Goetz,
TC
J:—This
is
an
appeal
by
the
appellant
with
respect
to
its
taxation
years
1973
to
1979
inclusive.
The
Minister
assessed
tax
on
the
basis
that
the
appellant’s
income
for
the
respective
years
in
question
was
from
property
in
accordance
with
subsection
149(5)
of
the
Income
Tax
Act.
The
appellant,
on
the
other
hand,
contends
that
it
comes
squarely
under
paragraph
149(1
)(1),
that
no
tax
is
payable
and
that,
specifically,
it
does
not
come
within
the
provisions
of
subsection
149(5).
I
will
deal
more
specifically
with
these
sections
later
in
this
judgment.
The
Manitoba
Curling
Association
was
organized
in
1888
by
curling
clubs
in
Manitoba
to
organize
bonspiels,
play
downs
and
to
promote
curling.
It
is
a
member
of
the
Canadian
Curling
Association
and
also
the
International
Curling
Association
and
was
incorporated
in
its
present
form
in
1980
in
order
to
get
the
benefit
of
lottery
funds.
Article
2
of
its
constitution
provides
as
follows:
The
object
shall
be
to
promote
the
game
of
Curling
in
the
Province
of
Manitoba;
to
unite
all
curling
clubs
therein
into
one
organization;
and
to
encourage
the
fraternal
relationships
with
other
neighboring
Curling
Associations.
It
has
established
several
committees,
one
of
which
is
a
task
and
development
committee
which
is
responsible
for
the
promotion
of
the
curling
game,
the
organization
of
individual
club
meetings
and
the
provision
of
video
tape
films
of
curling
in
the
schools.
There
are
196
curling
clubs
in
Manitoba
which
are
affiliated
with
the
Manitoba
Curling
Association
Inc
on
the
basis
of
an
affiliation
fee
of
$2.
The
benefits
flowing
to
the
clubs
from
the
membership
are
that
the
Association
(the
appellant)
organizes
play
downs
and
bonspiels
and
promotes
and
advertises
curling
in
general.
The
member
clubs
are
owned
by
the
shareholder
members
and
the
Association
has
no
control
over
the
operations
of
the
individual
curling
clubs
in
any
way.
In
order
to
become
a
member
of
the
Association,
an
individual
must
be
a
member
of
a
curling
club.
The
only
assets
of
the
appellant
are
sets
of
rocks
and
certain
office
equipment.
It
organizes
bonspiels
for
seniors,
veterans,
ladies,
juniors,
men,
and
senior
men.
The
individual
clubs
provide
their
facilities
which
include
the
whole
physical
structure
including
rinks
at
virtually
a
nominal
fee.
For
instance,
the
ordinary
costs
of
a
single
rink
per
day
would
be
$126,
whereas
the
Association
only
pays
$26.
This
could
run
from
8:00
am
through
to
2:00
am
the
next
day.
Entry
fees
for
bonspiels
or
play
downs
are
paid
through
the
individual
curling
clubs
to
the
Association
which,
in
turn,
incurs
expenses
for
publicity,
organization,
runners
and
communications.
The
Association’s
main
revenues
are
these
entry
fees
and
it
does
not
share
in
the
“bar
food”
revenue
accruing
during
play
downs
or
bonspiels.
To
be
a
member
of
the
Association,
the
various
curling
clubs
must
operate
a
building
with
recreation
facilities
and
of
course
the
ice
sheets,
and,
if
they
refuse
the
use
of
their
facilities
to
the
Association,
it
would
be
impossible
to
conduct
a
bonspiel.
The
Association
operates
on
the
basis
that
it
sometimes
earns
money
and
also
loses
money
for
both
bonspiels
and
play
downs.
There
are
many
outside
provincial
curling
clubs
that
play
in
bonspiels
arranged
by
the
Association
which
can
do
so
on
the
basis
that
they
are
members
of
the
Canadian
Curling
Association
or
of
the
International
Curling
Association.
Mr
Hal
Hooker,
manager
of
the
Granite
Curling
Club
in
Winnipeg
stated
in
evidence
that
some
of
the
activities
in
the
club
that
he
manages
are
curling,
billiards,
saunas,
bars
and
food.
