Jerome,
A.C.J.:—This
is
an
action
brought
by
the
Board
of
Trustees
of
the
Calgary
School
District
No.
19
(the
“
plaintiff")
appealing
a
notice
of
decision
issued
by
the
Minister
of
National
Revenue
on
behalf
of
Her
Majesty
the
Queen
(the"defendant").
The
Minister
disallowed
the
plaintiff's
application
for
a
refund
in
the
amount
of
$117,662.10
for
tax
paid
under
Part
V
of
the
Excise
Tax
Act,
R.S.C.
1970,
c.
E-13
[now
Part
VI,
R.S.C.
1985,
c.
E-15],
as
amended,
on
materials
used
in
a
construction
project
undertaken
at
Crescent
Heights
High
School
in
the
plaintiff's
school
district.
This
action,
on
consent
of
the
parties,
has
proceeded
by
way
of
stated
case
pursuant
to
Rule
475
of
the
Federal
Court
Rules.
It
was
heard
at
Vancouver,
British
Columbia,
on
March
21
and
22,
1990.
The
issue
in
this
proceeding
is
the
proper
interpretation
of
the
phrase
"for
use
exclusively
in
the
construction
of
a
building
for
that
institution”
found
in
section
44.27
of
the
Excise
Tax
Act,
R.S.C.
1970,
c.
E-13,
as
amended
by
S.C.
1986,
c.
9,
s.
34
[now
R.S.C.
1985,
c.
E-15,
s.
70].
At
the
time
of
the
joint
application
to
proceed
by
way
of
stated
case
(February
7,
1990),
there
were
several
similar
cases
pending
in
this
Court,
before
the
Canadian
International
Trade
Tribunal
and
in
the
Excise
Appeals
Directorate
of
the
Department
of
National
Revenue.
The
Department
of
Justice
has
been
instructed
to
proceed
with
this
action
as
a
test
case
to
provide
the
Department
of
National
Revenue
with
some
guidance
as
to
the
proper
interpretation
of
section
44.27
of
the
Excise
Tax
Act.
An
agreed
statement
of
facts
indicates
that
the
plaintiff
is
a
corporate
body
established
under
the
School
Act,
R.S.A.
1980,
c.
S-3.
The
Crescent
Heights
School
is
located
in
the
plaintiff's
school
district.
The
school
was
constructed
in
1928
and
there
were
changes
and/or
additions
to
the
original
building
in
1948,
1950,
1965
and
1967.
By
1984,
however,
the
plaintiff
was
of
the
opinion
that
the
Crescent
Heights
School
was
no
longer
a
functional
educational
facility.
Generally,
the
plaintiff
determined
that
the
facility
was
outdated,
worn
out,
and
that
it
had
the
following
specific
problems:
(a)
drama
and
music
facilities
were
inadequate;
(b)
auxiliary
gymnasium
and
assembly
hall
facilities
were
inadequate;
(c)
cafeteria
facilities
were
badly
located,
outdated
and
underutilized;
(d)
administration
facilities
were
outdated
and
too
small;
(e)
corridors
were
inadequate
for
the
flow
of
students
changing
classes;
(f)
there
were
insufficient
science
rooms;
(g)
classroom
lighting
was
inadequate
and
outdated;
(h)
parking
facilities
for
staff
were
inadequate;
(i)
heating
was
inadequate;
and
(j)
other
than
in
one
area,
there
was
no
mechanical
ventilation
system.
During
the
period
of
January
1986
to
November
1987,
the
plaintiff
undertook
certain
work
at
the
cost
of
$9,538,597.82
to
enable
the
Crescent
Heights
School
to
become
functional,
adequate,
modern
and
better
able
to
operate
as
a
school
now
and
into
the
future
(the
project").
