Section 125 of the ''Constitution Act, 1867'' (french: article 125 de la Loi constitutionnelle de 1867) is a provision of the

Constitution of Canada The Constitution of Canada (french: Constitution du Canada) is the supreme law in Canada. It outlines Canada's system of government and the civil and human rights of those who are citizens of Canada and non-citizens in Canada. Its contents a ...

relating to taxation immunities of the federal and provincial governments. The section provides that the property of the provincial and federal governments are not subject to taxation. The ''

Constitution Act, 1867 The ''Constitution Act, 1867'' (french: Loi constitutionnelle de 1867),''The Constitution Act, 1867'', 30 & 31 Victoria (U.K.), c. 3, http://canlii.ca/t/ldsw retrieved on 2019-03-14. originally enacted as the ''British North America Act, 186 ...

'' is the constitutional statute which established

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by to ...

. Originally named the ''

British North America Act, 1867 The ''Constitution Act, 1867'' (french: Loi constitutionnelle de 1867),''The Constitution Act, 1867'', 30 & 31 Victoria (U.K.), c. 3, http://canlii.ca/t/ldsw retrieved on 2019-03-14. originally enacted as the ''British North America Act, 186 ...

'', the Act continues to be the foundational statute for the Constitution of Canada, although it has been amended many times since 1867. It is now recognised as part of the supreme law of Canada.

''Constitution Act, 1867''

The ''

'' is part of the

and thus part of the supreme law of

. It was the product of extensive negotiations by the governments of the

British North America British North America comprised the colonial territories of the British Empire in North America from 1783 onwards. English colonisation of North America began in the 16th century in Newfoundland, then further south at Roanoke and Jamestow ...

n provinces in the 1860s. The Act sets out the constitutional framework of Canada, including the structure of the

federal government A federation (also known as a federal state) is a political entity characterized by a union of partially self-governing provinces, states, or other regions under a central federal government ( federalism). In a federation, the self-gover ...

and the powers of the federal government and the provinces. Originally enacted in 1867 by the

British Parliament The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprem ...

under the name the ''British North America Act, 1867'', in 1982 the Act was brought under full Canadian control through the

Patriation Patriation is the political process that led to full Canadian sovereignty, culminating with the Constitution Act, 1982. The process was necessary because under the Statute of Westminster 1931, with Canada's agreement at the time, the British parl ...

of the Constitution, and was renamed the ''

''. Since

, the Act can only be amended in Canada, under the amending formula set out in the ''

Constitution Act, 1982 The ''Constitution Act, 1982'' (french: link=no, Loi constitutionnelle de 1982) is a part of the Constitution of Canada.Formally enacted as Schedule B of the ''Canada Act 1982'', enacted by the Parliament of the United Kingdom. Section 60 of t ...

''.

Text of section 125

Section 125 reads: Section 125 is found in Part VIII of the ''Constitution Act, 1867'', dealing with revenues, debts, assets, and raxation. It has not been amended since the Act was enacted in 1867.

Nature of the taxation power in Canada

Section 125 affects the taxation powers of both levels of government, and has received a broad interpretation in the Canadian courts. Since the 1930

Supreme Court of Canada The Supreme Court of Canada (SCC; french: Cour suprême du Canada, CSC) is the Supreme court, highest court in the Court system of Canada, judicial system of Canada. It comprises List of Justices of the Supreme Court of Canada, nine justices, wh ...

ruling in ''Lawson v. Interior Tree Fruit and Vegetables Committee of Direction'', taxation is held to consist of the following characteristics: * it is enforceable by law; * imposed under the authority of the legislature; * levied by a public body; and * intended for a public purpose. In addition, the 1999 SCC ruling in ''Westbank First Nation v. British Columbia Hydro and Power Authority'' has also declared that a government levy would be in

pith and substance Pith and substance is a legal doctrine in Canadian constitutional interpretation used to determine under which head of power a given piece of legislation falls. The doctrine is primarily used when a law is challenged on the basis that one level of ...

a tax if it was "unconnected to any form of a regulatory scheme."''Westbank_First_Nation_v._British_Columbia_Hydro_and_Power_Authority'',_

''Westbank_First_Nation_v._British_Columbia_Hydro_and_Power_Authority'',_[1999
/nowiki>_3_SCR_134">999">''Westbank_First_Nation_v._British_Columbia_Hydro_and_Power_Authority'',_[1999
/nowiki>_3_SCR_134_paras._43,_44._The_test_for_a_regulatory_fee_set_out_in_''Westbank''_requires: *_a_complete,_complex_and_detailed_code_of_regulation;_ *_a_regulatory_purpose_which_seeks_to_affect_some_behaviour; *_the_presence_of_actual_or_properly_estimated_costs_of_the_regulation;_and *_a_relationship_between_the_person_being_regulated_and_the_regulation,_where_the_person_being_regulated_either_benefits_from,_or_causes_the_need_for,_the_regulation. This_is_important_to_note,_as_taxation_is_barred_under_s._121,_but_regulatory_fees_are_not,_and_Canadian_jurisprudence_under_s._125_has_turned_on_that_distinction.

_Interpretation_in_the_Canadian_courts

The_nature_of_s._125_has_been_described_as_thus: Therefore,_its_prohibition_covers_taxation_on_the_holding,_as_well_as_the_acquisition_and_disposal,_of_property._In_addition: *_the_provision_also_extends_to_property_held_by_Crown_corporations_of_Canada">Crown_corporation_ A_state-owned_enterprise_(SOE)_is_a__government_entity_which_is_established_or_nationalised_by_the_''national_government''_or_''provincial_government''_by_an_executive_order__or_an_act_of_legislation_in_order_to_earn_profit_for_the_government_...

s,_and *_the_prohibition_on_levying_such_taxation_also_extends_to_ ''Westbank_First_Nation_v._British_Columbia_Hydro_and_Power_Authority'',_[1999
/nowiki>_3_SCR_134">999">''Westbank_First_Nation_v._British_Columbia_Hydro_and_Power_Authority'',_[1999
/nowiki>_3_SCR_134_paras._43,_44._The_test_for_a_regulatory_fee_set_out_in_''Westbank''_requires: *_a_complete,_complex_and_detailed_code_of_regulation;_ *_a_regulatory_purpose_which_seeks_to_affect_some_behaviour; *_the_presence_of_actual_or_properly_estimated_costs_of_the_regulation;_and *_a_relationship_between_the_person_being_regulated_and_the_regulation,_where_the_person_being_regulated_either_benefits_from,_or_causes_the_need_for,_the_regulation. This_is_important_to_note,_as_taxation_is_barred_under_s._121,_but_regulatory_fees_are_not,_and_Canadian_jurisprudence_under_s._125_has_turned_on_that_distinction.

_Interpretation_in_the_Canadian_courts

s,_and *_the_prohibition_on_levying_such_taxation_also_extends_to_Local_government_in_Canada">local_government_ Local_government_is_a_generic_term_for_the_lowest_tiers_of_public_administration_within_a_particular__sovereign_state._This_particular_usage_of_the_word_government_refers_specifically_to_a_level_of_administration_that_is_both_geographically-loc_...

''Constitution Act, 1867''

Text of section 125

Nature of the taxation power in Canada

_Interpretation_in_the_Canadian_courts

_Interpretation_in_the_Canadian_courts

_Interpretation_in_the_Canadian_courts

Interpretation in the Canadian courts

Notes

References