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Citation: 2003TCC588
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Date: 20030826
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Docket: 1999-5096(IT)G
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BETWEEN:
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POTASH CORPORATION OF SASKATCHEWAN INC.,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent,
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Docket: 2000-1280(IT)G
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AND BETWEEN:
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SASKTERRA FERTILIZERS LTD.,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR ORDER
Mogan J.
[1] The Appellants in the above styles
of cause are related in the following manner. At all relevant
times prior to August 31, 1995, the issued shares of Saskterra
Fertilizers Ltd. ("Saskterra") were owned by Potash
Corporation of Saskatchewan Inc. ("PCS"). On August 31,
1995, Saskterra was wound-up into its parent, PCS. After certain
assessments were issued by the Minister of National Revenue
acting through Canada Customs and Revenue Agency
("CCRA" formerly known as "Revenue Canada"),
Saskterra was revived on or about November 16, 1999.
[2] At all relevant times, both
Saskterra and PCS owned and operated potash-producing
assets (including mines and mills) within the Province of
Saskatchewan. The Mineral Taxation Act, 1983, S.S.
1983-84, c.M-17.1 ("MTA") and The Potash Production
Tax Schedule, R.R.S. c.M-17.1, Regulation 6 (the
"Regulations") provide for the taxation on sales
of potash in two components: a base payment and a profit tax.
Having regard to certain deductions claimed by Saskterra and PCS
under the MTA and the Regulations, CCRA included in
computing the income of both Saskterra and PCS certain amounts
which CCRA thinks are required to be included under paragraph
12(1)(x) of the Income Tax Act.
[3] Saskterra and PCS come before the
Court on a common motion which is best summarized by an extract
from the Notice of Motion itself:
NOTICE OF MOTION FOR JUDGMENTS ON
ADMISSIONS RULE 170.1 OF THE
TAX COURT RULES, SOR/90-688, AS AMENDED
TAKE NOTICE THAT Potash Corporation of Saskatchewan
Inc. ("PCS") and Saskterra Fertilizers Ltd.
("Saskterra") (collectively the "Appellants")
will make a motion to the Court on 24 February 2003, at 9:30
A.M., or as soon after that time as these motions may be heard,
in Ottawa.
THE MOTION IS FOR
(a) Judgment, upon
the admissions found in the examination for discovery of Janet
Catherine Reinhard ("JCR"), a representative of the
Respondent, allowing in part the Appellants' appeals against
reassessments issued by the Canada Customs and Revenue Agency
("CCRA") for PCS's 1993 to 1996 taxation years,
Saskterra's 1995 taxation year and against a determination of
losses made by the CCRA with respect to Saskterra's 1993
taxation year, on the basis that no part of the amounts deducted
in calculating the Appellants' profits or profits tax under
the Mineral Taxation Act, 1983 chap. M-17.1, S. Sask.,
1983-1984, as amended (the "M.T.A."), are to be
included in their income for any of their relevant taxation years
under paragraph 12(1)(x) ("12(1)(x) of the
Income Tax Act, R.S.C. 1985, c. 1 (5th supp.) as
amended (the "I.T.A.");
(b) ...
(c) for such further
and other order as this Court may find just and equitable to
grant in the circumstances; and
(d) costs of these
motions on such a scale as this Court deems just but limited to
one order as to costs.
THE GROUNDS FOR THE MOTION ARE:
(a) the sole
operative effect of 12(1)(x) is set out in the
introductory words of subsection 12(1) I.T.A., which
provides that there shall be included, in computing the income of
a taxpayer, as income from a business, such of the following
amounts (which includes paragraph (x)) as are applicable.
12(1)(x) does not therefore authorize assessment of any
amount, that is not otherwise assessable, unless that amount is
described in 12(1)(x);
(b) as has now been
revealed by the Appellants' discovery of the Respondent,
there is no prima facie case to support the reassessments,
that purport to have been made under paragraph 12(1)(x),
because the amounts reassessed are not described in
12(1)(x);
(c) moreover, the
Appellants have not been able to discover and the Respondent has
not disclosed to the Appellant, by what findings of fact and
ruling of law, it has been decided that 12(1)(x) supported
the reassessments in question when it did not have that effect by
the direct application of its language. Because the information
is not disclosed it is not possible for the Appellants to
establish what position to take; and
(d) consequently,
the Appellants are entitled to judgment allowing that part of
their appeals.
