A-525-78
E.W. Bickle Ltd. (Applicant)
v.
Minister of National Revenue (Respondent)
Court of Appeal, Jackett C.J., Urie J. and Kelly
D.J.—Vancouver, March 27, 1979.
Judicial review — Federal sales tax — Exemptions —
Newspapers — Proviso in Schedule to Act that Minister sole
judge of printed material falling within exempt classes
Minister deciding that these publications devoted to advertis
ing not exempt despite falling within scope of word "newspa-
per" established by the Supreme Court — Whether decision
attacked is one contemplated by s. 28(1) of the Federal Court
Act — If so, whether or not Minister's decision should be set
aside as one based on an error of law — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 28(1) — Excise Tax Act,
R.S.C. 1970, c. E-13, ss. 27, 29(1), Schedule III, Part III, s. 3.
This is a section 28 application to set aside a decision of the
Minister of National Revenue that certain publications are not
newspapers for the purpose of the exemption from federal sales
tax provided in section 3 of Part III of Schedule III to the
Excise Tax Act. The Minister is empowered, as stated at the
end of Part III, to be the sole judge of whether printed material
comes within an exempted class. These publications were found
not to be newspapers even though they fell within the scope of
the word "newspaper" earlier established by the Supreme
Court. The Court is to decide whether or not the decision
attacked is one contemplated by section 28(1) of the Federal
Court Act, and if so, whether the Minister's decision should be
set aside as having been based on an error of law.
Held, the application is allowed. While the decision is an
administrative decision, it is one that must be exercised on a
quasi-judicial basis, for it is a decision whereby taxability or
non-taxability is determined. The Minister has not been
empowered by the statute to vary, arbitrarily or otherwise, the
ambit of the exemption. In making a decision as to whether the
exemption applies, the Minister's duty is to find the facts and
apply the exempting words. In this case, the vital word—
newspaper—has been the subject of a judgment of the Supreme
Court of Canada. In making his decision, the Minister has
rejected that argument and has claimed a "statutory discre
tion", which he apparently regards as giving him a power to
vary the ambit of the exemption from what it would be if the
Supreme Court's view were applied. The Minister erred in law
as there is nothing in the statute empowering him to do
anything other than be the "judge" as to whether the law
contained in the particular section of Part III applied to the
facts before him. It cannot be said that the Minister's decision
might not have been different if he had applied the ordinary
meaning of the word "newspaper" instead of applying the
arbitrary definition that had been conveyed by his Department
to the applicant.
R. v. Montreal Stock Exchange [1935] S.C.R. 614,
applied.
APPLICATION for judicial review.
COUNSEL:
Merin W. Shepard for applicant.
Karl Burdak for respondent.
SOLICITORS:
Russell & DuMoulin, Vancouver, for appli
cant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
lelivered orally in English by
JACKETT C.J.: This is a section 28 application to
;et aside a decision of the Minister of National
Rtevenue that certain publications to wit:
(a) Rapid Auto Mart Magazine,
(b) The Century Gold Post,
(c) Real Estate Victoria, and
(d) Buy, Sell and Trade,
ire not newspapers for the purpose of the exemp
tion from federal sales tax provided in section 3 of
Part III of Schedule III to the Excise Tax Act,
Z.S.C. 1970, c. E-13.
The "Case" material, in so far as it seems to be
relevant, consists of:
1. a letter from the Department of National
Revenue to the applicant dated May 2, 1978,
reading in part:
The assessment has been reviewed by the District Manager,
Victoria District Excise Tax Office and the following con
firms the tax status rulings with respect to the publications
assessed.
The weekly publication "Buy Sell & Trade", sample dated
February 14-20, has been examined, and as it contains
almost 100 percent advertising has been ruled to be a
taxable publication.
The weekly publication "Real Estate Victoria", sample
dated February 10-16, has been examined, as it contains
over 95 percent advertising has also been ruled to be a
taxable publication.
The "Century 21 Gold Post", issued on a random basis,
containing 100 percent advertising is a taxable publication.
The notation "an advertising supplement to the Comox
District Free Press", printed on the bottom of the back cover
page, does not qualify it as a part of a newspaper.
The publication "Rapid Auto Mart Magazine", sample
dated February 28, 1978 has been examined and as it
contains 100 percent advertising, is a taxable publication.
