Urie,
J.:—The
threshold
issue
in
this
appeal
from
a
decision
of
the
Tariff
Board,
brought
pursuant
to
section
60
of
the
Excise
Tax
Act,
R.S.C.
c.
E-13
and
amendments
thereto
(“the
Act”),
is
whether
or
not
the
Board
had
jurisdiction
to
hear
and
determine
the
appellants’
appeal.
As
required
by
section
60,
the
appellants
sought
and
obtained
from
this
Court
leave
to
appeal
the
Board’s
decision
on
questions
of
law.
The
relevant
facts
on
the
jurisdiction
issue
are
these.
A
letter
dated
April
9,
1984
from
the
Ad
Valorem
Tax
Supervisor
of
the
appellant,
Petro-Canada,
to
the
Tariff
Board
reads
as
follows:
Pursuant
to
section
59
of
the
Excise
Tax
Act,
Petro-Canada
Inc.
hereby
appeals
the
application
and
rate
of
tax
imposed
under
Section
25.14(4)(a),
(b)
and
(c)
of
the
Act.
As
a
result
of
a
Federal
Sales
Tax
Audit
and
Revenue
Canada’s
ruling
of
January
26,
1984
the
Minister
has
deemed
the
time
of
receipt
of
natural
gas
liquids
in
accordance
with
Section
25.15
of
the
Excise
Tax
Act.
However,
in
doing
so
the
Minister
has
accepted
the
volumes
of
natural
gas
liquids
produced
at
our
Empress
gas
reprocessing
plant
but
disallowed
the
analysis
of
the
metered
volumes
produced.
In
effect,
the
Minister
has
imposed
the
rates
of
tax
on
commercial
or
sales
volumes
as
opposed
to
production
volumes
and
disallowed
the
calculation
of
tax
in
accordance
with
Section
25.15(4)(d).
Please
advise
when
you
have
set
a
date
for
hearing
of
the
Appeal.
This
letter
was
acknowledged
by
the
Secretary
of
the
Board
in
the
following
terms,
on
April
13,
1984.
The
applicant
seeks
a
declaration
that
the
application
and
rates
of
tax
on
natural
gas
liquids,
when
time
of
receipt
has
been
determined
in
accordance
with
Section
25.15
of
the
Excise
Tax
Act,
should
be
on
the
basis
of
metered
volumes
of
the
mixture
produced
at
a
gas
reprocessing
plant
pursuant
to
Section
25.14(4)(d)
of
the
Act.
Counsel
for
the
appellant
Petro-Canada,
in
his
submission
to
the
Board
dated
September
12,
1984,
restated
what
was
sought
by
his
client
when
he
said
in
his
opening
two
paragraphs:
Petro-Canada
Inc.
does
hereby
make
application,
pursuant
to
Section
59
of
the
Excise
Tax
Act,
for
a
declaration
as
to
whether
any
or
what
rates
of
excise
tax
are
payable
on
natural
gas
liquids
produced
at
the
Empress
Plant
located
in
south
eastern
Alberta.
This
appeal
relates
to
the
audit
assessment
dated
March
11,
1983
made
by
Revenue
Canada,
Excise,
which
ruled
that
the
natural
gas
liquids
produced
between
November
1980
and
October
1982
at
the
Empress
Plant
did
not
constitute
a
mixture
of
two
or
more
natural
gas
liquids
as
defined
in
the
Excise
Tax
Act,
but
rather
pure
products.
The
appellant
The
Alberta
Gas
Ethylene
Company
Ltd.
intervened
at
the
hearing
of
the
Tariff
Board
on
September
26,
1984,
was
granted
the
status
of
intervenant
and
called
witnesses.
Early
in
the
proceedings
the
respondent
objected
to
the
jurisdiction
of
the
Board
to
hear
the
appeal.
That
objection,
in
general
terms,
was
that
Petro-Canada
by
its
appeal
was
asking
the
Board
to
review
a
decision
of
the
Minister
of
National
Revenue
for
Customs
and
Excise
("the
Minister”)
made
pursuant
to
section
25.15
of
the
Act.
It
was
counsel
for
the
Minister's
contention,
at
that
time,
that
the
decision
of
the
Minister
was
an
administrative
decision
not
amenable
to
an
appeal
under
subsection
59(1)
of
the
Act,
the
section
pursuant
to
which
the
appeal
was
brought.
