Décary,
J.A.:—The
Court
has
before
it
an
appeal
from
a
judgment
by
Pinard,
J.,
which
dismissed
the
appeal
brought
by
the
appellant
from
a
notice
of
assessment
issued
by
the
Deputy
Minister
of
National
Revenue
for
the
1980
taxation
year.
The
appellant,
together
with
five
partners,
bought
from
Chateau
Mont
Ste-
Anne
Inc.
a
fraction
("the
fraction")
of
a
building
(“the
building")
which
was
the
subject
of
a
declaration
of
co-ownership
registered
pursuant
to
the
provisions
of
Articles
441b
et
seq.
of
the
Civil
Code
of
Lower
Canada
("co-
ownership
by
declaration").
This
fraction
of
the
building
included
an
exclusive
portion
of
the
said
building,
described
as
subdivision
658-40
of
the
official
cadastre
of
the
parish
of
Ste-Anne,
Montmorency
registry
division
(“the
exclusive
portion")
and
a
share
of
the
undivided
rights
in
the
common
portions
of
the
building
relating
to
the
exclusive
portion,
designated
as
subdivision
658-1
of
the
said
cadastre
(“the
undivided
portion").
The
building
contained
44
units
and
was
part
of
a
large
recreational
complex
located
at
the
foot
of
Mont
Ste-
Anne,
about
40
kilometres
from
Quebec.
At
the
time
of
the
purchase,
a
certificate
("the
certificate")
of
the
construction
of
a
“multiple-unit
residential
building"
(“MURB”,
or
in
French
“immeuble
residential
a
logements
multiples",
"IRLM")
had
been
issued
for
the
building
by
the
Canada
Mortgage
and
Housing
Corporation
("the
CMHC")
under
Classes
31
and
32,
Schedule
Il
(formerly
B)
of
the
Income
Tax
Regulations.
The
certificate
described
the
building
as
follows:
"condominium".
The
appellant
filed
an
individual
federal
income
tax
return
for
1980
in
which
he
claimed
a
deduction
for
depreciation
and
in
which,
applying
in
his
favour
the
provisions
of
Class
31
of
Schedule
II
of
the
Regulations,
he
reported
a
net
rental
loss
on
the
fraction
of
the
building
owned
by
him.
In
a
notice
of
reassessment
the
respondent
subsequently
informed
the
appellant
that
she
was
disallowing
the
depreciation
deduction
requested,
on
the
ground
that
the
fraction
in
question
was
not
a
MURB
within
the
meaning
of
Class
31.
The
appellant
then
brought
an
unsuccessful
action
in
the
Federal
Court-
Trial
Division
to
have
this
notice
of
reassessment
invalidated:
hence
the
appeal
at
bar.
Relevant
legislation
and
regulations
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
Paragraph
20(1)(a)
(1)
Notwithstanding
paragraphs
18(1)(a),
(b)
and
(h),
in
computing
a
taxpayer's
income
for
a
taxation
year
from
a
business
or
property,
there
may
be
deducted
such
of
the
following
amounts
as
are
wholly
applicable
to
that
source
or
such
part
of
the
following
amounts
as
may
reasonably
by
regarded
as
applicable
thereto:
(a)
capital
cost
of
property.—such
part
of
the
capital
cost
to
the
taxpayer
of
property,
or
such
amount
in
respect
of
the
capital
cost
to
the
taxpayer
of
property,
if
any,
as
is
allowed
by
regulation
.
.
.
|
Article
248(1)
|
Subsection
248(1)
|
|
Biens—"Biens"
signifie
des
biens
|
Property—"property"
means
|
|
de
toute
nature,
meubles
ou
|
property
of
any
kind
whatever
whether
|
|
immeubles,
corporels
or
incorporels
|
real
or
personal
or
corporeal
and,
|
|
et
comprend,
sans
restreindre
la
|
without
restricting
the
generality
of
|
|
portée
générale
de
ce
qui
précède,
|
the
foregoing,
includes
|
|
a)
un
droit
de
quelque
nature
|
(a)
a
right
of
any
kind
whatever
|
|
qu'il
soit
|
|
|
Établissement
domestique
|
Self-contained
domestic
|
|
autome—"établissement
domestique
|
establishment—"self-contained
|
|
autonome"
signifie
une
habitation,
un
|
domestic
establishment”
means
a
|
|
appartement
ou
un
autre
logement
de
|
dwelling
house,
apartment
or
other
|
|
ce
genre
dans
lequel,
en
règle
|
similar
place
of
residence
in
which
|
|
générale,
une
personne
prend
ses
|
place
a
person
as
a
general
rule
sleeps
|
|
repas
et
couche
.
