Mahoney,
J:—The
first
issue
is
whether
a
“portable”
asphalt
plant,
acquired
by
the
plaintiff
in
its
1974
taxation
year
and
first
used
in
its
1975
taxation
year,
generated
“Canadian
manufacturing
and
processing
profits”
for
purposes
of
subsection
125.1(1)
of
the
Income
Tax
Act.
The
second
issue
is
whether,
for
purposes
of
capital
cost
allowance,
it
fell
within
Class
8,
and
therefore
by
reference,
Class
29
of
Schedule
B
to
the
Income
Tax
Regulations,
or
within
Class
10.
Section
125.1
provides
for
the
deduction,
from
the
tax
otherwise
payable
by
a
corporation,
of
a
portion
of
its
“Canadian
manufacturing
and
processing
profits”,
which
are
defined
by
subsection
125.1(3)
as
a
prescribed
portion
of
its
income
“applicable
to
the
manufacturing
or
processing
in
Canada
of
goods
for
sale
or
lease”.
The
subsection
goes
on
125.1
(3)(b)
“manufacturing
or
processing”
does
not
include
(iii)
Construction,
...
The
Act
clearly
contemplates
that
an
activity
may
constitute
either
manufacturing
or
processing
and,
at
the
same
time,
fall
within
the
exclusion
of
construction,
just
as,
for
example,
it
contemplates
a
manufacturing
or
processing
activity
may
also
be
farming,
fishing
or
logging,
to
cite
other
exclusions.
In
its
use
of
the
term
“construction”,
Parliament
seems
to
have
had
in
mind
construction
as
an
industrial
undertaking
rather
than
construction
in
the
narrower
sense
of
an
activity.
The
only
question
as
to
the
first
issue
is
whether
the
plaintiff’s
use
of
the
plant
was
within
the
scope
of
its
construction
undertaking.
If
not
within
that
exception,
it
clearly
qualifies
for
the
deduction
allowed
by
section
125.1.
The
plant
processed
aggregates
and
asphalt
to
produce
asphaltic
concrete
for
pavement.
About
90%
of
its
production
in
the
period
in
issue
was
used
by
the
plaintiff
in
the
fulfilment
of
contracts
it
had
entered
into
with
provincial,
municipal
and
private
owners.
Some
of
those
contracts
entailed
a
high
proportion
of
other
work;
some
were
primarily
for
the
paving.
The
remaining
10%
was
sold
to
third
parties
to
permit
them
to
fulfil
contracts
to
pave
or
to
do
that
for
themselves.
“Construction”
is
not
a
term
of
art.
The
paving
of
roads,
parking
lots,
and
so
on,
is
construction.
That
is
so
whether
the
paving
is
the
initial
application
of
pavement
to
a
newly
constructed
grade,
the
maintenance
or
repair
of
an
old
pavement
or
a
combination
as
in
the
case
of
a
road
widening
and
reconstruction.
The
production
of
asphaltic
concrete
was
an
integral
part
of
the
plaintiff’s
construction
undertaking
as
well
as
a
processing,
if
not
manufacturing,
operation.
The
Minister
was
right
to
reject
the
claim
for
a
deduction
under
section
125.1.
The
plant
consists
of
a
number
of
elements.
Some
have
wheels
attached;
others
may
be
loaded
on
trucks
or
trailers.
All
may
be
transported
from
location
to
location
and
reassembled.
A
crane
is
needed
to
assemble
and
reassemble.
A
crane
is
needed
to
assemble
and
reassemble
and
to
load
and
unload
the
elements.
The
plant
was
moved
twice
during
the
1975
taxation
year;
that
is,
it
operated
at
three
different
locations
in
Nova
Scotia,
not
more
than
50
miles
apart
as
the
crow
flies.
One
operator
ran
the
plant;
it
took
6
to
8
men,
a
dozen
trucks,
tractors
and
trailers
and
at
least
3
/2
days
for
each
move.
The
provisions
of
the
Regulations
are,
to
say
the
least,
confusing.
One
starts
with
Class
8
(20%).
Property
not
included
in
Class
2,
7,
9
or
30
that
is:
(a)
a
structure
that
is
manufacturing
or
processing
machinery
or
equipment;
(i)
a
tangible
capital
asset
that
is
not
included
in
any
other
class
in
this
Schedule
except.
