VANCOUVER – The legal battle over the HST began in B.C. Supreme Court Monday with the declaration that "revolutions have been fought over these issues."
Representing opponents of the controversial blended federal-provincial levy, renowned Vancouver lawyer Joseph Arvay insisted "democracy, federalism and the rule of law" were on the line.
He asked Chief Justice Robert Bauman to strike down the HST agreement between Ottawa and Victoria, the B.C. cabinet order-in-council that imposed the tax and "let events unfold."
Arvay said it would take him at least two days to explain why the harmonized tax violates the constitution and is an example of "taxation without representation" – evoking the very spark of the American Revolution.
The province’s most experienced constitutional expert, George Copley, Victoria’s veteran champion – grey of hair, wizened of mien – scribbled notes.
At a third table, former Liberal attorney general Geoff Plant whispered among the heavyweight team representing big businesses that support the tax and oppose the grass-roots campaign to repeal it.
This is a clash of B.C. legal titans over the meaning of Canada’s fundamental law and the separation of powers between the federal government and the provinces.
Arvay said Ottawa alone could not impose the harmonized tax because the constitution says provinces have the right to decide how their citizens are taxed for provincial purposes.
That’s why all other provinces with an HST have passed legislation enacting the levy, Arvay told the judge.
Ottawa provides a framework for collecting the levy under the Excise Tax Act, he added, but the constitutional responsibility for imposing it lies with the province.
"The federal government does not have the power to impose a direct tax on British Columbians for provincial purposes," Arvay said.
He went on to say the order-in-council and the agreement between the two governments is not enough either to impose the levy.
There must be a vote in the legislature, Arvay continued, saying a tax cannot be imposed by "the stroke of the minister’s pen in the privacy of his office."
The hushed 68-seat courtroom was packed to standing room only, prompting Bauman to arrange a larger venue with ample seating for the afternoon.
A dozen or so small B.C. flags were left in a pile on the hallway floor or leaning against the wall, abandoned by opponents of the harmonized tax when told they couldn’t be taken inside the Vancouver courtroom.
In the front row of the public gallery, leader of the tax revolt, former premier Bill Vander Zalm and his wife Lillian sat beaming.
He said outside the court that in spite of his lawyer’s fiery rhetoric, he was not ready to take up arms.
"It’s been peaceful," the Zalm said, flashing his trademark megawatt smile. "We’ve done it by the law all the way."
The charismatic former Social Credit Party leader said the key point was that Victoria passed a law to repeal the old Provincial Sales Tax but never introduced legislation to enact the HST.
He wants the Liberals to do exactly that.
"I’m sure if the vote were held today," he maintained, "it would be against the HST [in spite of the government majority]."
Vander Zalm is challenging the constitutionality of the tax while the coalition of industry and business wants his 700,000-name anti-HST petition and its accompanying act declared invalid.
The government and business lawyers say it will take two days for their arguments on the two separate questions before Bauman – the legality of the HST and the standing of Vander Zalm’s extinguishment law.
Arvay said the lawyers agreed arguments about the validity of the HST should be heard first and then the debate about the citizen’s initiative.
If the HST were ruled unconstitutional, he suggested the petition issue was moot.
"That’s too bad," Justice Bauman replied – he thought the other way round made more sense.
Still, if all goes well, he could be deliberating by Thursday.
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