Saskatchewan loses right to tax satellite transponders; ends six-year dispute

The Saskatchewan government has lost its bid to tax satellite transponders, putting to rest a six-year battle with the Canadian Broadcasting Corp. that had gone all the way to the country’s highest court. In a decision released September 5, the Supreme Court of Canada denied the provincial government’s leave to appeal a lower court ruling that struck down the province’s attempt to impose taxes on the leasing of satellite transponders. Canada’s highest court ruled that a Dec.4, 2001 Saskatchewan Court of Appeal decision that the province’s tax assessment on the CBC was not authorized by provincial legislation, would stand. Normand Nault, the CBC’s senior manager of technical policy and planning, tells Report on Wireless that the ruling confirms that the leasing of transponders in the province is not taxable. The government of Saskatchewan had argued throughout the six-year battle that it had the right to impose taxes on leased satellite transponders under its Education and Health Tax Act. The issue rose to the fore in the mid-1990s when the provincial government gave the CBC a tax bill for $150,264.77 – the amount of tax it says was due on satellite transponders leased by the public broadcaster from Telesat Canada between 1992 and 1995. Other provincial governments eyeing the possibility of taxing satellite transponders have been watching developments in this case closely. British Columbia has a similar tax, but it is voluntary. However, this ruling appears to change the satellite transponder tax landscape. Nault says the case for other provinces wanting to impose taxes on the leasing of satellite transponders has been significantly weakened. While he’s relieved the Supreme Court has sided with the CBC in the case, he cautions that the Saskatchewan government’s determination over the past six years may mean the fight isn’t over yet. He notes that the government may try to amend its Education and Health Tax Act to allow for the taxing of transponders. "After six years, I’m waiting for the next shoe to drop. I just don’t know if there are any shoes left," he says. "The fact that they fought it all the way through the court system shows their tenacity. Their legislation could be changed, but this will not be easy for them to change, I don’t know if they will be able to come up with a formula that will allow fair taxation of satellite transponders. It’s not an easy issue. They’re out there in space." The Supreme Court awarded costs to the CBC in Saskatchewan’s failed leave to appeal bid. For more details on the Supreme Court of Canada’s ruling and the Saskatchewan-CBC battle, please refer to the September 12/02 and March 15/02 issues of Report on Wireless affiliate publication, Canadian Communications Reports.

Saskatchewan loses right to tax satellite transponders; ends six-year dispute

News | September 16, 2002

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