If
it
was
reviewable
at
all,
he
said,
it
could
only
be
reviewed
by
a
court
with
supervisory
powers.
The
Board
reserved
its
decision,
on
the
jurisdictional
issue,
heard
the
appeal
on
the
merits
and
eventually
decided
that
it
had
jurisdiction
to
hear
the
appeal
but
dismissed
it
on
the
merits
on
the
basis
that
under
section
25.15
"the
Minister’s
discretion
is
absolute.”
It
is
from
the
portion
of
the
decision
on
the
merits
that
this
appeal
is
brought,
the
appellant,
of
course,
agreeing
with
the
Board's
finding
as
to
its
jurisdiction.
The
respondent
attacked
the
Board's
finding
that
it
had
jurisdiction
to
hear
Petro-Canada’s
appeal
but
supported
its
disposition
on
the
merits.
I
will
deal
first
with
the
jurisdictional
issue.
The
other
appellant,
The
Alberta
Gas
Ethylene
Company
Ltd.,
neither
submitted
a
memorandum
of
fact
and
law
nor
did
it
appear
through
counsel
at
the
hearing
of
the
appeal.
Section
59
of
the
Act,
being
the
section
upon
which
the
appellants
rely
as
clothing
the
Board
with
jurisdiction
on
the
issue
raised
by
the
appellant
in
its
appeal
to
the
Board,
reads
as
follows:
59.
(1)
Where
any
difference
arises
or
where
any
doubt
exists
as
to
whether
any
or
what
rate
of
tax
is
payable
on
any
article
or
on
transportation
by
air
under
this
Act,
the
Tariff
Board
constituted
by
the
Tariff
Board
Act
may
declare
what
rate
of
tax
is
payable
thereon
or
that
the
article
or
transportation
by
air
is
exempt
from
tax
under
this
Act.
(2)
Before
making
a
declaration
under
subsection
(1)
the
Tariff
Board
shall
provide
for
a
hearing
and
shall
publish
a
notice
thereof
in
the
Canada
Gazette
at
least
twenty-one
days
prior
to
the
day
of
the
hearing;
and
any
person
who,
on
or
before
that
day,
enters
an
appearance
with
the
Secretary
of
the
Tariff
Board
may
be
heard
at
the
hearing.
(3)
A
declaration
by
the
tariff
Board
under
this
section
is
final
and
conclusive,
subject
to
appeal
as
provided
in
section
60.
(4)
[Repealed,
1980-81-82-83,
c.
68,
s.
24]
(5)
An
application
to
the
Tariff
Board
for
a
declaration,
or
the
entering
of
an
appearance,
with
the
Secretary
of
the
Tariff
Board
under
subsection
(2)
of
this
section,
shall,
for
the
purposes
of
section
44,
be
deemed
to
be
an
application
in
writing.
Section
25.15
appears
in
Part
IV.1
of
the
Act,
which
Part
is
headed
“Natural
Gas
and
Gas
Liquids
Tax.”
That
subsection
reads
in
this
way:
25.15
Whenever
marketable
pipeline
gas
or
natural
gas
liquids
are
received
under
such
circumstances
or
conditions
as
render
it
difficult
to
determine
the
time
of
receipt
or
quantity
of
such
gas
or
liquids
because
of
inadequate
procedures
or
measuring
devices,
the
Minister
may
determine
the
time
of
receipt
or
quantity
for
the
purpose
of
determining
the
tax
payable
under
this
Part.
That
section
was
made
necessary
in
the
scheme
of
the
Act
by
reason
of
subsection
25.14(1)
and
25.14(5)
of
the
Act,
reading
as
follows:
25.14
(1)
There
shall
be
imposed,
levied
and
collected
on
the
first
receipt
of
natural
gas
liquids
produced
at
a
gas
processing
plant
or
a
gas
reprocessing
plant
for
removal
from
the
plant
a
tax
at
the
rate
specified
in
subsection
(4).
(5)
The
tax
imposed
under
this
section
is
payable
(a)
at
the
time
the
natural
gas
liquids
are
first
received
for
removal
from
the
gas
processing
plant
or
gas
reprocessing
plant
where
they
were
produced;
and
(b)
by
the
person
who
owns
the
natural
gas
liquids
at
the
time
described
in
paragraph
(a).
The
terms
relevant
to
the
resolution
of
this
appeal
are
defined
in
subsection
25.1
of
part
IV.1
of
the
Act.
