Maclean Hunter Limited v. Deputy Minister of National Revenue for Customs and Excise, [1988] 1 CTC 174, 88 DTC 6096

MacGuigan, J.: —The appellant (erroneously described as the applicant in the style of cause), a publishing company with many publications, appealed to the Tariff Board ("the Board”) decisions made by the respondent that seven of its publications were taxable under the Excise Tax Act ("the Act”). The Board heard the seven appeals together (Appeal Nos. 2284-2290), deciding in favour of the appellant in Appeals 2286 and 2287 relating to The Financial Post Survey of Mines and Energy Resources and The Financial Post Survey of Industrials respectively, and against it in the other five. This appeal is taken with respect to The Financial Post Corporation Service Booklets and Updates, Appeal No. 2285.

The Act imposes by subsection 27(1) a consumption or sales tax on all goods produced or manufactured in Canada, but by subsection 29(1) the said tax does not apply to the sale or importation of goods mentioned in Schedule 111, except in circumstances which are not relevant in this instance.

Part III of Schedule III to the Act provides for exemptions from the tax for certain printed matter, articles, and materials but also contains certain exclusions from the exemptions. The relevant part of section 3 of the Schedule is as follows:

3. The following printed matter, articles and materials:

(a) college and school annuals; unbound literary papers regularly issued at stated intervals not less frequently than four times yearly; sheet music; manuscripts; national manufacturing industrial or trade directories; printed books that contain no advertising and are solely for educational, technical, cultural or literary purposes; articles and materials for use exclusively in the manufacture or production of the foregoing;

but excluding albums, biographical, financial or statistical surveys and reports, books for writing or drawing upon, catalogues, colouring books, directories of all kinds not mentioned in this section, fashion books, guidebooks, periodic reports, price lists, rate books, timetables, year books, or any other similar printed matter and any printed matter or part thereof or class of printed matter as may be designated by the Governor-in-Council.

Thus, to be exempt from federal sales tax, a publication must first come within the exempting language of subsection 3(a) and, second, not fall within the exceptions to the exemptions set out in the concluding part of the section.

With respect to the exemption question, the appellant maintained that the Board had to decide whether the booklets and updates in question in appeal 2285 qualified either as “national manufacturing, industrial or trade directories", the basis on which the survey books in appeals 2286 and 2287 were found exempt, or as "printed books that contain no advertising and are solely for educational, technical, cultural or literary purposes". That, indeed, is how the Board itself stated the issue (Appeal Book, vol. 1, p. 100):

The first question addressed to the Board is whether the publications involved are national manufacturing, industrial or trade directories or alternatively, in the case of one publication, the Corporate Service Booklets and Updates (Appeal No. 2285), printed books that contain no advertising and are solely for educational, technical, cultural or literary purposes.

However, when the Board came to deal in its reasons for decision with appeal 2285 it did not mention the first alternative and dealt only with the second (Appeal Book, vol. 1, p. 108):

The Corporation Service Booklets and Updates (Exhibits A-1 (a) (b) and (c) Appeal No. 2284),* submitted as falling under the second of the exemptions invoked as printed books because they contained no advertising, are not books within the ordinary meaning of that word but rather booklets. Furthermore, while these individual corporation profiles might have a technical purpose for an investor or investment counsellor and also an educational purpose within the widest possible meaning that can be given to that term, it is not considered that either of these extensions of meaning were intended by the legislator. It is certain in any event that any such purposes even if they applied by such stretch of meaning, are not the sole purpose of such publications. Even if the publication were considered to fall within the exemption provided for printed books, it would fall into the exclusion from such exemption as being a periodic report. The Updates necessarily share the fate of their parent publication and are outside of the exemption.

*The reference here to No. 2284 is a clear misprint for No. 2285, both because Exhibit A-1 is in relation to No. 2285, and because the Board dealt elsewhere with No. 2284 and its Exhibit, A-3.

The appellant therefore argued that the Board erred in law in failing to consider the applicability of the exemption for "national manufacturing, industrial or trade directories".

