Bonner,
T.C.C.J.:—The
appellants
are
both
Canadian-controlled
private
corporations
("CCPCs")
within
the
meaning
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
At
the
relevant
time,
during
their
taxation
years
ending
February
28,
1990,
they
carried
on
business
in
partnership.
That
business
involved
the
production
of
paint
and
included
research
and
development
activities
in
that
field.
Based
on
expenses
incurred
in
carrying
out
such
research
and
development
the
appellants
claimed
investment
tax
credits.
The
Minister
of
National
Revenue
(the"Minister")
in
making
the
assessments
now
under
appeal,
disallowed
those
claims
to
the
extent
that
they
rested
on
subsection
127(10.1)
of
the
Act.
He
did
so
on
the
basis
that,
in
the
case
of
taxpayers
who
carry
on
business
in
partnership,
the
Act
does
not
permit
the
addition
to
the
investment
tax
credit
of
amounts
for
which
provision
is
made
in
subsection
127(10.1)
because
no
reference
to
that
subsection
is
to
be
found
in
subsection
127(8).
The
issue
is
whether
that
assessing
action
was
correct.
Subsection
127(5)
of
the
Act
authorizes
the
deduction
from
tax
otherwise
payable
under
Part
I
of
the
Act
of
an
amount
not
greater
than
the
least
of
three
defined
amounts.
One
of
those
amounts
is
an
aggregate
figure
which
includes
”.
.
.
his
investment
tax
credit
at
the
end
of
the
year
.
.
.”.
The
term
"investment
tax
credit”
is
defined
in
subsection
127(9)
of
the
Act
to
be
an
amount
by
which
the
aggregate
of
certain
defined
amounts
(the"additions")
exceeds
the
aggregate
of
certain
other
defined
amounts.
The
additions
include
one
calculated
under
paragraph
127(9)(e)
which
reads
in
part
(e)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
required
by
subsection
(10.1)
to
be
added
in
computing
his
investment
tax
credit
at
the
end
of
the
year
.
.
.
It
is
the
subsection
(10.1)
addition
which
the
appellants
claim
has
been
wrongly
denied
to
them.
A
partnership
is
not
a
person
and
therefore
cannot
itself
earn
or
use
investment
tax
credits.
Accordingly,
section
127
makes
specific
provision
for
such
credits
in
the
case
of
taxpayers
who
are
members
of
a
partnership.
Subsection
127(8)
reads
(8)
Where,
in
a
particular
taxation
year
of
a
taxpayer
who
is
a
member
of
a
partnership,
an
amount
would,
if
the
partnership
were
a
person
and
its
fiscal
period
were
its
taxation
year,
be
determined
in
respect
of
the
partnership,
for
its
taxation
year
ending
in
that
particular
taxation
year,
under
paragraph
(a),
(b)
or
(e.1)
of
the
definition
"investment
tax
credit"
in
subsection
(9),
if
(a)
paragraph
(a)
of
that
definition
were
read
without
reference
to
subparagraph
(iii)
thereof,
and
(b)
in
the
case
of
a
taxpayer
who
is
a
specified
member
of
the
partnership
in
the
taxation
year
of
the
partnership,
(i)
paragraph
(a)
of
that
definition
were
read
without
reference
to
subparagraph
(ii)
thereof,
and
(ii)
paragraph
(e.1)
of
that
definition
were
read
without
reference
to
the
words
"or
that
reduced
the
amount
of
an
expenditure
made
by
the
taxpayer
under
paragraph
(11.1)(c)”,
the
portion
of
that
amount
that
may
reasonably
be
considered
to
be
the
taxpayer's
share
thereof
shall
be
added
in
computing
the
investment
tax
credit
of
the
taxpayer
at
the
end
of
that
particular
taxation
year.
It
will
be
observed
that
subsection
(8)
is
silent
with
regard
to
amounts
determined
under
paragraph
(9)(e)
of
the
definition
of
investment
tax
credit,
but
the
appellants
do
not
look
to
subsection
127(8)
as
the
foundation
for
their
claim.
The
appellants
argue
that,
for
the
purpose
of
calculation
the
investment
tax
credit
of
a
taxpayer
who
is
a
partner,
regard
must
be
had
to
the
taxpayer
in
question
and
the
fact
that
the
taxpayer
carries
on
business
as
a
partner
is
irrelevant.