Those
terms
are:
“gas”
means
any
hydrocarbon
or
mixture
of
hydrocarbon
that,
at
a
temperature
of
15°C
and
a
pressure
of
101.325
KPa,
is
in
a
gaseous
state
and
that
is
taken
or
removed
from
a
natural
reservoir
in
Canada;
“gas
processing
plant”
means
an
installation
in
Canada
at
which
natural
gas
liquids
or
other
components
are
removed
from
gas
by
means
of
field
scrubbers,
field
separators
or
other
field
extraction
facilities
or
at
which
natural
gas
liquids
are
removed
from
oil
by
such
means;
“gas
reprocessing
plant”
means
an
installation
in
Canada
at
which
natural
gas
liquids
are
removed
from
marketable
pipeline
gas
and
at
which
such
liquids
and
the
remaining
marketable
pipeline
gas
are
not
further
processed;
“marketable
pipeline
gas”
means
gas,
other
than
(a)
natural
gas
liquids,
and,
(b)
gas
injected
into
a
natural
reservoir
for
any
purpose,
other
than
storage;
“natural
gas
liquids”
means
(a)
ethane,
(b)
propane,
(c)
butanes,
or
(d)
any
mixture
of
two
or
more
ethane,
propane
and
butanes,
whether
or
not
in
combination
with
other
substances,
that
are
produced
at
a
gas
processing
plant
or
a
gas
reprocessing
plant.
Definitions
of
ethane,
propane
or
butane
are
not
included
in
the
Act
and
it
is
unnecessary
for
the
decision
on
the
preliminary
issue
that
their
meanings
be
determined.
However,
for
a
better
appreciation
of
the
jurisdictional
issue
a
brief
factual
review
of
the
problem
exposed
by
the
Minister’s
ruling,
pursuant
to
section
25.15,
would
be
helpful.
Petro-Canada
operates
the
Empress
Plant
in
Alberta
at
which
natural
gas
liquids
are
extracted
from
marketable
pipeline
gas.
The
liquids
are
fractionated
into
ethane,
propane,
iso
and
normal
butane,
and
natural
gasolines
(pentanes
plus)
to
meet
commercial
specifications.
The
first
step
in
the
liquid
condensation
process
is
the
removal
of
methane
in
a
de-methanizer.
The
methane
is
then
fed
through
a
de-ethanizer
where
ethane
is
removed,
following
which,
in
succession,
it
is
fed
through
a
de-propanizer
for
removal
of
propane
and
a
de-butanizer
for
removal
of
butane
and
natural
gasoline.
Finally
the
butane
product
is
split
into
iso-butane
product
and
normal
butane
product.
Each
of
the
products
ethane,
propane
and
butane,
after
fractionation,
still
retain
small
quantities
of
one
or
more
of
the
other
two
substances
as
well
as
other
substances
not
falling
within
the
definition
of
“natural
gas
liquids."
For
example,
the
ethane
product
contains,
in
addition
to
ethane
—
methane,
carbon
dioxide
(CO,)
and
propane.
Butane
contains,
in
addition
to
butane
—
propane
and
pentanes.
The
issues
in
the
appeal
arise
because
the
Minister
has
assessed
excise
tax
on
the
basis
of
volumes
of
natural
gas
liquids
reported
by
Petro-Canada
to
the
Energy
Conservation
Board
of
Alberta.
Petro-Canada
measures
the
volumes
of
such
gas
liquids
by
using
turbine
meters
and
vortex
shedding
meters
after
the
fractionation
process.
The
total
amount
of
each
natural
gas
liquid
produced
by
the
fractionation
process
is
reported
monthly
to
the
Board.
In
addition,
each
day
the
natural
gas
liquids
are
analyzed
in
spot
checks
to
determine
the
constituent
elements
of
each.
While
the
constituent
elements
of
each
of
the
defined
natural
gas
liquids
can
be
determined
accurately
in
the
component
analysis,
the
quantities
of
each
element
are
not
constant.
The
results
of
each
analysis
may
differ
from
those
of
previous
days
or
later
days.
The
difficulty
in
determining
volumes
of
natural
gas
liquids
for
excise
tax
purposes
arises
not
only
from
the
difficulty
in
obtaining
analyses
of
the
components
which
have
some
constancy
but
is
also
due
to
the
nature
of
the
Empress
Plant.
It
is
an
integrated
plant
in
the
sense
that
the
fractionation
process
follows
immediately
after
the
extraction
process
where
the
methane
product
is
obtained.