.
.
|
and
eats
.
.
.
|
Income
Tax
Regulations,
1987,
c.
945,
as
amended
Subparagraph
1100(1)(a)(xxii)
(1)
For
the
purposes
of
paragraph
20(1)(a)
of
the
Act,
there
is
hereby
allowed
to
a
taxpayer,
in
computing
his
income
from
a
business
or
property,
as
the
case
may
be,
deductions
for
each
taxation
year
equal
to
(a)
subject
to
subsection
(2),
such
amount
as
he
may
claim
in
respect
of
property
of
each
of
the
following
classes
in
Schedule
II
not
exceeding
in
respect
of
property
(xxii)
of
Class
31,
5
per
cent,
of
the
undepreciated
capital
cost
to
him
as
of
the
end
of
the
taxation
year
(before
making
any
deduction
under
this
subsection
for
the
taxation
year)
of
property
of
the
class
.
.
.
Schedule
II
Class
31
(5
per
cent)
Property
that
is
multiple-unit
residential
building
in
Canada
that
would
otherwise
be
included
in
Class
3
or
Class
6
and
in
respect
of
which
(a)
a
certificate
had
been
issued
by
Canada
Mortgage
and
Housing
Corporation
certifying
(i)
in
respect
of
a
building
that
would
otherwise
be
included
in
Class
3,
that
the
installation
of
footings
or
any
other
base
support
of
the
building
was
commenced
(A)
after
November
18,
1974
and
before
1980,
or
(B)
after
October
28,
1980
and
before
1982,
as
the
case
may
be,
and
.
.
.
and
that,
according
to
plans
and
specifications
for
the
building,
not
less
than
80
per
cent
of
the
floor
space
will
be
used
in
providing
self-contained
domestic
establishments
and
related
parking,
recreation,
service
and
storage
areas;
(b)
not
more
than
20
per
cent
of
the
floor
space
is
used
for
any
purpose
other
than
the
purposes
referred
to
in
paragraph
(a)
.
.
.
Civil
Code
of
Lower
Canada
Chapter
Third
Of
Co-Ownership
of
Immoveables
Established
By
Declaration
Article
441b.
The
provisions
of
this
chapter
govern
every
immoveable
made
subject
thereto
by
the
registration
of
a
declaration
of
co-ownership
whereby
the
ownership
of
the
immoveable
is
apportioned
between
its
proprietors
in
fractions,
each
comprising
an
exclusive
portion
and
a
share
of
the
common
portions.
A
person,
even
acting
alone,
may
register
a
declaration
of
co-ownership
and
therein
declare
himself
proprietor
of
each
fraction.
441C.
Each
fraction
constitutes
a
separate
entity
and
may
be
the
object
of
a
total
or
partial
alienation
comprising
in
each
case
the
share
of
common
portions
pertaining
to
the
fraction
or
portion
of
a
fraction
alienated.
441d.
Each
coproprietor
had
an
undivided
right
of
ownership
in
the
common
portions;
his
share
in
the
common
portions
is
equal
to
the
value
of
the
exclusive
portion
of
his
fraction
in
relation
to
the
aggregate
of
the
values
of
the
exclusive
portions.
441e.
The
common
portions
and
the
rights
accessory
thereto
cannot
be
the
object,
separately
from
the
exclusive
portions,
of
an
action
in
partition
or
of
a
forced
licitation.
441h.
Each
coproprietor
disposes
of
the
exclusive
portions
included
in
his
fraction;
he
uses
and
enjoys
freely
the
exclusive
portions
and
the
common
portions
provided
that
he
does
not
impair
the
rights
of
the
other
coproprietors
or
the
destination
of
the
immoveable.
441k.
Each
of
the
coproprietors
is
bound
to
contribute,
in
accordance
with
the
provisions
of
the
declaration
of
co-ownership
or,
failing
such,
in
proportion
to
the
relative
value
of
his
fraction
established
in
the
declaration
of
co-ownership,
to
all
costs
resulting
from
the
co-ownership
and
the
operation
of
the
immoveable
and
particularly
to
the
costs
of
conservation,
maintenance
and
administration
of
the
common
portions
and
to
the
expenses
caused
by
the
operation
of
the
common
services.
4411.
The
declaration
of
co-ownership
defines
the
destination
of
the
immoveable
and
of
its
exclusive
and
common
portions,
of
which
it
gives
a
detailed
description;
it
determines
the
relative
value
of
each
fraction,
having
regard
to
the
nature,
area
and
situation
of
the
exclusive
portion
which
it
comprises,
but
without
taking
its
utilization
into
account
and,
subject
to
the
provisions
of
this
chapter,
specifies
the
conditions
of
enjoyment
of
the
common
portions
and
utilization
of
the
exclusive
portions,
and
lays
down
the
rules
for
the
administration
of
the
common
portions.
