Attorney General of Canada v. British Columbia Investment Management Corporation, et al.

(British Columbia) (Civil) (By Leave)


Constitutional law - Interjurisdictional immunity, Taxation, Goods and services tax, Courts, Jurisdiction - Constitutional law – Interjurisdictional immunity – Taxation – Goods and services tax – Courts – Jurisdiction – Intergovernmental agreements – Lower courts finding British Columbia Investment Management Corporation (“bcIMC”) immune from taxation by Canada under the Excise Tax Act, R.S.C. 1985, c. E-15, in respect of assets it holds in pooled investments portfolios – Lower courts also finding bcIMC bound by provisions of Reciprocal Taxation Agreement (“RTA”) and the Comprehensive Integrated Tax Coordination Agreement (“CITCA”) respecting those assets – Whether Province of British Columbia’s immunity to federal taxation under s. 125 of the Constitution Act, 1867 extends to assets held in trust by bcIMC in pooled investment portfolios under the Public Sector Pension Plans Act, S.B.C. 1999, c. 44 and the Pooled Investment Portfolios Regulation, B.C. Reg. 447/99 – Scope of Province’s immunity to application of Excise Tax Act, when it makes taxable supplies of services in a similar manner as a private, commercial supplier – Whether provincial superior court properly exercised its discretion to exercise its residual constitutional jurisdiction by entertaining this claim – In what circumstances do intergovernmental agreements give rise to enforceable contractual obligations binding the parties – What is required to bind third parties, including crown agents, to provisions of an intergovernmental agreement.


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bcIMC was incorporated under the PSPPA as a trust company authorized to provide investment management services as part of a restructuring of the provincial public-sector pension system. bcIMC manages certain assets in pooled investment portfolios pursuant to the Pooled Investment Portfolios Regulation. The majority of the funds held by bcIMC are investments of the five major B.C. public-sector pension plans. bcIMC provides investment management for these funds.

bcIMC was assessed for GST owing in relation to the provision of investment management services for the pooled portfolios at $40,498,754.94, exclusive of interest and penalties. bcIMC filed without prejudice notices of objection to the assessments, which it was required to do in order to preserve its rights to challenge them.

bcIMC also filed a petition seeking declaratory relief from the provincial superior court. The Supreme Court of British Columbia granted a declaration that the management services performed by bcIMC in relation to those assets are not subject to taxation by Canada under the ETA. At the same time, a declaration was granted that bcIMC is bound by the provisions of two agreements between Canada and British Columbia, the RTA and the CITCA, that may require bcIMC to collect and remit certain taxes.

The Attorney General of Canada appealed the former declaration and bcIMC cross-appealed the latter to the Court of Appeal. The Court of Appeal dismissed the appeal and the cross-appeal. Both issues have been appealed and cross-appealed to this Court.