Urie,
J.A.:—The
appellant
appeals
from
a
decision
of
Rouleau,
J.
in
the
Trial
Division
[[1987]
2
C.T.C.
112;
87
D.T.C.
5343]
in
which
he
dismissed
the
appel-
lant’s
appeal
from
a
decision
of
the
Tax
Review
Board
rendered
in
1987
[[1982]
C.T.C.
2035;
82
D.T.C.
1070],
whereby
the
respondent's
appeal
from
reassessments
of
income
tax
for
its
1974,
1975,
1976
and
1977
taxation
years
were
allowed.
This
appeal
relates
only
to
the
respondent's
1976
taxation
year
since
in
the
other
three
years—1974,
1975
and
1977—there
were
nil
assessments
in
respect
of
the
respondent's
income
and
for
those
three
taxation
years
the
respondent's
appeals
should
have
been
dismissed
at
the
Tax
Review
Board
level
and
since
that
had
not
been
done,
the
appellant's
appeal
to
the
Trial
Division
for
those
years
should
have
been
allowed.
Counsel
for
the
respondent
agreed
that
this
should
have
been
the
proper
disposition
of
the
appeal
before
Rouleau,
J.
so
that
to
that
extent
at
least
the
appeal
will
be
allowed
in
this
Court.
The
Facts
The
facts,
which
are
not
in
dispute,
were
succinctly
and
accurately
summarized
by
the
learned
trial
judge
in
the
following
passage
from
his
reasons
for
judgment
(page
112-13
(D.T.C.
5344)).
During
the
period
in
question
the
defendant
company
carried
on
the
business
of
operating
a
sand
and
gravel
pit
at
Brighton,
Ontario.
The
company's
operation
consisted
of
removing
raw
material
from
a
gravel
pit,
transporting
it
to
crushers
and
washers
and
from
there
to
loading
trenches.
Three
"966
Carruthers”
front-end
loaders
were
used
to
transport
the
material.
In
order
for
the
defendant
to
obtain
the
necessary
licence
to
operate
a
gravel
pit,
it
was
required,
pursuant
to
the
Pits
and
Quarries
Control
Act,
S.O.
1971,
c.
96,
to
produce
a
site
plan
for
the
rehabilitation
of
the
area.
The
rehabilitation
required
by
the
Act
comprised
levelling
off
the
banks
of
the
pit,
the
gradual
sloping
of
the
floor
of
the
pit,
covering
the
area
with
top
soil
and
planting
grass
and
trees
on
the
site.
The
defendant
estimated
the
cost
of
such
rehabilitation
to
be
approximately
between
$125,000.00
and
$130,000.00.
Pursuant
to
section
5
of
the
Pits
and
Quarries
Regulations,
O.
Reg.
545/71,
a
levy
of
$0.02
per
ton
was
imposed
on
the
material
extracted
from
the
pit
as
security
towards
the
cost
of
the
rehabilitation.
The
amount
paid
by
the
defendant
as
a
levy
bore
interest
at
the
rate
of
6
per
cent
and
was
refundable
when
and
if
the
rehabilitation
of
the
pit
was
completed.
In
its
1976
taxation
year,
the
defendant
claimed
as
an
expense
in
carrying
on
business
the
amount
of
$7,994.02
paid
by
it
to
the
Ontario
government
pursuant
to
the
Pits
and
Quarries
Control
Act.
The
Minister
reassessed
the
defendant's
1976
taxation
year
on
the
basis
that
the
defendant
was
not
entitled
to
claim
the
amount
as
an
expense
and
that
certain
assets
owned
by
the
defendant
and
used
in
its
operations,
namely
front-end
loaders,
should
be
classified
as
Class
10
assets
for
capital
cost
allowance
purposes,
rather
than
as
Class
22
assets
as
claimed
by
the
defendant,
with
the
result
that
the
capital
cost
allowance
claimed
was
reduced
by
the
amount
of
$3,972.85.
The
defendant
objected
to
the
Reassessment
of
March
1979
and
the
Minister
of
National
Revenue
confirmed
the
Reassessment
by
a
Notification
of
Confirmation
dated
June
13,
1980.
The
defendant
then
appealed
to
the
Tax
Review
Board
which,
by
judgment
dated
January
4,
1982,
allowed
the
appeal.
It
is
that
judgment
which
is
now
under
appeal.
The
Issues
There
are
just
two
issues
in
the
appeal:
(1)
Whether
in
computing
its
income
from
its
business
the
respondent
was
entitled
to
deduct
the
payments
which
it
made
to
the
government
of
Ontario
in
compliance
with
the
Pits
and
Quarries
Act
on
the
basis
that
they
were
outlays
or
expenses
incurred
by
it
in
earning
or
producing
income
from
the
business
and,
accordingly,
deductible
in
the
computation
of
its
taxable
income
for
the
1976
taxation
year
by
virtue
of
paragraph
18(1)(a)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act")
or
whether,
properly
understood,
they
were
deposits
transferred
or
credited
to
a
reserve
and
thus
precluded
from
deductibility
for
such
purpose,
by
virtue
of
paragraph
18(1)(e)
of
the
Act.
(2)
Whether
the
front-end
loaders
used
by
the
respondent
in
its
sand
and
gravel
operations
ought,
for
the
purpose
of
calculating
capital
cost
allowance,
to
have
been
classified
as
Class
10
or
as
Class
22
assets.
The
Argument
Issue
I
After
rejecting
the
applicability
of
several
cases
cited
by
the
appellant
as
supporting
its
proposition
that
the
annual
payments
made
by
the
respondent
to
the
government
of
Ontario
as
security
for
the
rehabilitation
of
the
gravel
and
sand
pits
site
were
security
deposits
not
deductible
in
the
calculation
of
the
respondent's
taxable
income,
the
learned
trial
judge
made
the
following
finding
(at
page
116
(D.T.C.
5346-47)):
In
my
opinion,
the
annual
levy
payments
made
by
the
defendant
to
the
province
constitute
a
part
of
the
defendant's
current
operating
expenses
and
are
deductible
under
paragraph
18(1)(a)
of
the
Income
Tax
Act.
Subsection
9(1)
of
the
Act
states
that
income
tor
a
taxation
year
from
a
business
or
property
is
the”
profit”
therefrom
for
the
year.
It
has
long
been
recognized
that
tax
must
be
imposed
not
on
the
gross
amount
received
but
on
that
amount
less
the
expenses
incurred
to
produce
it.
Paragraph
18(1)(a)
of
the
Income
Tax
Act
is
recognition
of
that
very
fundamental
principle:
18.
(1)
In
computing
the
income
of
a
taxpayer
from
a
business
or
property
no
deduction
shall
be
made
in
respect
of
(a)
an
outlay
or
expense
except
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
from
the
business
or
property;
The
Income
Tax
Act
does
not
define
the
term
"profit"
as
that
word
is
used
in
subsection
9(1)
of
the
Act.
However,
a
judicial
statement
as
to
the
proper
approach
for
determining
net
profit
is
set
out
in
Daley
v.
M.N.R.,
[1950]
C.T.C.
254;
50
D.T.C.
877,
where
Thorson,
P.
stated
at
page
260
(D.T.C.
880):
The
correct
view,
in
my
opinion,
is
that
the
deductibility
of
the
disbursements
and
expenses
that
may
properly
be
deducted
in
computing
the
amount
of
the
profits
or
gains
to
be
assessed"
is
inherent
in
the
concept
of
annual
net
profit
or
gain”
in
the
definition
of
taxable
income
contained
in
Section
3.
The
deductibility
from
the
receipts
of
a
taxation
year
of
the
appropriate
disbursements
or
expenses
stems,
therefore,
from
Section
3
of
the
Act,
if
it
stems
from
any
section,
and
not
at
all,
even
inferentially,
from
paragraph
(a)
of
Section
6.
That
being
so,
it
follows
that
in
some
cases
the
first
enquiry
whether
a
particular
disbursement
or
expense
is
deductible
should
not
be
whether
it
is
excluded
from
deduction
by
Section
6(a)
or
Section
6(b)
but
rather
whether
its
deduction
is
permissible
by
the
ordinary
principles
of
commercial
trading
or
accepted
business
and
accounting
practice
.
.
.
[Emphasis
added.]
Section
3
was
the
forerunner
to
the
present
subsection
9(1)
and
paragraph
6(a)
was
the
forerunner
to
the
present
paragraph
18(1)(a).
