Dep. MNR v. Bonair Leisure Industries Ltd., 82 DTC 6217, [1982] CTC 188 (FCA)

Thurlow, CJ:—This is an appeal under section 60 of the Excise Tax Act from the declaration of the Tariff Board in Appeal No 1488 that “the folddown trailers in issue are trailers for use as homes and as such are entitled to the exemption provided in paragraph 11, Part XI, Schedule III of the Excise Tax Act.” The issue to be determined on the appeal to this Court is whether the Board erred in law in reaching its conclusion.

Paragraph 11 is one of twelve unrelated items making up Part XI of Schedule III. It was enacted in 1957, SC 1957, c 26, s 6, and amended in 1963, SC 1963, c 12, s 7, so as to reduce to 25% the 75% exemption originally provided. In other respects it remains unchanged. As so amended it reads:

11. Twenty-five per cent of the sale price if manufactured in Canada, or twenty- five per cent of the duty-paid value if imported, of trailers for use as homes.

The trailers in question were described to the Board by the president of the respondent. His evidence is summarized by the Board in the following passage from its reasons:

Illustrated brochures were filed in evidence (Exhibits A-1, A-2 and A-3) showing the trailers in issue. They have a single axle and two wheels and are attached to a vehicle for towing by means of a trailer hitch. They range in length from 8 /2 to 13 feet and up to 6 feet 9 inches in width. They are 42 to 50 inches high when closed.

The body and top of the trailers are of moulded and insulated plastic. In the open position the body is levelled by means of jacks. The supports for the roof are raised by means of a crank. The walls are of canvas and are provided with screens and plastic windows which can be closed with zippers. An aluminum door of full height provides entry to the trailer. End bunks are pulled outwards to provide sleeping accommodation in addition to the beds located within the body of the trailer.

The trailers are provided with a dinette, a sink, stove, ice box or refrigerator and there are storage areas for cooking and eating utensils, baggage and clothing. Connections to outside sources of water and electricity are provided. Toilets and heaters are either provided or are optional equipment.

The company also manufactures the Lextra Fold-Down Travel Trailer (Exhibit A-4). This model has rigid walls and sliding windows which are folded down into the trailer for travelling. The facilities are essentially those of the trailers with canvas walls. Exhibits A-5 and A-6 illustrate two non-folding models which at one time were manufactured for the applicant under the Lextra name, which also contain the features found in the other models.

In cross-examination the witness said that he was a member of the Canadian Recreational Vehicles Association which comprises manufacturers of travel trailers and campers. He agreed that the recreational vehicle field includes vehicles which he defined as non-fold-down travel trailers, fold-down travel trailers; campers, which are units placed in the box of a truck; fifth wheels, which are trailers hitched to a truck in the manner of a semi-trailer; motor homes, which rest on a chassis with motor; and a new phenomenon, van conversions, which are re-designed delivery vans. These types are well recognized within the industry, he said.

With respect to what is said in the last sentence of the third paragraph the evidence indicates that at the material time portable toilets were available on the market but were not supplied by the respondent.

After summarizing some further evidence and the arguments put forward the Board expressed its reasoning as follows:

The parties in this appeal did not dispute that the goods in issue were trailers. Moreover, as Parliament has associated the word home with trailers, the only issue before the Board is whether or not Parliament intended to exclude fold-down travel trailers from the exemption provided in paragraph 11 on grounds that they lack the size, facilities and permanency of larger hard-top trailers.

The evidence in this appeal was that travel trailers of all sizes are used by families for recreational purposes. It was argued that fold-down trailers tend to be used for weekend recreation, rather than for longer periods, but it was also shown that trailers, by their very nature, are considered as temporary housing.

The Board concludes that Parliament in providing partial exemption for trailers for use as homes was well aware of their recreational nature and did not intend the exemption to be restricted to trailers purchased for year-round permanent use as a home. In the Board’s opinion Parliament used the term “trailers for use as homes” not to exclude certain trailers from the exemption but to distinguish between trailers used for living purposes and trailers used for other purposes such as hauling goods.

The Board therefore declares that the fold-down trailers in issue are trailers for use as homes and as such are entitled to the exemption provided in paragraph 11, Part XI, Schedule III of the Excise Tax Act.

As there was no dispute that the vehicles in question are trailers the tendency of the argument of both parties was to focus on the meaning to be given to the word “homes”. That is no doubt a relevant consideration but it seems to me that to dwell on the meaning of the particular word tends to obscure the meaning of the expression, “for use as homes”. The word “home” has a wide variety of meanings and nuances of meanings and what it means in any particular phrase or sentence depends to a great extent on the context in which it is found. For that reason I do not find the cases to which we were referred, in which the meaning of the word has been considered, to be of much assistance.

