Skip to main content

The Supreme Court of Canada. The top court ruled on Friday that the B.C. agency responsible for managing public-sector pension plan investments is constitutionally immune from remitting goods-and-services taxes related to those portfolios.

Adrian Wyld/The Canadian Press

The B.C. agency responsible for managing public-sector pension plan investments is constitutionally immune from remitting goods-and-services taxes related to those portfolios, the Supreme Court of Canada has decided.

However, the top court ruled Friday the British Columbia Investment Management Corporation, a Crown agency, still might be on the hook for GST payments to the federal government due to taxation agreements between B.C. and Ottawa.

The management corporation had been ordered to pay almost $40.5-million in GST, plus interest and penalties, for delivering investment-management services for pooled portfolios.

Story continues below advertisement

The corporation then sought a declaration from the Supreme Court of British Columbia that it was immune from federal excise taxes.

A B.C. judge ruled in 2016 that the federal government could not order the corporation to remit the GST on the basis that, as an agent of the provincial Crown, it enjoyed the same immunity from federal taxes as the province.

However, the judge also found the corporation was bound by two taxation agreements between B.C. and the federal government that may require the Crown agency to collect and remit certain taxes.

The ruling was upheld last year by the B.C. Court of Appeal.

In its 6-1 decision Friday, the Supreme Court of Canada affirmed the lower-court decisions.

In writing for the majority, Justice Andromache Karakatsanis noted intergovernmental immunity from taxation grants each level of government “operational space” to govern without interference. “It also prevents one group of elected representatives from dictating how another legislative body should allocate the financial resources under its control.”

She added that by entering into the agreements with Ottawa, “the provincial Crown chose to pay taxes for which it would not otherwise have been liable.”

Story continues below advertisement

But even after the high court ruling the nature of any specific obligations the corporation might have under the taxation agreements remained unclear, since those questions went beyond the scope of the decision.

Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.

Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter
To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies