Jurisdiction, Canadian Tulip Festival, Income Tax

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Jurisdiction, Canadian Tulip Festival, Income Tax

Legal jurisdiction can be by geographical area or by subject matter. In 1943, Canada exempted a geographical area, a maternity ward, allowing Princess Margriet to be born in Ottawa as a Dutch citizen. The Netherland’s annual gift of gratitude, tulips, started the Canadian Tulip Festival. Image credit: http://www.tulipfestival.ca/

Legal jurisdiction can be by geographical area, by subject matter, or both. In 1943, Canada exempted a geographical area, a maternity ward, allowing Princess Margriet to be born in Ottawa as a Dutch citizen. The Netherland’s annual gift of gratitude, tulips, started the Canadian Tulip Festival. Image credit: http://www.tulipfestival.ca/

Summary

Legal jurisdiction can be by geographical area, by subject matter, or both. First, in 1943 Canada exempted a geographical area, allowing Princess Margriet to be born in Ottawa as a Dutch citizen. Their gratitude is why the Netherland annually gifts Canada tulips. This is the reason for the Canadian Tulip Festival. Second, in 1936 the Supreme Court ruled Canada has no jurisdiction over work within the Provinces. To overcome this, Canada introduced Income Tax Act definitions for “employer” and “employee” that may have a relation to a federal “officer”. In summary, Canada gains subject matter jurisdiction over work through this federal “officer”.

Background

Many think jurisdiction in Canada is only a geographical area. However, in 1980 the Supreme Court of Canada (at page 56) stated,

The word “Canada” in s. 91(1) does not refer to Canada as a geographical unit but refers to the juristic federal unit.”

This also fits with Apu’s Theory, our research on how Canada’s tax laws really seem to work. That is why Slide #79 of the PowerPoint presentation of Apu’s Theory (get it here free) says,

Canada is a corporation of “persons”

The “juristic federal unit” is a body corporate, or a corporation of “persons” recognized by Canadian laws. Among these “persons” are private persons, and also officers that individuals choose to represent (see Venn diagram in Apu’s Theory Powerpoint presentation, Slide #40). In other words, the subject matter jurisdiction is over such “persons”.

Geographical Area Jurisdiction

Embassies: Not in Canada

Most embassies are legally exempted from being part of the country they are in. However, such legal exemptions can apply to even smaller places, such as a maternity ward.

Maternity Ward: Not in Canada

During the Second World War, after the Nazis occupied the Netherlands, the Dutch royal family hid in Ottawa. Then, in 1943, Princess Juliana gave birth to Princess Margriet at Ottawa Civic Hospital. However, the legal problem was a birth there would make her a Canadian citizen. The legal solution was proclaiming that maternity ward not being a part of Canada, or extraterritorial.

Geographical Area Jurisdiction: Maternity Ward Exempted

Canada’s Parliament secretly passed a Proclamation that the maternity ward is not Canadian territory for the day of Princess Margriet’s birth. (She was named after the marguerite flower, the symbol of the Dutch resistance.) In addition, the Parliament Building flag was changed to the Dutch flag for that day. In fact, this is the only time a foreign flag has flown over the Parliament Building. As a result, Princess Margriet was born a Dutch citizen with full Dutch inheritance rights.

Legal jurisdiction can be by geographical area or by subject matter. In 1943, Canada exempted a geographical area, a maternity ward, allowing Princess Margriet to be born in Ottawa as a Dutch citizen. The Netherland’s annual gift of gratitude, tulips, started the Canadian Tulip Festival.

Legal jurisdiction can be by geographical area or by subject matter. In 1943, Canada exempted a geographical area, a maternity ward, allowing Princess Margriet to be born in Ottawa as a Dutch citizen. The Netherland’s annual gift of gratitude, tulips, started the Canadian Tulip Festival. Princesses Irene and Beatrix with Princess Margriet,
Ottawa, 1943. Photo credit: https://todayinottawashistory.wordpress.com.

Holland Thanks Canada with Tulips

After the Second World War, the Netherlands thanked Canada by sending 100,000 tulip bulbs, and promised to send 10,000 more each year. This generous gift started Ottawa’s famous Canadian Tulip Festival. In 2017, it runs from May 12 to 22.

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Subject Matter Jurisdiction

The British North America Act, s.92(13), states that Provinces have jurisdiction over work as a “Property and Civil Rights in the Provinces”. However, due to the Great Depression, Canada considered enacting an Employment and Social Insurance Act. As Canada conceded that it has no geographical jurisdiction over work in the Provinces, they asked the Supreme Court for a legal opinion.

Supreme Court: Proposed Social Insurance Act is Illegal

Credit: Philippe Landreville, photographer Supreme Court of Canada Collection

In 1936, the Supreme Court of Canada ruled that the federal government cannot tax work within the Provinces. Credit: Philippe Landreville, photographer, Supreme Court of Canada Collection

Canada’s Supreme Court Act, Section 53(1), states that when the Government of Canada asks the Supreme Court for a legal opinion, that Court must render one. Such cases are called Reference cases. One in particular, Reference re: The Employment and Social Insurance Act, the Supreme Court in 1936 stated,

It being well understood, and in fact conceded, that the subject-matters of the Act fall within the legislative authority of the provinces, the Dominion Parliament may not, under pretext of the exercise of the power to deal with its property or to raise money by taxation, indirectly accomplish the ends sought for in this legislation. The effect of the Act under submission is “to attach statutory terms to contracts of employment”; and its immediate result is to create civil rights as between employers and employees. The Dominion Parliament cannot use its power of taxation to compel the insertion of conditions of that character in ordinary employment contracts.

Federal Officer: Gains Subject Matter Jurisdiction for Social Insurance

In 1953, Canada amended the Income Tax Act (“ITA”) by defining “employer” and “employee”. (You can see this amendment in the essay version of Apu’s Theory, Chapter 11). They are still used. Both refer to a possible relationship to a federal ITAofficer. In addition, the ITA, and case law, allows Canada to deem every one working as a federal ITAofficer. Then, in 1964, the Canada Pension Plan (“CPP”) defines a CPPofficer as basically the same as an ITAofficer”. In short, Canada overcame lack of geographical jurisdiction over work through subject matter jurisdiction using a federal officer.

Conclusion

In conclusion, since the federal Government lacks jurisdiction over work in the Provinces, they gain it for federal income tax purposes by deeming every one as a federal “officer” as defined by the CPP and/or the ITA.

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