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| Sara Blake |
The case does not concern human rights discrimination. It concerns differential treatment of industries under property tax law, which the court terms “administrative discrimination.” Administrative discrimination arises when subordinate legislation distinguishes among persons to whom its enabling legislation applies.
At issue was a Minister’s Guideline, which does not permit a tax assessor to allow depreciation when calculating the property tax assessments of coal-fired generators. An assessor may allow depreciation with respect to the assessment of other industrial properties.
TransAlta sought judicial review of the guideline alleging discrimination. Administrative discrimination must be authorized by statute explicitly or by necessary implication. The court ruled that the disallowance of depreciation was discriminatory but that it was authorized by necessary implication.
The statute required that property tax assessments be “current, correct, fair and equitable.” The Act specifically empowers the minister to make regulations respecting the “specifications and characteristics” of industrial property for the purpose of assessment. This contemplates the drawing of distinctions between types of industrial properties on the basis of their specifications and characteristics. The court ruled that the inverse is included by necessary implication. The Minister has authority to pronounce that certain specifications and characteristics are not relevant to an assessment.
The coal-fired generators had agreed with the government that they would cease operations by the end of 2030 and, in exchange, the government had agreed to compensate them for the loss resulting from the reduced life of their coal‑fired facilities. The agreement does not explicitly mention depreciation. However, the court found that the compensation for a reduced industrial life span implicitly reflected depreciation. Hence, the disallowance of depreciation when calculating property tax was current, correct and equitable in accordance with the purposes of the Act.
The Act authorizes the Minister to make an order establishing guidelines respecting any matter for which the minister may make a regulation. The court characterized the guidelines as subordinate legislation and applied the Auer standard of review to determine their validity (Auer v. Auer, [2024] S.C.J. No. 36).
This case does not create new law. The rule is well-established that a regulator may not discriminate among regulated persons unless authorized by statute or by necessary implication. The court applied this rule using the Auer standard of review.
Sara Blake is the author of Administrative Law in Canada, 7th edition, LexisNexis Canada. Her practice is restricted to clients who exercise statutory and regulatory powers.
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