the British North America Act, they might nevertheless not cease to operate immediately upon the date of the union until they are repealed, abolished or altered by the Parliament of Canada. But I do not think that we need consider that possible interpretation for the purpose of answering the three questions submitted to the court and which refer only to Bowater's Newfoundland Pulp and Paper Mills, Limited. I wish, therefore, to make it well understood that any general proposition laid down in the present opinion is strictly limited to that company and to the questions as they are submitted. In this case, the Parliament of Canada by section 49 of an Act to amend The Income Tax Act and the Income War Tax Act, assented to 10th December, 1949, has legislated that, "notwithstanding any other law heretofore enacted by a legislative authority other than the Parliament of Canada (including a law of Newfoundland enacted prior to the first day of April nineteen hundred and forty-nine), no person is entitled to (a) any deduction, exemption or immunity from, or any privilege in respect of, (i) any duty or tax imposed by an Act of the Parliament of Canada, or (ii) any obligation under an Act of the

Reference re Bowater's Pulp & Paper Mills Ltd.

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Full judgment (source text)

Antrobus c. Canada

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Antrobus c. Canada

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Reference re Bowater's Pulp & Paper Mills Ltd.

Court headnote

Full judgment (source text)

Antrobus c. Canada

Related cases

Antrobus c. Canada

Exam & revision prep