Az-Zahraa Housing Society, a non-profit providing affordable housing in Richmond, British Columbia, sought designation as a municipality under the GST/HST rebate mechanism in the Excise Tax Act.
The Minister denied this designation, based on criteria requiring government funding. The Society's arrangements with BC Housing didn't involve direct government funding.
The Society argued that the Minister’s delegate improperly applied administrative criteria, ignoring broader economic rationale of their arrangements.
Legal Issues:
Municipality Designation Eligibility: Whether the Society met the criteria for designation as a municipality for GST/HST rebate purposes.
Fettering of Discretion: Assessment of whether the Minister’s delegate rigidly applied administrative criteria without considering the unique economic circumstances of the Society's agreements.
Definition of Government Funding: Examination of whether the Society's arrangements with BC Housing constituted government funding.
Judgment:
Judge: Mr. Justice Sébastien Grammond
Decision: The application for judicial review was granted.
Reasoning:
The Court found that the Minister’s delegate fettered her discretion by strictly applying the administrative criteria.
The delegate failed to consider the broader economic implications of the Society's agreements with BC Housing, which indirectly provided government assistance.
The decision was deemed unreasonable due to the rigid interpretation of the term "government funding."
Conclusion:
The Federal Court granted the Society’s judicial review application, emphasizing the importance of considering the full context and economic reality in administrative decision-making. The case highlighted the limitations of strictly adhering to administrative guidelines without considering unique circumstances.