441m.
The
declaration
of
co-ownership
must
be
in
the
form
of
a
notarial
deed
en
minute;
the
same
applies
to
the
amendment
made
thereto.
The
registration
of
such
declaration
and
of
the
amendments
thereto
is
effected
by
deposit.
441n.
The
declaration
of
co-ownership
and
the
amendments
thereto
are
binding
upon
the
coproprietors
and
their
successors
by
general
title.
They
are
binding
upon
their
successors
and
assigns
by
particular
title
from
the
date
of
the
registration
of
their
rights.
442h.
Except
by
unanimous
vote,
the
co-proprietors
cannot
directly
or
indirectly
change
the
destination
of
the
immoveable.
Arguments
of
the
parties
Counsel
for
the
respondent
argued,
to
begin
with,
that
in
order
to
qualify
for
the
deduction
allowed
by
Class
31,
a
person
should
have
a
right
of
ownership
in
each
one,
or
at
least
in
more
than
one,
of
the
“multiple
units”
of
the
building,
and
that
accordingly
an
undivided
coproprietor
of
the
entire
building
would
be
eligible,
since
this
type
of
co-ownership
confers
rights
over
each
unit,
but
a
coproprietor
by
declaration
of
a
single
unit
would
not
be
eligible
since
this
type
of
co-ownership
in
his
submission
really
only
confers
rights
over
whichever
one
of
the
units
the
coproprietor
owns
exclusively.
In
this
regard,
counsel
for
the
respondent
said
he
completely
agreed
with
the
conclusion
at
which
the
trial
judge
arrived,
as
follows:
In
the
case
at
bar,
it
is
of
the
very
essence
of
the
provision
contained
in
Class
31
that
the
property
in
question
must
be
“a
multiple-unit
residential
building
in
Canada”.
To
my
way
of
thinking,
all
these
words
must
be
read
and
applied
together
to
the
property
defined
in
the
class.
Accordingly,
a
residential
building
in
Canada
consisting
of
a
single
unit
must
be
excluded
from
the
definition;
similarly,
each
of
the
multiple
units
of
a
residential
building
in
Canada,
taken
separately,
must
be
excluded
from
the
definition.
(p.
9)
As
in
the
case
at
bar
the
plaintiff
was
not
claiming
a
depreciation
deduction
in
respect
of
a
multiple-unit
residential
building
in
Canada,
but
in
respect
of
one
of
the
multiple
units,
namely
unit
29,
of
a
larger
building
containing
some
forty-four
units,
he
thus
cannot
benefit
from
the
provision
in
Class
31
of
Schedule
II
of
the
Regulations.
(p.
10)
Secondly,
counsel
for
the
respondent
argued
that
regardless
of
his
first
argument
the
building
in
the
case
at
bar
is
not
a
“residential
building”,
as,
he
wrote,
the
evidence
did
not
show
that
the
multiple
units
in
the
building
were
used
by
their
occupants
“more
or
less
permanently”
rather
than
"for
short
periods".
The
trial
judge
did
not
have
to
rule
on
this
second
argument.
Counsel
for
appellant,
for
his
part,
argued
that
nothing
in
the
phrase
“multiple-unit
residential
building”
prevents
it
being
applicable
to
the
fraction
of
such
a
building
held
under
the
legal
arrangement
of
co-ownership
by
declaration.
He
further
argued
that
a
building
may
be
described
as
residential
even
though
its
occupants
use
it
only
for
short
periods.
Rules
for
interpreting
tax
legislation
When
the
Court
has
to
interpret
the
provisions
of
tax
legislation
allowing
a
reduction
of
the
tax
burden,
the
traditional
rule
was
that
the
taxpayer's
argument
clearly
fell
within
the
exemption
provision
and
any
doubt
was
resolved
in
favour
of
the
Government.
This
strict
rule
of
interpretation
was
qualified
by
the
Supreme
Court
of
Canada
in
Stubart
Investments
Ltd.
v.
The
Queen,
[1984]
1
S.C.R.
536;
[1984]
C.T.C.
294;
84
D.T.C.
6305
as
follows
at
pages
314-16
(D.T.C.
6322-23;
S.C.R.
575-78):
I
would
therefore
reject
the
proposition
that
a
transaction
may
be
disregarded
for
tax
purposes
solely
on
the
basis
that
it
was
entered
into
by
a
taxpayer
without
an
independent
or
bona
fide
business
purpose.