He
stated
that
the
Association
has
no
hold
whatsoever
on
the
club
and
that
the
Association
for
bonspiels
and
play
downs
has
to
pay
a
very
nominal
fee
for
the
use
of
his
club’s
facilities.
All
drink
and
food
revenues
accrue
to
the
individual
club
and
not
to
the
Association.
In
the
interest
of
promoting
curling
in
the
province,
his
club
has
provided
its
facilities
to
the
Association
for
many
years
on
the
basis
mentioned
above.
Section
149(
1)(1)
of
the
taxation
years
in
issue
read
as
follows:
149
(1)
No
tax
is
payable
under
this
Part
upon
the
taxable
income
of
a
person
for
a
period
when
that
person
was
(1)
a
club,
society
or
association
that,
in
the
opinion
of
the
Minister,
was
not
a
charity
within
the
meaning
assigned
by
subsection
149.1(1)
and
that
was
organized
and
operated
exclusively
for
social
welfare,
civic
improvement,
pleasure
or
recreation
or
for
any
other
purpose
except
profit,
no
part
of
the
income
of
which
was
payable
to,
or
was
otherwise
available
for
the
personal
benefit
of,
any
proprietor,
member
or
shareholder
thereof
unless
the
proprietor,
member
or
shareholder
was
a
club,
society
or
association
the
primary
purpose
and
function
of
which
was
the
promotion
of
amateur
athletics
in
Canada;
Section
149(5)
provides
as
follows:
(5)
Notwithstanding
subsections
(1)
and
(2)
where
a
club,
society
or
association
was
for
any
period,
a
club,
society
or
association
described
in
paragraph
(1)(1)
the
main
purpose
of
which
was
to
provide
dining,
recreational
or
sporting
facilities
for
its
members
(in
this
subsection
referred
to
as
the
“club”),
an
inter
vivos
trust
shall
be
deemed
to
have
been
created
on
the
later
of
the
commencement
of
the
period
and
the
end
of
1971
and
to
have
continued
in
existence
throughout
the
period;
and,
throughout
that
period,
the
following
rules
apply;
[Emphasis
mine]
Both
of
these
sections
come
under
“Division
(H)
—
Exemptions”
of
the
Income
Tax
Act
and
the
relevant
words
upon
which
the
Minister
relies
are
contained
in
section
149(5)
and
read
as
follows:
.
.
.
the
main
purpose
of
which
was
to
provide
dining,
recreation
or
sporting
facilities
for
its
members
(in
the
subsection
referred
to
as
the
“club”)
The
Association
has
no
proprietary
interest
or
authority
over
any
of
the
individual
curling
clubs
or
its
members.
The
Association,
through
volunteers,
organizes
and
co-ordinates
curling
throughout
the
province
and
assists
in
the
organization
of
inter-club
curling
competitions.
It
engages
in
education
curling
clinics
in
order
to
promote
the
game
through
education.
A
great
amount
of
its
time
is
expended
in
this
area
over
and
above
the
volunteer
members’
work
in
connection
with
the
annual
bonspiels
and
play
downs.
Its
main
purpose
is
that
of
organizing
and
promoting
the
game
of
curling
in
Manitoba
at
all
levels.
Each
club
designates
certain
of
its
members
as
delegates
to
the
Association.
Counsel
for
the
appellant
stated
that
the
Association
conducts
the
largest
bonspiel
in
the
world
which
is
open
to
curlers
from
other
provinces
in
Canada,
the
United
States
and
Europe.
The
Association
has
no
proprietary
interests
in
its
member
curling
clubs
and
certainly
has
no
home,
or
facilities,
whether
through
ownership,
leasing,
or
otherwise.
It
is
my
view
that
the
Manitoba
Curling
Association
annual
bonspiel
and
others
are
in
effect
the
result
of
all
the
curling
clubs
in
Manitoba
cooperating
to
provide
the
facilities
for
such
events.