Therefore,
in
accordance
with
this
principle,
an
expenditure
properly
deducted
according
to
accounting
standards
would
be
deductible
for
tax
purposes
unless
prohibited
by
some
provision
of
the
Act.
There
is,
in
my
opinion,
no
question
that
the
amount
paid
in
this
case
by
the
defendant
to
the
Province
of
Ontario
in
the
form
of
an
annual
levy
constitutes
an
allowable
deduction.
The
expenditure
was
made,
indeed
had
to
be
made
by
the
defendant,
for
the
purpose
of
gaining
income
from
its
sand
and
gravel
pit
operation
and
is
clearly
not
capital
in
nature.
The
applicability
of
the
generally
accepted
accounting
principles
in
relation
to
income
tax
law
has
been
the
subject
of
comment
in
many
cases,
the
latest
of
which
in
this
Court
was
in
Foothills
Pipe
Lines
(Yukon)
Ltd.
v.
Canada,
[1990]
2
C.T.C.448;
90
D.T.C.
6607
where,
speaking
on
behalf
of
the
Court,
I
say
at
page
455
(D.T.C.
6612):
Among
those
principles
is
that
which
recognizes
that
according
to
generally
accepted
accounting
principles,
sums
received
by
a
taxpayer
should
be
recorded
in
a
taxpayer's
financial
statements,
in
the
way
which
most
nearly
reflects
its
actual
financial
position
at
any
given
time
or
for
any
given
period,
but
for
purposes
of
ascertaining
the
taxpayer's
income
for
tax
purposes
the
receipt
of
the
sums
may
require
to
be
recorded
differently.
In
Neonex
International
Ltd.
v.
The
Queen,
[1978]
C.T.C.
485
;
78
D.T.C.
6339
at
499
(D.T.C.
6348)
I
had
occasion
to
express
the
principle
in
this
way:
There
is
no
doubt
that
the
proper
treatment
of
revenue
and
expenses
in
the
calculation
of
profits
for
income
tax
purposes
with
a
view
to
obtaining
an
accurate
reflection
of
the
taxable
income
of
a
taxpayer,
is
not
necessarily
based
on
generally
accepted
accounting
principles.
Whether
it
is
so
based
or
not
is
a
question
of
law
for
determination
by
the
Court
having
regard
to
those
principles
(see
M.N.R.
v.
Anaconda
American
Brass
Ltd.,
[1956]
AC
85;
[1955]
CTC
311
;
55
DTC
1220;
see
also
Associated
Investors
of
Canada
Ltd.
v.
M.N.R.,
[1976]
Ex
CR
96;
[1967]
CTC
138;
67
D.T.C.
5096).
[Emphasis
added.]
The
reference
in
the
passage
to
M.N.R.
v.
Anaconda
American
Brass
Ltd.,
[1956]
A.C.
85;
[1955]
C.T.C.
311;
55
D.T.C.
1220
is
to
the
following
excerpts
from
the
judgment
of
the
Privy
Council
where
Viscount
Simonds
said
at
pages
319
and
321
(D.T.C.
1224
and
1225):
The
income
tax
law
of
Canada
as
of
the
United
Kingdom
is
built
upon
the
foundations
described
by
Lord
Clyde
in
Whimster
and
Co.
v.
C.I.R.,
12
Tax
Cases
813
in
a
passage
cited
by
the
Chief
Justice
which
may
be
here
repeated.
In
the
first
place,
the
profits
of
any
particular
year
or
accounting
period
must
be
taken
to
consist
of
the
difference
between
the
receipts
from
the
trade
or
business
during
such
year
or
accounting
period
and
the
expenditure
laid
out
to
earn
those
receipts.
In
the
second
place
the
account
of
profit
and
loss
to
be
made
up
for
the
ascertaining
that
difference
must
be
framed
consistently
with
ordinary
principles
of
commercial
accounting
so
far
as
applicable
and
in
conformity
with
the
rules
of
the
Income
Tax
Act
or
of
that
Act
as
modified
by
the
provisions
and
Schedules
of
the
Acts
regulating
Excess
Profits
duty
as
the
case
may
be.
But
it
at
least
supports
the
view
that
new
theories
of
accountancy
though
they
may
be
accepted
and
put
into
practice
by
business
men,
do
not
finally
determine
a
trading
company's
income
for
tax
purposes.
