What principle was highlighted in the Bank of Toronto v Lambe case regarding tax regulations?

The principle highlighted in the Bank of Toronto v Lambe case emphasizes that revenue-raising is fundamentally a matter of provincial jurisdiction. In this context, the decision clarified the authority of provinces to impose taxes, including those on banks operating within their territory. This solution underscores the division of powers outlined in the Constitution Act, 1867, where both the federal and provincial governments have their own areas of responsibility.

The case established that while the federal government has jurisdiction over banking activities, provinces retain exclusive rights over direct taxation. Though federal policies may influence financial institutions, any revenue-generating tactics, such as taxation, are ultimately managed by provincial legislation. This distinction reinforces the balance of power within Canada's federal structure, allowing provinces to secure essential funding through taxation, including on banks, which conduct their business within provincial boundaries.

This clear delineation is critical for understanding the broader dynamics of tax policy and jurisdictional disputes in Canada, illustrating that provinces have vital revenue-raising authority that can intersect with federal entities.