On Friday, December 13, 2019, the Supreme Court of Canada is releasing its decision in British Columbia Investment Management Corporation v. Canada (Attorney General). At issue is whether the British Columbia Investment Management Corporation (“bcIMC”) is immune from federal taxes and bound by tax agreements between the provincial and federal governments.
bcIMC is an agent of the BC government responsible for managing investment portfolios with assets from public-sector pension plans. It sought declarations from the Supreme Court of British Columbia that it is immune from federal excise taxes and not bound by certain taxation agreements between Canada and BC. In response, Canada argued that the Tax Court of Canada should decide the matter. The BC chambers judge chose to exercise jurisdiction over the matter and issued two declarations: bcIMC is immune from federal taxes; and bcIMC is bound by the taxation agreements.
The BC Court of Appeal dismissed the subsequent appeal and cross-appeal. It found that the BC Supreme Court and Tax Court have concurrent jurisdiction over the immunity issue and it was a matter of the judge’s discretion to assume jurisdiction. As an agent of the provincial Crown, bcIMC enjoys the same immunity from the taxes at issue as the Province. Federal legislation that seeks to separate the Crown from its assets cannot have the effect of diminishing this immunity. The taxation agreements are not merely political agreements and are legally binding on both the parties to them.
At the SCC, the Attorney General of Canada argued that the provincial Crown’s immunity from federal taxation under s. 125 of the Constitution Act, 1867 should not extend to shield private property that is placed with a Crown agent to hold in trust. The assets held by bcIMC are held pursuant to a statutory trust and do not belong to the provincial Crown. bcIMC argued that as long as it is acting within the scope of its role as a statutory agent of the provincial Crown, then it ought to receive the same liability and immunity as the provincial government.
I’m leaning towards appeal allowed on this one for the Crown. Due to the cross-appeals this might be another tricky one to score. I’ll treat the AGC as the appellant and if they are substantially successful on their appeal, it will be marked as appeal allowed. Make your predictions now.