Date: 20000221
Docket: T-452-97
BETWEEN:
British Columbia Ferry Corporation, Chevron Canada Limited,
Imperial Oil Limited and Shell Canada Products Limited
Plaintiffs
and
Her Majesty the Queen in Right of Canada as represented
by the Minister of National Revenue and
the said Minister of Finance
Defendant
Docket: T-1361-97
Imperial Oil Limited
Plaintiff
and
Her Majesty the Queen in Right of Canada as represented
by the Minister of National Revenue and
the said Minister of National Revenue
Defendant
Docket: T-1359-97
Shell Canada Products Limited
Plaintiff
and
Her Majesty the Queen in Right of Canada as represented
by the Minister of National Revenue and
the said Minister of National Revenue
Defendant
Docket: T-2051-96
British Columbia Ferry Corporation and
Chevron Canada Limited
Plaintiffs
and
Her Majesty the Queen in Right of Canada as represented
by the Minister of National Revenue and
the said Minister of Finance
Defendant
REASONS FOR JUDGMENT
DUBÉ J.:
margl1440.aftnnar.
[1] These four related actions, joined and heard together at trial, claim the reimbursement of taxes paid by the plaintiffs on diesel fuel for ships stores under provisions of the Excise Tax Act1, the Customs Act2 and the Ships Stores Regulations3 ("the Regulations"). The main plaintiff, B.C. Ferry Corporation ("B.C. Ferry"), is a B.C. Crown Corporation operating ferries in British Columbia. The plaintiffs Shell Canada Products Limited and Imperial Oil Limited ("the Suppliers") also paid taxes to the Crown in respect of fuel oil supplied to B.C. Ferry. In actions T-1359-97, T-1361-97 and T-2051-96, the plaintiffs claim refunds and drawbacks of taxes paid in accordance with the procedural codes set out in the Excise Tax Act and the Regulations for the years 1990 to 1996. In action T-452-97, the plaintiffs claim the return of all taxes paid on diesel fuel from 1986 to September 1, 1990, on the basis of unjust enrichment. (They did not apply for refunds within the prescribed statutory period).
[2] B.C. Ferry is engaged in the business of transporting persons, cargo and other goods by ferries between ports adjacent to the coastal mainland of British Columbia and several islands. It is admitted that all the routes travelled were on salt waters and there was no destination in the United States of America.
1. Statutory Background
[3] Subsection 23(1) of the Excise Tax Act provides for the levying of a tax on goods listed in schedules to that Act. Diesel fuel is listed in paragraph 9.1 of Schedule I of that Act. Section 17 of the Customs Act charges imported goods with duties. Diesel fuel can be an imported good.
[4] Pursuant to subsection 164(3) of the Customs Act and subsection 35(2.3) of the Excise Tax Act, in a single enactment, the Governor in Council passed Order in Council P.C. 1986-1856 to the effect that ships stores included fuel used on board "an inland waters ship". The terms "inland waters ship" were defined in that Order in Council as a "ship engaged in trade between ports on the inland waters of Canada". The terms "inland waters of Canada" were not defined in the Order in Council or in either of the enabling statutes. "Inland waters" were defined in the Customs Act as follows:
| "...all the rivers, lakes and other fresh waters in Canada and includes the St. Lawrence River as far seaward as the straight lines drawn |
| (a) from Cap-des-Rosiers to the westernmost point of Anticosti Island; and |
| (b) from Anticosti Island to the north shore of the St. Lawrence River along the meridian of longitude sixty-three degrees west;" |
[5] Order in Council P.C. 1986-1856 was pre-published.
[6] Order in Council P.C. 1988-1610 changed the definition of "inland waters ship" to the definition of a ship engaged on an island voyage as defined in the Canada Shipping Act4, which definition is similar to the definition in the Customs Act. However, Order in Council P.C. 1988-1610 was not pre-published.
[7] In 1993, Order in Council P.C. 1993-605 was passed and pre-published. It mirrors the wording of Order in Council P.C. 1988-1610.
2. Issues
[8] The issues raised in these actions are outlined by the plaintiffs in the prayers of their statements of claim as follows:
| (a) a declaration that the phrase "inland waters of Canada" as it is used in Order in Council P.C. 1986-1856 includes the waters plied by the Corporation's ships; |
| (b) a declaration that neither the Excise Tax Act nor the Customs Act authorizes the Governor in Council to discriminate between Canadian taxpayers who are exempted from or entitled to the recovery of levies paid on diesel fuel on the basis of the geographic location of their operations; |
| (c) a declaration that Order in Council P.C. 1988-1610 is of no force and effect and did not amend Order in Council P.C. 1986-1856; |
| (d) a declaration that Order in Council P.C. 1993-605 is of no force and effect and did not amend Order in Council P.C. 1986-1856; |
| (e) in the alternative, if Order in Council P.C. 1986-1856 in part discriminates against taxpayers on the basis of the geographic location of their operations, an order severing from the enactment those provisions that do so; |
| (f) a declaration pursuant to section 81.22(1) of the Excise Tax Act, that the appeal be allowed in whole by vacating the determination referred to in paragraph 12 and requiring the Minister of National Revenue to pay to the Plaintiff $77,780.00; |
[9] In response to the plaintiffs' prayers, the defendant says as follows in the Statements of Defence:
| a. Order in Council P.C. 1988-1610 had a separate legal authorization and existence under both the Customs Act and Excise Tax Act and was validly enacted and legally in force under both statutes separately; |
| b. in the alternative, as the Excise Tax Act did not require pre-publication, Order in Council P.C. 1988-1610 was legally and validly authorized, enacted and in force for the purposes of and pursuant to that statute; |
| c. none of the regulations named in the Statement of Claim herein discriminated against Canadian taxpayers; |
| d. in the alternative, if the aforesaid regulations or any of them did discriminate against Canadian taxpayers, such discrimination was authorized by the enabling provisions of the Customs Act and Excise Tax Act and was reasonable and justified in the context of the aforesaid statutes; and |
| e. none of the regulations named in the Statement of Claim herein when properly construed and interpreted authorized the payment of a refund for the alleged supply by the Plaintiff of diesel fuel to the Corporation, and the alleged use of diesel fuel by the Corporation, as the location and circumstances of that usage was not encompassed in any of the aforesaid regulations. As a result, there exists no basis upon which to grant to the Plaintiff the relief sought in the Statement of Claim herein. |
[10] With reference to the action T-452-97, B.C. Ferry raised the further issue of unjust enrichment. The defendant answers that where Parliament has provided a comprehensive code regulating the matter at issue, the statute has displaced the common law or any equitable remedy otherwise available: the plaintiff did not apply for refunds within the prescribed statutory period and is therefore barred from invoking this equitable remedy.
