Reference re Quebec Sales Tax

Reference re Quebec Sales Tax

The proposed amendments transforming the Quebec sales tax into a GST‑style value‑added tax are intra vires a provincial legislature under s.92(2) because the input tax refund mechanism and statutory design ensure the person intended to bear the burden is the ultimate consumer, making the tax a direct tax; the zero‑rated, exempt and small supplier provisions do not alter that general tendency and are constitutionally permissible.

Citation
[1994] 2 SCR 715
Parties
Referrer: Governor General in Council; Intervener: Attorney General of Canada; Intervener: Attorney General of Quebec; Amicus: Wilfrid Lefebvre, Q.C.
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
23 June 1994
Procedural Posture
Reference Under S.53 of the Supreme Court Act (constitutional Reference) / Final Judgment by the Supreme Court of Canada
Outcome
Both constitutional reference questions answered in the affirmative; proposed GST‑style amendments to the Québec sales tax are within provincial authority under s.92(2).
Legal Topics
Distribution of Legislative Powers, Provincial Direct Taxation, Value‑added Tax (gst/qst), Input Tax Refund, Exempt and Zero‑rated Supplies, Small Supplier Exemption
Source Language
English
Constitutional Law Taxation Federalism Distribution of Legislative Powers Provincial Direct Taxation Value‑added Tax (gst/qst) Input Tax Refund Exempt and Zero‑rated Supplies +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 5 Authorities cited 15 Party arguments 2 Amounts and remedies 6
Sign in to unlock

Parties

Governor General in Council

Referrer

Attorney General of Canada

Intervener

Attorney General of Quebec

Intervener

Wilfrid Lefebvre, Q.C.

Amicus

Procedural Posture

Reference Under S.53 of the Supreme Court Act (constitutional Reference) / Final Judgment by the Supreme Court of Canada

Legal Issues

  1. 1 Whether a province may enact a value‑added tax similar to the federal GST under s.92(2) of the Constitution Act, 1867
  2. 2 Whether collection along the production chain and input tax refunds render the tax indirect
  3. 3 Whether zero‑rated and exempt supplies convert the tax into an indirect tax

Ratio Decidendi

The proposed amendments transforming the Quebec sales tax into a GST‑style value‑added tax are intra vires a provincial legislature under s.92(2) because the input tax refund mechanism and statutory design ensure the person intended to bear the burden is the ultimate consumer, making the tax a direct tax; the zero‑rated, exempt and small supplier provisions do not alter that general tendency and are constitutionally permissible.

Court Disposition

Both constitutional reference questions answered in the affirmative; proposed GST‑style amendments to the Québec sales tax are within provincial authority under s.92(2).

Orders

  • Reference answered: Yes, the Québec Legislature may impose the proposed tax (Question 1: Yes; Question 2: Yes)