The present criteria for defining a "Newspaper" which is
exempt of tax under the provisions of Schedule III, Part III,
Section 3 of the Excise Tax Act is as follows:
It should be a periodical publication
—resembling a newspaper format, made up of one or more
numbered pages
— with a masthead on the front page showing the date of
issuance and the year of production
— containing considerable editorial content such as news
items of local or common interest, some advertising and such
other printed text that may or may not be found in a bona
fide newspaper e.g., recipes, fashion notes, stories, poems,
etc.
— it must be a medium of communication for public or
general circulation issued at frequent intervals (usually
daily, weekly, bi -weekly or monthly) and
—it must not have more than seventy percent of the space in
more than fifty percent of the issues of such publication
devoted to advertising.
The notation of advertising supplement on the "Century 21
Gold Post" was not sufficient to meet the requirements of
having the date of issuance and the year of production
appearing on the front page of the publication.
The other publications, not being supplements to a newspa
per do not meet the last requirement noted above in that
they must not have more than 70 percent of advertising in
more than 50 percent of the issues.
It is understood that you wish to dispute the above rulings
and resulting assessment, and as discussed the matter should
now be taken up with Mr. H.G. Billingsley, Regional Direc
tor, Vancouver Region, P.O. Box 69090, Station "K", Van-
couver, B.C.
2. a letter from solicitors for the applicant to
the Department dated June 6, 1978, reading in
part:
As we discussed over the telephone, I am writing to you for
the purposes of setting forth our case in support of the
proposition that a number of publications are exempt from
tax under the Excise Tax Act. The publications in question
are the Rapid Auto Mart Magazine, Century 21 Gold Post,
Real Estate Victoria, and Buy, Sell & Trade.
It is our position that all of these publications are newspa
pers within the meaning of that expression as used in section
3 of Part III of Schedule III of the Excise Tax Act.
Accordingly, they should all be exempt.
Although the Department may have established detailed
criteria for the purposes of determining whether or not a
publication is a newspaper, those criteria do not have the
force of law.
One must look instead to the statute itself and to the cases
decided by the courts. The statute itself refers simply to
"newspapers". So far I have been able to find only one case
dealing with this issue and I am enclosing a copy thereof for
your information. You will notice that the case went before
both the Exchequer Court of Canada and the Supreme
Court of Canada. It was decided in 1935 and to the best of
my knowledge has not been challenged. It deals directly with
the use of the word "newspapers" in the Excise Tax Act. It
gives an extremely broad definition to that word. In my
opinion, the definitions referred to by both the Supreme
Court of Canada and the Exchequer Court are broad
enough to include the publications of my client.
As you know, Mr. Billingsly drew my attention to the
closing paragraph of Part III of Schedule III of the Excise
Tax Act. That paragraph purports to make the Minister of
National Revenue the sole judge as to whether any printed
material is a newspaper. That paragraph is quite possibly
successful in ousting the jurisdiction of the Tariff Review
Board under the Excise Tax Act. Accordingly, there is no
other appeal from a decision of the Minister thereunder
except to the Federal Court of Appeal under Section 28 of
the Federal Court Act. I am enclosing a copy of that section.
You will notice that it operates notwithstanding the provi
sions of any other act and this would include the Excise Tax
Act. Although the Department may consider the decision of
the Minister herein to be of an administrative nature and not
to be made on a judicial or quasi judicial basis, the provision
in the Excise Tax Act actually states that the Minister shall
be the sole "judge" and his decision involves an interpreta
tion of a statute which affects the rights of many taxpayers.
The courts tend to interpret administrative decisions as
decisions related to public policy and public convenience.
They do not look favourably upon decisions being made on a
non-appealable basis by government officials, including
Ministers of the Crown.
My understanding from you is that the Minister has not yet
made a decision in this matter. If he does make a decision in
this matter contrary to the opinion that I have expressed, I
expect my client to instruct me to appeal the decision under
section 28 of the Federal Court Act and I expect the Federal
Court of Appeal to uphold my interpretation of the law.
3. a letter dated July 6, 1978 from the solicitors
for the applicant confirming the position previ
ously taken and adding:
Finally, I confirm that a formal decision from the Minister
will only be necessary with respect to the following:
1. The edition of Real Estate Victoria dated February 3-9
1978.
2. The edition of Rapid Auto Mart Magazine bearing
expiry date Feb. 28, 1978.
3. Issue 16 of Volume 3 of Buy, Sell & Trade bearing the
date April 18-24.
4. Edition 21 of the Century 21 Gold Post.
A decision by the Minister with respect to each of these
particular editions will be accepted by us as a decision
respecting all of the editions of these publications up to the
present time. My understanding is that the Minister and his
officials will be bound with respect to all editions of these
publications up to the present time by any board or court
decision made with respect to the four publications selected.
