James M. Mabbutt

The Governor in Council referred two questions to the Supreme Court of Canada concerning the constitutional validity of proposed amendments to Quebec's sales tax designed to harmonize it with the federal goods and services tax.

The Court held that the proposed value-added tax, including the input tax refund mechanism and various exemptions, constitutes direct taxation within the province.

The tax is therefore within the legislative authority of the province under section 92(2) of the Constitution Act, 1867.

The federal government enacted the Goods and Services Tax (GST).

The province of Alberta challenged the constitutionality of the GST Act, arguing it infringed on provincial jurisdiction over property and civil rights, amounted to taxation of provincial property, and unconstitutionally appropriated provincial funds by requiring the province to collect and remit the tax.

The Supreme Court of Canada held that the GST Act was a valid exercise of the federal taxation power under s. 91(3) of the Constitution Act, 1867.

The Court found that the collection and remittance obligations were necessarily incidental to the federal scheme and did not violate intergovernmental immunity or entitle suppliers to compensation for collection costs.

The appellants, customs inspectors, challenged the selection of other inspectors for a newly created 'dog handler' function, arguing it constituted an appointment to a new position under the Public Service Employment Act requiring selection according to merit.

The appeal board agreed and revoked the appointments, but the Federal Court of Appeal set aside that decision, holding that a new position requires a formal administrative decision.

The Supreme Court of Canada allowed the appeal, finding that a significant change in functions requiring special qualifications amounts to the creation of a new position, and thus the appointments were subject to the merit principle and the right of appeal.

The appellant appealed the temporary assignment of a co-worker to a newly created but unclassified supervisory position, arguing it was an appointment not based on merit under the Public Service Employment Act.

The Federal Court of Appeal had ruled that without a clear intent to create a position and make an appointment, no appointment occurred.

The Supreme Court of Canada allowed the appeal, holding that the objective facts, not the Department's intent, determine if an appointment occurred.

The Court found that the prolonged temporary assignment to new functions constituted an appointment to a position, triggering the merit principle and the right of appeal.