[4] The relief sought by the
Appellants is based on section 170.1 of this Court's Rules
of General Procedure:
170.1 A party may, at any stage of a proceeding,
apply for judgment in respect of any matter
(a) upon any
admission in the pleadings or other documents filed in the Court,
or in the examination of another party, or
(b) in
respect of which the only evidence consists of documents and such
affidavits as are necessary to prove the execution or identity of
the documents,
without waiting for the determination of any other question
between the parties.
Counsel for the Appellants stated clearly in argument that he
was relying on only paragraph (a) of section 170.1 and,
specifically, upon admissions in the examination for discovery of
Janet Catherine Reinhart, an authorized representative of the
Respondent.
[5] In order to understand the
admissions made by Ms. Reinhart in the context of the issues
raised in the pleadings, it is necessary to know certain parts of
the way in which the Province of Saskatchewan imposes taxes on
corporations engaged in the business of mining potash. I will
rely on the notes of argument of the Appellants' counsel (Mr.
Du Pont) to summarize what he submits are the relevant provisions
(parts of sections 4, 6, 7, 19 and 20) of The Potash
Production Tax Schedule which is the third schedule to The
Mineral Taxation Act. These parts of sections 4, 6, 7, 19 and
20 are important to the Appellants' motion.
A. Summary of Certain Provisions
in the
Saskatchewan Mineral Taxation
Legislation Relied on by the Appellants
4. The mineral
production taxes imposed by this Act on the sale or other
disposition of potash consist of:
(a) a base
payment calculated in accordance with section 5; and
(b) a profit
tax calculated in accordance with section 6.
In section 4, the "base payment" in (a) is
like a minimum tax because it does not depend upon profit; and
the "profit tax" in (b) is like an income tax
because it depends in part upon a rate of tax applied to the
profits for a year as described in section 6.
6(1) The profit tax for a year
is the amount equal to the difference between:
(a) the total
of the products of:
(i) profits
for that year, determined in accordance with the regulations,
within each profit bracket that is:
(A) prescribed pursuant to
clause 11(c); and
(B) expressed in dollars
per tonne of potash sold or otherwise disposed of; and
(ii) the rate of tax
that is prescribed for each profit bracket;
and
(b) the total
of any applicable deductions, allowances and credits that
are:
(i)
prescribed; or
(ii) provided for in
this Schedule.
Most taxing statutes determine the liability for tax by simply
applying a rate or percentage to an amount which might represent
profit, sales, cost or individual earnings. Subsection 6(1) is
unusual in my experience because it determines the liability for
tax, first, by applying in subparagraph (a) a particular
rate of tax to each profit bracket, and second, by subtracting in
subparagraph (b) the total of prescribed allowances,
deductions and credits. In other words, the net tax in subsection
6(1) is not determined by the simple application of a rate or
percentage to a particular amount. There are real amounts
deducted in the computation of tax.
7(2) Subject to subsection (3)
the following allowances, expenses and deductions may be taken in
determining profits pursuant to subsection (1):
(a)
...
(m) approved
marketing development costs incurred by the producer for the
year;
(n)
...
(o) approved
research and development costs eligible for credit that are
incurred by the producer for the year;
Paragraphs 7(2)(m) and (o) are the kind of
statutory expenses and costs which one would expect to find
deductible in computing profits.
19(1) For the purposes of clause
6(1)(b) of the Schedule, deductions may be made for the
following in calculating the profit tax for a year:
(a)
...
(b) an amount
not exceeding 40% of the approved marking development costs
that:
(i) are
incurred by the producer during the year; and
(ii) the producer
has not deducted in determining its profits for the year;
(c) an amount
not exceeding 40% of the approved research and development costs
that:
(i) are
incurred by the producer during the year; and
(ii) the producer
has not deducted in determining its profits for the year;
(d)
...
It is important to note that the amounts described in
paragraphs 7(2)(m) and (o) are primarily deductible
in determining profits but, under subsection 19(1), up to 40% of
those same amounts (not deducted in determining profits) are
deductible in calculating the profit tax under section 6. As I
understand the operation of these sections, if a corporation had
incurred in year I costs of $1,000,000 described in paragraph
7(2)(m), the corporation could under subsections 7(1) and
7(2) deduct $700,000 of those costs in determining its profits
for year I; and the corporation could under paragraphs
19(1)(b) and 6(1)(b) deduct 40% of the remaining
$300,000 in computing its profit tax for year I.
20(1) If the total of the deductions of a
producer pursuant to clauses 19(1)(b) and (c) in
any year exceeds the amount calculated pursuant to clause
6(1)(a) of the Schedule for the year, the excess may be
carried forward and deducted by the producer from the amount, if
any, of the base payment that would otherwise be payable by the
producer in the months following the receipt by the minister of
the statement mentioned in section 25.
This appears to be a carry-forward formula which provides
that, if amounts deductible under paragraphs 19(1)(b) and
(c) exceed the positive element of the profit tax
computation in paragraph 6(1)(a), the excess may be
carried forward and deducted from the "base payment"
that would otherwise be payable in a future period. The
Appellants argue that this is a true tax credit (as distinct from
an amount deductible in computing tax) because it is deducted
from the base payment "that would otherwise be
payable".
B. The Pleadings and
Paragraph 12(1)(x)
[6] For all practical purposes, the
pleadings in the appeal by Potash Corporation of Saskatchewan
Inc. ("PCS") are the same as the pleadings in the
appeal by Saskterra Fertilizers Ltd. ("Saskterra").
Paragraph 7 of the Saskterra Notice of Appeal is, in substance,
the same as paragraph 6 of the PCS Amended Notice of Appeal. In
those paragraphs, the Appellants make two basic claims: first,
that CCRA included in corporate income for federal income tax
purposes certain amounts which the two respective corporations
had deducted, pursuant to The Mineral Taxation Act
(Saskatchewan), in computing profits, profit tax or base payments
as the case may be; and second, that CCRA included such amounts
in corporate income pursuant to paragraph 12(1)(x) of the
Income Tax Act. In the Reply to each Notice of Appeal, the
Respondent admits or confirms the claims summarized above.
[7] The amounts are not in dispute.
According to the pleadings, CCRA has used paragraph
12(1)(x) of the Income Tax Act to include the
following amounts in the computation of income for the years
listed below (for Saskterra, there was a loss determination for
1993):
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PCS
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1993
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$821,094
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1994
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674,816
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1995
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1,221,846
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1996
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1,085,267
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Saskterra
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1993
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$194,913
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1995
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404,710
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[8] Paragraph 12(1)(x) of the
Income Tax Act is important because CCRA claims that the
amounts shown in the table in paragraph 7 above are amounts
described by certain words in paragraph 12(1)(x). The
relevant portion of paragraph 12(1)(x) is set out
below:
12(1) There shall be included in computing
the income of a taxpayer for a taxation year as income from a
business or property such of the following amounts as are
applicable:
(a)
...
(x) any
particular amount (other than a prescribed amount) received by
the taxpayer in the year, in the course of earning income from a
business or property, from
(i) a person
or partnership (in this paragraph referred to as the "payer") who
pays the particular amount
(A) in the course of
earning income from a business or property,
(B) in order to achieve a
benefit or advantage for the payer or for persons with whom the
payer does not deal at arm's length, or
(C) in circumstances where
it is reasonable to conclude that the payer would not have paid
the amount but for the receipt by the payer of amounts from a
payer, government, municipality or public authority described in
this subparagraph or in subparagraph (ii), or
(ii) a government,
municipality or other public authority,
where the particular amount can reasonably be considered to
have been received
(iii) as an inducement,
whether as a grant, subsidy, forgivable loan, deduction from tax,
allowance or any other form of inducement, or
(iv) as a refund,
reimbursement, contribution or allowance or as assistance,
whether as a grant, subsidy, forgivable loan, deduction from tax,
allowance or any other form of assistance, in respect of
(A) an amount included in,
or deducted as, the cost of property, or
(B) an outlay or
expense,
to the extent that the particular amount
(v) ...
[9] In the Respondent's Reply to
the Saskterra Notice of Appeal, the following statements
appear:
7(e) The amounts by which the
tax due under the MTA was reduced are amounts received as an
inducement, refund, reimbursement, contribution, or allowance or
as assistance, whether as a grant, subsidy, forgivable loan,
deduction from tax, allowance or any other form of inducement or
assistance;
10. ... the Minister
correctly included in the Appellant's income for each of the
years under appeal the reductions claimed by the Appellant in
determining its tax under the MTA for that particular year,
... . The said reductions are amounts received by the
Appellant in the year in the course of earning income from a
business or property from a government as an inducement, refund,
reimbursement, contribution, or allowance or as assistance,
whether as a grant, subsidy, forgivable loan, deduction from tax,
allowance or any other form of inducement or assistance within
the meaning of paragraph 12(1)(x) of the Act.
The same statements appear in the Reply to the PCS Amended
Notice of Appeal. One can easily identify in each Reply certain
words which appear to be lifted directly out of subparagraphs
12(1)(x)(iii) and (iv).
C. Analysis
[10] In the remainder of these reasons, I
shall consider the motion by Saskterra (Court File No.
2000-1280(IT)G) as if Saskterra were the only applicant on this
Motion, but everything I decide will apply equally to PCS (Court
File No. 1999-5096(IT)G) as the other applicant on the
Motion.
[11] Although Rule 170.1 is set out in
paragraph 4 above, for convenience I shall repeat the relevant
words:
170.1 A party may, at any stage of a proceeding,
apply for judgment in respect of any matter
(a) upon any
admission in the pleadings or other documents filed in the Court,
or in the examination of another party, or
(b)
...
without waiting for the determination of any other question
between the parties.
This is a Motion for judgment in respect of the question
whether the Minister of National Revenue may use paragraph
12(1)(x) of the Income Tax Act to include in the
computation of Saskterra's income certain amounts which were
deducted by Saskterra in various computations under the
Saskatchewan Mineral Taxation Legislation. The Motion is
for judgment upon admissions in the pleadings and in the
examination for discovery of Janet Catherine Reinhart, an
authorized representative of the Respondent. Counsel for the
Appellant, in his notes of argument, relies on four specific
admissions by the Respondent. I will consider those admissions in
the same order as they appear in the notes of argument.
[12] First
Admission. There is no dispute as to
quantum. This was confirmed by counsel for the Respondent at
question 9 of the discovery of Ms. Reinhart. Also, paragraph 7 of
the Saskterra Notice of Appeal sets out the amounts added to
income under paragraph 12(1)(x); and paragraph 7 is
admitted in the Reply.
[13] Second
Admission.
The Reply to the Notice of Appeal sets out all of the "facts
relied upon in support of the assessments under appeal". The
Appellant relies on the Respondent's Undertaking #1 for this
admission but the undertaking stated "The Reply to the
Notice of Appeal accurately reflects the Minister's
position". There is a difference between the admission which
the Appellant thinks it obtained and the statement delivered in
satisfaction of Respondent's Undertaking #1.
[14] Third Admission. PCS had
the option to deduct the "Approval Costs" either as a
deduction in the computation of profits or of profit tax. The
Appellant relies on question 145 in the discovery of Ms. Reinhart
to support his admission. In order to see question 145 in
context, I will set out questions 142 to 146 inclusive:
142
Q. Are you familiar with the way
the mineral tax of Saskatchewan operates, Ms. Reinhart?
A. I am some.
143
Q. You have canvassed
the way the forms and the way the Act operates?
A. I've gone
through the form, yes.
144
Q. Would you tell me in
general terms what you understanding is?
A. As far as this
issue?
145
Q. Yes, obviously
this.
A. My understanding
is that the taxpayer can choose, with those marketing and R and D
expenses, these specific types of items that qualify, they can
either take a 40 per cent tax credit against the taxes that are
owing for the potash production tax, or they can take it as a
deduction in the calculation of the profits which are subject to
the tax, profit tax rate.
146
Q. All right. Now
let's go back to basics, then. First of all, I gather we have
to establish profits under that tax or that taxing system, that
tax scheme?
MS. BURNHAM: Mr. Du
Pont, I'm not sure that this is proper questions; what
you're asking for is her opinion. The Act is there, it sets
out a procedure, perhaps you could explain how you think this is
relevant to -
MR. DU
PONT: Well,
you're right as always, Mrs. Burnham, let me perhaps cut to
the chase here. My position is very simple. ...
Mr. Du Pont proceeds in Question 146 to state his
understanding of the way that the mineral tax system operates.
Questions 143 to 145 concerning Ms. Reinhart's understanding
of the way that the Saskatchewan Mineral Taxation Act
operates may be questions of fact with respect to her
understanding but the manner in which that provincial taxing
statute actually operates is a question of law. What the
Appellant puts forward as the third admission is a conclusion of
law and not an admission of a material fact.
[15] Fourth Admission. The
"Approved Costs" which were in fact deducted were
deducted (i) in computing the Mineral Taxation Act profit;
or (ii) in computing the Mineral Taxation Act profit tax;
or (iii) in computing the Mineral Taxation Act profit and
carried forward against tax for a subsequent taxation year. The
Appellant relies on the following questions to support this
fourth admission: Questions 164 to 167 and 174; Questions 147 to
150; and Questions 218 to 237, 238 to 246, and 247 to 252. I have
read those questions and answers (except for questions 218 to 232
which were omitted from the Motion Record).
(i) Deductions in computing the
Mineral Taxation Act profit. Questions 164 to 167 and 174
are part of a series of questions which begin at Question 156
attempting to explain certain amounts entered upon a document
entitled "Potash Production Tax Annual Base payment return
for Allan Mine for 1996" (Exhibit A-5 to the discovery of
Ms. Reinhart). Exhibit A-5 is a complicated 15-page return for
the Allan Mine required to be filed under the Saskatchewan
Mineral Taxation Act. Mr. Du Pont acknowledged in Question
157 that Mr. Arnason (a representative of the Appellant in
attendance at the discovery of Ms. Reinhart) "will be much
more clever in explaining this than I will be". I assume
that Mr. Aranson is a senior employee or officer of PCS
responsible for the preparation of Exhibit A-5. If Ms. Reinhart
is being examined on one of the Appellant's own documents
(i.e. a Saskatchewan tax return for the Allan Mine),she could
state her understanding as to what the document means or what the
Appellant did when completing the tax return but her statement
(or "admission" for Rule 170.1) is an admission only of
her understanding. Ms. Reinhart's statement is not the best
evidence of what the Appellant did when completing the tax
return. The best evidence on that point would come from the
Appellant. Also, Ms. Reinhart would not be able to state whether
the tax return for the Allan Mine (Exhibit A-5 for discovery) was
filed with the Saskatchewan taxing authority in the same form as
Exhibit A-5, or whether it was accepted without challenge by the
Saskatchewan taxing authority. I do not attach much weight to Ms.
Reinhart's answers to Questions 164 to 167 and 174 because
those answers were only her understanding of the Appellant's
own document (tax return for the Allan Mine).
(ii) Deductions in computing the
Mineral Taxation Act profit tax. In Questions 147 to 150,
Ms. Reinhart is asked to confirm the amounts in the table which
is part of paragraph 6 in the PCS Amended Notice of Appeal, but
that table and the substance of paragraph 6 were already admitted
in paragraph 5 of the Respondent's Reply to the PCS Amended
Notice of Appeal.
(iii) Deductions in computing the
Mineral Taxation Act profit and carried forward against
tax for a subsequent taxation year. Questions 218 to 252 appear
to be part of a series of questions attempting to explain certain
amounts entered upon a document entitled "Potash Production
Tax Annual Base payment return for Cory Mine for 1996"
(Exhibit A-7 to the discovery of Ms. Reinhart). Exhibit A-7 is a
complicated 15-page return for the Cory Mine similar to Exhibit
A-5 for the Allan Mine described above. Counsel for the
Respondent (Ms. Burnham) made the following observation at
question 237:
Mr. Du Pont, I think this is a little unfair. These documents
are your client's documents and what we're saying here is
that according to your own documents your client got a credit of
$94,473 with respect to Cory and all we're saying now is
because your documents show that, we have included that as a
12(1)(x) incentive.
[16] The four specific admissions relied on
by the Appellant are described in paragraphs 12, 13, 14 and 15
above. Having regard to the first admission, I am satisfied that
there is no dispute concerning the amounts which the Minister
included in income under paragraph 12(1)(x). The second
admission is not established in the words adopted by the
Appellant; and the Respondent's Undertaking #1 speaks for
itself as described in paragraph 13 above. The third purported
admission is not an admission of fact at all but a conclusion of
law for the reason stated in paragraph 14 above.
[17] I am troubled by what the Appellant
claims to be a fourth admission concerning amounts in fact
deducted in computing profit or profit tax under the Saskatchewan
Mineral Taxation Legislation. Most of the questions put to
Ms. Reinhart with respect to this fourth admission were based on
her understanding of what the Appellant was doing when it
completed long 15-page complicated tax returns required under the
Saskatchewan Mineral Taxation Act. Those returns were
Exhibits A-5, A-6 and A-7 to the discovery for the Allan Mine,
the Esterhazy Mine and the Cory Mine, respectively. Those returns
were in fact prepared by the Appellant. In other words, the
Appellant should know more about those provincial mineral tax
returns than any employee of Revenue Canada whose primary
responsibility is the administration and enforcement of the
federal Income Tax Act.
