Supreme Court of Canada

City of Montreal v. Civic Parking Center Ltd. et al., [1981] 2 S.C.R. 541

Date: 1981-12-17

City of Montreal Appellant;

and

Civic Parking Center Ltd., Town Parking Ltd., Globe Parking Canada Limited, Institutional Parking Services Limited, Safeway Parking Ltd., E-Z Parking Ltd., Metropolitain Parking Ltd., L. & M. Parking Ltd., M. & S. Parking Inc., Easter Allright Parking Inc. and CanPark Services Limited Respondents.

1981: October 21, 22; 1981: December 17.

Present: Dickson, Beetz, Estey, McIntyre and Chouinard JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Municipal law—Taxation—Motion to quash a by-law imposing a tax—Tax may not be imposed without express authorization—Basis of calculating tax not authorized by Charter—By-law ultra vires—Charter of the city of Montreal, 1960, 1959-60 (Que.), c. 102 as amended, arts. 516, 517, 518, 521, 803, 805—By-law No. 4876 of the city of Montreal.

By a motion to quash respondents challenged the validity of By-law 4876 of the city of Montreal, the purpose of which was to raise the annual special tax on private parking grounds with a minimum area of 800 square feet from $0.01 to $0.12 a square foot as of May 1, 1975. The By-law was promulgated by notice in the newspapers on May 5 and 6, 1975.

The Superior Court quashed the By-law on the ground that the City did not, under its Charter, have the right to provide that By-law 4876 would become effective by any means other than that provided by art. 451 of the Charter. The Court of Appeal affirmed the judgment on the ground that the By-law imposed a tax the amount of which was to be calculated on a basis not authorized by the Charter.

Held: The appeal should be dismissed.

A municipality, in view of its status as delegatee, must observe the principle of ultra vires and exercise only the powers expressly conferred, or the implicit powers which derive from the express powers. In the matter of municipal taxation, the question is not to determine what prevents a municipality from imposing a given tax, but what authorizes it to do so.

[Page 542]

In the case at bar, it can be seen from examining arts. 516, 517, 518, 803 w. and 805 of the Charter that they cannot be used as a basis for the power which the City claimed to exercise. It follows that it did not have the power to impose the tax contained in By-law 4876.

Attorney General of Canada v. Compagnie de Publication La Presse, Limitée, 1966 SCC 35, [1967] S.C.R. 60; Longueuil Navigation Co. v. City of Montreal (1888), 1888 SCC 32, 15 S.C.R. 566; Vic Restaurant Inc. v. City of Montreal, 1958 SCC 78, [1959] S.C.R. 58; Phaneuf v. Corporation du Village de St-Hugues (1936), 61 Que. K.B. 83, referred to.

APPEAL from a judgment of the Court of Appeal of Quebec affirming a judgment of the Superior Court[^1]. Appeal dismissed.

Jean Rochette and Neuville Lacroix, for the appellant.

J. Vincent O’Donnell, Q.C., and Yves Mayrand, for the respondents.

English version of the judgment of the Court delivered by

CHOUINARD J.—The city of Montreal is appealing from a decision of the Court of Appeal dated January 7, 1980 affirming, but for different reasons, the judgment of the Superior Court[^1] dated January 6, 1976 which quashed By-law 4876.

The purpose of this by-law was to raise the annual special tax on parking grounds from $0.01 to $0.12 a square foot as of May 1, 1975.

By-law 4876 reads as follows:

At the meeting of the Council of the City of Montreal held on April 30, 1975,

Council ordained:

ARTICLE 1.—Section 63-1 of By-law 2820, as added by By-law 2939, as amended by Article 19 of By-law 3117 and replaced by Article 4 of By-law 3226 is replaced anew by the following:

“SECTION 63-1

Parking ground for motor vehicles on private property, of a minimum area of 800 square feet, where spaces are rented to the public.

Approved by: Permits and Inspections, Traffic.

[Page 543]

Fee: $0.12 per square foot, minimum of $100.00 for each parking lot.”

ARTICLE 2.—This By-law shall come into force on May 1, 1975.

