Rouleau,
J.:—The
plaintiff
seeks
to
set
aside
an
assessment
by
the
Customs
and
Excise
Branch
of
the
Department
of
National
Revenue
which
was
made
pursuant
to
paragraph
2(1)(f)
of
the
Excise
Tax
Act,
R.S.C.
1970
as
amended
by
1980-81
S.C.
c.
68;
it
had
been
determined
by
the
defendant
that
the
operations
performed
by
the
plaintiff
on
certain
imported
goods
were
"marginal
manufacturing”.
The
plaintiff,
a
duly
incorporated
Canadian
company
and
a
wholly
owned
subsidiary
of
Philips
U.S.,
carries
on
business
at
the
City
of
Montreal.
Among
its
many
endeavours,
it
is
in
the
business
of
importing
and
selling
receiving
tubes
for
the
television
industry.
During
the
period
between
August
1,
1981
and
October
31,
1983
it
was
importing
the
receiving
tubes
from
the
United
States
in
boxes
of
approximately
100
units
each.
After
landing,
certain
activities
were
performed
by
the
plaintiff
before
the
tubes
were
shipped
to
distributors
or
other
like
prospective
customers;
these
activities
were
classified
as
"marginal
manufacturing”,
hence
the
assessment
under
the
Excise
Tax
Act.
The
tubes
are
cylindrical
and
have
approximate
dimensions
of
two
and
one-half
inches
in
length
and
three
quarters
of
an
inch
in
diameter.
The
majority
are
manufactured
by
Philips
in
the
United
States
and
shipped
in
boxes
divided
into
small
square
spaces
measuring
approximately
three
quarters
of
an
inch.
When
they
are
received
in
Canada
the
trade
name
Sylvania
is
already
preprinted
on
the
glass
surface
as
well
as
a
type
number
and
warranty
code.
This
code
is
erased
from
the
tube
by
a
buffing
method
and
the
trade
name
as
well
as
the
type
number
remain.
The
warranty
code
is
removed
since
it
differs
from
the
one
applicable
to
Canada.
The
remaining
25
per
cent
of
the
imported
tubes
are
not
of
major
concern.
Upon
removing
the
warranty
code
they
are
then
placed
in
small
cartons
similar
to
all
other
tube
boxes
used
in
the
industry;
their
function
is
to
contain
the
tube
firmly
for
fear
of
breakage
in
handling,
shipping
and
storage.
On
the
fold-over
cover
of
the
carton,
the
plaintiff
prints
the
serial
number
describing
the
type
of
tube,
the
warranty
code
and
the
country
of
origin.
These
small
boxes
are
manufactured
and
printed
in
Canada
to
the
plaintiff’s
specifications.
The
tubes
are
inserted
into
television
receiving
sets
to
control
the
flow
of
current
and
the
sound
emanating
from
speakers.
Presently
because
of
depleting
sales
of
this
particular
type
of
tube,
it
is
now
importing
what
is
referred
to
as
"semi-conductors"
which
perform
the
same
functions.
When
received,
the
tubes
are
functional
and
in
no
other
way
altered;
after
being
boxed
they
are
ready
for
shipment
to
various
distributors
and
wholesalers
across
Canada.
The
plaintiff
testified
that
it
imported
and
distributed
a
great
variety
of
tubes
used
in
the
television
industry
and
that
it
was
renowned
for
the
quality
of
its
product
and
its
availability
because
of
the
large
inventory
it
maintained.
The
box
in
which
the
tube
was
placed
was
not
on
display
but
was
warehoused
by
the
plaintiff
and
was
customarily
shelved
in
the
back
of
stores
of
their
distributors
and
wholesalers.
The
only
identifying
mark
to
assist
the
distributors
would
be
the
name
Sylvania
printed
on
the
box.
This
enabled
them
to
distinguish
or
differentiate
from
other
manufacturers
of
tubes.
The
dealers
or
wholesalers
in
turn
sold
them
to
television
repairmen
or
service
dealers.
An
electronics
distributor
testifying
on
behalf
of
the
plaintiff
stated
that
he
purchased
from
the
plaintiff
company;
that
he
maintained
a
considerable
inventory
and
would
order
from
the
plaintiff
by
way
of
a
price
list;
that
the
products
sold
by
the
plaintiff
were
in
many
cases
superior
to
those
of
other
manufacturers.