A
strict
business
purpose
test
in
certain
circumstances
would
run
counter
to
the
apparent
legislative
intent
which,
in
the
modern
taxing
statutes,
may
have
a
dual
aspect.
Income
tax
legislation,
such
as
the
federal
Act
in
our
country,
is
no
longer
a
simple
devise
to
raise
revenue
to
meet
the
cost
of
governing
the
community.
Income
taxation
is
also
employed
by
government
to
attain
selected
economic
policy
objectives.
Thus,
the
statute
is
a
mix
of
fiscal
and
economic
policy.
The
economic
policy
element
of
the
Act
sometimes
takes
the
form
of
an
inducement
to
the
taxpayer
to
undertake
or
redirect
a
specific
activity.
Without
the
inducement
offered
by
the
statute,
the
activity
may
not
be
undertaken
by
the
taxpayer
for
whom
the
induced
action
would
otherwise
have
no
bona
fide
business
purpose.
Thus,
by
imposing
a
positive
requirement
that
there
be
such
a
bona
fide
business
purpose,
a
taxpayer
might
be
barred
from
undertaking
the
very
activity
Parliament
wishes
to
encourage.
At
minimum,
a
business
purpose
requirement
might
inhibit
the
taxpayer
from
undertaking
the
specified
activity
which
Parliament
has
invited
in
order
to
attain
economic
and
perhaps
social
policy
goals.
Examples
of
such
incentives
I
have
already
enumerated.
Indeed,
where
Parliament
is
successful
and
a
taxpayer
is
induced
to
act
in
a
certain
manner
by
virtue
of
incentives
prescribed
in
the
legislation,
it
is
at
least
arguable
that
the
taxpayer
was
attracted
to
these
incentives
for
the
valid
business
purpose
of
reducing
his
cash
outlay
for
taxes
to
conserve
his
resources
for
other
business
activities.
It
seems
more
appropriate
to
turn
to
an
interpretation
test
which
would
provide
a
means
of
applying
the
Act
so
as
to
affect
only
the
conduct
of
a
taxpayer
which
has
the
designed
effect
of
defeating
the
express
intention
of
Parliament.
In
short,
the
tax
statute,
by
this
interpretative
technique,
is
extended
to
reach
conduct
of
the
taxpayer
which
clearly
falls
within
“the
object
and
spirit"
of
the
taxing
provisions.
Such
an
approach
would
promote
rather
than
interfere
with
the
administration
of
the
Income
Tax
Act,
supra,
in
both
its
aspects
without
interference
with
granting
and
withdrawal,
according
to
the
economic
climate,
of
tax
incentives.
The
desired
objective
is
a
simple
rule
which
will
provide
uniformity
of
application
of
the
Act
across
the
community,
and
at
the
same
time,
reduce
the
attraction
of
elaborate
and
intricate
tax
avoidance
plans,
and
reduce
the
rewards
to
those
best
able
to
afford
the
services
of
the
tax
technicians.
Professor
Willis,
in
his
article,
supra,
accurately
forecast
the
demise
of
taxing
statutes.
Gradually,
the
role
of
the
tax
statute
in
the
community
changed,
as
we
have
seen,
and
the
application
of
strict
construction
to
it
receded.
Courts
today
apply
to
this
statute
the
plain
meaning
rule,
but
in
a
substantive
sense
so
that
if
a
taxpayer
is
within
the
spirit
of
the
charge,
he
may
be
held
liable.
.
.
While
not
directing
his
observations
exclusively
to
taxing
statutes,
the
learned
author
of
Construction
of
Statutes
(2nd
ed.
1983),
at
p.
87,
E.A.
Dreidger,
put
the
modern
rule
succinctly:
Today
there
is
only
one
principle
or
approach,
namely,
the
words
of
an
Act
are
to
be
read
in
their
entire
context
and
in
their
grammatical
and
ordinary
sense
harmoniously
with
the
scheme
of
the
Act,
the
object,
and
the
intention
of
Parliament.
This
is
the
new
approach
which
MacGuigan,
J.
described
in
Lor-Wes
Contracting
Ltd.
v.
The
Queen,
[1985]
2
C.T.C.
79;
85
D.T.C.
5310
(F.C.A.)
at
83
(D.T.C.
5313)
as
a
"words-in-total-context
approach
with
a
view
to
determining
the
object
and
spirit
of
the
taxing
provisions."
Additionally,
in
determining
the
object
of
the
legislation,
this
Court
no
longer
hesitates
to
refer
to
the
parliamentary
debates
when
the
latter
rise
above
mere
partisanship,
and
in
particular
in
tax
matters
to
refer
to
the
budget
speech
made
by
the
Minister
of
Finance.