[18] The answers which the Appellant
obtained from Ms. Reinhart with respect to the fourth admission
were only her understanding as to what amounts the Appellant was
deducting in a particular computation when it completed the
returns in Exhibits A-5, A-6 and A-7. Ms. Reinhart frequently
qualified her answers by saying "for this mine, for this
year". The best evidence concerning what amounts the
Appellant was deducting in a particular computation would come
from a senior employee or officer of the Appellant who was
responsible for completing the returns like Exhibits A-5, A-6 and
A-7 required under the Saskatchewan Mineral Taxation
Act.
[19] Any judge attempting to deliver the
judgment which the Appellant seeks on this motion would want to
hear the best evidence, preferably viva voce, from a
knowledgeable witness for the Appellant describing the various
computations (in which relevant amounts were deducted) in the tax
returns which the Appellant filed with the Province of
Saskatchewan in order to comply with the Mineral Taxation
Act. In particular, the judge would want to hear evidence
with respect to each amount included in income by the Minister of
National Revenue under paragraph 12(1)(x) as to whether
such amount was deducted (for Saskatchewan Mineral Tax purposes)
in computing profit, in computing tax, or from tax otherwise
payable. The judge would also want to know whether the various
returns were accepted without change or were challenged by the
Saskatchewan taxing authority. After hearing such evidence, the
judge would want to hear submissions from counsel for both
parties with respect to the operation of the Mineral Taxation
Act. At that point, the judge would be in a position to hear
further submissions concerning the interpretation and application
of paragraph 12(1)(x).
[20] On this motion, the Appellant has not
come even close to obtaining the kind of admissions which would
permit a judgment to be given on the issue concerning paragraph
12(1)(x). The motion will have to be dismissed.
[21] Counsel for the Respondent relied on a
decision of the Ontario Superior Court of Justice in which
Kiteley J. considered a rule similar to our Rule 170.1: Treats
Inc. v. Richter, Usher et al, [2001] O.J. No. 1188. Justice
Kiteley referred to two earlier decisions (Sigroum, 1985
and Plainsman Developments, 1982) as establishing seven
principles which are applicable to a motion for judgment on
admissions. The seven principles were summarized by Justice
Kiteley as follows:
1. the
admission must be clear and definite (Landergan v. Feast
(1886) 55 L.T. Ch. 505);
2. the
admission must be of such facts as show that the party is clearly
entitled to the order asked for (Gilbert v. Smith (1876),
2 Ch. D.686);
3. The rule
does not apply where there is any serious question of law to be
argued (Adcock v. Algoma Steel Corporation, [1968] 2 O.R.
647);
4. The rule
does not apply where there is a serious question of fact
outstanding (Ellis v McQueen [1967] 2 O.R. 399);
5. The motion
is based on admissions and proof of facts is not permitted
(Toronto v. Schein (1980), 19 C.P.C. 195);
6. The motion
should be granted only on a clear case and much care must be
taken not to take away the right of trial on viva voce
evidence (Cook v. Lemieu (1885) 10 P.R. 577);
7. To succeed
on this application, the applicant must show that there is a
clear admission on the face of which it is impossible for the
defendants to succeed.
Ms. Burnham relied, in particular, on the principles numbered
1 and 3. Those are the two principles which would give me the
most concern if the Appellant had otherwise established the many
admissions of fact necessary for a motion of this kind. As stated
above, the necessary admissions were not obtained.
[22] There are so many complex issues of law
concerning the interpretation and application of both the
Saskatchewan Mineral Taxation Act and paragraph
12(1)(x) of the federal Income Tax Act that it is
not appropriate to seek a judgment under Rule 170.1. It seems to
me that Rule 170.1 is better saved for a case in which there is
one (or more) simple question of fact which might be answered by
admissions in the pleadings or on discovery which, in turn, might
permit a final disposition through hearing argument on the
applicable law.
[23] Having regard to the complexity of the
Saskatchewan Mineral Tax Act; and considering the
difficulty in obtaining admissions from the Respondent on
discovery with respect to deductions taken by the Appellant
corporations in various computations under that Act; and
considering the near impossibility of obtaining admissions from
the Respondent on discovery as to whether those deductions taken
by the Appellant corporations were accepted or challenged by the
Saskatchewan taxation authority; it was, in my opinion, truly not
reasonable for the Appellant corporations to seek judgment on the
paragraph 12(1)(x) issue using Rule 170.1. The motions are
dismissed with one set of costs to the Respondent in any event of
the cause, payable forthwith.
Signed at Charlottetown, Prince Edward Island, this 26th day
of August, 2003.
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