http://decisions.fct-cf.gc.ca/fc-cf/decisions/en/item/110162/index.do
Union of Municipalities of New Brunswick v. Canada (National Revenue) (June 16, 2015 – 2015 FC 752, Mosley J.).
Précis: Effective July 1, 1997 the Union of Municipalities of New Brunswick (“UNMB”) was granted the status of a “municipality” for GST purposes. UMNB was an organization representing 59 of 105 municipalities of New Brunswick but provided no actual municipal functions. In 2006 CRA began a review of its status and finally, on November 19, 2014, it advised UMNB that its status would be revoked effective January 1, 2015. UMNB then commenced a judicial review proceeding of CRA’s revocation decision.
The Court concluded that there was no evidence that the Minister had acted unfairly in the course of the review process and that the decision that UNMB was not a municipality for the purposes of the
Excise Tax Act was not unreasonable. The application for judicial review was dismissed, with costs.
Decision: The Court rejected UMNB’s argument that the Minister had breached the duties of procedural fairness:
[41] The applicant argues that the respondent should have disclosed the two documents prepared by Ms Eastman and provided an opportunity to speak directly to the Director. It also questions Ms Desrosiers’s statement that she did not rely on Ms Eastman’s 2006 analysis. It implies that it was unfair for Ms Eastman to prepare the 2014 analysis because she had a closed mind. The applicant suggests that Ms Desrosiers impermissibly made the decision instead of Mr Nault. It also argues that the decision-maker fettered his or her discretion by applying administrative policies instead of the law. At the hearing, the applicant further alleged that the respondent should have disclosed the changes made to the applicable internal policies in 2004. In its view, it smacks of unfairness to revoke a determination that was granted under the previous policies without such notice.
[42] In my view, the applicant’s various allegations are wholly without merit.
…
[51] Upon consideration of these authorities, it cannot be said that the decision-maker committed a reviewable error. He allowed the administrative policies and eligibility criteria to guide the exercise of his discretion but there is no indication that he was insensitive to the particular facts of the case. To the contrary, his reasons carefully discuss the applicant’s circumstances with respect to every relevant criterion. No criterion is arbitrarily elevated to the detriment of any other. The reasons conclude that granting a municipal determination would not advance the Minister’s tax policy objectives in view of the applicant’s specific activities. Clearly, the decision-maker did not allow any particular factor to predetermine his decision.
Similarly, the Court rejected the argument that the Minister had acted unreasonably in not continuing to accord UMNB municipal status:
[38] Part IX of the Act concerns the Goods and Services Tax. Subsection 123(1) provides definitions, including a definition of “municipality”. According to paragraph (b) of that definition, the Minister may determine any “local authority” to be a municipality for the purposes of Part IX.
123(1)
|
123(1)
|
“municipality” |
« municipalité » |
« municipalité » |
“municipality” |
“municipality” means |
« municipalité » |
(a) an incorporated city, town, village, metropolitan authority, township, district, county or rural municipality or other incorporated municipal body however designated, and
|
a) Administration métropolitaine, ville, village, canton, district,
comté ou municipalité rurale constitués en personne morale ou autre
organisme municipal ainsi constitué quelle qu’en soit la désignation; |
(b) such other local authority as the Minister may determine to be a municipality for the purposes of this Part…
|
b) telle autre administration locale à laquelle le ministre confère le
statut de municipalité pour l’application de la présente partie… |
…
[62] The decision-maker reasonably characterized the UMNB’s main functions as conducting advocacy on behalf of its member municipalities and facilitating the flow of information between them. His conclusion that these functions do not justify a municipal determination was reasonably open to him. It is true that the First Schedule to the Municipalities Act does not purport to provide a comprehensive list of municipal services – but it is noteworthy that it does not contain any service which approximates those performed by the UMNB. While the UMNB provides a forum where municipalities may discuss their provision of these services and make requests related to these services to the provincial or federal governments, it does not actually perform these services on behalf of the municipalities. There is no evidence in the record of any fire departments, police stations or tourist offices administered by the UMNB. Given this factual matrix, the decision-maker could form the opinion that granting a municipal determination to the UMNB would not advance the Minister’s tax policy objectives.
[63] I do not wish to be understood as minimizing the significance and utility of the services provided by the UMNB. Quite clearly, they are of great benefit to the residents of New Brunswick. It is possible that the Minister could have made a positive decision on the facts before him. However, “[t]he essence of discretion is that it can be exercised differently in different cases”: Waycobah First Nation, above, at para 43. It is not up to the Court to compel the Minister to exercise that discretion in one way. Indeed, on reasonableness review, the Court is not “developing, asserting and enforcing its own view of the matter”: Delios v Canada (Attorney General), 2015 FCA 117 at para 28.
[64] In sum, the decision under review is transparent, justified and intelligible. This is enough on judicial review: Dunsmuir, above, at para 47. Once again, the Court does not shoulder the task of setting up a tax policy or pronouncing upon the wisdom of the Minister’s policy. Its task is simply to ensure that the Minister gives effect to his chosen policy in a manner which can be defended with respect to the facts and the law. In this case, that threshold was met. The Court has no reason to intervene.
As a result the Court dismissed the application for judicial review, with costs.