Quebec seeks to appeal order to pay $219 million to taxi permit holders

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The Quebec government has appealed a Superior Court ruling in June that ordered it to pay more than $219 million in damages to thousands of former taxi license holders.

The June ruling found that the government illegally seized the licenses of Uber Technologies Inc after the ride-hailing service entered the province without fair compensation.

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Judge Silvana Conte ordered the government to pay class members $143,873,463 in damages and interest as compensation for the taking of the permits, as well as additional compensation for the province’s establishment of the so-called “pilot program” in 2016, three years before the province made its final decision on the matter in 2019.

After the verdict was announced, Trudel Johnston and Lespérance, the law firm representing the taxi drivers, said its clients were owed more than $219 million in total.

In its appeal, Quebec said it would actually be liable for more than $308 million.

In 1973, the Montreal government decided to regulate the taxi industry by dividing the province into geographic regions and limiting the number of licenses that could be issued to taxi drivers in each region. In the decades that followed, the value of a taxi license in the Montreal area rose to more than $200,000. The licenses could be resold or rented to other drivers for a fee.

When Uber entered the Quebec market in 2014, the San Francisco-based ride-hailing company did not have a license. In 2016, Quebec launched a pilot program that allowed Uber to operate legally. Three years later, the province rescinded the license and paid the licensee compensation for the value of the license when he or she purchased it.

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The class action lawsuit was launched because license holders believe it is unfair to those who bought their licenses earlier, who were given less compensation than those who bought their licenses more recently. License holders believe the government’s decision, known as the 2019 law, does not recognize the value of each license before the Quebec government began the pilot project.

“The government’s decision to revoke their licenses and pay them the old fees is an absolutely blatant structural injustice because if you paid $10,000 for a license in 1976, you’re only going to get $10,000, and if you paid $200,000 for a license in 2015, you’re only going to get $200,000,” Bruce Johnston, a lawyer representing the license holders, explained to the Montreal Gazette in June.

The government’s main argument in its appeal was that the trial judge “committed an error of law in determining that class members were the subjects of a covert expropriation.”

The government argued that the Quebec Court of Appeal “has ruled that a disguised expropriation is an act that deprives a person or business of property or virtually eliminates any possibility of using the property. (The Quebec Court of Appeal) also ruled that a mere reduction in the value of the property or the potential loss of value is not sufficient to conclude that a disguised expropriation has occurred.”

“The fact that taxi driver licence holders were able to benefit from an increase in the value of their licence is irrelevant to the main purpose of the licence, which is to provide passenger transport services within a regulated framework. According to the jurisprudence established by the Quebec Court of Appeal, the change in the applicable regulations cannot amount to a disguised expropriation. The holders were not deprived of the main purpose of their licence.”

The Quebec Court of Appeal has not yet decided whether to hear the case.

pcherry@postmedia.com

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