The Lieutenant Governor in Council of Alberta referred questions to the Alberta Court of Appeal concerning the constitutionality of a proposed federal tax on exported natural gas, specifically whether it could apply to natural gas owned and exported by the provincial Crown.
The Court of Appeal held the tax was ultra vires in its application to provincial property.
The Attorney General of Canada appealed to the Supreme Court of Canada.
The Supreme Court dismissed the appeal, holding that the proposed tax was in pith and substance a taxation measure under s. 91(3) of the B.N.A. Act, rather than a regulatory measure under the trade and commerce power.
As such, it was subject to the immunity granted by s. 125, which protects provincial Crown property from federal taxation.