The respondent, however, drew the Court's attention to the Board's final summary of its findings in the seven appeals, in which it states explicitly as follows:

Appeal No. 2285. The Financial Post Corporation Service Booklets and Updates (Exhibit A-1): Not a directory nor a printed book, and therefore not exempt.

Clearly, therefore, the Board did make a finding that the materials were not national manufacturing, industrial or trade directories, even if it did not provide reasons for that decision. Courts have consistently held that it is not an error of law for a tribunal not to give reasons on every argument presented to it (Canadian Arsenals Limited v. Canada Labour Relations Board, [1979] 2 F.C. 393, at 399-400), nor even to fail to make an explicit written finding on each constituent element of its decision (Service Employees' International Union, Local No. 333 v. Nipawin District Staff Nurses Association of Ni pawin et al., [1974] 1 W.W.R. 653 at 659; 41 D.L.R. (3d) 6 at 13). The only question that can arise in the absence of written reasons is whether the decision arrived at can rationally be supported.

The appellant argued that, having found the Surveys considered in Appeals 2286 and 2287 to be tax exempt as national directories, the Board must needs have come to the same conclusion in this case. It is true that there is a close relationship between the Surveys found exempt in appeals 2286 and 2287 and the yellow-coloured booklets and white-coloured updates in question in this appeal. The booklets and updates cover the top one-sixth of the companies in the surveys, giving them more extensive and intensive information coverage: the booklets are published approximately annually, the updates as news warrants in the period between, with each booklet and update being cumulative so that the old one can be discarded (Appeal Book, vol. 2, p. 72). In the appellant's favour it may perhaps fairly be said that the booklets and updates are part of the same overall system as the surveys.

Nevertheless, there are a considerable number of differences between the surveys and the booklets/updates. The former are bound and contain indices and other specialized features, whereas the latter are unbound and designed to be stored in cabinets. The former contain advertising, the latter none. The latter have more coverage than the former of any given company and can also be bought individually. One cannot, therefore, conclude that it was irrational for the Board to arrive at different conclusions respecting such different materials.

The appellant's second argument was that the materials qualify for tax exemption as printed books that are solely for educational or technical purposes. The adjective "educational" is normally defined in lexicons in terms of “education”. The most relevant part of the definition of education in the Shorter Oxford English Dictionary (1977) is as follows:

3. The systematic instruction, schooling or training given to the young (and, by extension, to adults in preparation for the work of life. Also, the whole course of scholastic instruction which a person has received. Often qualified, as classical, legal, medical, technical. . .

The Living Webster Encyclopedic Dictionary of the English Language (1971) has the following definition:

The process of educating, teaching, or training; a part of or stage in this training; the learning or development which results from this process of teaching or training; the process of imparting or acquiring skills for a particular trade or profession; a kind of schooling; instruction and discipline in general; erudition; the academic discipline dealing with teaching and learning methods in the schools.

It is apparent from these definitions that, when the word “education” or "educational" is used without qualification, it has reference to a fundamental process of learning which is aimed at preparing either for life in general or for a large purpose such as a particular profession or trade, and is in any event without an immediately utilitarian focus.

The evidence shows (Appeal Book, vol. 2, at p. 80) that the target group for the materials is the Canadian financial community, described as stockbrokers, investment dealers, banks and trust companies. It seems to me that the purpose of the materials is not educational in the sense I have described, but rather informational with a view to fairly immediate commercial use. Particularly in light of the limitation resulting from the word solely in the Schedule, in my opinion the Board was right in concluding that the meaning the appellant contended for would involve a stretch of the statutory meaning.

The result must be the same with respect to the word "technical", which the Shorter Oxford English Dictionary defines as follows:

2. Belonging or relating to an art or arts; appropriate or peculiar to, or characteristic of, a particular art, science, profession; also, of or pertaining to the mechanical arts and applied sciences generally.

Again, the statutory definition, as confined by solely, must be taken narrowly, to refer to matter having to do with the mechanical arts or the applied sciences. The materials in the case at bar do not meet such a test.

Since in my view the appellant did not succeed in establishing that the materials are exempt from tax, it is unnecessary to consider the effect of the exceptions to the exemptions.

I would therefore dismiss the appeal with costs.

Appeal dismissed.