Section 125 of the Constitution Act, 1867
Section 125 of the Constitution Act, 1867 provides that: This affects the taxation powers of both levels of government, and has received a broad interpretation in the Canadian courts. Nature of the taxation power in Canada. Since the 1930 Supreme Court of Canada ruling in "Lawson v. Interior Tree Fruit and Vegetables Committee of Direction", taxation is held to consist of the following characteristics: In addition, the 1999 SCC ruling in "Westbank First Nation v. British Columbia Hydro and Power Authority" has also declared that a government levy would be in pith and  substance a tax if it was "unconnected to any form of a regulatory scheme." The test for a regulatory fee set out in "Westbank" requires: This is important to note, as taxation is barred under s. 121, but regulatory fees are not, and Canadian jurisprudence under s. 125 has turned on that distinction. Interpretation in the Canadian courts. The nature of s. 125 has been described as thus: Therefore, its prohibition covers taxation on the holding, as well as the acquisition and disposal, of property. In addition: However, provinces must collect and remit sales taxes on any commercial sales they  make, since the obligation when it acts as supplier does not amount to a taxation of the province's property. In addition, provincial authorities must still pay customs duties, because such charges are not strictly based on the taxation power. As noted in the "Johnnie Walker" case: Because of that, as noted in "Re Exported Natural Gas Tax":