A
construction
contract
was
executed
by
the
School
District
and
Stuart
Olson
Industrial
Contractors
Ltd.
entitled
Renovation
and
Addition”
to
and
portable
classrooms
for
Crescent
Heights
High
School,
including:
(a)
Increases
to
the
external
dimensions
of
the
existing
building
envelope,
and
all
mechanical,
electrical,
heating,
ventilating
and
air
conditioning
systems
integral
to
those
increases;
(b)
demolition
and
disposal
of
existing
structures,
fittings,
fixtures,
mechanical
and
electrical
installations;
(c)
installation
of
structures,
fittings,
fixtures,
mechanical
and
electrical
systems
equipment
to
suit
the
proposed
architectural
alterations
in
response
to
the
problems
described
above;
(d)
changes
to
existing
spaces;
(e)
work
with
respect
to
mechanical
systems;
(g)
work
with
respect
to
communications
and
security
systems;
(h)
work
with
respect
to
fire
separations,
sprinkler
systems,
fire
alarms,
fire
doors
and
emergency
lighting
as
required
to
meet
current
building
code
requirements;
and
(i)
maintenance.
Following
completion
of
the
project,
the
plaintiff
applied
for
a
tax
refund
pursuant
to
section
44.27
of
the
Excise
Tax
Act.
The
plaintiff
was
allowed
a
refund
for
those
portions
of
the
project
that
were
additions
to
the
building
envelope,
including
the
gymnasium
and
science
addition,
mechanical
room
corridor
link,
the
bridge
link,
and
the
portable
classrooms.
However,
by
notice
of
determination
(refund)
dated
February
17,
1987,
the
plaintiff
was
denied
a
refund
in
the
amount
of
$117,662.10
for
tax
paid
on
materials
used
for
the
project
other
than
those
referred
to
above.
The
plaintiff
was
informed
by
the
Minister
of
National
Revenue
(the
"Minister")
that
the
refund
application
had
been
adjusted
by
$117,662.10
due
to
the
fact
that:
"There
is
no
provision
under
the
Excise
Tax
Act
for
refund
of
tax
on
materialsused
for
renovations”.
Following
the
hearing
counsel,
at
my
request,
provided
me
with
figures
indicating
that
after
deducting
amounts
not
related
to
construction
items
from
the
contract
total,
it
appears
that
approximately
$1,841,028
was
allowed
as
new
construction
while
$6,912,756
was
not.
A
notice
of
objection
was
filed
by
the
plaintiff
on
March
23,
1987.
The
plaintiff
maintained
that
the
Calgary
Board
of
Education
is
"an
educational
institution”
within
the
meaning
of
section
44.27
of
the
Act
and
that
the
tax
was
paid
under
Part
V
of
the
Act
in
respect
of
materials
purchased
by
or
on
behalf
of
the
Calgary
Board
of
Education
for
use
exclusively
in
the
construction
of
the
Crescent
Heights
High
School.
According
to
the
plaintiff,
the
requirements
of
section
44.27
were
met
and
the
plaintiff
was
entitled
to
a
refund.
On
August
5,
1987,
the
Minister
issued
a
notice
of
decision
confirming
the
determination
on
the
basis
that:
In
general
terms
the
phrase
"construction
of
a
building”
as
found
in
section
44.27
of
the
Excise
Tax
Act
is
construed
to
mean
construction
of
a
new
building,
construction
of
an
addition
and
a
major
renovation
of
an
existing
building
such
as
where
the
interior
is
completely
gutted
and
reconstructed.
The
alteration
of
an
existing
building
though
it
may
involve
construction,
does
not
constitute
construction
of
a
building
which
is
the
requirement
of
section
44.27
of
the
Excise
Tax
Act.
On
November
3,
1987,
the
plaintiff
appealed
the
determination
to
this
Court.
The
defendant
filed
a
statement
of
defence
on
May
4,
1988,
and
on
February
9,
1990,
the
plaintiff
brought
a
notice
of
motion,
consented
to
by
the
defendant,
for
an
order
that
this
matter
proceed
by
way
of
stated
case.
The
order
was
issued
on
February
9,
1990,
and
the
agreed
statement
of
facts
set
out
the
following
questions
for
determination
by
this
Court:
(1)
What
is
the
meaning
of
the
phrase
“for
use
exclusively
in
the
construction
of
a
building
for
that
institution”
in
section
44.27
of
the
Excise
Tax
Act?
(2)
Does
the
entire
Project
qualify
for
refund
for
tax
paid
on
materials
pursuant
to
section
44.27
of
the
Excise
Tax
Act?