.
.
Classes
2,
7,
9
and
30
are
not
in
play.
Neither
are
the
exceptions
of
paragraph
(i).
Then
there
is
Class
10
(30%):
Property
not
included
in
any
other
class
that
is
(h)
contractor’s
moveable
equipment,
including
portable
camp
buildings,
except.
..
The
exceptions
are
not
in
play.
Finally,
there
is
Class
29
(50%).
Property
that
would
otherwise
be
included
in
another
class
in
this
Schedule
(b)
that
is
(i)
property
that,
but
for
this
class,
would
be
included
in
Class
8,
except.
..
Again,
the
exceptions
are
not
in
play.
The
plant
was
manufacturing
or
processing
equipment.
It
was
also
a
structure
within
the
appropriate
definition
of
The
Shorter
Oxford
English
Dictionary.
STRUCTURE:
6.
An
organized
body
or
combination
of
mutually
connected
and
dependent
parts
or
elements.
Stroud’s
Judicial
Dictionary,
Fourth
Edition,
at
p
2640
quotes
Lord
Denning
in
B
P
Refinery
(Kent)
v
Walker,
for
which
no
citation
is
given.
He
is
quoted
as
saying,
in
part:
It
is,
I
think,
characteristic
of
a
structure
that
it
is
built
up
of
component
parts
on
the
site.
That
expresses
my
understanding
of
the
term
in
this
context.
The
plant
was
a
structure
that
is
manufacturing
or
processing
equipment
within
paragraph
(a)
of
Class
8.
The
plaintiff
was
a
contractor.
The
plant
was
contractor’s
equipment,
in
fact,
as
well
as
generically.
The
question
is:
was
it
moveable?
Clearly,
it
was
when
disassembled
but
not
otherwise.
It
is
hard
to
conceive
of
anything
that
is
not
moveable
provided
it
can
be
broken
down
into
transportable
elements.
I
do
not
think
that
the
mere
fact
that
a
structure
can
be
disassembled
and
moved
makes
is
moveable.
However,
when
the
structure
is
designed
to
be
disassembled
and
moved
and
when
it
is,
in
fact,
assembled
so
as
to
preserve
that
moveability,
eg,
not
anchored
or
enclosed
or
otherwise
assembled
so
that
it
cannot
be
disassembled
as
intended
by
its
designer,
it
remains
moveable.
The
plant
was
contractor’s
moveable
equipment
as
well
as
a
structure
that
is
manufacturing
or
processing
machinery
or
equipment.
Having
regard
to
the
introductory
words
in
each
case,
it
is
not
excluded
from
Class
8
by
the
words
“property
not
included
in
class
2,
7,
9
or
30”
but,
once
within
Class
8,
it
is
excluded
from
Class
10
by
the
words
“Property
not
included
in
any
other
class”.
The
plant
was,
prima
facie,
a
Class
8
asset
but,
in
view
of
Class
29,
it
is
property
that
would
be
included
in
Class
8
but
for
Class
29.
As
it
is,
it
was
a
Class
29
asset.
If
I
am
wrong
in
finding
the
plant
to
be
within
Class
8
by
virtue
of
paragraph
(a)
thereof,
then
the
only
other
provision
under
which
it
might
fall
into
Class
8
is
paragraph
(i).
The
finding
that
the
plant
is
contractor’s
moveable
equipment
excludes
the
plant
from
Class
8
on
that
basis,
since
paragraph
(i)
extends
only
to
an
“asset
that
is
not
included
in
any
other
class”.
If
it
is
not
within
Class
8
by
virtue
of
paragraph
(a),
it
is
within
Class
10
as
contractor’s
moveable
equipment
and
not
to
be
included
in
Class
29.
Success
being
about
equally
divided,
there
will
be
no
order
as
to
costs.
Judgment
The
appeal
is
allowed
in
part.
The
plaintiff’s
1974
and
1975
income
tax
assessments
are
referred
back
to
the
Minister
for
reassessment
on
the
basis
that
the
Parker
“Super-Blackmobile”
was
an
asset
properly
to
be
classified
under
Class
29
of
Schedule
B
of
the
Income
Tax
Regulations.