Adélard Soucy – Court of Quebec finds that a building for warming equipment qualified as “manufacturing or processing machinery or equipment”

The taxpayer custom-fabricated pieces of heavy specialized equipment at the northern mining site of one of its mining customers. In order that its soldering work did not fracture (which required that the soldering be carried out at close to room temperature), it needed to house its operation in a pre-assembled shelter (the “Econox”) which it installed at the site. Whether the Econox qualified for Quebec investment tax credit purposes turned on whether it constituted a Class 29 property which, in turn, rested on whether it was a property described in Class 8. In finding that the Econox was a “a structure that is manufacturing or processing machinery or equipment” as per para. (a) of the Class 8 description, Popescu JCQ stated:

[T]he manufacturing and processing activities of the taxpayer could only be carried out within the Econox, which was closely linked to this activity.

The Econox also was fixed equipment which permitted the plaintiff to manufacture and process industrial and mining items.

… In default of being able to speak of permanent physical integration, one can certainly speak of a functional integration as the plaintiff could not carry out its operations in the Great North without the Econox.

Neal Armstrong. Summary of Adélard Soucy (1975) Inc. v. Agence du revenu du Québec, 2019 QCCQ 6956 under Schedule II – Class 8(a).