OTTAWA – A Supreme Court ruling on liquor license fees in new Brunswick will be used as fresh fodder as the Canadian Association of Broadcasters announced today it has asked the Federal Court of Appeal to order recovery of over $790 million of so-called Part II fees paid to the CRTC by Canadian broadcasters.
In December, Honourable Justice Michel J. Shore of the Federal Court of Canada Trial Division ruled that Part II Licence Fees paid by broadcasters and broadcast distributors were an unlawful tax in the form of a licence fee collected on behalf of the government by the CRTC.
However, the judge did not order the repayment of these fees to broadcasters.
"We ask the Federal Court of Appeal to bring the findings of Justice Shore to their logical conclusion and to order the return of the monies paid under protest since 1998,” said Glenn O’Farrell, president and CEO of the Canadian Association of Broadcasters (CAB). “To date, the Part II Licence Fees have drained over three-quarters of a billion dollars out of the broadcasting system into the Government’s Consolidated Revenue Fund."
The current legislative framework does not empower the CRTC to levy taxes. Judge Shore also stated that: "these levies are not connected to activities related to the broadcasting system but are in fact leakage out of the regulatory system."
In a decision issued today by the Supreme Court of Canada (Kingstreet Investments Ltd. v. New Brunswick [Department of Finance]) – dealing with the recovery of invalid taxes, in this case, additional liquor license fees, the decision stated "This principle of ‘no taxation without representation’ is central to our conception of democracy and the rule of law. When the government collects and retains taxes pursuant to ultra vires legislation, it undermines the rule of law.
"To permit the Crown to retain an ultra vires tax would thus condone a breach of this most fundamental constitutional principle. As a result, a taxpayer who has made a payment pursuant to ultra vires legislation has a right to restitution."
The bar owners must be paid back, essentially.
"This decision overturns the previous general rule against recovery of unlawful taxes. The Supreme Court of Canada’s decision directly addresses and validates broadcasters’ right to recover Part II fees," added O’Farrell.