The
reference
to
Associated
Investors
of
Canada
Ltd.
v.
M.N.R.,
[1967]
2
Ex.
C.R.
96;
[1967]
C.T.C.
138;
67
D.T.C.
5096
is
to
the
following
passage
from
Jackett,
P’s
judgment
(page
143
(D.T.C.
5099):
Profit
from
a
business,
subject
to
any
special
directions
in
the
statute,
must
be
determined
in
accordance
with
ordinary
commercial
principles
(Canadian
General
Electric
Co.
Ltd.
v.
M.N.R.,
[1962]
S.C.R.
3,
per
Martland,
J.
at
p.
12;
[1961]
C.T.C.
512
at
520.)
The
question
is
ultimately
"one
of
law
for
the
court”.
It
must
be
answered
having
regard
to
the
facts
of
the
particular
case
and
the
weight
which
must
be
given
to
a
particular
circumstance
must
depend
upon
practical
considerations.
As
it
is
a
question
of
law,
the
evidence
of
experts
is
not
conclusive
(see
Oxford
Motors
Ltd.
v.
M.N.R.,
[1959]
S.C.R.
548,
per
Abbott,
J.
at
p.
553;
[1959]
C.T.C.
195
at
202,
and
Strick
v.
Regent
Oil
Co.
Ltd.,
[1965]
3
W.L.R.
636
per
Reid,
J.,
at
pp.
645-46.
See
also
M.N.R.
v.
Anaconda
American
Brass
Ltd.,
[1956]
A.C.
85
at
p.
102;
[1955]
C.T.C.
311
at
319.
[Emphasis
added.]
It
is
clear
from
the
foregoing,
it
seems
to
me,
that
the
trial
judge
did
not
wholly
accurately
describe
the
law
when
he
said
that
”.
.
.
an
expenditure
properly
deducted
according
to
accounting
standards
would
be
deductible
for
tax
purposes
unless
prohibited
by
some
provision
of
the
Act."
More
precisely,
the
question
is
one
of
law
for
the
Court
which
must,
as
Jackett,
P.
(as
he
then
was)
said,
”
.
.
.
be
answered
having
regard
to
the
facts
of
the
particular
case
and
the
weight
which
must
be
given
to
a
particular
circumstance
must
depend
upon
practical
circumstances.
As
it
is
a
question
of
law
the
evidence
of
experts
is
not
conclusive!'
[Emphasis
added.]
The
particular
facts
in
this
case
relate
to
the
character
of
the
payments
made
by
the
respondent
each
year
in
compliance
with
the
Pits
and
Quarries
Control
Act
and
the
Regulations
pursuant
thereto.
The
proper
accounting
of
those
payments
for
the
taxpayer's
financial
purposes,
to
most
accurately
reflect
its
actual
financial
position
at
any
given
time,
may
well
be
that
they
be
recorded
as
expenses
incurred
for
the
purpose
of
gaining
or
producing
income.
That
may
not,
as
a
matter
of
law,
be
the
proper
way
for
them
to
be
recorded
in
the
calculation
of
the
taxpayer's
taxable
income.
The
question
to
be
asked
for
that
purpose
must
be—do
these
payments,
as
a
matter
of
law,
have
the
characteristics
of
expenses
or
outlays
made
in
earning
or
producing
income,
as
the
expert
called
by
the
respondent
before
the
Tax
Review
Board
apparently
testified,
or
had
they
the
characteristics
of
transfers
to
a
reserve
for
the
purpose
of
securing
the
performance
of
the
respondent's
obligation
to
rehabilitate
the
site,
within
the
meaning
of
paragraph
18(1)(e)
as
counsel
for
the
appellant
urged?
Even
a
cursory
analysis
of
the
Pits
and
Quarries
Control
Act
and
its
Regulations,
leads
inevitably
to
the
conclusion,
in
my
view,
that
while
the
annual
payments
made
pursuant
thereto
have
to
be
made
in
order
to
earn
income,
in
that
to
obtain
and
maintain
the
licence
issued
under
that
Act
(subsection
4(1))
to
operate
the
pit
and
thereby
to
earn
that
income
the
payments
had
to
be
made,
they
do
not
have
the
characteristic
of
deductible
expenses
for
tax
purposes,
in
that
they
are
not
made
once
and
for
all,
without
recourse.