(See
Lor-Wes
Contracting
Ltd.,
supra,
Edmonton
Liquid
Gas
Ltd.
v.
The
Queen,
[1984]
C.T.C.
536;
84
D.T.C.
6526
at
546-47
(D.T.C.
6534);
Canada
(A.-G.)
v.
Young,
[1989]
3
F.C.
647
at
657;
P.-A.
Côté,
The
Interpretation
of
Legislation
in
Canada,
1st
ed.,
Montreal,
Yvon
Blais,
at
347-50.)
Finally,
since
reference
will
later
be
made
to
the
Interpretation
Bulletins
published
by
Revenue
Canada,
it
is
worth
noting
at
once
the
rules
governing
use
of
these
Bulletins
to
interpret
a
particular
provision.
It
is
well
settled
that
Interpretation
Bulletins
only
represent
the
opinion
of
the
Department
of
National
Revenue,
do
not
bind
either
the
Minister,
the
taxpayer
or
the
courts
and
are
only
an
important
factor
in
interpreting
the
Act
in
the
event
of
doubt
as
to
the
meaning
of
the
legislation.
(Harel
v.
Deputy
Minister
of
Revenue
(Quebec),
[1978]
1
S.C.R.
851;
[1977]
C.T.C.
441;
77
D.T.C.
5438
at
447
(D.T.C.
5442;
S.C.R.
858),
de
Grandpré,
J.;
Nowegijick
v.
The
Queen,
[1983]
1
S.C.R.
29;
[1983]
C.T.C.
20;
83
D.T.C.
5041
at
24
(D.T.C.
5044;
S.C.R.
37),
Dickson,
J.;
Bryden
v.
Canada
Employment
and
Immigration
Commission,
[1982]
1
S.C.R.
443;
133
D.L.R.
(3d)
1
at
450
(D.L.R.
6),
Ritchie,
J.;
Mattabi
Mines
Ltd.
v.
Ont.
(Min.
of
Revenue),
[1988]
2
S.C.R.
175;
[1988]
2
C.T.C.
294
at
301-302
and
305
(S.C.R.
189
and
195
et
seq.),
Wilson,
J.)
Having
said
that,
I
note
that
the
courts
are
having
increasing
recourse
to
such
Bulletins
and
they
appear
quite
willing
to
see
an
ambiguity
in
the
statute—as
a
reason
for
using
them—when
the
interpretation
given
in
a
Bulletin
squarely
contradicts
the
interpretation
suggested
by
the
Department
in
a
given
case
or
allows
the
interpretation
put
forward
by
the
taxpayer.
When
a
taxpayer
engages
in
business
activity
in
response
to
an
express
inducement
by
the
Government
and
the
legality
of
that
activity
is
confirmed
in
an
Interpretation
Bulletin,
it
is
only
fair
to
seek
the
meaning
of
the
legislation
in
question
in
that
bulletin
also.
As
Prof.
Côté
points
out
in
The
Interpretation
of
Legislation
in
Canada
at
446:
"The
administration's
presumed
authority
and
expertise
is
never
more
persuasive
than
when
the
judge
succeeds
in
turning
it
against
its
author,
demonstrating
a
contradiction
between
the
administration's
interpretation
and
its
contentions
before
the
Court."
Question
one:
is
coproprietor
by
declaration
of
fraction
of
building,
otherwise
eligible,
owner
of
MURB?
Assuming
for
the
purposes
of
this
argument
that
the
building
is
a
MURB,
the
question
arising
in
the
case
at
bar
is
whether
co-ownership
by
declaration
of
a
fraction
of
that
building
makes
this
coproprietor
the
purchaser
of
"property
which
is
a
multiple-unit
residential
building”.
Applying
the
rules
of
interpretation
which
I
noted
above,
this
question
must
be
answered
by
considering
the
relevant
provisions
in
their
“words-in-total-
context".
(a)
Legislative
provisions
and
context
The
expression
"property
which
is
a
multiple
unit
residential
building”
is
not
defined
either
in
the
Act
or
the
Regulations.
In
the
absence
of
any
definition
and
in
the
context
of
a
depreciation
deduction
within
the
meaning
of
the
Act
and
Regulations,
there
is
no
reason
to
require
a
taxpayer
claiming
a
deduction
for
depreciable
property
to
have
acquired
all
that
property.
The
word
"property",
in
subsection
248(1)
of
the
Act,
"means
property
of
any
kind
whatever
whether
real
or
personal
or
corporeal
or
incorporeal
and,
without
restricting
the
generality
of
the
foregoing,
includes
(a)
a
right
of
any
kind
whatever.
