BCI was a BC Crown agent which was formed to manage and hold investments for the provincial pension plans. The governing Act (the “PSPSA”) and Regulation created a statutory trust under which each pension plan only had an entitlement to units in the investment pools managed by BCI and did not have ownership in any investment pool assets. CRA took the view (and ultimately assessed BCI for $40M in uncollected GST on the basis) that ETA s. 267.1(5)(a) deemed the statutory trust to be a person separate from BCI as agent for the provincial Crown, so that the investment services of BCI were supplied to that separate person.
Before going on to find that such assessments would contravene s. 125 of the Constitution Act, 1867 but for the effect of an Intergovernmental Agreement between B.C. and the federal government, Karakatsanis J stated (at paras. 56-57):
Counsel emphasized that because the PSPPA and the Regulation state that the Portfolio assets are “held in trust,” the Portfolios must be treated as a trust for the purposes of the ETA.
I disagree. The term “trust” is not defined in the ETA . Absent express direction to the contrary, undefined terms in a taxation statute must be interpreted according to their established and accepted legal meaning … . [S]. 8.1 of the Interpretation Act provides that, “unless otherwise provided by law, if in interpreting an enactment it is necessary to refer to a province’s rules, principles or concepts forming part of the law of property and civil rights, reference must be made to the rules, principles and concepts in force in the province at the time the enactment is being applied”. Since the ETA does not define the term “trust” and the concept of a trust undoubtedly forms part of the law of property and civil rights, reference must be made to the concept as its exists in British Columbia law. On this basis, unless the Portfolios would be considered a trust at private law, they cannot be a “person” within the meaning of s. 123(1) .