Rather
they
are
payments
which
may
be
refunded
in
whole
or
in
part,
together
with
interest
thereon,
upon
discharge
of
the
payer's
(in
this
case
the
respondent's)
obligation
to
rehabilitate
the
pit
site.
The
licence
must
be
renewed
annually
to
insure
compliance
with
the
Act,
the
regulations
and
the
licence,
failing
which
it
may
be
revoked.
Subsection
11(1)
requires
that
every
licensee
maintain
on
deposit
with
the
Treasurer
of
Ontario
the
security
prescribed
by
the
regulations.
Subsection
11(2)
authorizes
the
Minister
to
direct
the
security
deposited
to
be
forfeited
if
the
rehabilitation
is
not
carried
out
as
required
by
the
Act,
the
regulations
and
the
licence.
Subsection
3
authorizes
the
Minister
to
cause
the
rehabilitation
to
be
completed
at
the
expense
of
the
licensee
out
of
the
moneys
forfeited.
Section
19
provides
the
authority
to
make
regulations,
inter
alia,
prescribing
the
form,
terms,
conditions
and
the
amount
of
security
to
be
deposited
under
section
11.
Section
5(1)
of
the
regulations
requires
that
the
security
obliged
to
be
paid
by
virtue
of
section
11
of
the
Act
will
be
deposited
annually
"and
held
by
the
Treasurer
of
Ontario
bearing
simple
interest
at
the
rate
of
6%
per
annum."
This
requirement
of
holding
is
in
contrast
to
the
licence
fee
to
be
paid
under
subsection
2(8)
which
"shall
be
paid
to
the
Treasurer
of
Ontario"—an
outright
payment
of
an
expense,
presumably
properly
deductible,
having
been
incurred
to
permit
the
operator
to
operate
his
pit
and
thereby
to
earn
or
produce
income.
There
is
no
doubt
in
my
mind
that
the
foregoing
analysis
demonstrates
that
the
annual
payments
are
made
as
deposits
to
secure
the
rehabilitation
of
the
site.
That
they
may
be
insufficient
to
achieve
that
purpose
does
not
change
their
character
to
that
of
an
expense
incurred
for
the
purpose
of
gaining
or
producing
income.
The
deposits
do
not
become
the
absolute
property
of
the
province
until
they
are
forfeited
as
a
result
of
the
operation
of
the
Act,
for
the
purpose
of
paying,
or
to
assist
in
paying,
the
respondent's
obligations
under
the
Act
to
rehabilitate.
If
they
are
not
forfeited
they
will
be
returned
to
the
taxpayer
together
with
simple
interest
calculated
at
6
per
cent
per
annum.
That
is
the
substance
of
their
character
as
well
as
their
form
(see
Dominion
Taxicab
Association
v.
M.N.R.,
[1954]
S.C.R.
82;
[1955]
C.T.C.
34;
54
D.T.C.
1020
at
38
(D.T.C.
1021-22);
compare
The
Queen
v.
Imperial
General
Properties
Ltd,,
[1985]
1
C.T.C.
40;
85
D.T.C.
5045
at
48
(D.T.C.
5051))
and
clearly
differentiates
them
from
business
expenses
deductible
under
paragraph
18(1)(a).
I
would,
therefore,
allow
the
appeal
in
respect
of
Issue
I.
Issue
II
Should
the
front-end
loaders
used
by
the
respondent
in
its
sand
and
gravel
operation
be
classified
as
Class
10
or
Class
22
assets
for
the
purpose
of
calculation
of
capital
cost
allowance?
The
respondent
claimed
capital
cost
allowance
on
its
front-end
loaders
on
the
basis
that
they
were
Class
22
assets
under
Schedule
B
to
the
Act,
depreciable
at
the
rate
of
50
per
cent
under
the
provision
as
it
read
in
1976,
namely:
Property
acquired
after
March
16,
1964,
that
is
power-operated,
movable
equipment
designed
for
the
purpose
of
excavating,
moving,
placing
or
compacting
earth,
rock,
concrete
or
asphalt,
but
not
including
property
that
is
included
in
class
7.
