Date: 20070514
Docket: A-237-06
Citation: 2007 FCA 185
CORAM: NADON
J.A.
SHARLOW
J.A.
PELLETIER
J.A.
BETWEEN:
CCLI (1994) INC.
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
SHARLOW J.A.
[1]
This is an appeal by CCLI (1994) Inc. of a
judgment of the Tax Court of Canada (2006 TCC 240) dismissing income tax
appeals relating to assessments for 1989, 1990 and 1993 and loss determinations
for 1991 and 1992. One issue is whether foreign exchange gains and losses incurred
in respect of money borrowed to finance CCLI’s equipment leasing transactions
are to be treated for income tax purposes as income or capital. The other issue
is whether, in the circumstances of this case, the Income Tax Act,
R.S.C. 1985, c. 1 (5th Supp.) requires CCLI to deduct more of its
1991 non-capital loss in 1989 than it has chosen to deduct.
Foreign
exchange gains and losses
[2]
During the
years under appeal, CCLI was a wholly owned subsidiary of Citibank Canada, a Canadian chartered bank.
Citibank Canada is subject to the Bank Act,
S.C. 1991, c. 46. Prior to 1992, Citibank Canada was precluded by the Bank Act from
providing financing to its customers through leasing transactions. Citibank Canada could, however, own a
subsidiary corporation that could provide such financing as long as the leases
met the conditions set out in the Financial Leasing Regulations,
SOR/82-705.
[3]
In 1992,
the Bank Act was amended to remove the prohibition on lease financing
transactions. Citibank Canada was then free to provide
lease financing on its own account. In 1994, proceedings were commenced to wind
up CCLI into Citibank Canada.
[4]
During the
years under appeal, CCLI entered into a number of leasing transactions
involving the purchase by CCLI of aircraft or railcars which were then leased
to an operating company for terms of ten years or more. For each leasing
transaction, CCLI borrowed from Citibank Canada the money required to complete the
equipment purchase. The loans were in U.S. dollars or other foreign currencies,
depending upon the currency of the lease transactions. (The details of the
transactions are set out in the reasons for the judgment under appeal, and need
not be repeated here.) The leases met the conditions in the Financial
Leasing Regulations.
[5]
For
financial statement purposes, CCLI consistently and correctly reported the
financial results of its leases on the basis that they were “financial leases”
(or “direct financing leases” as they are sometimes called). For commercial
accounting purposes, a lease is classified as either a financial lease or an
operating lease, depending upon a practical assessment of the incidents of
ownership of the leased property. If substantially all of the benefits and risk
of the ownership of the leased property are in the hands of the lessee, the
lease is classified as a financial lease. Generally, a lease that meets the
conditions of the Financial Leasing Regulations would be classified as a
financial lease under commercial accounting principles.
[6]
In a
financial lease, the lessor has the financial benefit of an income stream from
the user of the leased property, and bears the risk of financial default by the
lessee, a risk that is mitigated by the fact that the lessor holds legal title
to the leased property. Because that is the functional equivalent of a secured
loan, the transaction is presented in the lessor’s financial statements in the
same manner as a secured loan (see, for example, section 3065.09 of the Handbook
of the Canadian Institute of Chartered Accountants, quoted in paragraph 8
of the reasons for judgment of the Tax Court Judge). Specifically, the lessor’s
asset is described as a loan receivable, and the amounts received by the lessor
are treated in part as interest income and in part as a return of capital. By
contrast, the financial statements of the lessor under an operating lease will
reflect the fact that the lessor is the owner of the leased property who receives
income in the form of rent and incurs the expenses of an owner of property,
including the cost of the equipment which is amortized over the number of years
of its estimated useful life.
[7]
As
mentioned above, CCLI treated its equipment leases as financial leases in
preparing its financial statements for commercial purposes. However, in filing
its income tax returns, CCLI consistently claimed capital cost allowance on the
leased equipment, as it was entitled to do.
[8]
For
financial statement purposes and for income tax purposes, CCLI included in its
income accrued but unrealized foreign exchange gains and losses relating to its
Citibank Canada loans. On that basis, CCLI
reported foreign exchange gains in the years 1988 to 1991 and foreign exchange
losses in the years 1992 to 1994. The position of the Crown is that all foreign
exchange gains and losses of CCLI should have been treated as capital gains and
losses, and reported when realized. On that basis, CCLI was reassessed for
1989, 1990 and 1993, and its losses for 1991 and 1992 were redetermined. The
appeal of CCLI to the Tax Court of Canada was unsuccessful. It now appeals to this
Court.
