Canada Packers Ltd. v. MNR, 68 DTC 682 (TAB)

Because the taxpayer's fiscal year ended in the last Saturday in March of each year, it was possible for it to pay holiday pay for two Good Friday's in a fiscal year, or for none at all (as in the case in the taxation year in question). The taxpayer calculated the beginning of each calendar years total liability for holiday pay and charged to operating expense for each week in the calendar year's a fixed percentage of the total liability.

In finding that the taxpayer was not able to deduct any portion of this accrual that related to a Good Friday that occurred after the fiscal year end, Mr. Weldon found that this amount had not been incurred by the taxpayer in the year.

Because the taxpayer's fiscal year ended in the last Saturday in March of each year, it was possible for it to pay holiday pay for two Good Fridays in a fiscal year, or for none at all (as in the case of the taxation year in question). At the beginning of each calendar year, the taxpayer calculated total liability for holiday pay and charged to operating expense for each week in the calendar year a fixed percentage of the total liability.

After finding that the portion of the holiday pay accrual that related to the Good Friday that occurred subsequent to the taxpayer's fiscal year end was not deductible by virtue of s. 12(1)(a) of the pre-1972 Act. Mr. Weldon went on (at p. 689) to indicate (in relation to s. 12(1)(e)) that "the word 'contingency' suggests some uncertainty, and there was clearly no uncertainty about the appellant's liability for statutory public holidays". He also noted that it should be borne in mind that the taxpayer's liability was subject to the employee's obligation to have been present at work on the preceding and following business day except as permitted.