Catalyst Paper Corp. v. North Cowichan (2012), 425 N.R. 22 (SCC)
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[French language version follows English language version]
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Temp. Cite: [2012] N.R. TBEd. JA.013
Catalyst Paper Corporation (appellant) v. Corporation of the District of North Cowichan (respondent)
(33744; 2012 SCC 2; 2012 CSC 2)
Indexed As: Catalyst Paper Corp. v. North Cowichan (District)
Supreme Court of Canada
McLachlin, C.J.C., LeBel, Deschamps, Fish, Abella, Rothstein and Cromwell, JJ.
January 20, 2012.
Summary:
Catalyst Paper Corp. operated a paper mill in the District of North Cowichan. Catalyst objected to the tax rate that it paid compared to residential ratepayers. In 2009, the tax rate for class 4 major industry was set at $43.3499 per $1,000 of assessed value, and in respect of residential properties class 1 was set at $2.1430 per $1,000, resulting in a ratio of 1:20.3 as between the residential and major industry classes. Catalyst filed a petition seeking (1) an order setting aside 2009 Tax Rates Bylaw adopted by the District for illegality; or, alternatively, (2) a declaration that the property tax rate set under the bylaw respecting class 4 major industry properties was unreasonable and ultra vires the District.
The British Columbia Supreme Court, in a decision reported at [2009] B.C.T.C. Uned. 1420, dismissed the petition. Catalyst appealed.
The British Columbia Court of Appeal, in a decision reported at 286 B.C.A.C. 149; 484 W.A.C. 149, dismissed the appeal. Catalyst appealed.
The Supreme Court of Canada dismissed the appeal.
Administrative Law – Topic 548
The hearing and decision – Decisions of the tribunal – Reasons for decisions – When not required – Catalyst objected to the tax rate that it paid compared to residential ratepayers – In 2009, the rate for class 4 major industry was set at $43.3499 per $1,000 of assessed value and in respect of residential properties class 1 was set at $2.1430 per $1,000, resulting in a ratio of 1:20.3 as between the residential and major industry classes – This ratio was dramatically higher than the 1:3.4 ratio that was prescribed by statute for all municipalities in British Columbia until 1984, and was the highest in the Province – The Supreme Court of Canada, in determining what the reasonableness standard of review required in this case, reviewed the relevant legislation, being the Community Charter (B.C.) (“Act”) – The court noted that the Act gave British Columbia municipalities broad power to vary rates between different classes of property – The Act did not support the contention that property value taxes ought to be limited by the level of service consumed – Section 197 authorized the imposition of a tax, not a fee – The distinguishing feature between the two was that a tax did not have to bear any relationship to the costs of the service being provided, while the opposite was true for a fee – As for matters of process, the municipality was not required to provide reasons or formally explain the rationale for passing a bylaw (an administrative act) – See paragraphs 26 to 31.
Municipal Law – Topic 430
Councils – Decisions of – Reasons – [See
Administrative Law – Topic 548
].
Municipal Law – Topic 1483
Powers of municipalities – Particular powers – Imposition and collection of taxes or fees – Catalyst Paper Corp. operated a mill in the District of North Cowichan – Catalyst objected to the tax rate that it paid compared to residential ratepayers – In 2009, the rate for class 4 major industry was set at $43.3499 per $1,000 of assessed value and in respect of residential properties class 1 was set at $2.1430 per $1,000, resulting in a ratio of 1:20.3 as between the residential and major industry classes – This ratio was dramatically higher than the 1:3.4 ratio that was prescribed by statute for all municipalities in British Columbia until 1984, and was the highest in the Province – Catalyst filed a petition seeking (1) an order setting aside 2009 Tax Rates Bylaw adopted by the District for illegality; or, alternatively, (2) a declaration that the property tax rate set under the bylaw respecting class 4 major industry properties was unreasonable and ultra vires the District – A chambers judge dismissed the petition – The Court of Appeal dismissed Catalyst’s appeal – The Supreme Court of Canada dismissed a further appeal – Catalyst’s contention that the District’s process was flawed because it provided neither formal reasons for the bylaw, nor a rational basis for its decision (based on Catalyst’s “Consumption of Services Model”) could not succeed – Municipal councils were not required to give formal reasons or lay out a rational basis for bylaws – In any event, as the trial judge found, the reasons for the bylaw were clear to everyone – As for the bylaw’s content, while harsh, it fell within a reasonable range of outcomes – The bylaw’s adoption was not a decision that no reasonable elected municipal council could have made – See paragraphs 32 to 37.
Municipal Law – Topic 1483
Powers of municipalities – Particular powers – Imposition and collection of taxes or fees – [See
Administrative Law – Topic 548
].