In item 11 the word is not qualified by any adjective. There is thus no reason for not according it the fullest or broadest meaning it may bear that is consistent with the context in which it is found.* By itself the word has a tendency to suggest permanence both as to location and as to duration. It can, however, include situations where the location is not fixed or permanent and in which the duration is of a temporary character. Examples of such usage are not hard to conceive. Here it seems to me to be clear that permanence or fixation of location is not a required feature. The subject of the item is not “homes” but “trailers”, one of the principal characteristics of which is their mobility over short or long distances.

The nature of trailers also suggests that while continuing to be trailers they are unlikely to be used by many as permanent year-round homes. No doubt when the wheels have been removed and the vehicle has been positioned on a foundation it might serve as a home that is permanent both as to location and to duration. But at that stage, while the structure still might be called a mobile home, it is scarcely any longer a trailer. I take the item to include trailers for use as homes while continuing to be trailers. It seems to me, therefore, that the word “homes” in the item is broad enough to include private dwelling places that may be of temporary duration, whether recreational or seasonal or other and I can see in the wording no justification for limiting or confining it to situations to which the trailers are for use as continuous year-round dwellings.

Moreover, the expression “remorques servant de logis” which appears in the French language version of the item has, as it seems to me, the same connotation as the corresponding English expression, “trailers for use as homes”.

The question before the Board was whether the vehicles in question were trailers for use as homes. That was a question of fact.* [1] Notwithstanding the modest, and perhaps spartan facilities such trailers would offer in comparison with other more highly developed and more elegantly furnished trailers, it was in my view open to the Board to conclude on the evidence of there nature and appointments that the trailers in question were capable of use as homes on a permanent basis by persons who might take them south in the winter months and north in the summer. There was also evidence on which the Board could conclude that such trailers are in fact used as living accommodation on vacation or other motor trips, or as weekend or vacation or summer cottages, whether in a single or in several locations and for short or protracted periods. In this situation if there is error in the Board’s finding that the vehicles are trailers for use as homes, — and I do not imply that there is, — it is at most an error of fact, not one of law. Counsel for the appellant submitted that only the large units which are known in the trade as mobile homes and which are more or less permanently located on a particular lot where they are connected to water, sewer, telephone and electrical services are within the exemption and that none of the types of trailers used for recreational purposes would qualify for it. It may be that what are known as mobile homes, when mounted on wheels and fitted for towing on a highway, would be found to be trailers for use as homes within the meaning of the statute if an issue on it ever arose but, as I have already indicated, I do not think that that type of manufacture is necessarily the only item that can qualify for the exemption. It is for the Board to decide as a question of fact, when the issue is raised, whether vehicles of a particular type are trailers for use as homes and the fact that one type of vehicle may easily be seen to fall within the statutory meaning cannot prevent other types from qualifying as well or deprive the Board of its authority to determine on the evidence whether or not they are trailers for use as homes.

There remains the question whether the Board in reaching its conclusion acted on an erroneous view of the law. It was said that the Board’s reasons show that it misinterpreted the meaning of the statute when it said in the last sentence of the second last paragraph that I have cited: “In the Board’s opinion Parliament used the term “trailers for use as homes” not to exclude certain trailers from the exemption but to distinguish between trailers used for living purposes and trailers used for other purposes such as hauling goods.” This, it was submitted, gave too broad an interpretation and resulted in an erroneous finding that the trailers in question are for use as homes. “For use for living purposes” was said to be broader than “for use as homes” since the former could include use for casual or overnight accommodation.

If the sentence in question were all the Board had to say on the subject it might be considered that the statute had been misinterpreted as meaning that all trailers capable of use for living purposes, however casual, as opposed to use for hauling goods would qualify for the exemption. But the sentence is not alone in the paragraph. It follows the sentence in which the Board says: “The Board concludes that Parliament in providing partial exemption for trailers for use as homes was well aware of their recreational nature and did not intend the exemption to be restricted to trailers purchased for year-round permanent use as a home.” In this the Board is plainly contemplating use as homes. When the Board uses, in the impugned sentence, the words “living purposes” it does so, as it seems to me, in the context of its discussion of the use of trailers as homes rather than in a sense that is so broad as to include purposes which scarcely qualify as “living” purposes. In my view the Board’s reasons should not be read so closely or “microscopically”. The only question of law involved was whether temporary or seasonal use as homes was within the meaning. The Board, in my opinion, resolved that question correctly, as its reasons show. The only other issues involved raised questions of fact.

I would dismiss the appeal.