A provincial Crown corporation (BCI) created to provide investment management services to public sector pension plans held pooled investment portfolio assets in trust.
The federal Crown argued that BCI was required to collect and remit GST on costs recovered from those portfolios under the Excise Tax Act.
The majority held that s. 125 of the Constitution Act, 1867 renders the relevant ETA provisions constitutionally inapplicable because BCI, as a provincial Crown agent, holds legal title to the portfolio assets and imposing GST would tax Crown property.
On the cross-appeal, the Court unanimously held that the Reciprocal Taxation Agreement and the Comprehensive Integrated Tax Coordination Agreement are legally binding intergovernmental agreements and that BCI is subject to them by virtue of s. 16(6) of the Public Sector Pension Plans Act.
Both the appeal and cross-appeal were dismissed.
Wagner C.J. dissented in part, finding that s. 125 immunity should not extend where private pension boards are the beneficial owners and the real impact of the tax falls on them.
