Levy
Continued From Page 1
The advertising companies
argued that the bylaw imposed an
indirect tax—contrary to s. 92.2
of the Constitution Act — because
it would ultimately be paid by
advertisers in the form of higher
rates, or the owners of properties
on which the signs were erected
in the form of reduced rents. They
also argued that the measure was
discriminatory because there
were exemptions for “public use”
structures, such as transit shelters, where the city had entered
into a revenue-sharing agreement
on advertising with Astral Media
Outdoor, one of Pattison’s main
competitors.
Superior Court Justice Michael
Penny ruled in March, 2011, that
the levy was neither an indirect
tax, nor was it discriminatory. He
also found that existing signs were
“grandfathered” and not subject
to the tax.
“The City expected to earn
$10.4-million per year from this
tax,” said Jason Squire of Ler-
Billboards in Toronto at locations such as Dundas Square can now be taxed.
VALEN TINO VISEN TINI / DREAMS TIME.COM
ners, who represented the Patti-
son companies. “Grandfathering
cut it to something less than
$1-million.”
The Court of Appeal agreed
with Justice Penny on the nature
of the tax and its validity, in its rul-
ing issued April 2.
The levy, which is a flat fee
based on the size and type of sign,
“is not tied to the price of, or the
revenue from, the advertising,”
wrote Justice Sharpe, with Jus-
tices Kathryn Feldman and Gloria
Epstein concurring. “It lacks the
‘clinging’ quality that is the hall-
mark of an indirect tax.”
The appeal court rejected the
suggestion by Pattison and OMAC
that the tax was indirect because
its cost will be passed on to adver-
tisers or in lower rents to land-
owners. “Every business that bears
a tax will treat the tax as a cost
that must be factored into the
price charged for its products.
This natural tendency of every
taxpayer cannot and does not
automatically make the tax
indirect,” Justice Sharpe wrote.
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