Amax Potash Ltd. v. Government of Saskatchewan
Encyclopedia
Amax Potash Ltd. v. Government of Saskatchewan [1977] 2 S.C.R. 576 is a leading case of the Supreme Court of Canada
on the application and role of the Constitution of Canada
.
's biggest industry was potash
mining. Much of it was run by American mining companies that would export it to the US. The recently elected New Democratic Party
(NDP) provincial government of Allan Blakeney
enacted the Mineral Taxation Act and the Potash Reserve Regulations that effectively taxed the companies for their mining.
The mining companies sought to reclaim the tax that they had paid over the years. They made a Constitutional challenge against the Act on the grounds that the taxes were ultra vires
the authority of the provincial government as taxation of this type was a matter for the federal government
.
The provincial government sought refuge under section 5(7) of the Saskatchewan Proceedings Against the Crown Act, which barred recovery in just such an event. It stated that "the province's liability is limited in respect of things done or omitted in the exercise of power or authority under an ultra vires enactment".
The issue before the Court was whether the immunity clause, exempting itself from paying back money gained through invalid law, was valid law.
.
In his reasoning, Dickson J. (as he was then) stated:
He concluded by stating:
Supreme Court of Canada
The Supreme Court of Canada is the highest court of Canada and is the final court of appeals in the Canadian justice system. The court grants permission to between 40 and 75 litigants each year to appeal decisions rendered by provincial, territorial and federal appellate courts, and its decisions...
on the application and role of the Constitution of Canada
Constitution of Canada
The Constitution of Canada is the supreme law in Canada; the country's constitution is an amalgamation of codified acts and uncodified traditions and conventions. It outlines Canada's system of government, as well as the civil rights of all Canadian citizens and those in Canada...
.
Background
During the 1970s, one of SaskatchewanSaskatchewan
Saskatchewan is a prairie province in Canada, which has an area of . Saskatchewan is bordered on the west by Alberta, on the north by the Northwest Territories, on the east by Manitoba, and on the south by the U.S. states of Montana and North Dakota....
's biggest industry was potash
Potash
Potash is the common name for various mined and manufactured salts that contain potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains, and this was the major historical source for it before the industrial era...
mining. Much of it was run by American mining companies that would export it to the US. The recently elected New Democratic Party
Saskatchewan New Democratic Party
The Saskatchewan New Democratic Party is a social-democratic political party in the Canadian province of Saskatchewan. It currently forms the official opposition, but has been a dominant force in Saskatchewan politics since the 1940s...
(NDP) provincial government of Allan Blakeney
Allan Blakeney
Allan Emrys Blakeney, PC, OC, SOM, QC, FRSC was the tenth Premier of the Canadian province of Saskatchewan from 1971 to 1982, and leader of the Saskatchewan New Democratic Party .-Life and career:...
enacted the Mineral Taxation Act and the Potash Reserve Regulations that effectively taxed the companies for their mining.
The mining companies sought to reclaim the tax that they had paid over the years. They made a Constitutional challenge against the Act on the grounds that the taxes were ultra vires
Ultra vires
Ultra vires is a Latin phrase meaning literally "beyond the powers", although its standard legal translation and substitute is "beyond power". If an act requires legal authority and it is done with such authority, it is...
the authority of the provincial government as taxation of this type was a matter for the federal government
Government of Canada
The Government of Canada, formally Her Majesty's Government, is the system whereby the federation of Canada is administered by a common authority; in Canadian English, the term can mean either the collective set of institutions or specifically the Queen-in-Council...
.
The provincial government sought refuge under section 5(7) of the Saskatchewan Proceedings Against the Crown Act, which barred recovery in just such an event. It stated that "the province's liability is limited in respect of things done or omitted in the exercise of power or authority under an ultra vires enactment".
The issue before the Court was whether the immunity clause, exempting itself from paying back money gained through invalid law, was valid law.
Opinion of the Court
The Court found in favour of the mining companies. The government was attempting to circumvent section 52 of the Constitution by exempting itself from federalismCanadian federalism
Canada is a federation with two distinct jurisdictions of political authority: the country-wide federal government and the ten regionally-based provincial governments. It also has three territorial governments in the far north, though these are subject to the federal government...
.
In his reasoning, Dickson J. (as he was then) stated:
To allow moneys collected under compulsion, pursuant to an ultra vires statute, to be retained would be tantamount to allowing the provincial Legislature to do indirectly what it could not do directly, and by covert means to impose illegal burdens.
He concluded by stating:
The principle governing this appeal can be shortly and simply expressed in these terms: if a statute is found to be ultra vires the legislature which enacted it, legislation which would have the effect of attaching legal consequences to acts done pursuant to that invalid law must equally be ultra vires because it relates to the same subject-matter as that which was involved in the prior legislation. If a state cannot take by unconstitutional means it cannot retain by unconstitutional means.
Aftermath
Upon losing the case, Premier Blakeney met with the mining companies and threatened that the provincial government would take over the potash mining industry. Eventually, however, the companies and the government came to an agreement under which the government paid back only part of the taxes.External links
- Full text of Supreme Court of Canada decision at LexUMhttp://scc.lexum.umontreal.ca/en/1976/1977rcs2-576/1977rcs2-576.html and CanLIIhttp://www.canlii.org/en/ca/scc/doc/1976/1976canlii15/1976canlii15.html