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Lawsuit over GA fee likely to end up before SCC

It is likely that Canada’s top court will eventually weigh in on the issues raised in a recently launched lawsuit against the Ontario government, that argues the global adjustment fee (GA) charged on energy bills is unconstitutional, Canadian tax lawyer David J. Rotfleisch tells The Lawyer’s Daily.

“It will end up in front of the Supreme Court of Canada no question. I’d be shocked if it didn’t,” says Rotfleisch, founding tax lawyer at Rotfleisch & Samulovitch Professional Corporation who is not involved in the case and comments generally.

“It’s fundamental constitutional law and it’s something that they’d want to give their opinion on.”

A manufacturer has filed suit in the Superior Court of Justice against two provincial ministries and the Independent Electricity System Operator (IESO), arguing the GA is an unconstitutional tax and not a valid regulatory charge, reports The Lawyer’s Daily. The manufacturer argues it is ultra vires the Constitution Act and also runs afoul of Ontario’s Taxpayer Protection Act.

The GA is a surcharge on electricity purchases which "covers the cost of building new electricity infrastructure in the province, maintaining existing resources, as well as providing conservation and demand management programs," the IESO notes.

Rotfleisch says the suit is “going to make for interesting case law.”

On the face of it, he says, the GA “seems to be more in the nature of a tax than a regulatory charge,” he tells The Lawyer’s Daily.

“The levy is based on consumption which makes it appear to be a tax,” he says. “It seems to be more akin to a sales tax — if you use it you pay for it.”

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