(3)
If
the
entire
Project
does
not
qualify
for
refund,
then
which
portions
of
the
Project,
if
any,
qualify
for
refund
for
tax
paid
on
materials
pursuant
to
section
44.27
of
the
Excise
Tax
Act?
The
relevant
provisions
of
the
Excise
Tax
Act
for
the
period
of
the
contract
at
issue
are
as
follows:
27.
(1)
There
shall
be
imposed,
levied
and
collected
a
consumption
sales
tax
at
the
rate
specified
in
subsection
(1.1)
on
the
sale
price
or
on
the
volume
sold
of
all
goods
(a)
produced
or
manufactured
in
Canada
.
.
.
(b)
imported
into
Canada.
.
.
(c)
sold
by
a
licensed
wholesaler.
.
.
(d)
retained
by
a
licensed
wholesaler
for
his
own
use
or
for
rental
by
him
to
others.
.
.
27.
(1.1)
Tax
imposed
by
subsection
(1)
is
imposed
.
.
.
(b)
in
the
case
of
goods
enumerated
in
Schedule
V,
at
the
rate
of
seven
per
cent;
[this
rate
was
increased
to
eight
per
cent
effective
April
1,
1986]
.
.
.
(d)
in
any
other
case,
at
the
rate
of
eleven
per
cent.
[this
rate
was
increased
to
twelve
per
cent
effective
April
1,
1986]
44.27
Where
a
tax
under
Part
V
has
been
paid
in
respect
of
any
materials
and
the
materials
have
been
purchased
by
or
on
behalf
of
(a)
a
school,
university
or
other
similar
educational
institution
for
use
exclusively
in
the
construction
of
a
building
for
that
institution,
(b)
any
organization
for
use
exclusively
in
the
construction
of
a
building
for
that
organization
that
is
to
be
used
exclusively
or
mainly
as
a
public
library
operated
by
or
on
behalf
of
that
organization
on
a
non-commercial
basis,
or
(c)
a
corporation
wholly-owned
and
controlled
by
Her
Majesty
in
right
of
a
province
that
is
established
for
the
sole
purpose
of
providing
residences
for
students
of
universities
or
other
similar
educational
institutions,
for
use
exclusively
in
the
construction
of
such
residences,
an
amount
equal
to
the
amount
of
that
tax
payable
shall,
subject
to
this
Part,
be
paid
to
that
institution,
organization
or
corporation
if
it
applies
therefor
within
two
years
after
the
materials
were
purchased.
[Section
44.27,
effective
May
1,
1986,
(S.C.
1986,
c.
9,
s.
34)
replaced
the
previous
section
46
which
read
as
follows:
46.
(1)
Where
materials
have
been
purchased
by
or
on
behalf
of
(a)
a
school,
university
or
other
similar
educational
institution
for
use
exclusively
in
the
construction
of
a
building
for
that
institution,
(b)
any
organization
.
.
.
,
or
(c)
a
corporation
.
.
.
,
and
the
tax
imposed
by
Part
V
has
been
paid
in
respect
of
those
materials,
the
Minister
may,
on
application
by
such
institution,
organization
or
corporation
in
such
form
as
the
Minister
prescribes,
made
to
the
Minister
within
four
years
from
the
time
the
materials
were
purchased,
pay
to
such
institution,
organization
or
corporation
an
amount
equal
to
that
tax.]
The
Minister
shall
only
grant
a
refund
pursuant
to
section
44.27
if
the
following
conjunctive
conditions
are
met:
1.
The
materials
upon
which
the
sales
tax
has
been
paid
were
purchased
by
or
on
behalf
of
a
qualifying
educational
institution.
2.
The
materials
are
for
use
exclusively
in
the
construction
of
a
building
for
that
institution.
There
is
no
dispute
that
the
materials
were
purchased
by
or
on
behalf
of
a
qualifying
educational
institution.
The
issue,
then,
is
whether
the
activities
undertaken
by
the
plaintiff
with
respect
to
the
Crescent
Heights
School
amount
to“
construction
of
a
building”
within
the
context
of
section
44.27.
The
terms”
construction”
and
building”
are
not
defined
in
the
Excise
Tax
Act.