By a motion to quash respondents cited four arguments which may be summarized as follows:

(a) in providing that it should become effective on May 1, 1975 but being published subsequently on May 5 and 6, By-law 4876 has retroactive effect, and is therefore unlawful;

(b) the By-law is unlawful in that it distinguishes between parking grounds of 800 square feet or more, on which a tax is imposed, and parking grounds of less than 800 square feet, on which no tax is imposed, a distinction which is not authorized by the Charter of the City;

(c) the By-law is unlawful in that it imposes a tax the amount of which is to be calculated based on the number of square feet of area in a parking ground, and the said basis of calculation is not authorized by the Charter of the City;

(d) the City acted in bad faith in adopting By-law 4876, in that it used its regulatory power to compete with applicants on the commercial level, and the said By-law is therefore unlawful.

In quashing By-law 4876, the Superior Court judge relied on the first argument. This by-law became effective on May 1, 1975; it was adopted on April 30 and promulgated by notice on May 5 and 6. The relevant passage from the reasons of the Superior Court judgment, by which the By-law was quashed, is as follows:

[TRANSLATION] At most by-law 2820, as amended by by-law 4876, could have applied to the coming fiscal year (Gagnon v. Cité de Chicoutimi, [1974] C.S. 187). However, this will not be possible for a very important reason.

The Charter of the city of Montreal provides, in article 451, cited above, that no by-law adopted under the Charter shall be valid and binding or shall come into

[Page 544]

force until certain conditions have been met, including promulgation. By-law 4876, adopted by the Council on April 30, 1975, provides in article 2:

Article 2—This by-law shall come into force on May 1, 1975.

By its Charter, the City did not have the right to provide that by-law 4876 would become effective by any means other than that provided by article 451 of the Charter. The City thus substituted for the application provisions contained in the law a formula which, in the circumstances and in view of the lack of time at its disposal, exempted it from at least one essential formality, promulgation. The City of Montreal thus arrogated to itself a right which it did not have and exceeded its jurisdiction. Its by-law 4876, adopted on April 30, 1975, is therefore ultra vires.

The Court of Appeal did not express any opinion on this argument. It upheld the third argument, which challenged the actual taxing power of the City and found By-law 4876 void, considering none of the other three arguments.

Similarly, if as I feel the Court of Appeal’s decision is correct, there will be no need for this Court to consider the other arguments raised.

In the Court of Appeal appellant argued that By-law 2820, as amended by By-law 4876, was authorized both by para. 34 of art. 521 and by para. w. of art. 803 of the Charter.

Paragraph 34 of art. 521, the preamble of which must also be reproduced, reads as follows:

521. Without prejudice to articles 516, 517, 518 and 519 and subject to the provisions of articles 539 to 543, the council by by-law, may:

522. Prohibit or regulate parking grounds for motor vehicles on private land and oblige all persons operating the same to obtain for such purpose an annual permit, on payment of the sum fixed by the council; define what constitutes a parking ground for the purposes of this paragraph.

In this Court, appellant did not repeat its argument based on art. 521, but confined itself to art. 803. In this appellant was correct, because in my view art. 521 has a completely different object, namely the regulation of parking grounds. In any

[Page 545]

case there is no need to decide the point, because appellant is no longer relying on this article.

Article 521 is contained in Division 2, Chapter II, Title IX of the Charter, titled “Power to make by-laws”. The object of Title IX is the general and specific regulatory powers of the City.

The City’s taxing powers are to be found in Title XI, “Taxation”.

This title contains three chapters: Chapter I, “Real estate and other taxes”; Chapter II, “Collection of taxes”; and Chapter III, “Certain special taxes”. Chapter I, which is of particular concern here, contains six divisions: Division 1, “Real estate taxes”; Division 2, “Business taxes and annual dues”; Division 3, “Special business and occupation taxes”; Division 4, “Service tax”; Division 5, “Inspection dues”; and Division 6, “Special provisions relating to taxes”.

Division 3 of Chapter I of Title XI contains art. 803, cited in this Court as the source of By-law 2820, and so too of the disputed By-law 4876. In support of its argument, appellant also referred to certain other articles of the Charter which will be discussed below, in particular art. 805 and arts. 516, 517 and 518. However, I will first consider art. 803.