If my understanding is correct, we also agree to be bound by
any such decision with respect to all editions of these
publications currently in existence.
4. a letter dated August 24, 1978 from the
applicant's solicitors to the Minister of National
Revenue reading:
Pursuant to the instructions of Mr. I. Ferguson, Regional
Chief, Excise Tax Administration in Vancouver, I am
enclosing all of the extra copies of the publications in this
case which are available to my client, E.W. Bickle Ltd.
I assume that Mr. Ferguson and Mr. Hugh Anderson, M.P.
have provided you with all the other material necessary for a
decision by you.
We are asking that you rule that the enclosed publications
are newspapers for the purposes of the exemption given
under section 3 of Part III of Schedule III of the Excise Tax
Act. Our request is based upon the definition of newspaper
set out in the case of The King v. Montreal Stock Exchange
and Exchange Printing Co. (1 DTC 288 and 307).
5. a letter from the Minister to the solicitors for
the applicant dated September 28, 1978 reading
in part:
Thank you for your letter of August 24, 1978, concerning
the application of federal sales tax to the "Rapid Auto Mart
Magazine", "The Century Gold Post", "Real Estate Vic-
toria" and "Buy Sell & Trade" which are published by E.W.
Bickle Ltd. of Courtenay, B.C.
I have examined these publications and have found that they
are essentially advertising circulars. Publications of this kind
have not been granted exempt status as newspapers, and I
can only confirm the previous decisions that they are subject
to sales tax.
I have noted your reference to the case of "The King v
Montreal Stock Exchange and Exchange Printing Co." and
I must tell you that, over the years, this case has been
mentioned by other persons writing to my Department.
After reference to legal counsel, our position is that it is not
a precedent and does not preclude the exercise of statutory
descretion conveyed to the Minister of National Revenue by
the Excise Tax Act.
(This letter from the Minister is the decision being
attacked by this section 28 application.)
Section 27 of the Excise Tax Act imposes a
sales tax on goods produced or manufactured in, or
imported into, Canada, and section 29(1) thereof
exempts from that tax articles mentioned in
Schedule III to that Act. Section 3 of Part III of
Schedule III mentions inter alia "newspapers". At
the end of Part III appear the words
The Minister shall be the sole judge as to whether any
printed material comes within any of the classes mentioned in
sections 1, 3, 5 and 8 of this Part.
In The King v. Montreal Stock Exchange [1935]
S.C.R. 614, a question arose with reference to the
scope of the word "newspapers" in Schedule III at
a time when the quoted words did not appear in
Part III. That case was initiated by an action for
sales tax in which the defendant claimed the
exemption; and the reasons for judgment of the
Supreme Court of Canada, in so far as relevant,
read as follows [at pages 615-617]:
For some years the Montreal Stock Exchange and later the
Exchange Printing Company printed, about noon of each day
that the Exchange was in session, a sheet showing the trans
actions on the Exchange during the morning, and in the
afternoon a similar record of the transactions for the remainder
of the day. In like manner were published the transactions on
the Montreal Curb market. Each week was printed a "com-
parative review of transactions" on the Exchange and a "com-
parative review of transactions" on the Curb.
These sheets from time to time contained notices of divi
dends, annual meetings and the loss of certificates, in connec
tion with companies whose stock was listed on the Exchange.
The weekly publications besides summaries of the week's busi
ness, contained a tabulation comparing the business of that
particular week with the business of the corresponding week in
the previous year.
The members of the Exchange formed the greater bulk of the
users of these sheets for which they paid on a sliding scale but
copies were also exchanged with similar institutions in Canada
and the United States. Some were sold to outsiders and the
result of the evidence of the acting secretary-treasurer of the
Exchange is that any member of the public might become a
subscriber.
In the instant case, the word under discussion is not defined in
any statute in pari materia and it remains only to give to it the
ordinary meaning that it usually bears. Webster's New Interna
tional Dictionary may be taken as giving a definition of "news-
paper" which is expressed in corresponding terms in other well
recognized dictionaries:—
a paper printed and distributed at stated intervals *** to
convey news *** and other matters of public interest.
The sheets in question meet these requirements; the mere fact
that any particular publication is meant to interest only a
section of the public does not limit the meaning of the expres
sion as a reference to religious or fraternal publications will at
once make clear. The sheets in question contain not merely a
record of transactions on the Exchange or curb market but also
information to those desiring it as to such transactions; and the
other items from time to time included give "tidings, new
information, fresh events reported," (vide Concise Oxford Dic
tionary defining "news").