The
plaintiff
submits
that
the
following
principles
of
statutory
interpretation
be
utilized
to
resolve
this
issue:
(a)
The
words
of
the
section
are
to
be
read
in
their
entire
context
in
their
grammatical
and
ordinary
sense.
(b)
harmoniously
with
the
scheme
of
the
Act,
the
object
of
the
Act
and
the
intention
of
Parliament.
(c)
Construed
liberally
in
favour
of
educational,
charitable
and
non-profit
institutions.
(d)
Construed
so
as
to
avoid
an
absurd
result.
(e)
Preferably
an
interpretation
which
is
simple
to
apply.
The
defendant
suggests
as
well
that
the
words
of
the
section
be
given
their
ordinary
grammatical
meaning,
that
they
be
considered
in
the
light
of
the
intent
of
Parliament,
and
be
given
an
interpretation
that
allows
for
ease
of
application.
The
defendant
states
that
the
onus
of
proof
is
on
the
plaintiff
to
clearly
establish
that
all
the
elements
of
section
44.27
have
been
met
in
order
to
qualify
for
the
refund.
At
one
time,
the
strict
interpretation
of
revenue
statutes
was
justified
on
the
basis
that
revenue
statutes
were
considered
to
have
no
other
governing
object
other
than
the
collection
of
taxes:
Lord
Halsbury,
in
Tennant
v.
Smith,
[1982]
A.C.
150
at
154.
Today,
however,
it
is
accepted
that
the
taxing
power
of
the
state
may
be
exercised
to
achieve
broader
economic
objectives.
This
power
is
now
used
as
an
economic
or
social
instrument
rather
than
simply
as
a
means
to
produce
revenue.
Accordingly,
there
is
no
reason
why
the
provisions
of
a
taxing
statute
should
not,
like
any
other,
be
read
in
the
light
of
their
true
object.
This
would
appear
to
apply
as
well
to
refund
or
exemption
provisions.
In
Extendicare
Health
Services
Inc.
v.
Canada
(Minister
of
National
Health
&
Welfare)
F.C.A.,
June
27,
1989
(as
yet
unreported),
Mahoney,
J.A.
acknowledged
that:
Eligibility
for
refund
under
the
Act
is
not
an
end
in
itself,
.
.
.
In
some
instances,
the
provision
is
clearly
intended
to
relieve
against
indirect
taxation
of
the
Crown
in
right
of
the
Provinces
and
in
others,
Parliament
has
crafted
the
legislation
to
benefit
certain
activities.
More
recently,
in
Lor-Wes
Contracting
Ltd.
v.
The
Queen,
[1986]
1
F.C.
346;
[1985]
2
C.T.C.
79;
85
D.T.C.
5310
at
83
(D.T.C.
5313;
FC.
352),
MacGuigan,
J.A.
concluded
that:
It
seems
clear
from
these
cases
that
older
authorities
are
no
longer
to
be
absolutely
relied
upon.
The
only
principle
of
interpretation
now
recognized
is
a
words-
in-total-context
approach
with
a
view
to
determining
the
object
and
spirit
of
the
taxing
provisions.
It
follows
then
that
the"words-in-total-context"
principle
of
statutory
interpretation
must
be
applied
in
this
instance
to
determine
the
meaning
of
the
phrase"for
use
exclusively
in
the
construction
of
a
building
for
that
institution”
found
in
section
44.27
of
the
Excise
Tax
Act.
As
well,
I
note
that
section
11
of
the
Interpretation
Act,
R.S.C.
1985,
c.
1-21,
directs
me
to
give
a
fair,
large
and
liberal
construction
and
interpretation
as
best
ensures
the
attainments
of
the
Act's
objectives.
Accordingly,
I
must
endeavour
to
assign
to
the
words
chosen
by
Parliament
a
meaning
consistent
with
the
apparent
objectives
of
the
provision
in
question.
As
noted
above,
the
terms
"construction"
and
"building"
found
in
section
44.27
are
not
defined
in
the
Excise
Tax
Act.
Both
parties
have,
however,
provided
me
with
dictionary
definitions
of
these
terms:
Construction:
Construct
I.
