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DIVISION OF POWERS - Direct taxation within the province - Property and civil rights

Tuesday, December 03, 2019 @ 6:26 AM  


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Application by British Columbia to dismiss the action. The plaintiff, who was a Chinese citizen, claimed that ss. 2.01-2.04 of the Property Transfer Tax Act, which imposed a 20 per cent tax on “foreign entity” transferees of residential property in Vancouver, were ultra vires BC and violated s. 15 of the Canadian Charter of Rights and Freedoms (Charter).

HELD: Application allowed. As the dominant purpose of the tax was to deter the purchase of real property in Vancouver by foreign buyers to address housing affordability and the secondary purpose of generating revenue for provincial purposes, it was in pith and substance a measure that fell within provincial jurisdiction under ss. 92(2) and 92(13) of the Constitution Act, 1867. There was no precedent establishing a core of federal jurisdiction under s. 91(25) that the impugned provisions could impair. Thus, the doctrine of interjurisdictional immunity should not be applied. The impugned provisions did not strike at the general capacity of aliens to acquire or hold property and were not in conflict with the Citizenship Act. There was no violation of s. 15 of the Charter. The distinction drawn by the impugned provisions was based on immigration status. The distinction was not based solely on citizenship, but also on whether someone was a permanent resident. Because the tax exempted permanent residents and provincial nominees, it did not draw a broad or general distinction based on citizenship.

Li v. British Columbia, [2019] B.C.J. No. 2017, British Columbia Supreme Court, T.W. Bowden J., October 24, 2019. Digest No. TLD-December22019006