Date: 20101104
Docket: A-128-10
Citation: 2010 FCA
294
CORAM: NOËL J.A.
PELLETIER J.A.
MAINVILLE
J.A.
Docket: A-128-10
BETWEEN:
ZALE CANADA DIAMOND SOURCING INC.
Appellant
and
HER MAJESTY THE QUEEN
(MINISTER OF NATIONAL REVENUE)
Respondent
Docket: A-127-10
BETWEEN:
MARILENA JEWELLERY IMPORT LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-129-10
BETWEEN:
KLASSEN JEWELLERS LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-130-10
BETWEEN:
BIRKS AND MAYORS INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-131-10
BETWEEN:
SAMUEL KLEINBERG JEWELLERY (CANADA) INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-132-10
BETWEEN:
ZALE CANADA CORPORATION
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-134-10
BETWEEN:
E.P. KAUFMANN & CO. INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-135-10
BETWEEN:
M. EVANCHICK MANUFACTURING LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-136-10
BETWEEN:
BIJOUTERIE LAVIGUEUR LTÉE
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-137-10
BETWEEN:
COSTCO WHOLESALE CANADA LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket:
A-138-10
BETWEEN:
IBB INTERNATIONAL (CANADA) INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-139-10
BETWEEN:
CHATEAU D’ARGENT INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-140-10
BETWEEN:
139551 ONTARIO INC. (CARMELLA FINE
JEWELLERY)
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket:
A-141-10
BETWEEN:
3588718 CANADA INC. (EMPRESS JEWELLERY)
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-142-10
BETWEEN:
LIBMAN MANUFACTURING LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-143-10
BETWEEN:
PM GEMS INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-144-10
BETWEEN:
GEMME CANADIENNE P.A. INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Heard at Montréal, Quebec, on November
3, 2010.
Judgment delivered at Montréal,
Quebec, on November
4, 2010.
REASONS FOR JUDGMENT BY:
MAINVILLE J.A.
CONCURRED
IN BY:
NOËL J.A.
PELLETIER J.A.
Date: 20101104
Docket: A-128-10
Citation: 2010 FCA 294
CORAM: NOËL
J.A.
PELLETIER J.A.
MAINVILLE J.A.
Docket: A-128-10
BETWEEN:
ZALE CANADA DIAMOND SOURCING INC.
Appellant
and
HER MAJESTY THE QUEEN
(MINISTER OF NATIONAL REVENUE)
Respondent
Docket: A-127-10
BETWEEN:
MARILENA JEWELLERY IMPORT LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-129-10
BETWEEN:
KLASSEN JEWELLERS LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-130-10
BETWEEN:
BIRKS AND MAYORS INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-131-10
BETWEEN:
SAMUEL KLEINBERG JEWELLERY (CANADA) INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-132-10
BETWEEN:
ZALE CANADA CORPORATION
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-134-10
BETWEEN:
E.P. KAUFMANN & CO. INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-135-10
BETWEEN:
M. EVANCHICK MANUFACTURING LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-136-10
BETWEEN:
BIJOUTERIE LAVIGUEUR LTÉE
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-137-10
BETWEEN:
COSTCO WHOLESALE CANADA LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket:
A-138-10
BETWEEN:
IBB INTERNATIONAL (CANADA) INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-139-10
BETWEEN:
CHATEAU D’ARGENT INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-140-10
BETWEEN:
139551 ONTARIO INC. (CARMELLA FINE
JEWELLERY)
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket:
A-141-10
BETWEEN:
3588718 CANADA INC. (EMPRESS JEWELLERY)
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-142-10
BETWEEN:
LIBMAN MANUFACTURING LTD.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-143-10
BETWEEN:
PM GEMS INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
Docket: A-144-10
BETWEEN:
GEMME CANADIENNE P.A. INC.
Appellant
and
HER MAJESTY THE QUEEN (MINISTER OF
NATIONAL REVENUE)
Respondent
REASONS FOR JUDGMENT
MAINVILLE J.A.
[1]
These are
appeals from decisions of Beaudry J. of the Federal Court dismissing the
actions brought by the appellants in a single set of reasons and on the basis
that the Act to Amend the Excise Tax Act (elimination of excise tax on
jewellery), S.C. 2005, c. 55 (Bill C-259) did not eliminate the excise tax
on jewellery.
[2]
The
appeals were consolidated by order of this Court rendered on May 7, 2010, the
appeal in file A-128-10 being designated as the lead appeal. In conformity with
this order, the reasons which follow will be filed in the lead appeal and a copy
thereof will be filed as Reasons for Judgment in the other appeals.
Background
and context of the appeals
[3]
Prior to
February 24, 2005, section 5 of Schedule I of the Excise Tax Act, R.S.C.
1985, c. E‑15, provided that the excise tax on jewellery was set at
10%.
