A question about taxing “rights” has piqued our interest and if anyone can enlighten us with information, we would appreciate it.
The Income Tax Act states: (select part)
248. (1) In this Act,
"property" means property of any kind whatever whether real or personal or corporeal or incorporeal and, without restricting the generality of the foregoing, includes
(a) a right of any kind whatever…
Buried in our present Constitution there is a clause that states that when a farmer wants to trade, under prescribed conditions, the Sovereign COMMANDS a License be granted without Fee or Reward. The farmers in Ontario/Quebec shall receive licenses of which grant a right to trade. Marketing Licenses.
Quota is merely a license with a quantitative value.
So how does one define quota?
A judge in the 1980’s said that quota was not PROPERTY. But the Income Tax Act states “property” includes “a right of any kind whatever”.
But to understand marketing Licenses, we believe one has to understand the true nature of land grants. The Sovereign land grants are in reality “contracts” with the Crown. The contracts are Sovereign production Licenses whereby the farmer was given the Sovereign right to produce any/all indigenous commodities for personal use. Land Patents are Licenses granting rights.
As farmers technically do not “own” land but have Sovereign “possession” of the property, what happens when he sells his ‘property’? Is he selling the things of the soil, his Sovereign production License, or both? Does the Income Tax Act take into account Sovereign production rights as “property”?
The marketing licenses are an extension of the production rights to fulfil Constitutional obligations to the domestic population. (part of a bundle of rights)
I mention this because in the court case Manrell v. Canada, the Judge stated;
“The phrase upon which the Crown relies in this case, "a right of any kind whatever", like the word "property", has a very broad meaning. But it is not a word of infinite meaning. It cannot include every conceivable right. It cannot be given a meaning that would extend the reach of the Income Tax Act beyond what Parliament has conceived. Even counsel for the Crown conceded that it does not include a human right, or a constitutional right.”
So it begs our question: If quota is not property by a previous court decision, and production and marketing licenses are constitutional rights for farmers (licenses not conceived by Parliament)....…. when a farmer sells his land he is also selling the Sovereign production rights attached to the land…. Constitutional rights….as are marketing rights….. does the government differentiate property and Sovereign property rights (bundle of rights) for taxation purposes?
If a farmer gives up his production and marketing liberties of which are technically available to the general public if they chose to acquire those liberties.....are those liberties “taxable”?
But just for fun let’s throw into the mix a select definition of “tax”.
P.S. It is worth noting how marketing licenses morphed into a capital item.
In 1928, it appears the first permanent agricultural marketing rights appeared in Ontario. (note: in the same time frame as the LCBO as the 2 issues are related). The marketing rights were attached to the "land". The 'rights' were awarded to qualifying lands without 'fee or reward' as stated in the Constitution. Those 'rights' were non-transferable and stayed with the property.
In the early 1960's, a division of the Ontario Ministry of Finance assessed a value of the "marketing rights" against the expressed wishes of the affected farmers. The assessed values generated a 'benefit' for the Province of Ontario as the affected farmers paid significantly more in regards to education, county and municipal taxes. The farmers argued that the marketing licenses were "rights" that were given "without fee" therefore no value was to be placed on the 'rights' itself.
At this point, it could be argued the Province of Ontario, in essence, capitalized marketing "rights". .... and the rest if history....The Province of Ontario has been the single largest benefactor.....legislatively..... has been the single largest entity to receive "REWARDS" from agricultural marketing rights......small wonder they introduced quota valuations..... they rewarded themselves richly through the dispensation of licenses.......
OFPMC hangs it's hat on a court case in 1987 of which the judge stated in that particular case concerning agricultural licenses (quota is a license with a quantitative value): " a previous definition was quoted with approval to this effect: 'a dispensation or license properly passes no interest, but only makes an action lawful which without it had been unlawful' "
Indeed, the judge was actually quoting from a very old english definition of "license". A license is a form of "contract".
But the judge in this case stopped at this definition and did not elaborate further on the agricultural licenses therefore shored up government's interest in licenses. The judge reinforced the governments "rights" over agricultural licenses but neglected to inform the farmer about the governments' obligations in regards to agricultural licenses. Maybe the farmer neglected to ask.......The judge failed, in my opinion, to elaborate that with every "right' there is an "obligation".
What the judge failed to bring to light in the precedent setting case, was the fact that our constitution clearly outines that when a farmer wants to "trade" under prescribed conditions, the Sovereign COMMANDS a license be issued... as mentioned earlier. That means the farmer has a constitutional "right" to trade under certain conditions.
There are many licenses dispensed in our society... our country was actually founded and built on "licenses". But the distinction has to be made whether a license is a "privilege" or a "right".
Our drivers licenses grant us the "privilege" to drive on Crown lands. (roads) Doctors, nurses, teachers, police, lawyers, etc... upon meeting certain criteria.... are granted a license for the "privilege" of plying their trade.
Not so with farmers. Farmers are granted a "right" to trade. The judge in the 1987 failed to mention this fact. The judge failed to mention that the Crown has an obligation in regards to agricultural licenses.........
And when a license grants a 'right' it is technically a tax. As the Sovereign COMMANDS the farmers' licenses be issued..... the farmers enters into a contract to tax...........but please..... correct us if we are wrong....... please....
Blackstone once said " whatever contacts he (the Sovereign) engages in , no other power in the kingdom can legally delay, resist, or annul".
The judge failed to mention the farmers "rights".