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TTC vs federal government - Court date April 22, 2003


TORONTO, April 8 /CNW/ - The TTC has filed an application in the Ontario Superior Court of Justice seeking a declaration that the TTC is exempt from paying the GST. A court date has been set: April 22, 2003.

Section 125 of the Constitution Act, 1867 provides:

No Lands or Property belonging to Canada or any Province shall be liable to Taxation.

In effect, the section provides that the federal government cannot tax the provincial government, and that the provincial government cannot tax the federal government. The provincial government does not pay the GST, nor do many provincial Crown agencies. The TTC is a public, municipal institution, created and ultimately controlled and owned by the Province of Ontario. Like the Province and Crown agents, the TTC should be immune from federal tax.

Although the province and the federal government have agreed that certain provincial Crown corporations and agencies shall pay the GST under the Reciprocal Taxation Agreement, they have not addressed the status of municipalities.

The TTC and other municipal institutions pay the GST on all of their taxable purchases. They are entitled to a 57% rebate of the GST. The amount paid each year, however, is still significant. In 2001, the TTC paid a net amount of over $12 million in GST. In 1999, it paid over $20 million.

The TTC is seeking a declaration that from the date of the Application (June 21, 2002) onwards the TTC be exempt from GST payments.

“The TTC is a vital government service created by the province, and it, like the rest of the province, should be exempt from the GST. The Better Way would be even better if it didn’t have the financial burden of the GST,” says David Miller, Chair, TTC Litigation Sub-Committee.

Spokespersons for the TTC:

  • Commissioner David Miller, TTC Litigation Sub-Committee: phone No. 416-392-4072
  • Legal Counsel Paul Schabas, Blake, Cassels & Graydon LLP: phone No. 416-863-4274

Commissioner Miller will speak to the media at 12:45 p.m., on Wednesday, April 9th, outside Committee Room 3, 2nd floor, Toronto City Hall.

For further information: Marilyn Bolton, Media Relations, (416) 393-3741