[1] The issue in this appeal is whether Judge Bell of the Tax Court of Canada committed a reviewable error in determining that Suncor Energy Inc.'s 1990 expenditure of $746,000.00 on the construction of the dykes enclosing tailings ponds in an oil sands mining operation should be treated as a current expense deductible in computing its profit for that year, pursuant to subsection 9(1) of the Income Tax Act. The Crown had taken the position that the expenditure was a capital outlay eligible for capital cost allowance under paragraph 20(1)(a) of the Act as the acquisition of a "structure" within the meaning of Schedule II, class 10(g) of the Income Tax Regulations.

[2] It was agreed by counsel that the Judge identified the correct legal tests for determining how the expenditure should be characterized. The disagreement concerns his application of those tests to the facts. In the absence of a more general question of precedential value, and in the circumstances of this case, the application of the law to the facts was an essentially factual exercise: Housen v. 2002 SCC 33">Nikolaisen, 2002 SCC 33.

[3] Despite counsel's able submissions, we are not satisfied that the Judge made a palpable or overriding error in characterizing the expenditure by Suncor in 1990 on the construction of dykes from compacted tailings, and from other waste from the mine, as a current expense incurred for the removal of the waste produced by mining in that year. Removing this waste was integral to the operation of the mine.

[4] For these reasons, the appeal will be dismissed with costs.

"John Evans"

J.A.

FEDERAL COURT OF CANADA

Names of Counsel and Solicitors of Record

DOCKET: A-576-01

STYLE OF CAUSE: HER MAJESTY THE QUEEN

Appellant

- and -

SUNCOR ENERGY INC.

Respondent

DATE OF HEARING: THURSDAY, SEPTEMBER 26, 2002

PLACE OF HEARING: TORONTO, ONTARIO

REASONS FOR JUDGMENT

OF THE COURT BY: EVANS, J.A.

DELIVERED FROM THE BENCH AT TORONTO, ONTARIO ON THURSDAY, SEPTEMBER 26, 2002.

DATED: THURSDAY, SEPTEMBER 26, 2002

APPEARANCES BY: Mr. William L. Softley

Ms. Julia Parker

For the Appellant

Mr. Al Meghji

Mr. Gerlad Grenon

For the Respondent

SOLICITORS OF RECORD: Morris Rosenburg

Deputy Attorney General of Canada

For the Appellant

Donahue Ernst & Young

Barristers & Solicitors

1000 Ernst & Young Tower

440 - 2^nd Avenue S.W.

P.O. Box 2558, Station M

Calgary, Alberta

T2P 5E5

For the Respondent

FEDERAL COURT OF APPEAL

Date: 20020926

Docket: A-576-01

BETWEEN:

HER MAJESTY THE QUEEN

Appellant

- and -

SUNCOR ENERGY INC.

Respondent

REASONS FOR JUDGMENT

OF THE COURT

You are here

Canada v. Suncor Energy Inc., 2002 FCA 350

Citations2002 FCA 350

Case tabs

Citations
2002 FCA 350