Monday, August 16, 2010

Fight HST lawyer Joe Arvay makes masterful case in BC Supreme Court that HST is unconstitutional

Bill Vander Zalm outside BC Supreme Court Monday - Bill Tieleman photo

"There should be no taxation in British Columbia without representation."

With that call to arms, veteran constitutional lawyer Joe Arvay outlined powerful arguments against imposition of the Harmonized Sales Tax by the BC Liberal government without a vote in the BC Legislature to do so.

Arvay is acting for Fight HST and its leader, former Premier Bill Vander Zalm, in a BC Supreme Court legal action that seeks to have the HST declared unconstitutional.

The case is being heard by Chief Justice Robert Bauman andis opposed by the provincial government and a coalition of big business groups, who have launched their own legal action to overturn the successful Fight HST citizens Initiative petition signed by 705,643 voters.

"This is no small deal. People have fought wars over the right to representation before taxation," Arvay told Bauman in front of a standing-room-only court full of media and observers.

The big business coalition brought out its high-powered legal guns - former BC Liberal Attorney General Geoff Plant, now of Heenan Blaikie, colleague and longtime labour union adversary Peter Gall, former Labour Relations Board chair Don Munroe, also at Heenan Blaikie and University of BC constitutional law professor Robin Elliot.

The BC government is represented by veteran lawyer George Copley, who also attends the Basi-Virk/BC Legislature Raid trial on its behalf, and Alison Luke.

Arvay is assisted by Bruce Elwood and Alison Latimer.

Arvay's argument is that while the BC Liberal government repealed the previous Provincial Sales Tax it never passed legislation imposing the Harmonized Sales Tax - thereby violating Section 53 of the Constitution Act.

"In every other province that has the HST there was such a law - in BC there is no such law," Arvay said. "The whole point is to require a law and then a Bill before there is a tax."

Instead, Arvay stated, the HST was imposed through an agreement between the provincial and federal governments signed on BC's part by Finance Minister Colin Hansen.

"It's for the people's representatives to decide, not the Executive with the stroke of a pen in an office," Arvay said, referring to the Executive Branch of government - or cabinet.

Perhaps Arvay's most telling argument in his opening summary turned the BC-Ottawa HST deal - formally called the Comprehensive Integrated Tax Coordination agreement - on its head to make his point.

"In this agreement the provincial and federal governments agree what the Provincial Value Added Tax [provincial portion of the HST] shall be - 7% - and the province now takes the position that no legislation is required," Arvay said.

"And yet, in the Agreement itself the province, if it wants to change the rate, requires legislative consent," he concluded.

Arvay then cited numerous examples of federal politicians, including Conservative cabinet ministers, who publicly said that the decision to impose the HST was a provincial one, not a federal one.

Arvay also quoted BC Liberal provincial cabinet minister Mary Polak from Hansard, as saying that: "The HST has already been passed by the federal government."

That prompted Chief Justice Bauman to interject to laughter in the courtroom.

"Aren't we seeing an awful lot of rhetoric? Everyone's trying to deflect the criticism of who imposes the HST," Bauman said.

Arvay then summed up his argument that legislation imposing the 12% HST in BC does not constitutionally exist.

"There is no legislative approval at any level for an HST of 12%. The provincial component of the HST is not imposed by federal legislation alone," he said.

Outside the court Vander Zalm told media that the government was ignoring "the will of the people" by imposing the HST and had deliberately avoided legislation that would forced BC Liberal MLAs to vote in favour of the new tax.

"I'm sure if a vote were held today, it would be against the HST," Vander Zalm said.

The case continues Tuesday.



Anonymous said...

Both sides will appeal this case all the way to Canada's Supreme Court.

When the recall campaigns begin this case will be hanging over the BC Liberals like the Sword of Damocles... perhaps we will see Chairman Campbell recall the Recall and Initiative Act.

DPL said...

More than once we have heard that should business lose they will not appeal

Salvaich said...

Great summary of the argument.

What is now clear that for the provincial liberals to take such a litigation risk to impose the HST without legislative sanction, there must be some other hitherto undisclosed factor that drove them to take this extraordinary risk with the lives of BC taxpayers.

Either that or they and their legal advisers were just plain arrogant.

Which is it ? (or both)

Anonymous said...

Vaughn Palmer blogged today (Aug/17) about a letter that A/Chief Electoral Officer Craig James sent to New Democratic Party MLA Leonard Krog in response to an inquiry [.PDF] Krog had sent to James.

Would anybody know how to get a full copy of James' response?

Anonymous said...

The letter is on the CBC website:

Anonymous said...

Really Joe Arvay was masterful??? He's losing.

Anonymous said...

Well, we seven hundred and some thousand, anti-HST voters, could do some boycotting. In one community, businesses, are hiding their, Chamber of Commerce signs. Some merchants, are madder than hell, with the C.O.C. and the HST, because they are struggling to stay in business. However, restaurants and businesses, have to realize. That most of we seniors and low income peoples money, all goes to direct and indirect taxes. We are already seeing evictions and utility shut offs. This winter, is going to be dreadful, because of all the provincial budget, utility tax hikes, and the HST, on everything, from a TV, to a can of pepsi.