ARTICLE 803 OF THE CHARTER

At the time, the preamble of art. 803 and para. w. read:

803. Subject to article 804, the council may also impose, by the vote of two-thirds of the members present, on certain persons, establishments, occupations and means of profit or livelihood, in addition to the business tax provided for by articles 794 and 795, special taxes, for one year or for shorter periods, of such amounts as it may determine, the whole as hereinafter stated:

w. The operation of private grounds as public lots for the parking of motor vehicles.

[Page 546]

By-law 2820 is titled:

By-law concerning permits and special or personal taxes on businesses, occupations and activities.

A few preliminary observations should be made. By-law 2820 refers to permits as well as to special taxes, as art. 814 of the Charter authorizes the City to collect “in the form of a permit or license” the special taxes provided for by art. 803 of the Charter, and by the other articles in Division 3: “Special business and occupation taxes”, and in Division 4 (art. 808): “Service tax”. As it happened, the City chose to collect this special tax in the form of a permit.

Article 814 reads as follows:

814. The city, in the discretion of the council, under such conditions and restrictions as it may determine, may impose and levy in the form of a permit or license the special taxes provided for by articles 801, 802, 803, 805, 807 and 808; such taxes shall be payable annually on the first of May.

The council may however authorize the director of finance to issue permits or licenses from the first of November on payment of half of the annual fee.

The preceding paragraph shall not apply to licenses or permits for circuses, exhibitions, parades, temporary stores or brokers.

Accordingly, even though the fee of $0.12 a square foot imposed by the By-law is imposed and levied in the form of a permit, as art. 814 cited above allows, it is nonetheless a special tax under art. 803.

Returning to art. 803, appelant noted that:

[TRANSLATION] The decision of the Court of Appeal was that the special taxes provided for in art. 803 of the Charter must be imposed by the Council by means of a fixed amount, unless some other method is specified.

First, it submitted that this limits the ordinary meaning of the words of art. 803 itself, which authorizes the Council to impose these taxes in “such amounts as it may determine”.

In support of this proposition, appellant referred the Court to several definitions of the word “amount”. Respondents cited other definitions in support of the contrary proposition. I do not think

[Page 547]

that the solution is to be found in this way, for as counsel for the respondents pointed out, we are not dealing here with isolated words, but with words placed in the context of art. 803 and the other provisions of the Charter of the city of Montreal.

Additionally, appellant argued that the very generality of the phrase “such amounts as it may determine” allows the amounts to be fixed or to be the result of a mathematical operation which is the same for all taxpayers included in each category. [TRANSLATION] “In other words, the Council may impose a fixed amount or it may establish a uniform standard to determine the amount of the special tax.”

Appellant cited in support the decision of this Court in Attorney General of Canada v. Compagnie de Publication La Presse, Limitée[^2], in which the Court held to be valid the tariff of licence fees for private commercial broadcasting stations established by the Governor General in Council pursuant to s. 3(1) of the Radio Act, R.S.C. 1952, c. 233 (now s. 6(1), R.S.C. 1970, c. R-l), which read as follows:

3. (1) The Governor in Council may

(a) prescribe the tariff of fees to be paid for licences and for examination for certificates of proficiency held and issued under this Act;

The disputed tariff set the fees at a percentage of gross receipts, replacing the earlier tariff which had provided fees fixed by category, the categories being defined in terms of gross receipts.

Appellant, while acknowledging the difference in formulation, drew a parallel between the phrase “such amounts as it may determine” in art. 803 of the Charter and the phrase “may prescribe the tariff of fees to be paid” in s. 3(1) of the Radio Act, and concluded that like the second phrase, the first did not in any way limit the manner in which the amount of the special tax could be determined by the Council. This conclusion is incorrect and in my opinion the decision of this Court in La Presse cannot be applied here.

[Page 548]

Appellant cited in particular from this decision the following passage in the opinion of Abbott J., speaking for the majority, at p. 75:

The tariff established under P.C. 1960-1488 abolished a previously existing maximum fee and provided for licence fees calculated upon the basis of gross revenues of the licencee. In my view this in no way changed the character of the levy. As to the alleged discriminatory character of the regulation, I am not satisfied that it is in fact discriminatory. In any event s. 3 of the Act puts no limitation upon the powers of the Governor in Council to prescribe licence fees. That such fees may in fact be discriminatory, in my opinion, affords no legal ground of attack upon the validity of the Order.

Counsel for the appellant especially emphasized two extracts from this passage.

The first extract is as follows: “In my view this in no way changed the character of the levy”.

As we shall see, this extract is in no way relevant to the case at bar.

It should be mentioned that in La Presse, supra, three arguments were made. They are set forth on p. 631 of the judgment of the Exchequer Court[^3] as follows:

[TRANSLATION]

1°—The new s. 5 of the General Radio Regulations does not provide for licence fees, but in fact and in law imposes a tax, without the authority of Parliament;

2°—If the type of levy enacted by this new section was within the jurisdiction of the Governor in Council, the said s. 5, as enacted by Order in Council 1960-1488, is void, unlawful and ultra vires because it establishes unfair (discriminatory) distinctions between applicant and other private commercial broadcasting stations, and between the group of private commercial broadcasting stations, the CBC and all other classes of broadcasting station operators;

3°—In any case, the new s. 5 of the Regulations, as enacted by Order in Council 1960‑1488, is void, unlawful and ultra vires because it affects the rights of applicant and of other persons to whom it applies in a retroactive manner not authorized by the enabling Act.

[Page 549]

It is clear from reading Abbott J.’s opinion that the first part of the passage cited above relates to the first of these three arguments. The question was accordingly as to whether the tariff at issue imposed licence fees or a tax, and in this connection Abbott J. concluded that the fact that the fees were calculated in terms of gross receipts did not have the effect of making them a tax, and he therefore wrote: “In my view this in no way changed the character of the levy”.

The case at bar in no way raises this question. Under art. 803 special taxes are precisely what the City may impose, and under art. 814 it may collect these special taxes in the form of a permit.

The second passage noted by counsel for the appellant is as follows: “In any event s. 3 of the Act puts no limitation upon the powers of the Governor in Council to prescribe licence fees.” One only needs to re-read the passage from the opinion of Abbott J. cited above to see that this passage relates to the second argument, regarding discrimination, and has no bearing on the question at issue in the case at bar, namely whether in the absence of any specific authorization the Council of the City of Montreal can tax the operation of parking grounds based on their area rather than on a fixed amount.

Moreover, a review of art. 803 and the provisions which preceded it provides a simple explanation for the presence of the phrase “of such amounts as it may determine” in the preamble of the article, and of the meaning which must be given to it. This phrase was introduced at the time the Charter was revised in 1960, 1959-60 (Que.), c. 102, but at the same time the maximum amount of the tax indicated in each of the paragraphs was deleted. It will suffice for purposes of illustration to cite para. a. of art. 803:

a. The owners of horses and vehicles, for each horse and for each vehicle, except owners who, as carters or hackmen, pay the tax mentioned in paragraph 2 of article 801;

Paragraph a. was formerly para. (d) of art. 364, which has been there at least since the revision of

[Page 550]

1899, 1899 (Que.), c. 58. The preamble of art. 364 and para, (d) read as follows:

364. The council may also, in addition to the above taxes, impose and levy, by a vote of the majority of the whole of its members, the following special taxes:

(d) On the owners of horses and vehicles, for each and every horse, a special tax not exceeding $10; and for each and every vehicle, a special tax not exceeding $15; except such owners as are licensed or taxed under the preceding paragraph.

Amounts were thus indicated in each of the; paragraphs until they were deleted, and in their place the phrase “such amounts as it may determine” was introduced into the preamble.

On the other hand, the phrase “the whole as hereinafter stated” was added at the same time to the preamble of art: 803, and respondents cited it as proof that the City has only the powers expressly mentioned in the various paragraphs, and that in the absence of any provision in para. w. regarding the method of taxing parking grounds, only a fixed amount may be imposed.

Appellant however maintained that the modalities and characteristics which are found in many of the paragraphs in art. 803 have the effect of limiting the specific power, not of enlarging it, and as para. w. has no such limitation attached to it, the City has the power to determine the modalities or method of calculation and to define the tax by the square foot as in the case at bar.

With respect, I cannot subscribe to this interpretation. In my opinion an analysis of the various paragraphs leads to the opposite interpretation.

