Pratte,
J.A.:—The
only
issue
on
these
appeals
from
the
Trial
Division
relates
to
the
computation
of
capital
gains
realized
by
the
appellant.
The
appellant
is
a
citizen
of
the
United
States
and
has
been
a
resident
of
Canada
since
1971.
The
capital
gains
here
in
question
resulted
from
the
sale
in
the
United
States,
for
a
price
in
American
currency,
of
certain
United
States
securities
that
the
appellant
had
purchased
in
American
currency
before
moving
to
Canada
and
that
were
managed
for
her
in
the
United
States
by
an
American
trust
company.
The
appellants
contention
is
that,
in
order
to
calculate
the
amount
of
her
capital
gains,
the
respondent
should
have
first
determined
the
profit
in
American
currency
that
she
had
realized
on
the
sale
of
her
securities
and,
after
that,
should
have
converted
the
amount
of
that
profit
into
Canadian
currency
at
the
rate
of
exchange
prevailing
at
the
time
she
had
sold
the
securities.
This
contention
was,
in
our
view,
correctly
rejected
by
the
trial
judge.
Paragraph
40(1)(a)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
makes
it
clear
that
the
capital
gain
realized
by
the
appellant
in
each
case
was
the
“amount”
by
which
the
proceeds
of
the
disposition
of
her
securities
exceeded
the
adjusted
cost
base
of
those
securities.
When
that
provision
speaks
of
the
"amount"
of
the
capital
gain,
it
obviously
refers
to
an
amount
expressed
in
Canadian
currency.
As
that
amount
is
the
result
of
a
comparison
between
two
other
amounts,
namely
the
amount
representing
the
cost
of
the
securities
and
the
amount
representing
the
value
of
the
proceeds
of
disposition,
it
necessarily
follows
that
both
the
cost
of
the
securities
and
the
value
of
the
proceeds
of
disposition
must
be
valued
in
Canadian
currency
which
is
the
only
monetary
standard
of
value
known
to
Canadian
law.
Once
this
is
realized,
it
becomes
clear
that
the
cost
of
the
securities
to
the
appellant
must
be
expressed
in
Canadian
currency
at
the
exchange
rate
prevailing
at
the
time
of
their
acquisition
while
the
valuation
of
the
proceeds
of
disposition
of
the
same
securities
must
be
made
in
Canadian
currency
at
the
rate
of
exchange
prevailing
at
the
time
of
the
disposition.
That
method
of
assessing
the
amount
of
capital
gains
may,
as
counsel
for
the
appellant
said,
produce
undesirable
results
in
certain
cases.
It
is
nevertheless
the
only
method
that
is
in
harmony
with
the
provisions
of
the
Act.
The
appeals
will
be
dismissed
with
costs.
Appeal
dismissed.
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