.
.”.
[Emphasis
added.]
This
definition
could
hardly
be
more
inclusive
and
seems
quite
broad
enough
to
me
to
take
in
a
portion
or
fraction
of
property:
a
person
who
acquires
a
portion
or
fraction
of
property
most
certainly
acquires
property.
Indeed,
counsel
for
the
respondent
did
not
seek
to
persuade
the
Court
of
the
contrary.
He
argued
instead
that
the
fraction
in
question
had
to
be
an
undivided
portion
of
the
entire
property,
or
at
least,
if
I
understand
his
arguments
correctly,
comprise
more
than
one
unit
since
only
a
multiple-unit
building
qualifies.
This
proposition
runs
directly
into
two
obstacles
which
seem
to
me
insurmountable.
The
first
results
from
the
very
definition
of
"property"
cited
above.
A
right
of
co-ownership
by
declaration
is
indubitably
"a
right
of
any
kind
whatever"
in
the
building,
in
the
same
way
as
an
undivided
right
of
co-
ownership.
Additionally,
the
right
of
ownership
required
by
Class
31
in
respect
of
a
MURB
is
a
right
of
ownership
in
the
multiple
units
as
such.
Accordingly,
the
wording
of
Class
31
does
not
in
any
way
support
limiting
its
application
only
to
certain
types
of
right
of
ownership
or
requiring
that
the
right
of
ownership
extend
to
each
or
to
many
of
the
units
in
the
building.
The
second
and
still
more
conclusive
obstacle
arises
from
the
very
nature
of
the
right
of
co-ownership
by
declaration.
Counsel
for
the
respondent,
with
all
due
respect,
makes
a
serious
error
of
fact
and
of
law
in
saying
the
following,
in
his
submission:
.
.
.
the
appellant
purchased
not
a
multiple-unit
building
but
a
fraction
of
such
a
building.
The
appellant
is
exclusive
owner
of
that
fraction
(unit
29),
not
owner
of
an
undivided
share
in
the
building.
The
appellant
chose
co-ownership
by
declaration
rather
than
some
other
form
of
ownership
such
as
undivided
co-ownership
.
.
.
This
is
an
error
of
fact
because,
as
appears
from
the
deed
of
sale
itself,
the
appellant
purchased
a
fraction
of
the
building
which
includes
both
an
exclusive
portion
of
the
said
building
and
a
share
of
the
undivided
rights
to
the
common
areas.
The
appellant
is
clearly
the
owner
of
an
undivided
part
of
the
building.
It
is
an
error
of
law
because
the
very
concept
of
co-ownership
by
declaration
in
Quebec
civil
law
embraces
two
things
which
are
absolutely
inseparable
from
each
other,
namely
the
right
of
exclusive
ownership
to
an
exclusive
portion
and
"an
undivided
right
of
ownership"
(Article
441d
of
the
Civil
Code
of
Lower
Canada)
in
the
common
portions.
These
two
rights
are
real
rights,
which
are
each
the
subject
of
separate
registration
and
which
cannot
be
alienated
without
each
other
(Articles
441C
and
441e).
The
declaration
of
co-
ownership
"defines
the
destination
of
the
immoveable
and
of
its
exclusive
and
common
portions,
of
which
it
gives
a
detailed
description",
"determines
the
relative
value
of
each
fraction,
having
regard
to
the
nature,
area
and
situation
of
the
exclusive
portion
which
it
comprises"
and
"specifies
the
conditions
of
enjoyment
of
the
common
portions
and
utilization
of
the
exclusive
portions
.
.
.”
(Article
4411).
This
declaration
of
co-ownership
is
in
the
form
of
a
notarial
deed
(Article
441m)
and
is
binding
on
"the
coproprietors
and
their
successors
by
general
title”
(Article
441n).
Each
of
the
coproprietors
"is
bound
to
contribute
.
.
.
to
all
costs
resulting
from
the
co-ownership
and
the
operation
of
the
immoveable
and
particularly
to
the
costs
of
conservation,
maintenance
and
administration
of
the
common
parties
.
.
.”
(Article
441k).
The
interpretation
suggested
by
counsel
for
the
respondent
leads
to
the
absurd
result
that
in
the
case
at
bar
the
appellant
would
only
have
had
to
acquire
two
fractions
instead
of
one
in
order
to
make
use
of
the
deduction.
Additionally,
if
it
is
the
co-ownership
by
declaration
as
such
which
is
an
obstacle,
this
would
disqualify
a
person
who
"even
acting
alone”,
as
Article
441b
of
the
Civil
Code
of
Lower
Canada
puts
it,
"may
register
a
declaration
of
co-ownership
and
therein
declare
himself
proprietor
of
each
fraction",
yet
such
a
person
would
be
owner
of
all
fractions.