Apparently,
for
this
reason
meters
cannot
be
placed
immediately
after
the
extraction
process,
which
would
normally
be
the
point
of
“first
receipt"
of
natural
gas
liquids
in
the
determination
of
volumes
for
excise
tax
purposes.
The
meters
are,
therefore,
located
in
such
manner
as
to
measure
post
fractionated
volumes
of
natural
gas
liquids
produced.
The
Minister
accordingly
applied
section
25.15
in
the
determination
of
the
“time
of
receipt"
and
held
it
to
be
at
the
post-fractionation
stage.
He
also
determined
that
the
tax
was
payable
on
the
volumes
of
natural
gas
liquids
produced,
metered
as
above
described
and
as
reported
to
the
Alberta
Energy
Resources
Conservation
Board.
Petro-Canada
argued
that
the
quantities
so
determined
were
incorrect
because
they
failed
to
take
into
account
the
component
analyses
of
the
natural
gas
liquids.
instead,
the
Minister,
wrongly
in
its
view,
calculated
the
tax
on
the
volumes
of
natural
gas
liquids
reported
to
the
Alberta
Energy
Resources
Conservation
Board.
This
results
in
two
errors
it
was
said:
(1)
Since
the
rates
of
tax
are
different
for
ethane,
propane
and
butane,
the
volumes
used
by
the
Minister
distort
the
tax
payable;
(2)
Further
distortion
occurs
because
components,
which
are
not
defined.
as
natural
gas
liquids
in
the
Act,
such
as
methane,
carbon
dioxide
and
pentanes
plus,
are
not
susceptible
to
tax.
The
effect
of
their
presence
in
the
natural
gas
liquids,
although
not
legally
taxable,
is
that
tax
is
paid
on
them.
The
declaration
sought
from
the
Board
by
the
appellants,
in
its
April
9,
1984
notice
of
appeal,
was
that
the
excise
tax
unpaid
should
have
been
on
the
metered
volumes
produced
not
simply
the
natural
gas
liquids
produced.
It
is
from
the
Board's
refusal
to
make
the
declaration
that
this
appeal
has
been
brought.
I
return
now
to
the
threshold
issue
of
the
Board’s
jurisdiction
to
make
the
declaration
sought.
Ever
since
the
judgment
of
the
Supreme
Court
of
Canada
in
The
Goodyear
Tire
and
Rubber
Company
of
Canada,
et
al
v.
The
T.
Eaton
Company
Limited,
et
al,
[1956]
S.C.R.
610,
it
has
been
clear
that
(to
quote
the
language
of
Rand,
J.
at
616
referring
to
the
predecessor
of
section
59):
The
language
“whether
any
or
what
rate
of
tax
is
payable
on
any
article”
raises
a
question
that,
in
effect,
asks
for
a
decision
in
rem,
a
decision
determining
the
rate
as
applied
to
the
article
regardless
of
personal
liability
for
tax.
It
is
only
for
that
reason
that
a
general
hearing
is
required
and
that
the
declaration
is
to
be,
by
subsection
3,
“final
and
conclusive”.
To
what
extent,
then,
does
that
interpretation
of
section
59
powers
confer
any
right
upon
the
Board
to
review
the
decision
of
the
Minister
made
pursuant
to
the
statutory
power
granted
to
him
by
section
25.15
of
the
Act?
in
contending
that
no
such
authority
rests
with
the
Board,
the
respondent
advanced
a
three-pronged
argument,
only
one
branch
of
which
it
will
be
necessary
for
me
to
discuss
in
view
of
the
conclusion
to
which
I
have
come.
That
relates
to
his
submission
that
section
25.15
of
the
Act,
given
its
plain,
ordinary
and
grammatical
meaning,
enables
the
Minister
“to
determine
the
time
of
receipt
or
quantity
.
.
.”
of
(in
this
case)
natural
gas
liquids,
when
circumstances
or
conditions
render
it
difficult
to
determine
(a)
such
time
of
receipt
or
(b)
the
quantities
of
natural
gas
liquids
received.
That
is
quite
a
different,
separate
and
distinct
function
from
that
of
the
Board
under
subsection
59(1)
which
plainly
does
not,
in
his
view,
authorize
a
review
or
revision
of
that
decision.
The
reason
for
this
is
because
the
Minister's
determination
did
not
result
in
a
“difference"
or
“doubt
.
.