It
would
appear
that
the
respondent's
equipment
both
by
its
nature
and
purpose
falls
squarely
within
the
definition
of
Class
22
assets.
However,
the
appellant's
contention
is
that
the
respondent's
front-end
loaders
were
acquired
for
the
purpose
of
gaining
or
producing
income
from
a
mine
with
the
result
that
they
are
Class
10
assets
for
capital
cost
allowance
purposes.
The
trial
judge
had
no
difficulty
in
concluding
that
the
respondent's
equipment
was
properly
classified
as
Class
22
assets
and
dismissed
the
appellant's
appeal
on
that
issue.
I
am
of
the
opinion
that
he
was
correct
in
so
holding.
Class
10
assets
were
defined,
in
part,
in
1976,
as:
Property
not
included
in
any
other
class
that
is
(k)
property
(other
than
property
in
Class
28
or
a
property
described
in
paragraph
(ka))
that
was
acquired
for
the
purpose
of
gaining
or
producing
income
from
a
mine
and
that
is
(ii)
machinery
or
equipment.
Capital
cost
allowance
on
such
assets
is
calculated
at
the
rate
of
30
per
cent.
"Mine"
is
not
defined
in
the
Act.
Its
meaning
is
restricted
in
some
of
the
provisions
of
the
Act
and
regulations.
For
example,
subsections
1104(7)
and
(8)
of
the
regulations
specifically
exclude
sand
pits,
gravel
pits
and
quarries
for
purposes
of
classes
12
and
28
of
Schedule
B
but
not
for
purposes
of
Class
22
assets.
Subsections
1104(5)
and
(6)
specifically
refer
to
Class
10
without
any
such
restriction,
but
they
do
refer
to
"mineral
ores
from
mineral
resources".
It
is,
thus,
the
appellant's
contention
that
sand
and
gravel
are
industrial
minerals
and
the
pits
from
which
they
are
extracted
are
industrial
mineral
mines.
Therefore,
it
is
argued,
the
specific
provisions
of
the
definition
of
Class
10
assets
override
the
general
provisions
of
the
definition
of
Class
22
assets.
That
being
so
the
Class
10
30
per
cent
capital
cost
allowance
rate
prevails
in
the
view
of
appellant's
counsel.
I
have
little
trouble
in
accepting
on
the
authority
of
at
least
some
jurisprudence
that
sand
and
gravel
may
be
described
as
"industrial
minerals”
(Nova
Scotia
Sand
and
Gravel
Ltd,
v.
The
Queen,
[1980]
C.T.C.
378;
80
D.T.C.
6298
at
379
(D.T.C.
6299)).
But
that
does
not
mean
that
they
come
from
a"
mine"
as
that
term
is
generally
understood.
In
fact,
Pigeon,
J.
in
Avril
Holdings
Ltd.
v.
M.N.R.,
[1970]
C.T.C.
572;
70
D.T.C.
6366
at
574-75
(D.T.C.
6368)
observed
in
a
different
statutory
context
but
in
an
apposite
factual
situation
that:
In
the
context
of
Schedule
E,
it
is
apparent
that
the
word"mine"
is
not
taken
in
its
usual
meaning
as
applied
to
metal
mines
but
in
a
special
meaning
as
part
of
the
expression
“
industrial
mineral
mine”.
With
respect
to
metal
mines,
it
was
pointed
out
that
“a
portion
of
the
earth
containing
mineral
deposits"
was
not
the
usual
meaning
of
the
word
mine.
Here,
it
must
be
noted
that
the
word
"mine"
is
not
a
common
use
to
describe
a
sand
or
gravel
pit.
This
is
therefore
a
case
where
the
word
is
obviously
not
taken
in
the
usual
sense.
[Emphasis
added.]
Further
assistance
is
derived
from
what
Dumoulin,
J.
said
in
the
Exchequer
Court
case
of
Canadian
Gypsum
Co.
v.
M.N.R.,
[1965]
C.T.C.
310;
65
D.T.C.
5125
at
221-22
(D.T.C.
