DuPont,
J
(Orally):—This
matter
is
before
me
by
way
of
appeal
from
the
decision
of
the
Minister
of
Revenue,
dated
December
15,
1976,
relating
to
a
retail
sales
tax
assessment.
The
appellant
is
a
corporation
incorporated
by
special
Act
of
the
Parliament
of
Canada
with
powers
to
manufacture,
use,
supply
and
dispose
of
electricity,
water
and
gas,
and
water
hydraulic
or
other
power
by
means
of
wires,
cables,
pipes,
conduits,
machinery
or
other
appliances;
and
construct,
maintain
and
operate
works
for
the
production,
sale
and
distribution
thereof.
The
municipal
corporation
of
the
City
of
Cornwall
entered
into
the
contract
authorized
by
by-laws
under
which
the
appellant,
during
all
relevant
times,
supplied
electrical
power
or
energy
required
by
such
municipality.
In
the
period
commencing
July
1,
1972
and
ending
June
30,
1975,
the
appellant
purchased
tangible,
personal
property
which
was
used
in
the
manufacture
of
such
electric
energy
and
which
remained,
at
all
times,
the
property
of
the
appellant’s.
This
appeal
is
concerned
with
the
assessment
of
retail
sales
tax
upon
the
purchase
of
that
property.
The
appellant
alleges
that.
it
is
exempt
of
such
tax.
The
Retail
Sales
Tax
Act,
RSO
1970,
c
415
provided
in
paragraph
5(1)60
as
follows:
5.(1)
The
purchaser
of
the
following
classes
of
tangible
personal
property
and
taxable
services
is
exempt
from
the
tax
imposed
by
this
Act:
60.
tangible
personal
property
that
is
purchased
in
good
faith
pursuant
to
a
contract
entered
into
after
the
1st
day
of
June
1964
for
use
exclusively
and
not
for
resale
by
a
municipality
or
a
local
board
thereof
and
that
enters
directly
into
and
becomes
part
of
the
construction
of
capital
works.
Paragraph
5(1)60
of
the
Act
was
amended
by
SO
1973,
c
23,
subsec
46(6)
to
read
as
follows:
60.
tangible
personal
property
that
enters
directly
into
and
becomes
part
of
the
construction
of
capital
works
that,
upon
completion,
are
owned
by
a
municipality
or
by
a
local
board
thereof,
if
the
cost
of
such
tangible
personal
property
is
shown
to
have
been
directly
and
substantially
borne
by
the
municipality
or
local
board
that
owns
the
capital
works
into
the
construction
of
which
such
tangible
personal
property
entered.
Paragraph
30
of
section
1
of
Regulation
785,
RRO
1970
passed
under
the
Act
states
that
in
the
Act
and
Regulations:
“local
board”
means
a
school
board,
public
utility
commission,
transportation
commission,
public
library
board,
board
of
park
management,
local
board
of
health,
board
of
commissioners
of
police,
planning
board,
or
any
other
board,
commission
committee,
body
or
local
authority
established
or
exercising
any
power
or
authority
under
any
general
or
special
Act
with
respect
to
any
of
the
affairs
or
purposes,
including
school
purposes,
of
a
municipality
or
of
two
or
more
municipalities
or
parts
thereof
and
includes
the
Ontario
Water
Resources
Commission
and
a
conservation
authority.
It
is
the
submission
of
the
appellant
that
for
the
purposes
of
the
Act,
it
is
a
body
established
or
exercising
power
or
authority
under
such
general
or
special
Act
with
respect
to
the
affairs
of
a
municipality,
and
accordingly
entitled
to
exemption
under
the
Act.
The
purpose
of
the
exemption
provided
in
paragraph
5(1)60
of
the
Act
was
dealt
with
by
His
Lordship
Mr
Justice
Keith
in
Re
Baiocco
Construction
Limited
and
Ministry
of
Revenue
of
Ontario,
[1972]
3
OR
121.
In
that
case
the
court
was
concerned
with
a
registered
subdivision
agreement
whereunder
a
subdivider
agreed
to
provide
for
streets,
storm
sewers
and
other
municipal
services,
pursuant
to
which
it
contracted
with
an
agent
or
subcontractor
to
do
the
work
under
such
agreement.
The
agent
purchased
tangible
property
for
such
purpose,
and
was
held
entitled
to
relief
from
the
payment
of
retail
sales
tax.
I
quote
from
the
judgment
of
Keith,
J
at
p
123:
I
think
on
any
fair
reading
of
this
statute,
which
has
obviously
been
enacted
for
sensible
purposes
and
to
prevent
the
unnecessary
loading
of
sales
tax
on
municipal
services
and
the
recipients
of
them,
that
the
word
‘exclusively’
must
be
given
a
reasonable
interpretation
and,
in
my
view,
when
a
sub-divider
enters
into
a
contractual
obligation
to
provide
these
services
for
the
municipality
and,
in
turn,
seeks
an
agent
or
a
subcontractor
to
do
a
certain
part
of
that
work,
that
in
no
way
derogates
from
the
purpose
for
which
the
tangible
personal
property
was
purchased
in
the
first
instance.
It
was
implicit
in
that
case
that
the
goods
purchased
were
to
become
the
exclusive
property
of
the
municipality
and
solely
for
the
benefit
of
such
municipality.
