The Queen v. G.T.E. Sylvania Canada Ltd., 74 DTC 6673, [1974] CTC 751 (FCA)

Citations
74 DTC 6673, [1974] CTC 751

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Text of decision

The Chief Justice (per curiam) (judgment delivered from the Bench):—This is an appeal from a judgment of the Trial Division allowing with costs an appeal by the respondent from its assessment under Part I of the Income Tax Act for the 1971 taxation year.

The appeal turns upon what effect is to be given to paragraph 20(6)(h) of the Income Tax Act, as it was in respect of that taxation year, on certain agreed facts:

20. (6) For the purpose of this section and regulations made under paragraph (a) of subsection (1) of section 11, the following rules apply:

(h) where a taxpayer has received or is entitled to receive from a government, municipality or other public authority, in respect of or for the acquisition of property, a grant, subsidy or other assistance . . . the capital cost of the property shall be deemed to be the capital cost thereof to the taxpayer minus the amount of the grant, subsidy or other assistance;

Put in a nutshell, the question is whether the reduction in Quebec income tax for the year in question that was effected by the provincial National Assembly by appropriate amendment to the provincial tax statute, as a result of which the respondent was liable to pay less tax to the Government of the Province than it would otherwise have been liable to pay, resulted in the respondent having “received . . . from a government . . . a grant, subsidy or other assistance” within the meaning of those words in paragraph 20(6)(h). In my view, the answer is in the negative. In so far as the reduction in tax is concerned, the respondent literally received nothing. If a meaning were given to the expression “received . . . other assistance” broad enough to include such a reduction in tax, the ambit of the rule in paragraph 20(6)(h) would be such as to include a reduction effected by various allowances in the Income Tax Act itself that could not, in my view, be taken to have been intended without more explicit language. I have in mind, for example, what is commonly referred to as the “capital cost allowance” that is provided for by paragraph 11 (1)(a) itself.” [1]

For the aforesaid reasons, I am of opinion that the appeal should be dismissed with costs.

v.

*I wish, expressly, to reserve consideration of the accuracy of that part of the learned trial judge’s reasons for judgment that reads as follows:

“Again referring to the dictionary meanings. of the words ‘grant’ and ‘subsidy’ there is one common thread throughout, that is a gift or assign ment of money by government or public authority out of public funds to a private or individual or commercial enterprise deemed to be beneficial to the public Interest. Subject to minor refinements the words ‘grant’ and ‘subsidy’ appear from their dictionary meanings to be almost synonymous.

I am of the view that rules of interpretation or canons of construction which have been established judicially must be applied where pertinent and in so saying I do so fully cognizant’ that such rules, particularly the principle of ejusdem, generis, are a useful servant but a dangerous master.

The ejusdem generis doctrine is as old as Bacon’s maxims. That rule, which I repeat, is that where general words follow an enumeration of par ticular things they do not introduce changes of a different character.

In my judgment the familiar rule that where there are general words following particular and specific words all of one genus, the general words are presumed to be restricted to the same genus as the particular words— applies to the words ‘grant, subsidy or other assistance’ as used in para graph 20(6)(h) of the Income Tax Act. In this section there are the specific words ‘grant’ and ‘subsidy’ followed by the general words ‘or other assist ance’.

The fact is that the general words ‘or other assistance’ can hardly avoid being ancillary in nature to the words ‘grant’ and ‘subsidy’. It seems to me that where there are ancillary words of this nature it is a sound rule not to give such a construction to the ancillary words as will wipe out the signifi cance of the particular words which antecede them.

As I have said before the constant and dominating feature in the words ‘grant’ and ‘subsidy’ is that each contemplates the gift of money from a fund by government to a person for the public weal. Something concrete and tangible is to be bestowed. For the reasons I haVe expressed the general words 'or other assistance’ must be coloured by the meaning of those words.”

Summaries

Summary Under

Tax Topics - Income Tax Act - Section 13 - Subsection 13(4)

taxable income deduction was not receipt of assistance

A reduction in the taxpayer's Quebec income tax that was effected by an amendment to the provincial legislation did not result in the taxpayer...

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The Queen v. G.T.E. Sylvania Canada Ltd., 74 DTC 6673, [1974] CTC 751 (FCA)

Citations74 DTC 6673, [1974] CTC 751

Case tabs

Citations
74 DTC 6673, [1974] CTC 751