Amax Potash Ltd. v. Government of Saskatchewan
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| Amax Potash Ltd. v. Government of Saskatchewan | |||||
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| Hearing: ? Judgment: ? |
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Chief Justice: Bora Laskin |
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Majority by: Dickson J. |
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Amax Potash Ltd. v. Government of Saskatchewan [1977] 2 S.C.R. 576 is a leading case of the Supreme Court of Canada on the application and role of the Constitution of Canada.
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[edit] Background
During the 1970s, one of Saskatchewan's biggest industry was potash mining. Much of it was run by American mining companies that would export it to the US. The recently-elected New Democratic Party (NDP) provincial government of Allan Blakeney enacted the Mineral Taxation Act and the Potash Reserve Regulations that effectively taxed the companies for their mining.
The mining companies sought to reclaim the tax that they had paid over the years. They made a Constitutional challenge against the Act on the grounds that the taxes were ultra vires the authority of the provincial government as taxation of this type was a matter for the federal government.
The provincial government sought refuge under section 5(7) of the Saskatchewan Proceedings Against the Crown Act, which barred recovery in just such an event. It stated that "the province's liability is limited in respect of things done or omitted in the exercise of power or authority under an ultra vires enactment".
The issue before the Court was whether the immunity clause, exempting itself from paying back money gained through invalid law, was valid law.
[edit] Opinion of the Court
The Court found in favour of the mining companies. The government was attempting to circumvent section 52 of the Constitution by exempting itself from federalism.
In his reasoning, Dickson J. (as he was then) stated:
To allow moneys collected under compulsion, pursant to an ultra vires statute, to be retained would be tantamount to allowing the provincial Legislature to do indirectly what it could not do directly, and by covert measn to impose illegal burdens.
He concluded by stating:
The principle governing this appeal can be shortly and simply expressed in these terms: if a statute is found to be ultra vires the legislature which enacted it, legislation which would have the effect of attaching legal consequences to acts done pursuant to that invalid law must equally be ultra vires because it relates to the same subject-matter as that which was involved in the prior legislation. If a state cannot take by unconstitutional means it cannot retain by unconstitutional means.
[edit] Aftermath
Upon losing the case, Premier Blakeney met with the mining companies and threatened to nationalize the potash mining industry. Eventually, they came to an agreement where the government would only pay back part of the taxes.