To illustrate this, I would cite para. p.:

p. Every gasoline pump installed on public or private property: a tax which may vary according as the pump is installed in a building or in the open, or as gasoline is delivered in the street or on private land;

[Page 551]

This provision was introduced for the first time in 1921 (1921 (Que.), c. 111, s. 2) as para. qq. of art. 364, in the following terms:

qq. A special tax not exceeding twenty-five dollars for the privilege of placing gasoline pumps on the edge of the sidewalk or upon public property generally.

This paragraph was first replaced in 1940 by s. 49 of 1940 (Que.), c. 75, in the following terms:

49. The city may impose and levy an annual tax for every pump used in the sale of gasoline; the rate of such tax may be different according to whether the pump be installed in a building or in the open air, or whether the delivering of gasoline be effected in the street or on private ground.

It is provided that the rate of the tax can vary depending on where the pump is installed. This is clearly an enlargement of the power to tax pumps. However, it can be seen that only pumps “used in the sale of gasoline” can be taxed. This was amended in 1942 by s. 18 of 1942 (Que.), c. 72. Section 49 became:

49. The city may impose and collect an annual tax on every gasoline pump in use. The rate of such tax may be different according to whether the pump is installed in a building or in the open air, whether the delivery of the gas is made in the street or on private ground.

Following this amendment not only pumps used in the sale of gasoline are taxable, but all pumps in use as well.

The 1960 revision added a further refinement applicable to every gasoline pump “installed on public or private property”.

It can therefore be seen that on each occasion the changes made have had the purpose of extending the scope of the tax. The same is true, in my opinion, for all the provisions and modalities contained in the various paragraphs of art. 803.

Thus, the power conferred by para. a. cited above to impose a special tax on owners of horses and vehicles “for each horse and for each vehicle” is wider than the simple power to impose a tax on the owners of horses and vehicles would be.

[Page 552]

This interpretation is in accordance with the interpretation given by this Court with respect to another power in Longueuil Navigation Co. v. City of Montreal[^4]. In that case the City, which had the power of imposing an annual tax on “ferrymen or steamboat ferries”, had adopted a by-law imposing a tax of $200 on each boat operated by appellant, and this by-law was found by this Court to be ultra vires. It was held that the enabling provision only permitted a tax on each operator of a boat, not a tax on each boat.

In order to show that the provisions and modalities introduced had the effect of extending and not of limiting the power conferred, we may also refer to para. f. of art. 803, which permits a tax on circuses and menageries which give travelling exhibitions or shows “for each day that they operate”. Similarly, para. i. permits the imposition on persons carrying on the coal oil trade of “a tax on each vehicle used for such purposes and varying according as such vehicles are drawn by one horse or by more than one”; para. j. permits, for moving picture theatres, “a tax on each individual seat”; para. e. provides for each shop opened, or other premises used temporarily to sell or offer for sale therein at retail, whether by samples or otherwise, any articles or goods: “a stated tax for a maximum period of 30 days and a supplementary tax for each additional day”; paras. k. and r. authorize a tax for each day that the activities referred to in these paragraphs continue; paras. g., h. and t. authorize a tax corresponding to a percentage of the paid-up capital of the company or corporation in the first case, of the annual rental value of the premises occupied in the second, and of the premiums collected in the third; para. o. authorizes “a tax based on the area of the sign”, on every illuminated or electric sign; and so on.

[Page 553]

On the other hand, para. q. simply states “every boxing exhibition” and para. v. “every plumber’s certificate issued under the by-laws”.

A similar analysis could be made with regard to the special tax authorized on some 48 other categories of persons, establishments, occupations and means of profit or livelihood by art. 801, contained in the same Division 3 of Chapter 1 of Title XI, to which art. 802 adds a number of refinements, modalities or qualifications.

I conclude from the foregoing that when the legislator wished to authorize the City to add modalities to a special tax provided for in art. 803 or to make it variable, he said so expressly, and this was not done in para. w. It follows that the City did not have, merely by virtue of this paragraph, a power to impose a tax on the operation of private land as public grounds for the parking of motor vehicles at the rate of $0.12 a square foot.

