Labrador Offshore Shipping Co. Ltd. v. The Queen, 90 DTC 6096 (FCTD)

The taxpayer, which was resident in Nova Scotia, leased a diving support vessel to Petro-Canada, which used the vessel outside Nova Scotia in its exploration and drilling operations. The taxpayer argued that the act of leasing the vessel to Petro-Canada, which lease was executed in Nova Scotia, constituted that plaintiff's "use" of the vessel in Nova Scotia. Martin J. held that by the act of leasing the taxpayer had parted with the use or the right to use the property, and that it was not the lessor who was using the vessel, but the lessee who was using it for its own purposes outside Nova Scotia. Therefore, the property was not "used in" Nova Scotia for purposes of former s. 127(9)(a.1).

A diving support vessel which was used by Petro-Canada in its exploring and drilling operations in the seabed areas off the coast and outside of the provinces of Newfoundland and Nova Scotia, thereby was used "in Canada" for purposes of former s. 127(10)(d).