Few topics have sustained the Supreme Court's attention in distribution of powers matters as much as the power to tax. One judge noted that "the power to tax is the power to destroy"; the Courts accordingly have been vigilant in their monitoring of government's taxing power.

The federal government was granted very wide taxing powers. By virtue of s. 91(3) of the Constitution Act, 1867, the federal government was granted the power to tax by any mode or system of taxation. Coupled with additional powers of taxation in the form of customs and excise taxes (Constitution Act, s. 122), the federal government was clearly clothed with the fiscal powers to build a nation.

The provincial governments, by contrast, were given only limited powers of taxation. Section 92(2) of the Constitution Act confined the provinces to levying "direct taxes" for provincial purposes. They were also given power to raise revenue by licensing regulations under s. 92(9). The distinction between indirect and direct taxation has returned to the Supreme Court repeatedly since Confederation in 1867. As recently as 1996, we find the Court deeply split over the meaning of the distinction in Ontario Home Builders v. Region of York. And, in October 1998, the Supreme Court was still deeply split on the constitutionality of provincial levies -- in that case, probate fees.

There are certain recurring questions that emerge at the Supreme Court: is the charge a "tax"? is it a "direct tax", an "indirect tax" or some other creature? is the object of the tax "within the province" or for "provincial purposes? And, if the charge is a "tax", has the government complied with the constitutional requirements for the imposition of taxes -- such as section 53 of the Constitution Act, 1867, which requires all money bills to originate in the legislature or Parliament (see Re Eurig, below). Finally, if the charge is a "tax", then s. 125 precludes its applicability on other orders of government.

In addition to materials contained in Constitutional Law of Canada, 8th edition, the following links might be of some interest:

• Re Eurig Estate (1998 SCC)
• Ontario Home Builders v. Region of York (1996 SCC)
• Allard Contractors v. Coquitlam (1993 SCC)
• Reference Re QST (1994 SCC)
• CP Air v. B.C. (1989 SCC)
• Air Canada v. B.C. (1989 SCC)
• Westbank First Nation v. B.C. Hydro and Power Authority (1999 SCC)