Finance (the “minister”) to demand security from parties, like
the appellant, who manufacture and sell tobacco intended for
export or for sale on First Nations reserves. The appellant
claims that the minister erred in his interpretation and application of the provision when he demanded that it provide security.
Alternatively, the appellant claims that the provision is unconstitutional because it is an indirect tax on exported goods.
 For the reasons that follow, I would dismiss the appeal.
I agree with the Divisional Court that the minister’s interpretation of the provision was reasonable and is entitled to deference.
Section 12(2)(f.1) is constitutionally valid because it is incidental
to a scheme of direct taxation within the province.
 The appellant is the largest Canadian exporter of tobacco.
It manufactures tobacco on the Six Nations of the Grand River
Reserve Territory in Ontario. In addition to producing tobacco
for export, the appellant produces tobacco products for sale to
“Indians” and “bands” located on “reserves”, within the meaning
of the Indian Act, R.S.C. 1985, c. I-5. It does not sell tobacco to
retailers outside reserves and does not sell to consumers who are
required to pay taxes under the TTA.
 The appellant’s tobacco produced for export is partially
processed and then packaged in large boxes. It is further refined
and packaged by the foreign purchaser for sale and consumption
in the export market.
 In order to manufacture tobacco products in Ontario, the
appellant, like all participants in the industry, must hold a
permit. It has held permits since 1998, and in that year it was
required to post $550,000 as security. In January 2014, as a
result of legislative amendments to the TTA, persons distributing and selling unmarked fine cut tobacco (“UFCT”), as
defined in the TTA, were required to hold a permit. Prior to that
time, the only permit the appellant required under the TTA for
its unmarked tobacco products was for the purchase and sale of
 In December 2013, the minister issued two permits to the
appellant. One authorized the possession, storage and sale of
UFCT for export. The other authorized the sale of UFCT to First
Nations retailers. The minister informed the appellant that he
would be seeking security in relation to those permits, and in September 2014, demanded security in the amount of $3,209,000.
Ministry staff calculated the amount of security based on the
monthly returns filed by the appellant. In particular, ministry