ITA regulatory scheme encompasses more than those who pay taxes:
employers, banks, brokers, charities, and other entities are required to file
information returns and to produce information in order to verify taxpayer
compliance. Provisions, such as administrative monetary penalties, that
encourage compliance by these non-taxpayers are integral to the ITA's regulatory regime and are not criminal in nature simply because the target is
not the taxpayer.
 Similarly, in this case, the administrative penalties, fines
and other assessments in the TTA are integral to the scheme
of the Act. The provision of security is not itself a tax. It is
a means of ensuring collection of amounts payable under the
statute, including taxes, interest and penalties.
 I agree with the minister that s. 12(2)(f.1) falls within
Ontario’s legislative jurisdiction because it is in furtherance of a
valid scheme of direct taxation within the province. It ensures
that manufacturers account for the products they manufacture,
possess, purchase or sell and that, where applicable, the tax
is ultimately collected from the consumer.
 I would also reject the appellant’s submission that the
minister was not entitled to calculate the security based on the
amount of product manufactured by the appellant. It argues
that the definition of “acquire” in the TTA (“to obtain tobacco
products by any means, including through manufacturing”)
must be read down to exclude manufactured products, because
the tobacco tax would otherwise be an unconstitutional indirect
tax on manufacturing. It says that because the minister has no
constitutional authority to tax a manufacturer based on
the amount of product manufactured, he has no authority to
demand security on that basis.
 For the reasons set out above, the TTA creates a tax on
consumption of tobacco. The requirement for security is incidental to the regulatory scheme. The requirement for security
from a permit holder calculated on the amount of tobacco it
manufactures does not turn a tax on consumption into a tax on
 For these reasons, I would dismiss the appeal, with costs
to the minister in the amount of $30,000, inclusive of disbursements and all applicable taxes.