[9]
The tax
treatment of income differs from the tax treatment of capital in a number of respects.
One difference relates to the timing of the recognition of gains or losses. For
income tax purposes, most revenue and most expenses of a business are required
to be reported on an accrual basis, while capital gains and losses are reported
when realized. That means, generally, that revenue is included in income in the
year in which it becomes receivable and expenses are deducted in the year in
which they become payable. However, capital gains and losses are reported for
income tax purposes in the year the gain is made or the loss is sustained.
[10]
Another
difference relates to the inclusion rate. For income tax purposes, capital
gains and capital losses are only partly reflected in income. The amount of a
capital gain or loss that is included in income depends upon the capital gain
inclusion rate for the year. For example, in a year with a 50% inclusion rate
(1972 to 1987), only 50% of a capital gain is included in income and only 50%
of a capital loss is deductible. (The capital gain inclusion rate was increased
to 66 2/3% for 1988 and 1989 and to 75% for 1990 through 1999, and reduced to
50% in 2000.)
[11]
Finally,
there is a difference in terms of how losses may be deducted for income tax
purposes. A loss on income account can be deducted from all other income in the
year. The deductible portion of a capital loss can be deducted only from the
taxable portion of capital gains in the year. If in a particular year a
taxpayer has losses on income account that exceed income for that year, the
excess (called a “non-capital loss”) can be carried back 3 years and forward 7
years, and deducted in computing taxable income in those other years (a 2006
amendment increases the carry-forward period to 20 years). If a taxpayer has
deductible capital losses in a year that exceed taxable capital gains in that
year, the excess can be carried back 3 years and forward indefinitely, and deducted
against taxable capital gains in those other years.
[12]
It is not
necessary to recount in detail how these differences affected the tax position
of CCLI when its returns were reassessed to treat its foreign exchange gains
and losses as capital rather than income. It is enough to say that CCLI was
entitled to object to the changes and, when not satisfied of the result of the
objection, to appeal to the Tax Court of Canada.
[13]
For income
tax purposes, the classification of a foreign exchange gain or loss as income
or capital depends on the nature of the transaction in relation to which the
gain or loss occurred. In this case, the transactions are the loans from
Citibank Canada to CCLI. The question is
whether, to CCLI, those loans are capital transactions or income transactions.
[14]
The position
of the Crown is that the Citibank Canada loans are capital transactions to CCLI
because the borrowed money was used to acquire equipment that was capital property.
CCLI was entitled to deduct and did deduct the cost of the equipment over
number of years as capital cost allowance pursuant to Part XI of the Income
Tax Regulations, C.R.C. c. 945. Property in respect of which capital cost
allowance is claimed falls into the definition of “capital property” in
subsection 248(1) of the Income Tax Act (see also the definition of
“capital property” in section 54 and the definition of “depreciable property”
in subsection 13(21) of the Income Tax Act). The Tax Court Judge agreed
with the Crown.
[15]
CCLI argues
that the Citibank Canada loans are income transactions because CCLI carries on
a financing business, which consists of acquiring equipment that is leased to
its customers under financial leases. CCLI argues that in commercial terms a
financial lease is exactly the same as a secured loan, and so the tax character
of the loan should be the same as if the borrowed money was used to finance a
money lending transaction by a financial institution.
[16]
The
argument of CCLI is based on Gifford v. Canada, [2004] 1 S.C.R. 411. The
issue in that case was whether a financial adviser was entitled to a deduction
for the cost of a client list, and for interest on money borrowed to make the
purchase. Because the expenditures were incurred for the purpose of earning
income from employment rather than income from a business or property, the availability
of a deduction depended on paragraph 8(1)(f) of the Income Tax Act. That
provision precluded any deduction for a “payment on account of capital” (subject
to certain exceptions that did not apply). Justice Major, writing for the
Court, concluded that the client list was a capital asset to the financial
adviser, and therefore the cost of the client list was a payment on account of
capital, as was the interest on the money borrowed to make the purchase.
