Date: 20050729
Docket: T-631-05
Citation: 2005 FC 1048
BETWEEN:
CITY OF MONTRÉAL
Applicant
and
CANADIAN BROADCASTING CORPORATION
Respondent
RICHARD MORNEAU, PROTHONOTARY:
[1] This is a motion by the respondent, the Canadian Broadcasting Corporation (the CBC), to have the Court dismiss the application for judicial review filed on April 12, 2005, by the applicant, the City of Montréal. In the alternative, the CBC is seeking a stay of proceedings on the ground of lis pendens.
Background
[2] The essential purpose of the application for judicial review (the application) brought by the City of Montréal is to obtain a declaration that adjustments made by the CBC to the payment in lieu of taxes owed to the City of Montréal for fiscal years 2003, 2004 and 2005 were illegal.
[3] The City of Montréal is a legal person established in the public interest under its Charter and has the authority to collect taxes and other fees from owners of immovables located on its territory.
[4] The CBC is a corporation established under the Broadcasting Act, S.C. 1991, c. 11. It is, within the meaning of its incorporating Act, an agent of the Crown in right of Canada.
[5] According to its incorporating Act, property acquired by the CBC belongs to Her Majesty in right of Canada, and title thereto may be vested in the name of Her Majesty or in that of the CBC.
[6] The CBC owns and occupies several immovables located on the territory of the City of Montréal.
[7] Under the Constitution Act, 1867, real property or immovables belonging to Her Majesty in right of Canada enjoys absolute immunity from taxation.
[8] This immunity does not preclude the possibility of the federal Crown paying municipal taxes or arranging for payment thereof by certain decentralized agencies.
[9] For this purpose, the Parliament of Canada has enacted the Payment in Lieu of Taxes Act, R.S. (1985), c. M-13 (the PLTA) and associated regulations.
[10] The PLTA concerns payments in lieu of taxes made to municipalities, provinces and other agencies carrying out local government functions and levying property taxes.
[11] Pursuant to the PLTA and its regulations, that is, the Crown Corporation Payments Regulations (SOR/81-1030) (the Regulations), the CBC administers immovables belonging to Her Majesty in right of Canada.
[12] The immovables or real property that belong to Her Majesty in right of Canada and are under the management or charge of the CBC are deemed to be the property of the CBC, pursuant to the PLTA and its associated regulations.
[13] Pursuant to the PLTA, the CBC is a corporation referred to in Schedule III of the Act and is therefore subject to the tax system set out in the Act.
[14] The City of Montréal is an authority that collects property tax and is, for the application of the definition of “taxing authority” in the PLTA, deemed to be the authority that levies and collects the taxes referred to in the Act and its associated regulations (subsection 2(2)).
[15] As the taxing authority, the City of Montréal accordingly sent the CBC a demand for payments in lieu of taxes for the years 2003 through 2005.
[16] In a legal proceeding brought by the CBC in Quebec Superior Court in March 2004 and amended in March 2005, the CBC alleged that it had informed the City of Montréal of adjustments that it had made to the demands for payment by the City of Montréal. In the meantime, the CBC had made, in whole or in part and under protest, the payments sought by the City of Montréal for 2003 and 2004. No payment was made for 2005.
[17] Although we are not directly concerned with this aspect here, it is of interest that the substantive dispute between the parties originated in the fact that they could not agree on the tax rates applicable under the relevant legislation. The rates used by the CBC to estimate amounts owed to the City of Montréal would, in its view, exclude a business or commercial tax rate. According to the City of Montréal, the CBC had no discretion in the application of rates and, therefore, the City of Montréal was entitled to expect to receive payment in full of its claims.
[18] As grounds for dismissal of the the City of Montréal’s application, the CBC primarily argues that, in the context of the application by The City of Montréal, the CBC cannot be considered a “federal board” within the meaning of subsection 2(1) of the Federal Courts Act, R.S. (1985), c. F-7, as amended (the Act), and that, consequently, the Court would not have jurisdiction to hear the City of Montréal’s application.
[19] In the alternative, the CBC alleges that the application by the City of Montréal was filed over a year beyond the applicable statutory deadline.