In
the
present
case
the
property
in
question
is
to
remain
that
of
the
appellant.
While
it
is
argued
that
it
is
used
exclusively
for
the
manufacture
of
power
for
the
municipality,
the
agreed
statement
of
facts
does
not
so
provide.
Counsel
for
the
respondent
is
not
prepared
to
admit
such
allegation
of
exclusive
use.
It
is
clear
that
the
terms
of
the
private
Act,
pursuant
to
which
the
appellant
was
incorporated,
provides
for
its
right
to
carry
on
its
operations
over
a
wide
area,
and
thus
free
to
use
all
its
assets
including
the
property
in
question
for
the
purpose
of
executing
any
of
its
undertakings.
It
was
incorporated
for
the
purpose
of
carrying
on
business
for
profit
for
its
shareholders
and
not
for
the
purpose
of
manufacturing
power
for
the
municipality.
In
every
sense,
the
appellant
is
an
independent
contractor
carrying
on
a
commercial
operation
for
gain.
It
is
the
court’s
view
that
the
term
“local
board’’
as
used
in
paragraph
30
of
section
1
of
the
Regulations
does
not
encompass
a
corporation
in
the
position
of
the
appellant.
As
I
indicated,
it
is
a
private
corporation
operating
for
profit
and,
in
so
doing,
is
carrying
on
its.
own
affairs
and
not
carrying
on
“the
affairs
of
the
municipality”
as
understood
by
the
section.
The
interpretation
of
the
word
“body”
as
contained
in
paragraph
30
can
only
be
arrived
at
by
considering
its
meaning
within
the
context
of
the
entire
section
which
specifically
lists
eight
bodies
to
which
the
provision
applies.
Such
bodies
are
those
normally
existing
as
mun-
icipally
established
for
the
governing
and
regulating
of
civic
affairs
with
a
view
to
providing
certain
services
for
the
municipality.
The
appellant,
which
is
a
private
corporation
having
as
its
object
of
carrying
on
a
commercial
operation
for
the
financial
benefit
of
its
shareholders,
does
not
fall
within
that
class.
The
principle
of
statutory
construction
known
as
ejusdem
generis
doctrine
applies
restricting
the
construction
of
the
general
words
within
the
section
to
the
class
indicated
in
the
specific
part.
Paragraph
60
of
subsection
(1)
of
section
5
of
The
Retail
Sales
Tax
Act,
as
it
existed
prior
to
May
1973,
has
reference
to
property
purchased
for
use
“exclusively”
by
a
municipality.
On
the
facts
of
this
case,
the
property
in
question
is
being
used
by
the
appellant
and
not
the
municipality.
Neither
can
it
be
said
that
such
property
was
purchased
for
the
exclusive
use
by
the
appellant
for
the
manufacture
of
power
for
the
municipality,
as
it
is
free
to
use
such
property
in
contracts
with
other
parties,
although
the
evidence
does
not
establish
such
additional
use.
The
amendment
to
paragraph
60
refers
to
the
need
for
such
property
to
be
owned
by
either
the
municipality
or
local
board.
I
have
already
held
that
the
appellant
is
not
a
“local
board”
as
understood
by
the
section.
It
is
also
clear
that
the
property
remains,
at
all
times,
that
of
the
appellant
corporation
and
is
never
vested
in
the
municipality.
The
appellant
seeks
the
benefit
of
an
exemption
under
the
Act.
The
onus
is
upon
it
to
establish
that
it
comes
clearly
within
such
exemption.
I
refer
in
particular
to
the
case
of
Assessment
Commissioner
of
the
Village
of
Stouffville
v
Mennonite
Home
Association
of
York
County
(1973),
DLR
(2d)
237,
where
the
Honourable
Mr
Justice
Spence,
speaking
for
the
majority
of
the
court,
stated
at
page
240:
.
.
.
It
is,
of
course,
clearly
established
that
although
the
words
of
the
statute
must
plainly
assess
the
tax
in
order
to
bring
the
subject
within
the
levy,
the
subject
must,
in
turn,
clearly
establish
that
his
case
falls
within
the
exemption
in
order
to
claim
his
benefits.
I
find
that
the
appellant
has
not
discharged
the
onus
cast
upon
it,
and
the
appeal
is
thus
dismissed.
At
the
request
of
counsel,
I
wish
to
add,
however,
that
the
disposition
of
this
appeal
might
indeed
have
been
otherwise
had
it
been
established
that
the
company
had
been
incorporated
for
the
sole
purpose
of
manufacturing
power
for
the
municipality,
had
carried
on
its
business
within
such
limitation,
and
that
the
property
purchased
was
to
become
the
property
of
the
municipality
on
the
termination
of
the
contract.
Such
facts
would
support
an
allegation
that
the
property
was
purchased
substantially
for
the
benefit
of
the
municipality.
However,
such
facts
are
not
present
in
this
case.
Such
observation
is
made
at
the
request
of
both
counsel.
The
motion
for
judgment
is
dismissed
with
costs.
To
the
extent
that
this
motion
is
to
be
considered
an
appeal
from
the
decision
of
the
Minister
which
is
hereby
upheld,
it
is
dismissed
with
costs.
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