[17]
CCLI relies
on certain statements made by Justice Major in discussing whether, as a matter
of law, a payment of interest is always a capital outlay, and if not, what test
ought to be applied in determining in a particular case whether interest is a
capital outlay. Justice Major found no support in the jurisprudence for the
general proposition that a payment of interest is always a capital outlay. He concluded
that interest on borrowed money is a capital outlay if the loan proceeds are
added to the financial capital of the borrower, but not if the loan proceeds
constitute part of the stock in trade of the borrower, as may be the case if
the loan is made to a moneylender, such as a bank or a similar financial
institution. In the case before him, the borrowed money was used to pay for the
client list, which was a capital asset, indicating that the loan proceeds increased
the financial capital of the taxpayer. It followed that the interest payments on
the loan were capital outlays.
[18]
I do not
read Gifford as authority for the proposition that either the characterization
of the leases as financial leases, or the characterization of the business of
CCLI as a “financing business”, determines conclusively that the loan proceeds
received by CCLI from Citibank Canada comprise part of the stock in
trade of a moneylender. It seems to me that, although the business of CCLI may
be described as a financing business, it could with equal accuracy be described
as an equipment leasing business.
[19]
CCLI used
the money borrowed from Citibank Canada
to acquire equipment that CCLI then leased to its customers for relatively long
terms. The leases are treated for commercial accounting purposes as financial
leases because they entail business risks that are the functional equivalent of
secured loans, but on the specific facts of this case, that is not a sufficient
basis to justify treating the leases for income tax purposes as though they
actually were loans. As the Tax Court Judge correctly noted, each loan to CCLI was
earmarked for a particular equipment acquisition and in each case, the purchased
equipment was the subject of capital cost allowance claims which caused the
equipment to fall within the definition of “capital property” in the Income
Tax Act. In my view, that leads inescapably to the conclusion that each
equipment acquisition was a capital transaction, and that each loan entered
into to finance an equipment acquisition was also a capital transaction.
[20]
I conclude
that the Tax Court Judge was correct to find that the foreign exchange gains
and losses of CCLI arising from the Citibank Canada loans were capital gains
and losses. That makes it necessary to consider the other point on appeal,
relating to CCLI’s 1993 claim for a deduction of part of its 1991 non-capital
loss.
[21]
I note
parenthetically that one issue that was not debated in this case is whether it
would have been open to CCLI to determine its income for income tax purposes on
the same basis as its income for financial statement purposes, foregoing any
claim for capital cost allowance. In my view, it is an open question whether
the income of CCLI as determined for financial statement purposes would have
been sufficiently accurate for income tax purposes, and consistent with all of
the provisions of the Income Tax Act and established legal principles
(see Canderel Ltd. v. Canada, [1998] 1 S.C.R. 147 at paragraph 53).
Is CCLI entitled to a deduction in 1993
for part of its 1991 non-capital loss?
[22]
If the
Minister was correct on the foreign exchange issue, the resulting determination
of the income and losses of CCLI for the years under appeal is agreed to be
correct, except for one remaining issue relating to 1993. By way of summary,
the 1991 non-capital loss of CCLI has been determined conclusively to be $25,824,050.
CCLI has asked for $19,984,499 of that 1991 non-capital loss to be deducted in
1993, and the Minister has refused. The entitlement of CCLI to that deduction
was one of the issues in its appeal to the Tax Court for 1993. The Tax Court
Judge agreed with the Minister.
[23]
To
understand this issue, it is necessary to consider paragraph 111(1)(a) of the Income
Tax Act, which reads as follows:
111. (1) For the
purpose of computing the taxable income of a taxpayer for a taxation year,
there may be deducted such portion as the taxpayer may claim of the
taxpayer's
|
111. (1) Pour le
calcul du revenu imposable d'un contribuable pour une année d'imposition,
peuvent être déduites les sommes appropriées suivantes:
|
(a) non-capital losses for the 7
taxation years immediately preceding and the 3 taxation years immediately
following the year.
|
a) ses pertes autres que des pertes en capital subies au
cours des 7 années d'imposition précédentes et des 3 années d'imposition qui
suivent l'année.
|
[24]
The term “non-capital
loss” is defined in subsection 111(8) by means of a complex statutory formula.
For the purposes of this case, a non-capital loss is synonymous with a business
loss.
[25]
For 1987
and 1988, CCLI had non-capital losses of $19,895,182 and $31,636,822 respectively.
Those amounts have not changed. They were deducted in 1989 under paragraph
111(1)(a), resulting in a 1989 taxable income of $29,259,177.