His
evidence
was
that
the
tubes
were
never
on
display
and
that
the
box
would
in
no
way
influence
the
public
in
its
decision
to
buy
but
it
did
facilitate
storage
and
handling.
The
box
was
primarily
a
protective
device
and
usually
kept
in
the
warehouse
of
his
distributorship;
it
would
be
impossible
to
distribute
articles
of
this
type
and
warehouse
them
if
they
were
not
placed
in
a
protective
covering.
The
issue
is
to
determine
whether
or
not
the
activities
performed
by
the
plaintiff
should
be
construed
as
"marginal
manufacturing".
If
so,
it
is
bound
to
pay
federal
sales
tax
on
the
imported
conductors
for
the
period
between
August
1,
1981
and
October
31,
1983.
The
amendments
to
the
Excise
Tax
Act
which
are
of
concern
came
into
effect
on
July
8,1981
and
more
particularly
paragraph
2(1)(f)
of
the
Act:
[Before
amendment]
2.1
In
this
Act,
manufacturer
or
producer
includes
(f)
any
person
who,
by
himself
or
through
another
person
acting
for
him,
assembles,
blends,
mixes,
cut
to
size,
dilutes,
bottles,
packages,
repackages
or
otherwise
prepares
goods
for
sale
other
than
a
person
who
so
prepares
goods
in
a
retail
store
for
sale
in
that
store
exclusively
and
directly
to
customers.
[After
amendment]
2.(1)
In
this
Act
"manufacturer
or
producer”
includes
(f)
any
person
who,
by
himself
or
through
another
person
acting
for
him
prepares
goods
for
sale
by
assembling,
blending,
mixing,
cutting
to
size,
diluting,
bottling,
packaging
or
repackaging
the
goods
or
by
applying
coatings
or
finishes
to
the
goods,
other
than
a
person
who
so
prepares
goods
in
a
retail
store
for
sale
in
that
store
exclusively
and
directly
to
consumers.
The
debate
revolves
around
the
interpretation
to
be
given
to
the
phrase
"packages
or
repackages
.
..
or
otherwise
prepares
goods
for
sale”.
One
should
bear
in
mind
that
the
imported
conductors
bore
the
United
States
warranty
code
on
the
glass
surface
and
its
removal
by
way
of
buffing
was
the
only
change
to
the
tube
itself
necessitated
because
of
the
Canadian
warranty
code.
Also,
the
new
warranty
code
as
well
as
the
type
number
of
tube
and
country
of
origin
were
printed
on
the
fold-over
cover
of
the
box
that
contained
the
conductor.
Counsel
for
the
plaintiff
submitted
an
interpretation
given
to
the
pertinent
section
of
the
Act
by
Mr.
Justice
Campbell
Grant
in
Fiat
Auto
Canada
Limited
v.
The
Queen,
6
C.E.R.
82,
decided
in
1983,
which
he
thought
applicable
to
the
case
at
bar.
Justice
Grant
considered
the
meaning
of
the
phrase
"or
otherwise
prepares
goods
for
sale”
and
at
page
87
he
wrote:
In
such
paragraph
2(1)(f)
of
the
Excise
Tax
Act,
following
the
definite
words
“assembles,
blends
mixes,
cuts
to
size,
dilutes,
bottles,
packages,
repackages”
is
the
general
phrase
“or
otherwise
prepares
goods
for
sale”.
The
last
group
of
words
must
be
construed
ejusdem
generis
with
the
words
quoted
which
precede
such
phrase.
As
none
of
such
words
have
any
relation
to
the
task
of
connecting
a
radio
to
an
automobile,
they
are
not
helpful
in
bringing
such
operation
within
the
meaning
of
the
definition.
The
general
word
which
follows
particular
and
specific
words
of
the
same
nature
as
itself
takes
its
meaning
from
them
and
is
presumed
to
be
restricted
to
the
same
genus
as
those
words.
For,
according
to
a
well-established
rule
in
the
construction
of
statutes,
the
general
terms
following
particular
ones
apply
only
to
such
persons
or
things
as
are
ejusdem
generis
with
those
comprehended
in
the
language
of
the
legislature.