(b)
Purpose
of
legislation
and
budget
speech
In
the
budget
speech
he
made
on
November
18,
1974,
the
Minister
of
Finance
said
the
following:
For
reasons
already
discussed,
I
am
particularly
anxious
to
provide
a
quick
and
strong
incentive
to
the
construction
of
new
rental
housing
units.
I
therefore
propose
to
relax
for
a
period
the
rule
whereby
capital
cost
allowances
on
rental
construction
could
not
be
charged
against
income
from
other
sources.
Specifically,
in
respect
of
new,
multiple-unit
residential
buildings
for
rent,
started
between
tonight
and
December
31,
1975,
the
capital
cost
allowance
rule
will
not
apply.
This
means
that
an
owner
of
an
eligible
rental
unit
will
be
permitted
to
deduct
capital
cost
allowance
against
any
source
of
income
at
any
time.
I
am
confident
that
this
measure
will
attract
a
significant
amount
of
private
equity
capital
into
the
construction
of
new
rental
housing.
[Emphasis
added.]
Although
these
observations
do
not
have
the
decisive
scope
claimed
for
them
by
counsel
for
the
appellant,
they
illustrate
quite
clearly
the
Government's
intention
to
encourage
the
construction
of
MURBs
and
to
induce
taxpayers
to
invest
in
such
buildings
in
return
for
significant
depreciation
potential.
It
seems
to
me
that
it
would
be
treating
the
Government
as
naive
to
suggest
that
it
had
in
mind
only
the
construction
of
buildings
financed
by
a
single
owner.
The
Minister's
choice
of
words
seems
revealing
in
this
connection:
He
refers
to
"new
multiple-unit
residential
buildings"
to
describe
buildings
the
construction
of
which
he
wants
to
encourage,
but
refers
to
the
"owner
of
an
eligible
rental
unit’
[emphasis
added]
to
describe
a
taxpayer
he
is
seeking
to
benefit.
These
words
are
quite
consistent
with
the
practice
of
co-
ownership
by
declaration
and
reinforce
the
textual
and
contextual
interpretation
at
which
I
arrived
above.
(c)
Interpretation
Bulletin
As
I
have
concluded
that
the
legislation
presents
no
ambiguity
and
means
what
the
taxpayer
says
it
means,
and
as
further
I
believe
that
the
objective
sought
by
the
Government
reinforces
this
interpretation,
it
is
not
really
necessary
for
me
to
go
further
and
examine
the
Interpretation
Bulletin
submitted
to
the
Court
by
counsel
for
the
appellant.
However,
in
the
event
that
I
am
wrong
in
my
interpretation
of
the
expression
"property
that
is
a
multiple-unit
residential
building"
and
accordingly,
that
expression
is
not
as
clear
as
I
have
said,
I
am
pleased
to
see
that
Interpretation
Bulletin
No.
IT-367R2,
published
on
September
7,
1981
regarding
“Capital
Cost
Allowances—Multiple-Unit
Residential
Buildings”,
confirms
my
conclusion
in
all
respects.
That
Bulletin
refers
expressly
to
the
"owner
of
a
unit
or
interest
in
such
a
building”
(section
2),
even
states
that
"If
an
entire
building
satisfies
the
requirements
of
Class
31
or
Class
32,
each
unit
or
ownership
interest
thereon
which
has
been
acquired
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
therefrom
.
.
.
is
considered
to
be
property
of
Class
31
or
Class
32"
(section
4)
and
refers
in
particular
to
the
"case
of
condominiums
or
row
houses"
(section
14).
Counsel
for
the
respondent
frankly
admitted
that
this
Bulletin
is
an
obstacle
to
his
arguments
and
strove
unsuccessfully
to
persuade
the
Court
that
the
legislation
and
regulations
at
issue
so
clearly
supported
the
interpretation
that
there
was
no
need
to
have
recourse
to
the
Bulletin.
Question
two:
whether
purpose
of
building
residential
Counsel
for
the
respondent
argued,
with
the
support
of
dictionary
definitions,
that
a
residential
building
"is
a
place
where
someone
habitually
resides”
and
which
"is
used
to
accommodate
its
occupants
more
or
less
permanently,
as
opposed
to
a
place
lived
in
for
short
periods."
He
also
relied
on
the
expression
“logements
autonomes"
used
in
paragraph
(a)
of
Class
31,
the
equivalent
of
which
in
the
English
version
is
“self-contained
domestic
establishment”,
which
is
itself
defined
in
subsection
248(1)
of
the
Act
as
meaning
“dwelling
house,
apartment
or
other
similar
place
of
residence
in
which
place
a
person
as
a
general
rule
sleeps
and
eats."