[26]
In filing
its income tax returns for 1991 and 1992, CCLI initially reported further
non-capital losses. CCLI requested that those non-capital losses be deducted in
1989. That request resulted in a reassessment dated May 4, 1995 reducing the
1989 taxable income of CCLI to nil, calculated as follows:
1989
net income (unchanged)
|
|
$80,891,181
|
Less:
Loss carry forward from 1987 (unchanged)
|
$19,895,182
|
|
Less:
Loss carry forward from 1988 (unchanged)
|
31,636,822
|
|
|
|
51,532,004
|
|
|
$29,359,177
|
Less:
Loss carry back from 1991
|
$ 5,839,551
|
|
Less:
Loss carry back from 1992
|
23,519,626
|
|
|
|
29,359,177
|
1989
taxable income
|
|
NIL
|
[27]
By 1997,
the Minister had reached its current position that the foreign exchange losses
and gains of CCLI should have been reported as capital gains and losses. It was
apparent that this would result in changes to the non-capital losses of CCLI
for 1991 and 1992.
[28]
In 1997,
the revised amounts of the non-capital losses of CCLI for 1991 and 1992 were
calculated by the Minister as $21,481,249 and $7,085,367, respectively. Those
amounts were the subject of loss determinations under subsection 152(1.1) of
the Income Tax Act. A taxpayer has the right to object to a subsection
152(1.1) loss determination, and appeal it, in the same manner as an
assessment. CCLI objected to those loss determinations.
[29]
Meanwhile,
on June 11, 1997, the Minister reassessed CCLI for 1989 to change the
deductions for the 1991 and 1992 non-capital losses, resulting in taxable
income for 1989, determined as follows:
1989
net income (unchanged)
|
|
$80,891,181
|
Less:
Loss carry forward from 1987 (unchanged)
|
$19,895,182
|
|
Less:
Loss carry forward from 1988 (unchanged)
|
31,636,822
|
|
|
|
51,532,004
|
|
|
$29,359,177
|
Less:
Revised loss carry back from 1991
|
$21,481,249
|
|
Less:
Revised loss carry back from 1992
|
7,085,367
|
|
|
28,566,616
|
28,566,616
|
Revised
1989 taxable income
|
|
$792,561
|
[30]
CCLI
objected to this reassessment on the basis that it was made outside the statutory
time limit (see subsection 152(4) of the Income Tax Act). The Minister
considered that objection and agreed that the reassessment was out of time.
[31]
The 1989
objection was under consideration at the same time as the objections to the
1991 and 1992 loss determinations. The major issue for 1991 and 1992 was the
characterization of the foreign exchanges gains and losses of CCLI.
[32]
One result
of the objections for 1991 and 1992 was that the non-capital losses of CCLI for
those years were redetermined to reflect a number of changes, none of which are
relevant for present purposes. The revised amounts of the 1991 and 1992
non-capital losses, $25,824,050 and $8,122,335 respectively, were the subject
of notices of loss determination dated April 19, 2002. Those loss
determinations were appealed to the Tax Court.
[33]
On April
18, 2002, the Minister reassessed CCLI for 1989 to acknowledge that the 1997
reassessment was out of time. In that reassessment, the Minister also purported
to change the amounts of the 1989 deductions for the 1991 and 1992 non-capital
losses, based on the April 19, 2002 loss determinations. The result was as
follows:
1989
net income (unchanged)
|
|
$80,891,181
|
Less:
Loss carry forward from 1987 (unchanged)
|
$19,895,182
|
|
Less:
Loss carry forward from 1988 (unchanged)
|
31,636,822
|
|
|
|
51,532,004
|
|
|
$29,359,177
|
Less:
Loss carry back from 1991
|
$25,824,050
|
|
Less:
Loss carry back from 1992
|
3,535,127
|
|
|
|
29,359,177
|
Revised
1989 taxable income
|
|
NIL
|
[34]
At the
same time, the Minister reassessed CCLI for 1990 by permitting a deduction of
$4,587,208 for part of the 1992 non-capital loss as finally determined (previously,
there was no deduction in 1990 for any part of the 1992 non-capital loss). CCLI
does not take issue with that adjustment. Nor does CCLI take issue with revised
amount of the 1989 deduction for the 1992 non-capital loss, which the Minister
changed from $23,519,626 to $3,535,127. Both of those changes favour CCLI.