The
Minister
takes
the
position
that
the
annual
bonspiels
and
play
downs
are
restricted
to
MCA
members.
This
is
not
true.
The
Minister
treats
the
word
“facilities”
as
a
verb
as
opposed
to
a
physical
entity.
The
member
curling
clubs
provide
their
facilities
on
a
voluntary
basis
for
a
very
nominal
fee
to
the
Association.
The
Minister
vacillated
on
the
interpretation
of
subsection
149(5)
when
one
B
Cumming,
on
behalf
of
the
chief
audit
department,
advised
the
Association
in
writing
on
July
11,
1980
that
it
qualified
as
a
non-profit
organization
and
that
it
remains
exempt
from
income
tax
on
any
profits
earned
as
long
as
it
remains
within
its
stated
objectives.
This
was
reversed
in
a
letter
dated
September
11,
1980
by
Mr
Cummings
on
behalf
of
the
chief
of
audit
and
further
confirmed
by
J
C
Boucher
of
the
appeals
branch
in
a
letter
of
August
11,
1981.
In
order
for
the
Association
to
promote
the
game
of
curling,
competitions
are
very
important,
and
it
spends
many,
many
hours
in
the
area
of
promotion.
I
quote
from
Webster
Living
Dictionary,
1973-1974
edition,
the
definition
of
“facility”:
the
quality
of
being
easily
performed
or
guided;
ease
in
performance;
readiness
proceeding
from
skill
or
use;
dexterity;
freedom
from
difficulty;
the
means
by
which
the
accomplishment
of
anything
is
rendered
easier;
often
pl.
something
built
and
activated
to
serve
a
particular
purpose;
as,
the
school’s
luncheon
facilities.
Clearly,
the
word
“facilities”
as
used
in
subsection
149(5),
in
the
spirit
of
the
legislation,
contemplates,
when
it
uses
the
word
facilities,
a
physical
thing
such
as
a
building.
The
appellant
owns
no
physical
facilities
other
than
curling
rocks
and
its
office
equipment.
To
organize
the
play
downs
and
bonspiels,
the
Association
must
rely
on
the
beneficence
of
its
member
curling
clubs
which,
in
fact,
own
the
facilities
and
which,
at
a
nominal
fee,
provide
them
for
play
downs
and
bonspiels.
Clearly,
the
Association
is
an
umbrella
organization
established
for
the
purpose
of
promoting
the
sport
of
curling.
It
is
not
like
a
tennis
club
or
a
golf
club
which
owns
its
own
facilities
and
its
promotional
operations
in
no
way
reflect
that
type
of
operation.
In
that
there
is
no
jurisprudence
relating
to
subsection
149(5),
I
think
it
can
be
fairly
stated
that
the
purpose
of
Parliament
in
enacting
this
section
of
the
Income
Tax
Act
related
to,
as
I
mentioned,
golf
clubs,
tennis
clubs
and,
further,
such
other
clubs
as
country
clubs,
health
clubs,
recreation
clubs,
etc.
These
clubs
all
have
in
common
the
fact
that
they
either
lease
or
own,
their
facilities.
The
evidence
before
me
is
quite
clear
that
the
Association
does
not
own
or
lease
any
facilities
for
the
purpose
of
dining,
recreation
or
sporting
events.
I
do
not
agree
with
the
Crown’s
contention
that
facilities
must
be
interpreted
as
“to
facilitate”.
The
word
“facilities”
in
subsection
149(5)
to
me
refers
to
physical
buildings.
Although
I
realize
that
the
section
under
which
the
Minister
purports
to
assess
tax
against
the
Association
is
an
exemption
provision,
I
do
not
hesitate
in
the
present
instance
to
equate
the
word
“facilities”
with
a
verb
as
opposed
to
a
noun.
My
interpretation
is
that
the
word
“facilities”
in
subsection
149(5)
is
a
noun
and
if
there
is
ambiguity
in
the
meaning
and
intention
of
Parliament
in
subsection
149(5),
it
should
be
construed
in
favour
of
the
taxpayer
and
I
so
do.
I
therefore
allow
the
appeal.
Appeal
allowed.
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