ARTICLE 805 OF THE CHARTER

Appellant further relied on art. 805 of its Charter, which reads as follows:

805. The city may impose and levy, in addition to the business tax provided for by articles 794 and 795, certain annual dues or special taxes on all businesses, manufactures, financial or commercial establishments, occupations, arts, professions, trades or means of profit or livelihood or activities practised or carried on in the city and respecting which no special tax is provided for by articles 801, 802 and 803. The annual dues or special tax may vary in each case or within a category according to criteria or conditions determined by the council.

In this regard appellant, in its factum, submitted inter alia the following:

[TRANSLATION] The interpretation according to which under article 803 the Council may impose special taxes on “establishments, occupations and means of profit or livelihood” listed therein, in accordance with whatever method it regards as proper in each case, is further confirmed by the final provisions of article 805, in that if the legislator has specified that the special taxes imposed under this article on “businesses, manufactures, financial or commercial establishments, occupations, arts, professions, trades or means of profit or livelihood or activities practised or carried on in the city and

[Page 554]

respecting which no special tax is provided for by articles 801, 802 and 803” may vary in each case “according to criteria or conditions determined by the council”, «a fortiori» the taxes imposed with respect to the cases expressly mentioned in arts. 801, 802 and 803 can be imposed in some manner other than by a fixed amount.

Contrary to the view taken by the Court of Appeal, the presence of the last phrase in the final provisions of article 805 and its absence from article 803 should not be interpreted as giving the Council a discretion to enact a variable tax only in the residuary cases under article 805.

If these passages mean that the last sentence of art. 805 applies also to arts. 801, 802 and 803, this interpretation seems to me to be clearly incorrect.

It is apparent that art. 805 covers cases other than those contemplated in arts. 801, 802 and 803, since it states: “all businesses …respecting which no special tax is provided for by articles 801, 802 and 803”.

Moreover, the wording of the last sentence of art. 805, which begins “The annual dues or special tax may vary”, suffices to establish that this sentence cannot be applied to any articles other than art. 805. It is the annual dues or the special tax which may vary. There is no mention of any annual dues in arts. 801, 802 and 803. The only reference is to a special tax. Only art. 805 provides for annual dues or special taxes. The annual dues or special taxes which may vary according to art. 805 therefore can only be the annual dues or special tax authorized by art. 805.

Appellant further argued:

[TRANSLATION] …accepting the interpretation adopted by the Court of Appeal would mean conferring less power on the Council when it imposes a special tax on the activities expressly mentioned in article 803 than when it enacts taxes applicable to the residuary cases under article 805.

The fact remains that in my opinion this is precisely what has been done.

[Page 555]

The power to vary the annual dues or special tax in each case or within a category according to criteria or conditions determined by the Council, which is found in art. 805, was not there originally. The article was amended in 1971. It previously read as follows:

805. The city may impose and levy, in addition to the business tax provided for by articles 794 and 795, certain annual dues or special taxes not exceeding two hundred dollars on all businesses, manufactures, financial or commercial establishments, occupations, arts, professions, trades or means of profit or livelihood practised or carried on in the city and respecting which no special tax is provided for by articles 801, 802 and 803.

This article was replaced by the above-cited present wording, by s. 40 of c. 96 of the 1971 Statutes of Quebec. The maximum of two hundred dollars was deleted, and the last sentence was added. Article 803 remained unchanged.

In my opinion, therefore, in the case at bar art. 805 is of no assistance.

ARTICLES 516, 517 AND 518 OF THE CHARTER

Finally, appellant relied on the general powers conferred on it by arts. 516, 517 and 518 of its Charter:

516. The council shall have power to enact by-laws to ensure the peace, order and good government of the city, the welfare of its citizens and the proper administration of its affairs, and to pronounce upon any matter calculated to affect or interest the city and its people in any way, provided that such by-laws be not repugnant to the laws of the Province or of Canada, or to any special provision of this charter.

517. For greater certainty as to the powers conferred on the council by article 516, but without restricting the scope thereof and subject to the reservations which it contains, and without restricting the scope of the powers otherwise conferred on the council by this charter, the authority and jurisdiction of the council extend to all the following matters:

a. the raising of money by taxation;

[Page 556]

518. No enumeration or mention of specific powers in this charter or its amendments, and in particular in chapters II and III of this title, shall be interpreted as restricting the authority or the general powers conferred on the city by articles 516 and 517, or as affecting them in any way, even as regards matters to which such specific powers relate; but on the contrary, such authority and general powers shall retain all their scope and may be completely exercised, notwithstanding such specific powers.