Municipal Law – Topic 3882
Bylaws – Quashing bylaws – Judicial review – Practice – Jurisdiction – The Supreme Court of Canada stated that “A municipality’s decisions and bylaws, like all administrative acts, may be reviewed in two ways. First, the requirements of procedural fairness and legislative scheme governing a municipality may require that the municipality comply with certain procedural requirements, such as notice or voting requirements. If a municipality fails to abide by these procedures, a decision or bylaw may be invalid. But in addition to meeting these bare legal requirements, municipal acts may be set aside because they fall outside the scope of what the empowering legislative scheme contemplated. This substantive review is premised on the fundamental assumption derived from the rule of law that a legislature does not intend the power it delegates to be exercised unreasonably, or in some cases, incorrectly.” – See paragraph 12.
Municipal Law – Topic 3884
Bylaws – Quashing bylaws – Judicial review – Practice – Standard of review – The Supreme Court of Canada held that a reasonableness standard applied to the substantive judicial review of municipal taxation bylaws – Reasonableness depended on the context – The court stated that “… courts reviewing bylaws for reasonableness must approach the task against the backdrop of the wide variety of factors that elected municipal councillors may legitimately consider in enacting bylaws. The applicable test is this: only if the bylaw is one no reasonable body informed by these factors could have taken will the bylaw be set aside. The fact that wide deference is owed to municipal councils does not mean that they have carte blanche. Reasonableness limits municipal councils in the sense that the substance of their bylaws must conform to the rationale of the statutory regime set up by the legislature. The range of reasonable outcomes is thus circumscribed by the purview of the legislative scheme that empowers a municipality to pass a bylaw.” – See paragraphs 10 to 25.
Municipal Law – Topic 3884
Bylaws – Quashing bylaws – Judicial review – Practice – Standard of review – [See
Administrative Law – Topic 548
].
Cases Noticed:
New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, appld. [para. 13].
Thorne’s Hardware Ltd. v. R. – see Irving Oil Ltd., Canaport Ltd., Kent Lines Ltd. and Thorne’s Hardware Ltd. v. National Harbours Board.
Irving Oil Ltd., Canaport Ltd., Kent Lines Ltd. and Thorne’s Hardware Ltd. v. National Harbours Board, [1983] 1 S.C.R. 106; 46 N.R. 91, refd to. [para. 14].
R. v. Bell, [1979] 2 S.C.R. 212; 26 N.R. 457, refd to. [para. 15].
O’Flanagan v. Rossland (City) (2009), 270 B.C.A.C. 40; 454 W.A.C. 40; 2009 BCCA 182, refd to. [para.15].
Westcoast Energy Inc. et al. v. Peace River (Regional District) (1998), 113 B.C.A.C. 59; 184 W.A.C. 59; 54 B.C.L.R.(3d) 45 (C.A.), refd to. [para. 15].
Canadian National Railway Co. v. Fraser-Fort George (Regional District) (1996), 83 B.C.A.C. 153; 136 W.A.C. 153; 26 B.C.L.R.(3d) 81 (C.A.), refd to. [para. 15].
Hlushak v. Fort McMurray (City) (1982), 37 A.R. 149 (C.A.), refd to. [para. 15].
Ritholz v. Manitoba Optometric Society (1959), 21 D.L.R.(2d) 542 (Man. C.A.), refd to. [para. 15].
Khosa v. Canada (Minister of Citizenship and Immigration), [2009] 1 S.C.R. 339; 385 N.R. 206; 2009 SCC 12, refd to. [para. 18].
Pacific National Investments Ltd. v. Victoria (City) et al., [2000] 2 S.C.R. 919; 263 N.R. 1; 144 B.C.A.C. 203; 236 W.A.C. 203; 2000 SCC 64, refd to. [para. 19].
Kruse v. Johnson, [1898] 2 Q.B. 91 (Div. Ct.), refd to. [para. 20].
Associated Provincial Picture Houses Ltd. v. Wednesbury Corp., [1948] 1 K.B. 223 (C.A.), refd to. [para. 20].
Lehndorff United Properties (Canada) Ltd. et al. v. Edmonton (City) (1993), 146 A.R. 37 (Q.B.), affd. (1994), 157 A.R. 169; 77 W.A.C. 169 (C.A.), refd to. [para. 20].
Immeubles Port Louis ltée v. Lafontaine (Village), [1991] 1 S.C.R. 326; 121 N.R. 323; 38 Q.A.C. 253, refd to. [para. 28].
Statutes Noticed:
Community Charter, S.B.C. 2003, c. 26, sect. 197 [para. 26].
Counsel:
Roy W. Millen, Joanne Lysyk and Alexandra Luchenko, for the appellant;
Sukhbir Manhas and Reece Harding, for the respondent.
Solicitors of Record:
Blake, Cassels & Graydon, Vancouver, British Columbia, for the appellant;
Young, Anderson, Vancouver, British Columbia, for the respondent.
This appeal was heard at Ottawa, Ontario, on October 18, 2011, by McLachlin, C.J.C., LeBel, Deschamps, Fish, Abella, Rothstein and Cromwell, JJ., of the Supreme Court of Canada. McLachlin, C.J.C., delivered the following decision in both official languages for the court on January 20, 2012.
