After five decades of picking up fares in Montreal, 80-year-old Max-Louis Rosalbert thought he’d be retired by now. Instead, the president of the Montreal Taxi Owners’ Association says he’s still behind the wheel trying to make ends meet.
Rosalbert believed he was investing in his retirement back in 1977 when he took out a loan to buy a taxi owner’s permit.
“When I would no longer be able to work, I would be able to rent the permit out, rent out my taxi, so I could have something to supplement my retirement insurance,” he explained.
But when the Quebec government deregulated the taxi industry in 2019 to allow app-based ride-hailing services like Uber to operate legally in the province, it abolished the taxi permit system that Rosalbert — and so many like him — had banked on.
“One day we had it and the next it disappeared,” he said.
Rosalbert is one of around 7,000 former owners of taxi permits represented in a class-action lawsuit seeking additional compensation from the government for what they — and a 2024 Quebec Superior Court ruling — say is disguised expropriation.
Essentially, the class action argues taxi permits were a form of property and that when the government ended the permit system, owners should have been compensated the same way they would have been if the government had expropriated any other type of property, such as land.
After a victory in Quebec Superior Court followed by a loss in the province’s Court of Appeal, former permit owners are hoping Canada’s top court will hear their case, at the heart of which lies the question: What constitutes property that can be expropriated?
A taxi owner’s permit, distinct from a driver’s licence, gave a limited number of holders the right to operate a taxi business in a designated area of Quebec. The permits were heavily regulated by the province and steadily increased in value, allowing owners to sell them or rent them out.
Rosalbert’s permit, which he bought for $12,000 in the 70s, was worth more than $180,000 in 2014, according to estimates by the Commission des transports du Québec.
But that same year, Uber entered the market and destabilized the taxi industry, causing the value of the permits to plummet. After changing the law in 2019, the government paid out more than $800 million in compensation to taxi drivers.
For Dama Metellus, the lead plaintiff in the class-action lawsuit, that wasn’t enough. He said that permit holders should be compensated for the market value of the permits in 2014 and not their acquisition values. He took the province to court for roughly $300 million in extra compensation.
“You have to understand that the majority of people who drive taxis are immigrants,” he said, adding the situation has amounted to “financial genocide for a certain group of migrants.”
The argument hinged on the concept of disguised expropriation.
“A fundamental principle in our legal system is that when the state takes an individual’s property, it has to compensate them for that,” explained Lex Gill, a partner at Trudel Johnston and Lespérance, and one of the lawyers representing members of the class-action.
But what they’ll have to prove to the Supreme Court of Canada, if it agrees to hear the case, is that the permits were in fact considered the kind of property that can be expropriated.
“They were treated as property by Revenu Québec. When you sold them, you paid capital gains tax and people inherited them when their parents died. You could lease one of these permits without ever even having a driver’s licence yourself,” she said.
That argument held up in Quebec’s Superior Court in 2024, where taxi permit owners were awarded an extra $141 million plus interest.
“The 2019 law had the effect of dispossessing the group members of a key asset used in the operation of their business, thus depriving them of the enjoyment of the attributes of their property rights over that asset. This constitutes a disguised expropriation,” the judgment states.
But the victory was short-lived.
In March, Quebec’s Court of Appeal overturned that judgment, concluding that the permits did not have the attributes of the right of ownership, which is “absolute, exclusive and perpetual,” calling them instead a “privilege conferred by the state.”
“The respondent is not complaining of the actual loss of his taxi owner’s permit, but rather the loss of its economic or resale value,” the judgment reads.
Robert Poëti, who served as Quebec’s minister of transportation from 2014 to 2016 and fought against Uber operating illegally in the province at that time, said he was surprised by the Court of Appeal’s ruling.
Poëti, who also testified on behalf of taxi owners in Superior Court in 2024, said he agreed with the judge’s decision and believes the government should have respected it.
Taxi drivers score partial victory in Quebec class action
“Yes, life changes, situations change, technology changes, and I agree with that. But the thing is if … you decided to change a law and some people are hurt financially with that decision, I think the government has to take the responsibility, pay the compensation and let’s go forward,” he said.
But one expert says the case boils down to the definition of disguised expropriation and how it has been applied in both civil and common law.
“The main thing that the Court of Appeal clarified in the decision is that the common law was pretty clear that the government needs to take back a property [for it to be considered] disguised expropriation,” Vincent Ranger, a law professor at Université de Montréal whose research focuses on state liability, told CBC.
While that’s not explicitly stated in Quebec’s civil code, Ranger says Quebec courts have applied the common law conditions for disguised expropriation to other cases heard in the province.
“In this case, the government did not take back the taxi licence, it just opened the market,” Ranger said.
The Court of Appeal took that into consideration, concluding that because the permit system was only abolished and nothing was taken by the government, and since taxi owners are still permitted to drive taxis under the new system, disguised expropriation cannot be applied to the case.
To Ranger, the judgment is sound, and it could also have wider implications on other government-regulated industries.
Gill, the lawyer representing members of the class-action, agrees with that point, naming dairy quotas, fishing permits, and mining rights among other forms of intangible property that are similarly regulated.
“These kinds of intangible assets have enormous economic value in our legal system. And the Court of Appeal’s reasons call into question whether and under what circumstances an individual will be compensated if the state decides to take them,” she said.
Last week, the lawyers representing members of the class-action lawsuit filed an application for leave to appeal to the Supreme Court of Canada.
The Attorney General of Quebec has 30 days to respond to the application. The Supreme Court will decide whether to hear the appeal in the coming months.
Rosalbert, who works eight hours a day, has two more years on his taxi before he’ll have to replace it in order to keep driving per Quebec’s laws. But he doesn’t know if he’ll able to afford the expense.
“If I can make $60, it’s a good day,” he said.
He hopes the Supreme Court will hear their case and that it won’t take too long, he said, explaining that a lot of his colleagues have passed away in recent years, and others, like him, are getting older.
“When I called them to tell them we won in the Superior Court, they told me they’re happy, but they asked, ‘Will I have time to see the cheque?’
“Even if we have a one per cent chance, we’ll take it,” he said. “We have nothing to lose.”