In its factum, appellant reviewed the origin of these articles, which were arts. 299 and 300 of the 1899 Charter, to which art. 300c was added by s. 9 of 1912 (Que.), 3 Geo. V, c. 54 and art. 299a by s. 27, schedule B of 1921 (Que.), c. 112. At the time of the 1960 revision, mentioned above, these articles became arts. 516, 517 and 518, and it was by this revision that the last sentence of art. 518, primarily relied on by appellant as the basis for its argument, was added; it is worth repeating: “but on the contrary, such authority and general powers shall retain all their scope and may be completely exercised, notwithstanding such specific powers”.

With regard to the extent of these general powers and the meaning to be given to these sections, appellant relied on the following passage from Fauteux J., as he then was, in Vic Restaurant Inc. v. City of Montreal[^5], at p. 66, commenting on art. 300c in effect at the time:

[TRANSLATION] The provisions of this article, on which the judgment of the Court of Appeal especially relies, manifestly depart from the strictness of the principle generally applicable, referred to by Sir Mathias Tellier, then Chief Justice of the Province of Quebec, in Phaneuf v. Corporation du Village de St-Hugues, as follows:

Where legislation is concerned, municipal corporations have no powers other than those which are formally delegated to them by the Legislature; and these powers cannot be extended or exceeded by them.

In none of the decisions mentioned at the end of the second question submitted by this Court does it appear that the municipalities whose by-laws were challenged received such a power from the Legislature. This is a special characteristic which constitutes a fundamental

[Page 557]

difference between the legislative power of the city of Montreal and that of these municipalities. The Quebec legislature could not have indicated in clearer terms its intent to ensure complete independence for the city and to prohibit any limiting interpretation of the legislative power conferred.

In that case, the City denied Vic Restaurant Inc. the permits needed to operate a restaurant on the ground that the Director of the Police Force had refused to give his approval. Section 2(B) of the By-law stated that no permit could be issued by the Director of Finance unless he had obtained the written approval of each of the directors of the branches concerned, including the Director of the Police Force.

In particular, it was necessary to determine whether the requirement of approval by the Director of the Police Force constituted a delegation by the Council of its powers to the Director. Fauteux J. concluded that there had not been a delegation. He wrote, at p. 68, [TRANSLATION] “this is a condition which the city Council, by virtue of the powers given it by the legislature, had the authority to impose on the obtaining of a permit”.

As counsel for the respondents pointed out, there was no question of a taxing power, but of something quite different.

It is also true of course that Fauteux J. was dissenting. The majority held that the Council had exceeded its jurisdiction and ordered that the permit sought be issued. Locke J., for the majority, wrote at pp. 85-86:

The City of Montreal is a municipal corporation and the council in respect of the granting and withholding of licences to persons engaged in certain classes of business has the powers and only the powers vested in it by its statute of incorporation. That statute does not authorize or purport to authorize the council to delegate the power to fix the terms upon which permits may be granted vested in it by ss. 299 and 300 to the Director of the Police Department or to anyone else.

Returning to art. 518, and bearing in mind the last sentence added at the 1960 revision, it is clear that this article must be seen in conjunction with arts. 516 and 517, to which it refers.

[Page 558]

Regarding the power “to enact by-laws to ensure the peace, order and good government…” conferred by art. 516, it is necessary to bear in mind the condition stated as follows: “provided that such by-laws be not repugnant to the laws of the Province or of Canada, or to any special provision of this charter”. It goes without saying that if By-law 4876 is inconsistent with any special provision of the Charter, especially with para. w. of art. 803, which as I concluded above does not give the City the power to impose a tax in the manner which it has adopted, neither art. 516 nor art. 518 can remedy the situation.

With regard to art. 517, the general power vested in the City to raise money by taxation cannot have the effect of conferring on it a general power to tax regardless of the many powers conferred, and in great detail, especially that set forth in para. w. of art. 803, adopted by s. 9 of c. 91 of the 1969 Statutes of Quebec, some 70 years after arts. 299 and 300, to which were later added arts. 300c and 299a, and which were later replaced by arts. 516, 517 and 518.