In
other
words,
the
general
expression
is
to
be
read
as
comprehending
only
things
of
the
same
kind
as
that
designated
by
the
preceding
expressions
unless
there
is
something
to
show
that
a
wider
sense
was
intended.
Counsel
then
referred
to
the
departmental
suggested
interpretation
to
be
given
the
section
prior
to
its
enactment.
He
outlined
certain
quotes
from
Excise
News
issued
by
Revenue
in
December
1980,
entitled
Expanded
Definition
of
Manufacturer
or
Producer
(Marginal
Manufacturing).
The
initial
statement
at
page
1
of
the
newsletter
deals
with
paragraph
2(1
)(f)
generally:
This
amendment
will
bring
within
the
definition
of
manufacturer
or
producer
a
person
who
performs
one
or
more
of
the
above-noted
operations
except
where
these
operations
are
conducted
in
a
retail
store
for
sale
in
that
store
exclusively
and
directed
to
consumers.
These
operations
are
generally
termed
“marginal
manufacturing”.
Later
on
in
the
Excise
News
further
refinements
are
outlined
and
on
page
3,
certain
operations
were
considered
not
to
fall
within
the
proposed
amendment.
Examples:
(1)
the
cutting
of
goods
to
size
at
the
site
of
construction
in
order
to
accommodate
their
installation;
(2)
the
assembly
of
cabinets
or
other
goods
at
the
site
of
installation
by
the
contractor
or
user
for
his
own
use;
(3)
the
packaging
or
crating
of
goods
exclusively
for
shipment
purposes
to
fill
an
individual
customer's
order;
(4)
the
unpacking
and
repacking
of
goods
solely
for
inspection
purpose;
(5)
the
replacement
of
damaged
container;
(6)
the
single
operation
of
cutting
of
goods
to
the
length
specified
by
the
individual
customer’s
order,
i.e.:
wire,
cable,
drapery
material
which
is
sold
by
the
foot,
yard
or
meter;
(7)
the
single
operation
of
attaching
a
price
tag
or
price
label
to
a
product;
(8)
the
single
operation
of
labelling
or
relabelling
goods;
(9)
the
preparing
of
food
or
drink
in
a
restaurant,
centralized
kitchen
or
similar
establishment
whether
or
not
such
food
or
drink
is
for
consumption
on
the
premises;
(10)
the
restoration
of
used
goods
to
a
serviceable
condition
by,
or
for
and
on
behalf
of
the
owner-user;
(11)
the
purchasing
of
goods
under
a
private
brand
label
where
materials
are
not
supplied
to
the
manufacturer;
(12)
the
installation
or
removal
of
optional
equipment
and/or
accessories
to
or
from
automobiles,
by
or
on
behalf
of
the
dealer
or
sale
to
consumers
and
users.
Further
in
the
same
publication,
there
is
an
attempt
to
define
what
constitutes
“to
package
or
repackage””
at
page
2
under
the
section
dealing
with
“clarification
of
terms
used":
"package”
and/or
"repackage”
includes
the
making
up
into
an
enclosed
package,
a
package
being
a
parcel,
bag,
box,
etc.
e.g.:
(1)
the
blister
packaging
of
goods;
(2)
the
repackaging
into
smaller
quantities
of
goods
obtained
in
bulk
such
as
paste
wax,
chemicals,
etc.
He
argues
that
these
examples
clearly
indicate
that
“marginal
manufacturing"
was
intended
to
apply
to
those
who
“package
or
repackage"
for
display
and
sales
promotional
purposes,
not
the
function
performed
by
the
plaintiff.
Following
this
initial
Excise
News
dispatch
of
December
1980,
further
guidelines
were
published
by
the
Assistant
Deputy
Minister
for
Excise
in
a
memorandum
directed
to
the
regional
directors
and
dated
July
6,
1981,
entitled
Principles
and
Philosophy
of
Marginal
Manufacturing.
The
fourth
and
fifth
paragraphs
of
the
memo
state
as
follows:
The
activities
mentioned,
i.e.
assembly,
blending,
are
all
related
to
preparing
goods
for
sale
in
the
sense
of
changing,
altering
or
enhancing
the
commercial
presentation
of
the
goods
in
anticipation
of
a
sale.