.
as
to
whether
any
or
what
rate
of
tax
is
payable
on
any
article
.
.
.”
That
is
a
prerequisite
for
the
exercise
of
the
Board’s
jurisdiction.
On
the
other
hand,
counsel
for
the
appellant
argued,
as
I
understood
him,
that
the
result
of
the
Minister's
ruling
was
that
not
only
did
a
“difference"
arise
between
the
appellant
and
the
respondent
but,
more
precisely,
a
“doubt"
existed
“‘as
to
whether
any
or
what
rate
of
tax
is
payable
.
.
."
on
the
natural
gas
liquid
volumes
at
the
time
of
receipt.
The
presence
of
the
“difference”
and
“doubt”
brought
the
appellant
within
the
jurisdiction
of
the
Board
under
subsection
59(1),
in
counsel’s
submission.
What
the
appellant
Petro-Canada
sought
in
its
appeal
to
the
Board
was
a
decision
in
rem
since
it
asked
for
a
declaration
as
to
whether
any
or
what
rate
of
tax
was
payable
on
specific
substances.
Since
the
prerequisites
had
been
established
for
the
making
of
such
a
declaration,
the
Board
had
the
authority
to
make
it.
Having
given
the
arguments
of
each
counsel
the
best
consideration
that
I
can,
I
have
concluded
that
the
Board
does
not
have
the
jurisdiction
it
asserted
in
this
case.
The
only
reasonable
interpretation
of
the
substance
of
what
is
sought
by
the
appellant
in
these
proceedings
as
opposed
to
the
form
of
its
appeal,
is
that
it
required
a
review
of
the
Minister’s
determination,
made
pursuant
to
section
25.15,
of
the
time
of
receipt
of
the
natural
gas
liquids
at
the
Empress
Plant
and
of
the
quantities
thereof
for
the
purpose
of
determining
the
tax.
That
determination
became
necessary
because
of
his
conclusion
that
the
natural
gas
liquids
were
received
in
such
a
manner
as
to
render
it
difficult
to
determine
the
time
of
receipt
and
quantities
of
gas.
In
making
this
determination
he
was
performing
an
administrative
function
not
subject
to
appeal
to
the
Board.
It
is,
in
my
view,
clear
from
Petro-Canada's
letter
of
appeal
dated
April
9,
1984,
(supra,
page
315)
and,
in
particular,
paragraph
2
thereof
that
it
was
the
Minister’s
section
25.15
determination
which
formed
the
basis
of
its
complaint.
The
result
of
the
alleged
faulty
determination,
as
paragraph
3
of
the
letter
pointed
out,
was
the
imposition
of
tax
under
section
25.14
on
volumes
of
liquid
gas
allegedly
improperly
calculated.
That
this
constitutes
the
genesis
of
the
appeal
is
made
abundantly
clear
by
paragraph
2
of
its
counsel's
formal
submissions
dated
September
12,
1984
(supra,
page
316).
In
form,
of
course,
it
would
appear
that
the
appeal
was
brought
in
the
terms
of
the
Board's
powers
under
section
59.
Both
the
opening
paragraphs
of
the
April
9
letter
and
of
the
September
submission
appear
to
bear
that
out.
But,
as
I
have
said,
in
substance
the
appeal
seeks
a
review
of
or
an
appeal
from,
the
Minister's
section
25.15
determination.
That
is
not
within
the
jurisdictional
competence
of
the
Board
although
it
might
well
have
been
the
subject
of
review
proceedings
in
one
of
the
divisions
of
this
Court.
The
Board,
however,
was
not
the
proper
forum
for
that
review
or
appeal
since
its
jurisdiction
is
precisely
limited
by
the
terms
of
subsection
59.
I
am
of
the
opinion,
therefore,
that
the
Board
wrongly
held
that
it
had
jurisdiction
to
deal
with
appellants’
appeal
on
the
merits
and
its
declaration
must,
therefore,
be
set
aside.
In
view
of
this
conclusion,
it
is
unnecessary
for
me
to
deal
with
two
other
arguments
on
jurisdiction
advanced
by
the
respondent.
Nor
would
it
be
proper
to
deal
with
the
merits
of
the
appeal
due
to
the
possibility
that
any
findings
which
I
might
make
with
respect
thereto
be
deemed
to
be
preempting
other
possible
proceedings
by
the
appellants.
Accordingly,
I
would
dismiss
the
appeal.
Appeal
dismissed.
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