Thus,
the
argument
proceeded,
subsection
127(5)
coupled
with
the
paragraph
(e)
of
the
subsection
127(9)
definition
of
investment
tax
credit
allows
partners
to
claim
the
subsection
127(10.1)
addition
if
they
qualify
under
the
terms
of
that
provision.
Subsection
127(10.1)
reads:
(10.1)
For
the
purposes
of
paragraph
(e)
of
the
definition
investment
tax
credit”
in
subsection
(9),
where
a
taxpayer
was
throughout
its
taxation
year
a
Canadian
controlled
private
corporation
whose
taxable
income
for
the
immediately
preceding
taxation
year
together
with
the
taxable
incomes
of
all
corporations
with
which
it
was
associated
in
the
year
for
their
taxation
years
ending
in
the
calendar
year
immediately
preceding
the
calendar
year
in
which
the
corporation's
year
ended
does
not
exceed
the
aggregate
of
the
business
limits
(as
determined
under
section
125)
of
the
corporation
ana
the
associated
corporations
for
those
preceding
years,
the
amount,
if
any,
by
which
(a)
35
per
cent
of
the
lesser
of
(i)
the
aggregate
of
all
expenditures
described
in
subparagraph
(e)(iv)
of
the
definition
“specified
percentage"
in
subsection
(9)
made
by
it
in
the
year
and
that
were
designated
by
the
taxpayer
in
its
return
of
income
under
this
Part
for
the
year,
and
(ii)
the
taxpayer's
expenditure
limit
for
the
year
exceeds
(b)
the
aggregate
of
all
amounts
determined
under
paragraph
(a)
of
the
definition
"investment
tax
credit”
in
subsection
(9)
in
respect
of
an
expenditure
referred
to
in
subparagraph
(a)(i)
shall
be
added
in
computing
the
taxpayer's
investment
tax
credit
at
the
end
of
the
taxation
year.
The
appellants
are
both
CCPCs
and
assert
that
they
otherwise
qualify,
by
reason
of
expenditures
made,
to
the
additions
in
dispute.
Counsel
for
the
respondent
argued
that
if
the
appellants
were
right
in
asserting
that
they
are
not
impeded
by
the
absence
in
subsection
(8)
of
a
reference
to
subsection
(10.1)
then
subsection
(8)
must
be
viewed
as
surplusage
and
totally
unnecessary
to
any
claim
by
a
partner,
even
one
founded
on
paragraphs
(a),
(b)
or
(e.1)
of
the
subsection
(9)
definition.
Such
an
approach
would,
she
submitted,
violate
a
fundamental
rule
of
statutory
construction
namely
that:
Not
only
must
the
whole
Act
be
read,
but
every
provision
of
the
Act
should,
if
possible,
be
given
meaning;
hence,
if
there
are
rival
constructions
the
general
principle
is
that
the
construction
that
gives
effect
to
the
whole
of
the
statute,
or
to
the
provision
under
consideration,
should
be
adopted
in
preference
to
one
that
renders
part
thereof
meaningless.
In
my
view
the
position
of
counsel
for
the
respondent
is
correct.
Either
subsection
(8)
has
meaning
and
effect
or
it
does
not.
If
counsel
for
the
appellants
is
correct
in
arguing
that
partners
have
a
right
to
claim
investment
tax
credits
which
does
not
depend
on
subsection
(8)
then
there
is
no
basis
on
which
that
right
can
be
restricted
to
amounts
required
by
subsection
127(10.1)
to
be
added
in
computing
the
investment
tax
credit.
Thus,
inherent
in
the
appellants’
argument,
is
the
proposition
that
subsection
(8)
is
either
(a)
a
grant
of
a
second
right
to
claim
amounts
determined
under
paragraphs
(a)
(b)
and
(e.1)
of
the
subsection
9
definition
Or,
(b)
in
its
entirety,
surplusage.
An
argument
that
carries
with
it
such
a
capricious
and
improbable
interpretation
of
the
statute
is
to
be
rejected.
In
my
view,
subsection
(8)
was
intended
to
define
the
extent
to
which
taxpayers
who
carry
on
business
in
partnership
may
claim
investment
tax
credits
in
respect
of
the
expenditures
of
the
partnership.
The
appeals
will
be
dismissed
with
costs.
Appeals
dismissed.
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