R. v. Leslie Murray Josey
Nova Scotia Provincial Court
Williams Prov. Ct. J.
Oral judgment: October 30, 1998.
WILLIAMS PROV. CT. J. (orally): The defendant, Leslie Murray Josey, is charged that he:
"On or about the 9th day of January, 1997, at or near Halifax, in the County of Halifax, Province of Nova Scotia, did unlawfully fail to provide to the office of the Minister of National Revenue at Halifax in the said County of Halifax, a return of income on Form T1 for the taxation year 1994, including a Balance Sheet and Income Statement, following notice therefore made upon him pursuant to paragraph 231.2(1)(a) of the Income Tax Act contrary to subsection 238(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended.
AND FURTHERMORE at or near Halifax, in the County of Halifax, Province of Nova Scotia, on or about the 27th day of January, 1997,
Did unlawfully fail to provide to the office of the Minister of National Revenue at Halifax, in the said County of Halifax, a return of income on Form T1 for the taxation year 1995, including a Balance Sheet and Income Statement, following notice therefore made upon him pursuant to paragraph 231.2(1)(a) of the Income Tax Act contrary to subsection 238(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended."
The defendant challenges the constitutionality of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended. In short, it is his contention that income tax is a "direct tax". Therefore, collection of this tax from him is outside the legislative and constitutional competence of the Federal Parliament. He argues that the Federal government, through the Income Tax Act, has in effect usurp jurisdiction reserved exclusively to the provinces by the Constitution Act 1867, s. 92. As a corollary, he further contends that the Minister of National Revenue cannot legally demand that he file an income statement.
I have read with great interest the affidavit and supporting documents submitted by the defendant. In addition, I have listened to the able and persuasive arguments of both the defendant and the Crown. However in the end, I must conclude, that despite the able submissions of the defendant, a proper reading of the Constitution Act, 1867, shows that "the raising of money by any mode or system of taxation" and, as a corollary, its attendant collection mechanism, falls squarely within the ambit of s. 91(3) - federal legislative powers. This, in my view, renders his arguments on the issue of the Income Tax Act as ultra vires the Parliament of Canada wholly without substance.
Respectfully, on the issue of "direct taxation" I conclude, that courts have already decided this issue and have established and settled the Federal taxing power under the constitution. Judgements in cases such as Caron v. the King  A.C. 999 (P.C.), Attorney General of Canada v. Attorney General of Alberta et al. (Reference Re Goods and Services Tax),  2 S.C.R. 445, Hoffman v. Canada (1996) 112 F.T.R. 185 (Fed T.D.), Winterhaven Stables Ltd., v. Canada (Attorney General) (1988) 53 D.L.R. (4th) 413 (Alta. C.A.), and Nova Scotia (Attorney General) v. Canada (Attorney General) 1950 Can Rep NS 20,  S.C.R.31, are on the point.
In addition, the Constitution Act 1982, confers rights and freedoms on individuals in a new constitutional document that did not exist in 1867. Section 52(1) of the Constitution Act 1982 states:
"52.(1) The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect".
Thus, having reviewed and considered the above authorities, the result is that I am confined, as a matter of law, to and by these persuasive, compelling and binding examples. Therefore, I believe that for me now to adjudicate upon the limits of the Federal taxation power and authority, the very same settled issues, is, in the circumstances of this case, unwarranted and unhelpful. The above authorities point to and reflect the current state of the law. Accordingly, my decision is that the constitutional challenge as presented and argued by the defendant is not only now futile but it is also untenable and, with respect, cannot be sustained.
For the above reasons I dismiss the defendant's application. The matter will be set down for trial.