Words and Phrases - "consumption"

S. 2(1) of the Retail Sales Tax Act (Ont.) imposed tax on “every purchaser of tangible personal property … in respect of the consumption and use thereof… .” “Consumption” was defined to include the use of tangible personal property.

The appellant, which maintained a stock of spare parts which were used to repair the computer systems of customers to whom it had provided a warranty, unsuccessfully argued that it was not subject to the tax because it was not “using” such parts, which were instead used by the customers. Low J stated (at paras. 12-13, 15):

[O]n the plain and ordinary meaning of the word “use”, … the appellant is the user of repair parts. The appellant is in the warranty business. …

How does the appellant go about its business? It uses parts that it keeps in inventory to fix customers’ equipment whose parts have become dysfunctional. It keeps a supply of parts in inventory so that when a customer who has bought a warranty requires the appellant to perform under the contract, the appellant has the tangible property with which it can do so in prompt fashion. Once a part has been taken from inventory and inserted into a customer’s piece of equipment, the part has been used in the carrying on of the business of performing repairs under warranty contracts.

I do not view “use” and “consumption” as words redundant to each other and I would construe the terms as having separate though similar meanings.