Analysis
CBC Not a Federal Board
[20] It is not in dispute that the special remedies set out in sections 18 to 18.4 of the Act can only be validly exercised with regard to a federal board meeting the definition of the term under subsection 2(1) of the Act.
[21] In this subsection, “federal board” is defined as follows:
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“federal board, commission or other tribunal” means any body, person or persons having, exercising or purporting to exercise jurisdiction or powers conferred by or under an Act of Parliament or by or under an order made pursuant to a prerogative of the Crown, other than the Tax Court of Canada or any of its judges, any such body constituted or established by or under a law of a province or any such person or persons appointed under or in accordance with a law of a province or under section 96 of the Constitution Act, 1867;
[Emphasis added ] |
«office fédéral» Conseil, bureau, commission ou autre organisme, ou personne ou groupe de personnes, ayant, exerçant ou censé exercer une compétence ou des pouvoirs prévus par une loi fédérale ou par une ordonnance prise en vertu d’une prérogative royale, à l’exclusion de la Cour canadienne de l’impôt et ses juges, d’un organisme constitué sous le régime d’une loi provinciale ou d’une personne ou d’un groupe de personnes nommées aux termes d’une loi provinciale ou de l’article 96 de la Loi constitutionnelle de 1867
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[22] In Canada Metal Co. v. Canadian Broadcasting Corporation (Ontario Court of Appeal, October 3, 1975, reported in 1975 Carswell Ont 560), the Court rejected the argument that the Federal Court had jurisdiction to issue an injunction against the CBC. In his reasons, MacKinnon J.A. distinguished the situation of the Hamilton Harbour Commissioners from that of the CBC, stating at paragraph 15 of his reasons the following:
15 He argued that the Canadian Broadcasting Corporation is a body which exercises powers conferred by an Act of Parliament and, therefore, by virtue of s. 18, only the Federal Court has power to grant an injunction. He relied on the recent decision of this Court in Hamilton (City) v. Hamilton Harbour Commissioners, [1972] 3 O.R. 61, 27 D.L.R. (3d) 385 (C.A.). In that case the Court, after quoting the above-noted interpretation section, held that the Hamilton Harbour Commissioners were a federal tribunal and accordingly the Supreme Court of Ontario did not have jurisdiction to make the declaratory order requested against the commissioners. The legislation governing the Hamilton Harbour Commissioners makes it clear that they have extensive powers to make administrative orders, such as licensing and regulating other people in the use of the harbour, as well as power to impose penalties upon persons infringing on their governing statute or their by-laws. This, in my view, is completely different from the C.B.C., a corporate entity carrying on the business of broadcasting in this country with none of the attributes of a federal Board, commission or tribunal . . . .
[Emphasis added.]
[23] In 1979, in Wilcox v. Canadian Broadcasting Corporation, [1980] 1 F.C. 326, a CBC employee applied for a declaratory judgment to the effect that, in order to calculate his retirement pension, he was entitled to take into account his years of service in the RCMP prior to being hired by the CBC. The Court ruled that it had no jurisdiction to hear the application.
[24] In that decision, after confirming the proposition upheld in Canada Metal that the CBC was not a federal board with respect to its broadcasting activities, Thurlow A.C.J. added the following at paragraphs 10 and 11 of his reasons:
10. While I see no reasons to doubt that the powers referred to in the definition of “federal board, commission or other tribunal” in section 2 [of the Act] are not confined to powers that are required by law to be exercised on a judicial or quasi-judicial basis, it appears to me that the expression “jurisdiction or powers” refers to jurisdiction or powers of a public character in respect of the exercise of which procedures by prerogative writs or by injunction or declaratory relief would formerly have been appropriate ways of invoking the supervisory authority of the superior courts. I do not think it includes the private powers exercisable by an ordinary corporation created under a federal statute which are merely incidents of its legal personality or of the business it is authorized to operate. Absurd and very inconvenient results would flow from an interpretation that it does include such powers and it does not appear to me that that was intended or that it is necessary to so interpret the expression in the context in which it is used.