[35]
However,
CCLI does take issue with the change in the amount of the 1989 deduction for
the 1991 non-capital loss. CCLI argued in the Tax Court and in this Court that
the Minister had no legal authority to increase the 1989 deduction for the 1991
non-capital loss from the amount originally deducted in 1995, which was
$5,839,626. CCLI claims that, of its 1991 non-capital loss as finally
determined ($25,824,050), $5,839,626 was properly deducted in 1989, and it is
entitled to deduct the remainder, $19,984,499, in 1993. The Tax Court Judge did
not agree.
[36]
The
statutory provisions read in relevant part as follows:
111. (1) For the
purpose of computing the taxable income of a taxpayer for a taxation year,
there may be deducted such portion as the taxpayer may claim of the
taxpayer's
|
111. (1) Pour le
calcul du revenu imposable d'un contribuable pour une année d'imposition,
peuvent être déduites les sommes appropriées suivantes:
|
(a)
non-capital losses for the 7 taxation years immediately preceding and the 3
taxation years immediately following the year
|
a) ses pertes autres que des pertes en capital subies au
cours des 7 années d'imposition précédentes et des 3 années d'imposition qui
suivent l'année;
|
[…]
|
[…]
|
(3) For the purposes of subsection 111(1),
|
(3) Pour l'application
du paragraphe (1):
|
(a) an amount in
respect of a non-capital loss ... for a taxation year is deductible ... in
computing the taxable income of a taxpayer for a particular taxation year
only to the extent that it exceeds the total of
|
a) une somme au titre d'une perte autre qu'une perte en
capital, ... pour une année d'imposition n'est déductible ... dans le calcul
du revenu imposable d'un contribuable pour une année d'imposition donnée que
dans la mesure où la somme dépasse le total des montants suivants:
|
(i) amounts deducted
under this section in respect of that non-capital loss ... in computing
taxable income for taxation years preceding the particular taxation year,
|
(i) les sommes déduites selon le présent article, au titre
de cette perte autre qu'une perte en capital … dans le calcul du revenu
imposable pour les années d'imposition antérieures à l'année donnée,
|
[…]
|
[…]
|
(b) no amount is
deductible in respect of a non-capital loss, net capital loss, restricted
farm loss, farm loss or limited partnership loss, as the case may be, for a
taxation year until
|
b) aucune somme n'est déductible au titre d'une perte
autre qu'une perte en capital, d'une perte en capital nette, d'une perte
agricole restreinte, d'une perte agricole ou d'une perte comme commanditaire
pour une année d'imposition avant que:
|
(i) in the case of a
non-capital loss, the deductible non-capital losses,
|
(i) dans le cas d'une perte autre qu'une perte en capital,
les pertes autres que les pertes en capital déductibles,
|
[…]
|
[…]
|
for preceding
taxation years have been deducted.
|
pour les années d'imposition antérieures n'aient été
déduites.
|
Neither party has suggested
that there is any relevant difference between the English and French versions.
[37]
In my view, paragraph 111(1)(a)
entitles CCLI to the deduction as requested, subject only to the restrictions in
subparagraphs 111(3)(a)(i) and 111(3)(b)(i).
[38]
I will
consider those two restrictions in reverse order. Subparagraph 111(3)(b)(i)
says that CCLI cannot deduct, in 1993, any part of its 1991 non-capital loss until
all of its non-capital losses for 1990 and prior years are deducted. The
Minister does not allege that CCLI has any undeducted non-capital losses for 1990
or any year prior to 1990.
[39]
Subparagraph
111(3)(a)(i) says that CCLI cannot deduct, in 1993, its 1991 non-capital loss
to the extent it was deducted in a year prior to 1993. The Minister argues that
the entire amount of the 1991 non-capital loss was deducted in 1989 and that
none is available for deduction in 1993. That is true only if the Minister can
point to some legal authority for increasing the 1989 deduction, as indicated
in the disputed 1989 reassessment dated April 18, 2002.