3. Analysis
[11] In my view, B.C. Ferry does not qualify under any of the Regulations because, admittedly, it operates only on salt waters within Canada. It has never qualified for the exemption and none of the amendments at issue change the situation.
[12] First, the 1986 Regulations created the exemption for all vessels operating on fresh waters throughout Canada. B.C. Ferry plies on Canadian salt waters only.
[13] Second, the 1988 Regulations narrowed down the definition to fresh waters in the Great Lakes and the St. Lawrence River. Admittedly, B.C. Ferry operates exclusively on Canadian salt waters. Even if the Customs Act required these Regulations to be pre-published, the Excise Tax Act did not and therefore these Regulations are valid at least with respect to the Excise Tax Act.
[14] Third, the 1993 Regulations were pre-published and, as mentioned earlier, they mirror the wording of the 1988 Regulations. Again, B.C. Ferry does not qualify because it operates exclusively on Canadian salt waters.
[15] Paragraph 15(2)(b) of the Federal Interpretation Act, stipulates that "where an enactment contains an interpretation section or provision, it shall be read and construed, as being applicable to all other enactments relating to the same subject-matter unless a contrary intention appears".
[16] And section 16 of that Act provides that "where an enactment confers power to make regulations, expressions used in the regulations have the same respective meanings as in the enactment conferring the power". Thus, "inland waters" is to be interpreted in accordance with the Customs Act definition which, as mentioned earlier, means all the fresh waters in Canada including the St. Lawrence River as far seaward as a straight line between Cap-des-Rosiers, Anticosti Island and the North Shore.
[17] In any event, none of the other relevant definitions of "inland waters" can possibly include salt waters upon which, admittedly, B.C. Ferry travels exclusively. To sum up, between 1986 and 1988, the Customs Act definition excluded ships which operated exclusively on salt waters. Between 1988 and 1993, the 1988 Regulations incorporated the Canada Shipping Act definition which excluded ships which operated exclusively on Canadian salt waters.
[18] It is not necessary for me to decide on the technical validity of the unpublished 1988 Regulations as, in any event, the preceding 1986 Regulations excluded B.C. Ferry's ships as they travel exclusively on Canadian salt waters.
[19] In my view, it cannot be said that the Regulations create geographical discrimination between the East Coast and the West Coast of Canada. All ships operating exclusively in Canada on salt waters are excluded, which applies as well to ferries operating between Halifax and Dartmouth, Nova Scotia, which also travel exclusively on Canadian salt waters. On the other hand, a vessel sailing between British Columbia and Seattle would be entitled to the exemptions because it does not operate exclusively in Canada.
[20] As to unjust enrichment, as claimed by the plaintiffs for the period when it did not act within the statutory limitation period, the Excise Tax Act constitutes a complete statutory code. Such a code excludes an equitable remedy which may otherwise be available5. Where Parliament has provided a comprehensive code regulating the matter at issue, the enabling statute displaces the common law6. And more so with reference to taxing statutes which are statutory creations prescribing dates and conditions to payments, repayments, or reimbursements. A taxing code constitutes a bar to the equitable remedy of unjust enrichment as a means for recovery to be invoked by taxpayers who have failed to act during the prescribed period7. Section 71 of the Excise Tax Act further enshrines the principle as follows:
| 71. Except as provided in this or any other Act of Parliament, no person has a right of action against Her Majesty for the recovery of any moneys paid to Her Majesty that are taken into account by Her Majesty as taxes, penalties, interest or other sums under this Act. |
[21] Unjust enrichment is not provided as a right of action under the Excise Tax Act.
[22] Thus, there is no scope for a plea of unjust enrichment under the Excise Tax Act and even if there were, it would not be available to the plaintiffs in this case as B.C. Ferry is not entitled to reimbursement because the fuel in question was carried in ships stores on board vessels plying exclusively on salt waters in Canada.
4. Disposition
[23] Consequently, the four actions are dismissed with costs.
OTTAWA, Ontario
February 21, 2000
Judge
__________________5 Consumers Glass Co. Ltd. v. Canada (1989), 107 N.R. 156 (F.C.A.) and Sunbeam Corp. (Canada) Ltd. v. M.N.R. (Customs & Excise) (1993), 71 F.T.R. 199.
6 Glaxo Welcome PLC v. M.N.R., [1998] 4 F.C. 439 (F.C.A.).
7 Zaidan Group Ltd. v. London (City) (1990), 71 O.R. (2d) 65 et 69 (C.A.); aff'd [1991] 3 S.C.R. 593 at 594.