Being of opinion that the publications are newspapers for the
purposes of the Special War Revenue Act, the respondents have
brought themselves within the language of an exempting
proviso.
The first question that has to be considered on
this section 28 application is whether the decision
attacked is a decision contemplated by section
28(1) of the Federal Court Act.'
While the decision being attacked was made
under a statutory provision that made the Minister
the "sole judge" as to whether the publications in
question came within the word "newspapers", in
my view, the use of the word "judge" does not
make the decision a decision of a judicial character
as opposed to a decision of an administrative char
acter. In effect, the provision confers on the Minis
ter, who is charged with the administration of the
' Section 28(1) reads:
28. (1) Notwithstanding section 18 or the provisions of
any other Act, the Court of Appeal has jurisdiction to hear
and determine an application to review and set aside a
decision or order, other than a decision or order of an
administrative nature not required by law to be made on a
judicial or quasi-judicial basis, made by or in the course of
proceedings before a federal board, commission or other
tribunal, upon the ground that the board, commission or
tribunal
(a) failed to observe a principle of natural justice or
otherwise acted beyond or refused to exercise its
jurisdiction;
(b) erred in law in making its decision or order, whether
or not the error appears on the face of the record; or
(c) based its decision or order on an erroneous finding of
fact that it made in a perverse or capricious manner or
without regard for the material before it.
Act, the exclusive power to decide, in the course of
such administration, what articles fall within the
exempting provision. Nevertheless, while the deci
sion is, in my view, an administrative decision, it is
one that must be exercised on a quasi-judicial
basis, for it is a decision whereby taxability or
non-taxability is determined. 2 That being so, in my
view, since the enactment of section 28 of the
Federal Court Act, such a decision may be
reviewed under section 28 (1) thereof, whether or
not it could have been questioned before that time
as having been made on a wrong view of the legal
ambit of the exemption.
The further question to be considered is whether
the Minister's decision should be set aside as
having been based on an error of law.
Very briefly, as I understand it, there has been a
long-standing exemption of "newspapers" from
sales tax under the Excise Tax Act and, more
recently, the Minister has been made the "judge"
of whether a particular publication falls within
that exemption. The Minister has not, however, as
I understand the statute, been empowered, arbi
trarily or otherwise, to vary the ambit of the
exemption. In making a decision as to whether the
exemption applies, the Minister's duty as I con
ceive it, is to find the facts and apply the exempt
ing words. In this case, the vital word—newspa-
per—has been the subject of a judgment of the
Supreme Court of Canada and, in making his
decision, the Minister has rejected that judgment
and has laid claim to a "statutory discretion",
which he, apparently, regards as giving him a
power to vary the ambit of the exemption from
what it would be if the Supreme Court's view were
applied. In taking this view, I am of opinion that
2 The power is to decide whether an article is, or is not,
exempt by virtue of certain specified sections and it is not a
decision that "forms ... part of the definition of the case
provided for". Contrast K. v. Noxzema Chemical Company of
Canada Limited [1942] S.C.R. 178 per Kerwin J. at p. 186.
While I recognize that it is frequently difficult to decide
whether there is an implied obligation on a person who has a
statutory power to decide something to give those affected an
opportunity to be heard, I find it difficult to conceive of a case
where a person would not be entitled to be heard, before the
determination of his statutory obligations, in the absence of an
express provision to the contrary.
the Minister erred in law, as I find nothing in the
statute empowering him to do anything other than
be the "judge" as to whether the law contained in
the particular section of Part III applied to the
facts before him.
I am further of opinion that it cannot be said
that the Minister's decision might not have been
different if he had applied the ordinary meaning of
the word "newspaper" instead of applying, as it
seems probable that he did, the arbitrary definition
that had already been conveyed by his Department
to the applicant. While I recognize that opinions
may differ, when I read the publications that were
the subject matter of the decision attacked in the
light of the Supreme Court's judgment in the
Montreal Stock Exchange case, I can see room for
the conclusion that they are "newspapers" even
though they consist exclusively, or almost exclu
sively of advertisements. As I understand them,
they are not mere "advertising circulars" in the
sense of advertising by the person who distributes
them. On the contrary they contain information
(news) as to what is available in particular fields
of commerce even though such information is con
veyed by way of advertising by third parties who
have things to sell.
I am of opinion that the section 28 application
should be allowed, that the decision referred to
therein should be set aside and the matter should
be referred back for reconsideration on the basis of
the application of the statute to the facts.
* * *
URIE J. concurred.
* * *
KELLY D. J. concurred.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.