The
problem
is
that
the
Act
has
defined
"self-contained
domestic
establishment",
but
in
French
defined
not
“logement
autonome”,
which
is
the
expression
used
in
Class
31,
but
“établissement
domestique
autonome",
so
that
it
is
not
clear
that
the
intention
in
Class
31
was
to
refer
to
the
same
situation
as
that
referred
to
in
subsection
248(1).
In
any
case,
I
consider
that
the
French
and
English
wordings
of
Class
31
lead
to
the
same
interpretation.
Counsel
for
the
respondent
also
tried
to
show
that
in
the
case
at
bar
the
appellant
submitted
no
evidence
that
the
units
were
occupied
by
persons
who
were
making
them
their
habitual
place
of
residence,
rather
than
temporary
occupants.
I
note
at
the
outset
that
the
requirement
of
“logements
autonomes"
is
an
objective
one
in
the
case
at
bar,
determined
first
in
the
CMHC
certificate
and
second
in
the
plans
and
specifications
for
the
building
approved
by
the
CMHC
As
a
question
of
fact,
therefore,
this
requirement
precedes
construction
of
the
building.
Once
the
plans
and
specifications
have
been
approved
and
the
certificate
issued
by
the
CMHC,
the
building
qualifies
of
itself
and
I
do
not
think
that
in
the
absence
of
any
allegation
of
bad
faith
or
deceit
the
Court
can
impose
on
the
taxpayer
the
burden
of
establishing
that
the
intended
use
of
the
building
is
not
or
is
no
longer
in
fact
what
it
was
on
paper.
In
the
case
at
bar,
the
Department
had
the
burden
of
showing
that
the
certification
was
wrongly
issued
or
the
intended
use
of
the
building
had
been
changed.
It
did
not
discharge
that
burden.
I
note
from
consulting
the
Interpretation
Bulletin,
since
there
is
a
doubt,
that
it
is
in
fact
the
"intended
use
of
the
units"
[emphasis
added]
which
makes
it
impossible
for
a
building
"to
qualify
as
residential"
(section
7),
which
confirms
my
interpretation
of
the
burden
of
proof
in
the
event
that
a
building
ceases
to
fall
within
Class
31,
as
mentioned
in
section
11
of
the
Bulletin.
The
Interpretation
Bulletin
is
also
instructive
as
to
the
meaning
to
be
given
to
the
word
"residential".
Under
section
7
a
building
will
be
“residential”
if
it
is
intended
"to
provide,
on
a
more
or
less
permanent
basis,
the
place
of
residence
or
abode
of
its
occupants."
The
idea
of
“on
a
more
or
less
permanent
basis”,
while
it
may
be
a
barrier
for
example
to
the
occupants
perpetually
coming
and
going,
does
not
rule
out
the
possibility,
as
in
the
case
at
bar,
of
more
or
less
long-term
rental
depending
on
the
market
and
on
chance.
I
also
note
that
in
sections
11
and
12
"residential"
is
contrasted
with
“commercial
use",
which
leads
me
to
think
that
what
the
Department
is
primarily
trying
to
avoid
is
units
being
eventually
used
for
commercial
purposes
that
would
be
inconsistent
with
residential
occupancy
of
the
premises.
Clause
9.2.3
of
the
declaration
of
co-ownership
states
that
"the
business
of
room
rental
is
absolutely
prohibited
in
any
part
used
for
commercial
or
professional
purposes,
such
as,
but
not
limited
to,
shops
or
offices."
In
the
absence
of
evidence
by
the
Department
that
these
clauses
have
been
amended—I
note
that
under
441m
of
the
Civil
Code
of
Lower
Canada,
any
change
to
the
declaration
of
co-ownership
must
be
notarized
and
registered,
and
under
Article
442h,
the
intended
use
of
the
building
can
only
be
changed
by
unanimous
vote
of
the
coproprietors—they
represent
in
my
opinion
a
formal
statement
of
the
residential
rather
than
commercial
use
to
which
the
building
is
to
be
put.
It
was
further
in
evidence
that
the
appellant
has
never
paid
municipal
business
taxes
on
his
fraction,
which
was
taxed
as
a
"dwelling".
Disposition
of
case
For
these
reasons
I
would
allow
the
appeal,
reverse
the
trial
judgment
and
invalidate
the
notice
of
reassessment
of
September
16,1983,
the
whole
with
costs
against
the
respondent
at
trial
and
on
appeal.
Appeal
allowed.
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