[4]
This
section of the Excise Tax Act was replaced effective February 24, 2005
through the operation of sections 25 and 26 of the Budget Implementation
Act, 2005, S.C. 2005, c. 30. This last act replaced section 5 of Schedule I
of the Excise Tax Act with three new sections, 5, 5.1 and 5.2. The new
section 5.2 set out a gradual reduction in the excise tax on jewellery over a
four year period. The net effect of this amendment was to gradually reduce the
excise tax on jewellery to 8%, 6%, 4% and 2% over a four year period, culminating
in the elimination of this tax on jewellery as of March 1st, 2009.
[5]
On
November 25, 2005, Bill C-259 came into force. Though the title and
preamble of Bill C‑259 clearly set out its purpose as the elimination of
the excise tax on jewellery, the substantive provisions of the act technically
failed to do so. Indeed, the technical effect of Bill C-259 was to replace
section 5 of Schedule I of the Excise Tax Act by a tax on clocks, but it
did not affect the gradual reduction on the excise tax on jewellery set out by
section 5.2 of that Schedule.
[6]
A few
months after the coming into force of Bill C-259, the Budget Implementation
Act, 2006, S.C. 2006, c. 4 was introduced in Parliament and eventually
adopted. Section 89 of the Budget Implementation Act, 2006 repealed
sections 5 to 5.2 of Schedule I of the Excise Tax Act with retroactive
effect to May 2, 2006. One of the effects of this legislation was the elimination
of the excise tax on jewellery as of that date.
[7]
The
appellants, Canadian jewellery manufacturers, seek a refund on excise taxes for
the period from November 25, 2005, when Bill C-259 came into force, to May 1st,
2006, the day prior to the elimination of the excise tax on jewellery under the
terms of the Budget Implementation Act, 2006. The appellants’ position
throughout has been that the clear and unambiguous intent of Bill C‑259
was to eliminate the excise tax on jewellery as of November 25, 2006, and that
this intent must prevail over the technical drafting of the substantive
provisions of the legislation.
[8]
Beaudry J.
rejected the appellants’ contentions. Though Beaudry J. agreed with the
appellants “that the source of the error has been demonstrated to the Court and
that there was some absurdity which flows from the application of the Act as
written” (at para. 65 of his reasons), he was not convinced that the technical
drafting of Bill C-259 was a simple clerical error since “the Act as drafted is
not meaningless, contradictory or incoherent on its face” (at para. 62 of his
reasons), nor could he “conclude with confidence that had Bill C-259 been
properly understood and presented in its final stages, that it would indeed
have been adopted to achieve the effect suggested by the [appellants]” (at
para. 68 of his reasons).
[9]
The
appellants appeal to this Court on the basis that Beaudry J. erred in deciding
that Bill C‑259 cannot be interpreted as having eliminated the excise tax
on jewellery as of its coming into force on November 25, 2005.
Analysis and decision
[10]
While I
recognize that there is an inherent contradiction between the title and the
preamble of Bill C-259 and the technical drafting of the substantive provisions
enacted pursuant to that Bill, I agree with Beaudry J. that this is not a mere clerical
error. As drafted, Bill C-259 has a meaning which may not be the one stated in
its preamble, but which nevertheless is coherent.
[11]
The
appellants are basically asking this Court to redraft the legislation through
judicial fiat in order to meet the objectives which the appellants believe
Parliament had when it adopted Bill C‑259. I am of the view that it is
not the role of the judiciary to carry out a substantial redraft of the
legislation, nor to give the language of the substantive provisions of the
legislation a meaning which it cannot bear (see by analogy Exida.com Limited
Liability Company v. The Queen, 2010 FCA 159, 2010 D.T.C. 5101 at paras. 28
to 32, and Stone v. Woodstock (Town), 2006 NBCA 71 at para. 21).
[12]
It is the
responsibility of Parliament to correct any substantive errors in the
legislation it adopts if it deems proper to do so. In this case, I am of the
view that any perceived contradictions between the title and preamble of Bill
C-259 and its substantive provisions were addressed by Parliament in the Budget
Implementation Act, 2006 which repealed the excise tax on jewellery
effective as of May 2, 2006. Had Parliament intended to extend the repeal of
this tax to November 25, 2005, the date of the coming into force of Bill
C-259, it could have done so, but chose not to. The intent of Parliament is
abundantly clear: the excise tax on jewellery is fully repealed as of May 2,
2006. Notwithstanding the appellants’ assertions to the contrary, section 45 of
the Interpretation Act, R.S.C. 1985, c. I-21 is not a bar to reaching
such a conclusion: Silicon Graphics Ltd. v. Canada, 2002 FCA 260, [2003]
1 F.C. 447 at paras. 42-43.
[13]
I would
therefore dismiss the appeals with one set of costs.
“Robert M.
Mainville”
“I
agree.
Marc
Noël”
“I
agree.
J.D.
Denis Pelletier”
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