5131):
I
cannot
but
renew
my
assent
to
the
"dicta"
of
Lord
Watson
and
Justice
Kitto,
that
“mines”
and
"minerals"
are
not
definite
terms:
“they
are
susceptible
of
limitation
or
expansion,
according
to
the
intention
with
which
they
are
used”
(Lord
Watson):
and“
"The
meaning
of
the
words'mine'
and'mining'
like
the
word
‘minerals’
is
by
no
means
fixed
and
is
readily
controlled
by
context
and
subject
matter".
(Kitto,
J.)
The
vast
and
constantly
expanding
proportions
of
the
development
area
in
depth,
width
or
circumference,
the
costly
and
powerful
equipment
at
work,
a
labour
force
of
about
175
men,
the
assignment
of
one
or
two
professional
engineers
and
of
two
geologists
in
a
permanent
testing
laboratory,
convince
me
that
Miller’s
Creek
clearly
evinces
the
characteristics
of
a
mine.
Exhibit
A-11,
a
lot
of
22
photos
of
the
site
(11a
to
11v)
fully
substantiate
such
a
conclusion
as
to
the
material
facts
of
the
problem.
The
respondent's
admission
that
Miller’s
Creek
was
not
a
"stone
quarry"
has
greatly
simplified
the
legal
aspect
of
the
case.
Section
83(5),
cited
supra,
is
an
exempting
provision
"at
large”,
restricted
only
by
the
excluding
clause
of
83(6),
specifically
disqualifying
from
the
exemption
benefit
a
"stone
quarry”.
In
a
fiscal
statute,
the
age-long
maxim
"inclusio
unius
est
exclusio
alterius"
finds
its
fullest
justification.
I
could
well
agree
with
Mr.
Finlayson’s
argument,
on
appellant's
behalf,
that
"the
nominal
exclusion
of
a'stone
quarry'
in
the
definition
of
the
noun“
"mine"
coupled
with
the
admission
that
Miller's
Creek
is
not
a
stone
quarry,
must,
irresistibly,
lead
to
the
deduction
that,
legally
speaking
at
the
very
least,
it
is
a
mine.
Three
things
are
noteworthy
from
that
quotation.
First,
the
meaning
of
the
word
mine”,
inter
alia,
”
is
by
no
means
fixed
and
is
readily
controlled
by
the
context
and
subject
matter.”
Two,
the
size
of
the
operation
and
the
skills
of
those
involved
was
relevant.
Three,
the
learned
judge
would
have
had
difficulty
in
finding
the
operation
in
question
to
be
a
mine
had
it
not
been
for
the
admission
by
the
Minister
that
it
was
not
a
stone
quarry.
Applying
those
factors
here,
it
is
to
be
noted
first,
that
the
subject
matter
is
equipment
used
in
the
extraction,
removal
and
transportation
of
sand
and
gravel,
which
is
the
context
within
which
the
claim
that
the
operation
is
a
"mine"
must
be
viewed.
Clearly,
it
was
not
a
"mine"
as
that
term
is
ordinarily
understood.
Secondly,
the
operation
in
question
here
was
apparently
relatively
small.
There
is
no
evidence
that
professional
engineers
or
geologists
were
involved
as
they
would
normally
be
in
mining
operations.
Thirdly,
the
operation
here
was
a
gravel
pit
which
is
akin
to
a
stone
quarry,
a
fact
which
at
the
time
of
that
case
was
of
some
significance
to
the
Minister
and
to
the
Court
in
deciding
whether
the
operation
there
was
a
mine.
These
factors,
when
coupled
with
Pigeon,
J.'s
comment
that
the
word
”
mine
is
not
in
common
use
to
describe
a
sand
or
gravel
pit
.
.
.”,
and
the
fact
that
when
Parliament
wished
to
include
or
exclude
such
operations
from
the
ambit
of
"mines"
it
said
so,
leads
me
irresistibly
to
the
conclusion
that
the
operation
in
question
is
not
a
mine.
Therefore,
the
respondent's
front-end
loaders
were
not
machinery
and
equipment"
acquired
for
the
purpose
of
gaining
or
producing
income
from
a
mine”.
They
are
not
Class
10
assets
but
were
properly
characterized
as
Class
22
assets
by
the
learned
trial
judge.
The
appeal,
as
it
relates
to
Issue
II,
will,
accordingly
be
dismissed.
Success
having
been
divided,
the
appellant
will
be
entitled
to
one
half
of
its
taxable
costs
both
here
and
in
the
Trial
Division.
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