Our Taxpayers Protection Act is toothless

Nothing ruins the fun of being a politician like having your successor come in and reverse everything you've done. Former Finance Minister Joe Oliver penned a piece in the Financial Post several weeks ago.

Nothing ruins the fun of being a politician like having your successor come in and reverse everything you’ve done.

Former Finance Minister Joe Oliver penned a piece in the Financial Post several weeks ago lamenting the prompt dismantling of the Conservative legacy by a new Liberal government with what he called a “single-minded determination to overturn almost every Conservative initiative.”

Wise to the fact that the public is a fickle bunch, politicians sometimes decide to actually do something about the changing winds and take some step to “lock in” the changes that have made.

Sometimes the obstacles they put up are practical. The previous Conservative government was well aware that abolishing the long gun registry and eliminating the Canada Wheat Board’s monopsony over the purchase of grain were controversial in certain circles. So they made sure that these hard-won victories survived their term in office by destroying the gun registry’s records and selling off the wheat board’s asset to Saudi investors. I dare you to bring them back now, Mr. Trudeau!

Sometimes the obstacles politicians put up are constitutional. Pierre Trudeau made sure that Canada would stay on the socially progressive path his government had set it on by entrenching principles like equality, bilingualism and even equalization when he repatriated the Constitution in 1982. Who could deny that the Charter of Rights has played a transformative role in Canadian society over the last 34 years, much to the chagrin of some successor governments?

But sometimes politicians try to etch their legacy in stone on the cheap by putting obstacles into ordinary legislation.

An example from here in the Yukon that hasn’t yet had the opportunity to be controversial is the so-called “Taxpayers Protection Act.” Passed under the previous Yukon Party government of John Ostashek, the legislation, among other things, purports to limit the ability of later territorial legislatures to introduce new taxes, stating that: “A bill to impose a new tax, or to increase the rate of tax… must not be presented to the Legislative Assembly unless the government first puts the question of proceeding with such a bill to the electors of the Yukon in a referendum and the electors approve the imposition of the new tax or the increase in the rate of tax.”

The provision has never been tested, despite being on the books for 20 years. That’s probably because the Yukon government has more money than any jurisdiction of comparable size could ever dream of. It is hard to imagine why on Earth it would ever need to go to territorial taxpayers for more. As well, since the law’s creation we have largely been ruled by the ostensibly conservative Yukon Party, and “thou shall not raise taxes” is an honorary 13th commandment on the political right.

But the question remains what if we ever do want to raise taxes, or, as I suggested in a column several weeks ago, introduce some sort of revenue neutral carbon tax. I was asked recently if such a tax – even if it didn’t actually increase the total tax revenue of the Yukon government – would have to be approved in a referendum.

My response was that it doesn’t matter because that part of the Taxpayers Protection Act is probably unconstitutional anyway.

It is generally acknowledged to be a principle of our democracy that one legislature cannot bind a future legislature. That which can be done can be undone. To allow otherwise would be to allow a government to rule from beyond the grave.

There is some legal debate over whether that principle invalidates so called “manner and form” provisions which impose precondition on introducing new legislation.

A recent court case that dealt with this issue was one I mentioned earlier – the abolition of the Canada Wheat Board’s monopsony. Until recently it was law in Canada that western grain producers could only sell their products to the federal Canada Wheat Board. It was a requirement that irked some farmers who believed they could maximize their returns by shopping their goods around.

At some point some politician got it in their head that it should be hard to change that, so they inserted a requirement in the legislation requiring the minister to hold a referendum of farmers prior to doing so. The Conservatives – who wanted to abolish the board for ideological reasons – scoffed at the requirement and proceeded to introduce the self-explanatorily titled “Marketing Freedom for Grain Farmers Act.”

Litigation ensued and the Federal Court of Appeal ultimately upheld what the Harper government had done (the Supreme Court of Canada declined to hear the case). The court refused to expressly rule on the point in the Wheat Board cases because it was able to deal with the case on other grounds. But it did express that it had “serious reservations” about the referendum requirement and stated “I seriously doubt such a provision could be used to impede the introduction of legislation in Parliament or could result in the invalidation of any subsequent legislation adopted by Parliament”.

There is an important distinction: the provision to abolish the wheat board required a vote of farmers, whereas the Taxpayer Protection Act requires a referendum of all Yukoners. The debate over whether referenda or representative democracy is a more perfect expression of democracy is far beyond the scope this column.

Perhaps more on point, the Ontario Liberals have gotten away with flouting the spirit of similar legislation in that province for years by simply amending their own Taxpayers Protection Act to create an exception to allow them to raise taxes.

So if any of you territorial party leaders are considering introducing carbon pricing after the next election, I wouldn’t let the Taxpayers Protection Act keep you up at night.

Kyle Carruthers is a born-and-raised Yukoner who lives and practises law in Whitehorse.

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