[40]
The
Minister does not suggest that it has express legal authority for increasing
the 1989 deduction, but argues that such authority is implicit in the scheme of
section 111. The Minister argues that section 111 should be understood as
establishing a pool of available non-capital losses, with adjustments being
made by the Minister as the need arises, until there is some final
determination (such as, in this case, a loss determination under subsection
152(1.1)). Under that interpretation, the Minister takes the initiative, as
changes are made to the computation of taxpayer’s income and losses from time
to time (whether reflected in a reassessment or not), to allocate and
re-allocate non-capital losses of a particular year within the prior 3 and
following 7 years, essentially on a first in-first out basis. (I assume that
the Minister would acknowledge that authority to allocate and re-allocate, if
it exists, would be exercisable only if the taxpayer has first elected to
deduct at least $1 of its non-capital losses in computing the income of another
year, although that point was not addressed in argument.)
[41]
One
problem with this interpretation is that section 111 says nothing about pooling
non-capital losses. The drafters of the Income Tax Act are familiar with
the notion of pools for deductions. Examples may be found in the statutory
schemes for capital cost allowance, and Canadian exploration expenses. Section
111 bears no resemblance to those schemes.
[42]
A more
important problem with this interpretation is that it fails to respect the
choice that Parliament has given to taxpayers in the first line of subsection
111(1). As I read subsection 111(1), only the taxpayer has the right to choose
how to allocate the non-capital loss of a particular year between the 3 prior
years and the 7 subsequent years, subject only to the restrictions in subparagraphs
111(3)(a)(i) and 111(3)(b)(i). Although in a given situation a taxpayer may be
content to allow the Minister to choose how its losses may be applied, nothing
in section 111, except subparagraphs 111(3)(a)(i) and 111(3)(b)(i), gives the Minister
any legal basis for imposing on a taxpayer a particular allocation.
[43]
The
Minister argues that in this case, subparagraph 111(3)(b)(i) would be violated
if CCLI is permitted to deduct part of its 1991 non-capital loss in 1993,
because CCLI’s 1992 non-capital loss was deducted in computing CCLI’s taxable
income for 1989 and 1990. The Minister may well have been wrong to permit
CCLI’s 1992 non-capital loss to be deducted in 1989 and 1990. However, in this
appeal CCLI has not challenged the propriety of those deductions, and the Minister
is not entitled to do so.
[44]
The
Minister points out that CCLI is getting an unfair advantage, because it will
be allowed a 1993 deduction for 1991 non-capital losses that should have been
deducted in 1989, and would have been deducted in 1989 but for the statutory
limitation period. It is to be expected that the statutory limitation period
will sometimes work to the advantage of taxpayers. That result is tolerated in
the interest of finality in tax matters.
[45]
The
Minister argues that if this proposed interpretation is not adopted, the result
will be “administrative chaos”, because the Minister will refrain from allowing
non-capital loss deductions until after the losses have been finally
determined, which could potentially take so long that the years available for
deduction will become statute barred. As the record contains no evidence in
support of this argument, there is no factual basis upon which to determine
whether the Minister’s practices will change as a result of this decision, and
if so in what way and with what consequences. The only guidance available on
this point is the Income Tax Act itself.
[46]
The normal
reassessment period is either three or four years from the date of initial
assessment, depending upon the status of the taxpayer (paragraphs 152(3.1)(a)
and (b) of the Income Tax Act). The reassessment period is automatically
extended by three years to permit extra time to reassess losses carried back
from future years (subparagraph 152(4)(b)(i)). There is a more generous
limitation period of ten years in the case of a taxpayer who has requested a reassessment
to reduce tax payable (subsection 152(4.2)). If these provisions do not give
the Minister enough time in a particular case, taxpayers may be asked to waive
the time limitations (subparagraph 152(4)(a)(ii)), assuming they are alerted to
the issue on a timely basis. Perhaps the Minister will still run out of time in
some cases. If so, the remedy lies with Parliament. The remedy is not for this
Court to give section 111 an interpretation it cannot reasonably bear.
[47]
I conclude
that CCLI is entitled to deduct $19,984,499 of its 1991 non-capital loss in 1993.
I would allow this part of the appeal.
Conclusion
[48]
I would
dismiss the appeal in relation to 1989, 1990, 1991 and 1992, allow the appeal
in relation to 1993, set aside the judgment of the Tax Court of Canada in
relation to 1993, and replace it with a judgment allowing the appeal of CCLI
for that year and referring the reassessment for that year back to the Minister
for reconsideration and reassessment in accordance with these reasons. In light
of the mixed success, the parties should bear their own costs.
“K.
Sharlow”
“I
agree
M.
Nadon J.A.”
“I
agree
J.D.
Denis Pelletier J.A.”