11. It appears to me, as well, that if the powers of the defendant under the Broadcasting Act in respect of the defendant’s broadcasting activities are not powers of the kind embraced by the definition, there is even less reason to conclude that the power of the defendant to engage employees falls within the meaning of the definition.
[Emphasis added]
[25] In support of its argument that the CBC is, in fact, a federal board, the City of Montréal ultimately submits that, by making a payment in lieu of taxes under the PLTA and its Regulations, the CBC becomes such a board, because it would then exercise jurisdiction or powers conferred by or under a federal statute other than the Broadcasting Act, supra.
[26] It is clear in my mind that this argument by the City of Montréal is untenable.
[27] The jurisdiction or powers within the meaning of the definition of “federal board” set out in the Act is the City of Montréal as the taxing authority exercising them, not the CBC. The CBC receives a demand for payment issued by the City of Montréal pursuant to its taxing power and, in response, makes a payment, whether or not it agrees with the views of the City of Montréal.
[28] I fully agree with the CBC’s arguments in paragraphs 17 to 20 of its written submissions in reply to the effect that:
[TRANSLATION]
17. CBC’s payment in lieu of taxes is not an exercise of “jurisdiction or powers” conferred by or under section 2 of the Federal Courts Act; it is simply a management activity in the normal course of operations, like the payment of insurance premiums, snow removal charges or electricity bills.
18. We maintain, with respect to the payments in lieu, that the mere fact that other legislation is involved could not turn an incidental act of management of “the business that it is authorized to carry on”,3 in the context of its mission, into an activity that could be subject to judicial review before this honourable Court.
19. Note also that the PLTA and its regulations do not give rise to third party rights, as is made crystal clear in section 15:
No right to a payment is conferred by this Act.
20 We maintain that the facts in this case cannot turn the CBC, “a corporate entity carrying on the business of broadcasting in this country with none of the attributes of a federal board, commission or tribunal”4, into a “federal board” subject to review by this honourable Court.
3Wilcox v. CBC (Tab 2 of the motion record, paragraph 10)
4Canada Metal (Tab 1 of the motion record, paragraph 15)
[29] Although the City of Montréal did not dwell on my analysis from paragraph 14 of my decision dated October 22, 2004, in City of Montréal v. Montréal Port Authority, 2004 FC 1476, I do not think that the decision is binding on the Court in this case, because it did not initially involve the CBC which, first of all, is supported here by case law establishing its general status. Second, in that decision, the Court did not have the benefit of the complex arguments put forward here by the CBC.
[30] In my view, it is therefore clear that, here, the CBC is not a federal board within the meaning of subsection 2(1) of the Act. Accordingly, the Federal Court has no jurisdiction to hear the application by the City of Montréal. Consequently, pursuant to and based on Bull (David) Laboratories (Canada) Inc. v. Pharmacia Inc. et al. (1994), 176 N.R. 48, at pages 54-55, the motion by the CBC to dismiss the application by the City of Montréal should be granted, with costs.
[31] In light of this conclusion, there is no need to rule on the other ground for dismissal raised by the CBC or on the alternative remedy concerning a stay of the application by the City of Montréal on the ground of lis pendens.
[32] An order will be issued accordingly.
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Richard Morneau |
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Prothonotary |
Montréal, Quebec
July 29, 2005
Certified true translation
Michael Palles
FEDERAL COURT
SOLICITORS OF RECORD
DOCKET:
STYLE OF CAUSE:
T-631-05
CITY OF MONTRÉAL
Applicant
and
CANADIAN BROADCASTING CORPORATION
Respondent
MOTION DEALT WITH IN WRITING AT MONTRÉAL WITHOUT APPEARANCE OF THE PARTIES
REASONS FOR ORDER: RICHARD MORNEAU, PROTHONOTARY
DATED: July 29, 2005
WRITTEN SUBMISSIONS BY:
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Patrice Brunet |
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FOR THE APPLICANT |
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Gilles Fafard |
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FOR THE RESPONDENT |
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SOLICITORS OF RECORD:
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Brunet, Lamarre Montréal, Quebec |
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FOR THE APPLICANT |
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de Grandpré Chait Montréal, Quebec |
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FOR THE RESPONDENT |
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