These articles cannot be used as a basis for the power which the City claimed to exercise by By-law 4876.

The passage cited from Fauteux J. in Vic Restaurant Inc. v. City of Montreal refers to the decision of the Court of Appeal in Phaneuf v. Corporation du Village de St-Hugues[^6]. Under art. 406 of the Municipal Code, the municipality had adopted a by-law requiring dogs weighing over 35 pounds to be muzzled or kept on a chain. The taxpayer, in addition to establishing that only his own dogs were covered, challenged the by-law on the ground that defendant had exceeded its powers by making its by-law applicable not to all dogs, but only to dogs of a given weight, a distinction not authorized by law, and this argument was accepted by the Court of Appeal. At p. 90 of the opinion

[Page 559]

of Tellier C.J. there is the following passage, cited in part by Fauteux J.:

[TRANSLATION] AS the Legislature has neither made nor authorized a distinction, I do not see by what right corporations could undertake to do so.

In matters of legislation, municipal corporations only have the powers which have been formally delegated to them by the Legislature; and they cannot extend or exceed these powers.

In the case at bar, defendant extended and exceeded its powers, distinguishing for the purposes of its by-law between dogs weighing 35 pounds or more and those weighing less.

In the matter of municipal taxation, the question is not to determine what prevents a municipality from imposing a given tax, but what authorizes it to do so.

In their Précis de droit municipal, Montreal, 1973, Messrs. Tremblay and Savoie write at p. 32: [TRANSLATION] In other words, a municipality, in view of its status as delegatee, must observe the principle of ultra vires and exercise only the powers expressly conferred, or the implicit powers which derive from the express powers.

They add, at pp. 44-45:

[TRANSLATION] Finally, we should note the principle which consists in interpreting literally and restrictively the powers of municipalities which may encroach on the rights of citizens, those seeking to limit the free exercise of rights, franchises or privileges generally used by means of licences or permits, and those which provide for measures of expropriation and taxation.

In his text Droit administratif, 1981, Professor Patrice Garant, at p. 316, states the following rule:

[TRANSLATION] It is not possible to impose a tax by by-law without express authorization to this effect.

In The Law of Canadian Municipal Corporations, vol. 1, Rogers writes at p. 388, § 64.77:

The rule is well established that common law rights are not to be held to have been taken away or affected by a statute or by-law passed under its authority unless it is so expressed in clear language. This is tantamount to a virtual presumption against such a legislative intendment. The burden lies on those seeking to establish that the legislature intended to take away the rights

[Page 560]

of individuals to show that by express words or necessary implication such an intention appears. So a statute which invests local bodies with authority to restrict or take away the common law right of every subject to employ himself in a lawful manner in any lawful trade or calling is to be strictly scrutinized. The same rule applies where the municipality has a right to impose a tax on occupations.

In order to entertain the proposition of appellant, it would be necessary to read into para. w. of art. 803 words which are not there, words such as those which are now in this paragraph, since it was replaced in 1980, and which I cite not as a conclusive indication of the meaning to be given to it before the amendment, but simply to illustrate what it would be necessary for it to contain. Paragraph w. was replaced by s. 41 of c. 40 of the 1980 Statutes of Quebec, and it now reads as follows:

w. The operation of parking lots: a tax based on the area or levied on the base of any other terms and conditions determined by the council. The council, for the purposes of this paragraph, may define what constitutes a parking lot and fix tax rates which may vary according to the zones where the lots are situated and according to the various categories that it fixes.

For these reasons, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitors for the appellant: Péloquin, Badeaux, Allard & Lacroix, Montreal.

Solicitors for the respondents: Lavery, O’Brien, Montreal.

[^1]: [1976] C.S. 63. [^2]: 1966 SCC 35, [1967] S.C.R. 60. [^3]: 1963 (CA CÉC) 1065, [1964] Ex. C.R. 627. [^4]: (1888), 1888 SCC 32, 15 S.C.R. 566. [^5]: 1958 SCC 78, [1959] S.C.R. 58. [^6]: (1936), 61 Que. K.B. 83.