The
activity
generally
makes
the
product
more
acceptable
to
the
customer,
regardless
of
his
status.
Preparing
goods
in
anticipation
of
a
sale
would
not
include
packing
goods
for
shipment
only,
nor
would
it
include
preparing
goods
to
meet
an
individual
user’s
requirement,
where
there
is
no
"commercial
enhancement”
aspect
to
the
activity,
but
rather
a
service
is
offered
to
the
user
of
the
goods.
This
distinction
may
cause
some
fine
lines
to
be
drawn
but
there
is
no
practical
method
of
avoiding
that
situation.
For
example
the
mixing
of
paint
in
other
than
a
retail
store
is
preparation
of
goods
for
sale
because
the
mixing
is
normally
a
condition
of
sale
and
is
the
manner
in
which
the
paint
is
advertised
and
marketed.
On
the
other
hand
if
a
person
is
in
the
business
of
selling
hose
and
fittings
and,
as
a
service
to
the
customer
will
attach
the
fittings
to
the
hose,
then
that
person
is
not
preparing
goods
for
sale
and
would
not
be
a
"marginal”
manufacturer.
In
a
critical
analysis
of
departmental
philosophy
he
points
out
that
placing
something
in
a
box
for
protection,
handling,
storage
and
shipping
is
not
enhancement
for
resale
purposes
and
certainly
bears
no
influence
on
the
purchaser
such
as
“blister"
packaging
which
is
“enhancing
the
commercial
presentation".
In
concluding
counsel
submitted
that
administrative
policy
and
interpretation,
though
not
determinative,
should
be
given
some
weight
and
should
be
considered
“an
important
factor”
in
the
case
of
doubt
concerning
the
meaning
of
the
legislation,
this
principle
having
been
established
by
Mr.
Justice
Dickson
in
Nowegijick
v.
The
Queen
et
al.,
[1983]
C.T.C.
20
at
24;
144
D.L.R.
(3d)
193
at
199.
Counsel
for
the
defendant
advanced
the
argument
that
the
Court
should
apply
the
literal
approach
or
the
“plain
meaning”
rule
in
interpreting
paragraph
2(1
)(f)
of
the
Excise
Tax
Act.
That
rule
provides
that
the
words
of
the
statute
are
to
be
examined
and,
if
they
are
clear
and
unambiguous
in
their
meaning,
then
they
should
be
interpreted
in
their
ordinary
and
grammatical
sense.
Accordingly,
the
defendant
has
submitted
and
relies
upon
various
dictionary
definitions
of
the
word
“package”
and
urges
the
Court
to
apply
those
definitions
to
the
words
“packaging
or
repackaging”
in
paragraph
2(1
)(f)
of
the
Act.
In
applying
this
“plain
meaning”
rule
of
statutory
interpretation,
the
defendant
maintains
that
the
words
“‘packaging
or
repackaging”
used
in
the
definition
section
of
the
Excise
Tax
Act
extend
the
meaning
of
manufacturer
or
producer
to
cover
what
was
done
in
this
case.
Further,
the
defendant
argues
that
I
should
refrain
from
basing
my
decision
on
the
administrative
policy
of
the
Minister
of
National
Revenue
for
Customs
and
Excise,
because
such
reliance
is
only
justified
if
the
words
of
a
statute
are
ambiguous
or
unclear
in
their
meaning.
As
long
as
the
words
of
a
legislative
enactment
are
clear,
it
is
unnecessary
for
a
Court
interpreting
the
statute
to
go
outside
the
four
corners
of
the
statute
itself
in
order
to
ascertain
the
intention
of
Parliament.
In
support
of
this
argument,
the
defendant
relies
upon
the
Supreme
Court
of
Canada
decision
in
Harel
v.
Deputy
Minister
of
Revenue
(Quebec),
[1978]
1
S.C.R.
851;
[1977]
C.T.C.
441,
wherein
de
Grandpré,
J.
stated
at
858
(C.T.C.
