FEES AND TAXES

Fees^[1] are imposed to recover from users the administrative costs of providing a particular government program. Taxes are imposed to generate revenue for government expenditures in general.

The distinction between a fee and a tax is important. The authority to impose a fee does not include the power to impose what is essentially a tax. If an amount charged is not linked to a valid regulatory scheme, or will result in revenues that far exceed program costs, it will likely be considered to be a tax.^[2]

Enabling authority

As a rule, a regulation cannot impose fees unless there is express authority to do so in the enabling statute. In some circumstances, a wide regulation-making power may be interpreted as impliedly authorizing the imposition of fees so long as that interpretation is supported by the scheme and purposes of the Act. However, any regulation imposing fees in the absence of express authority risks being declared ultra vires by the courts. A tax cannot be imposed by regulation unless authorized by the enabling statute in express and unambiguous language.^[3]

The power to impose a fee includes the authority to impose the legal obligation to pay the fee^[4] and the power to establish categories of users.^[5]

If the authority to set fees is not found in enabling legislation, such authority may be found in sections 19 to 19.3 of the Financial Administration Act.

User Fees Act

While the User Fees Act does not authorize or prevent the imposition of fees, it does, however, impose requirements that regulating authorities must meet before they can fix or increase user fees.

Drafting

Fees and taxes may be specified in the body of a regulation or in a schedule. If they are set out in a schedule, there must be a provision in the body of the regulation referring to the schedule.

The drafter may use formulas for the purpose of specifying a fee or tax.^[6]

Example of a formula:

  12. (1) Every owner of a lot located in Banff National Park, Yoho National Park or Waterton Lakes National Park shall pay the garbage collection and disposal charge determined by the formula

A × B ÷ 12 × C ÷ D

where

A is the aggregate of the volume values of the units on the lot,

B is the number of months in the year during which the owner is permitted to occupy the lot under the lease, permit or licence of occupation for that lot,

C is the total operating and maintenance cost incurred in respect of the park, and

D is the total volume value for the park.

Further Reading

• "Policy on Service Standards for External Fees":  www.tbs-sct.gc.ca/pubs_pol/opepubs/TB_H/CRP_e.asp

• P. Salembier, Regulatory Law and Practice in Canada (Lexis Nexis Canada Inc., 2004) p.p. 328-335.

Part 4 – Table of contents

Footnotes

• ^[1] "Fees", for the purposes of this article, includes "charges", "rates" and "tolls".

• ^[2] Westbank First Nation v. British Columbia Hydro and Power Authority, [1999] 3 S.C.R. 134.

• ^[3] The King v. National Fisheries Co. Ltd, [1931] Ex. C.R. 75 at p.83; Ontario English Catholic Teachers Association v. Ontario (Attorney General) [2001] S.C.C. 15; P. Salembier, Regulatory Law and Practice in Canada (Lexis Nexis Canada Inc, 2004) p. 328.

• ^[4] Pan American World Airways v. The Queen, [1981] 2 S.C.R. 565.

• ^[5] Aerlinte Aireann Teoranta v. Canada, [1987] 3 F.C. 383.

• ^[6] The Standing Joint Committee on the Scrutiny of Regulations ("SJC") argues that formulas may only be used where the authority includes the power to regulate "the manner of determining" a fee or tax.