447):
If
I
had
the
slightest
doubt
on
this
subject,
I
would
nevertheless
conclude
in
favour
of
appellant
on
the
basis
of
respondent's
administrative
policy.
Clearly,
this
policy
could
not
be
taken
into
consideration
if
it
were
contrary
to
the
provisions
of
the
Act.
In
the
case
at
bar,
however,
taking
into
account
the
historical
development
that
I
will
review
rapidly,
this
administrative
practice
may
validly
be
referred
to
since
the
best
that
can
be
said
from
respondent's
point
of
view
is
that
the
legislation
is
ambiguous.
[Emphasis
added.]
There
is
no
question
that
the
literal
approach
is
a
well
established
one
in
statutory
interpretation.
Nevertheless,
it
is
always
open
to
the
Court
to
look
to
the
object
or
purpose
of
a
statute,
not
for
the
purpose
of
changing
what
was
said
by
Parliament,
but
in
order
to
understand
and
determine
what
was
said.
The
object
of
a
statute
and
its
factual
setting
are
always
relevant
considerations
and
are
not
to
be
taken
into
account
only
in
cases
of
doubt.
The
defendant
argues
that
the
words
“‘packaging
or
repackaging”
are
to
be
read
in
their
ordinary
and
grammatical
sense.
While
this
is
true,
there
is
one
fundamental
important
step
which
must
first
be
taken.
That
is
that
the
Act
under
consideration
is
to
be
read
in
its
entire
context
so
as
to
ascertain
the
intention
of
Parliament,
the
object
of
the
Act
and
the
scheme
of
the
Act.
The
words
of
the
individual
provisions
under
consideration
are
then
to
be
read
in
the
grammatical
and
ordinary
sense
in
light
of
the
intention
of
Parliament
embodied
in
the
Act
as
a
whole,
the
object
of
the
Act
and
the
scheme
of
the
Act.
I
have
carefully
reread
what
was
stated
in
the
Excise
News
issued
by
Revenue
Canada
in
December
1980.
There
is
no
doubt
that
at
that
time
they
intended
to
expand
the
definition
of
manufacturer
and
created
a
new
class
called
“marginal
manufacturing”.
It
is
clearly
stated
in
that
policy
that
they
want
to
bring
within
the
definition
any
entity
that
performs
one
or
more
(packaging
or
repackaging)
operations
.
.
.
that
prepares
the
goods
for
sale.
In
Fiat
Auto
Canada
Ltd.
v.
The
Queen,
(supra),
Grant,
J.
in
construing
the
ejusdem
generis
rule
could
not
find
that
the
installing
or
connecting
of
a
radio
to
an
automobile
as
being
part
of
those
new
functions
enumerated
in
paragraph
2(1
)(f)
and
relate
them
to
“the
preparation
of
goods
for
sale”;
as
a
result,
he
dismissed
National
Revenue's
assessment.
That
case
is
clearly
distinguishable
from
the
one
at
bar.
I
am
also
convinced
that
this
is
not
the
type
of
situation
where
administrative
policy
should
be
given
restrictive
interpretation
as
suggested
by
the
plaintiff
nor
should
I
rely
on
the
principle
established
in
the
Nowegijick
case
(supra)
since
no
doubt
has
risen
in
my
mind
as
to
what
was
intended
by
the
statute.
The
amendments
clearly
enunciate
those
operations
which
are
to
be
considered
“marginal
manufacturing”.
Doubtless
the
tubes
themselves
required
to
be
placed
in
a
container
for
the
purposes
of
handling,
storage
and
shipping
and
that
this
may
have
been
the
primary
purpose
of
the
intervening
acts.
Nevertheless,
these
operations
relate
directly
to
the
definition
of
“packaging
or
repackaging”
and
the
plain
meaning
of
the
section.
The
extended
definition
given
to
manufacturing
was
intended
by
Parliament
to
tax
all
procedures
which
are
described
in
paragraph
2(1)(f).
The
words
in
the
section
are
clear
and
unambiguous
and
were
properly
interpreted
by
the
Minister.
I
hereby
confirm
the
assessment
of
the
Excise
Branch
of
the
Department
of
National
Revenue
and
I
dismiss
the
plaintiffs
case
with
costs.
Assessment
confirmed.
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