To
make
or
form
by
fitting
the
parts
together;
to
frame,
build,
erect
Construction
1.1
The
action
of
framing,
devising,
or
forming
by
the
putting
together
of
parts;
erection,
building;
the
art
or
science
of
constructing.
2.
The
manner
in
which
a
thing
is
constructed
or
formed;
structure;
constructive
faculty.
3.
A
thing
constructed.
Shorter
Oxford
English
Dictionary
(3rd
Ed.
1959)
Construct
.
.
.
2:
to
form,
make
or
create
by
combining
parts
or
elements:
Build,
Fabricate.
.
.
Construction
.
..
2a:
the
act
of
putting
parts
together
to
form
a
complete
integrated
object:
Fabrication
b(1):
the
form
or
manner
in
which
something
has
been
put
together:
Design
c:
something
built
or
erected
Structure
Webster's
Third
New
International
Dictionary
(1976)
Building:
Building
1.
The
action
of
the
vb.
Build
b.
Build
(e.g.
of
a
ship).
2.
That
which
is
built;
a
structure,
edifice.
Shorter
Oxford
English
Dictionary
(3rd
Ed.
1959)
building:
1.
a
thing
built:
a:
a
constructed
edifice
designed
to
stand
more
or
less
permanently,
covering
a
space
of
land,
usu.
covered
by
a
roof
and
more
or
less
completely
enclosed
by
walls,
and
serving
as
a
dwelling,
storehouse,
factory,
shelter
for
animals,
or
other
useful
structure—distinguished
from
structures
not
designed
for
occupancy
(as
fences
or
monuments)
and
from
structures
not
intended
for
use
in
one
place
(as
boats
or
trailers)
even
though
subject
to
occupancy
.
.
.
2:
the
act
or
practice
of
making,
erecting,
or
establishing;
specific:
the
art
or
business
of
assembling
materials
into
a
structure—sometimes
distinguished
from
architecture
and
construction
as
involving
relatively
simple
artistic
and
engineering
problems
.
.
.
Webster's
Third
New
International
Dictionary
(1976)
In
argument,
a
number
of
additional
terms
have
been
raised
and
definitions
have
been
provided
for
these
terms
as
well.
The
Shorter
Oxford
English
Dictionary,
3rd
ed.
(1959)
definitions
are
outlined
below:
Addition:
1.
The
action
or
process
of
adding.
2.
That
which
is
added;
an
appendix,
accession,
etc.
Alteration:
Alter
1.
To
make
otherwise
or
different
in
some
respect,
without
changing
the
thing
itself;
to
modify.
.
.
Maintenance:
Maintain
.
.
.
2.
to
continue,
persevere
in.
b.
To
carry
on,
keep
up;
8.
To
pay
or
furnish
the
means
for
the
keeping
up
of:
.
.
.
to
keep
(a
road,
a
building)
in
repair.
.
.
Reconstruction:
Reconstruct.
.
.
1.
To
construct
anew.
Renovation:
Renovate
1.
To
renew,
resume
(an
action
or
purpose)
2.
To
renew
materially;
to
repair;
to
restore
by
replacing
lost
or
damaged
parts;
to
create
anew,
b.
To
restore
to
vigour;
to
refresh.
c.
To
regenerate.
Repair:
1.
The
act
of
restoring
to
a
sound
or
unimpaired
condition;
the
process
by
which
this
is
accomplished;
the
result
attained,
b.
Restoration
of
some
material
thing
or
structure
by
the
renewal
of
decayed
or
worn
out
parts,
by
refixing
what
has
become
loose
or
detached;
the
result
of
this..
.
.
Plaintiff's
Argument
The
plaintiff
submits
that
the
phrase
"
construction
of
a
building”
is
broad
in
its
ordinary,
grammatical
sense.
Utilizing
the
above
dictionary
references,
he
has
defined
the
key
words
in
issue
as
follows:
"Construction"
—the
action
of
framing,
devising,
or
forming,
by
putting
together
of
parts;
Counsel
submits
that
the
use
of
the
word
”
of"
is
critical.
He
suggests
that
if
the
statute
had
read
"for
use
exclusively
to
construct
a
building”,
the
phrase
might
then
bear
the
interpretation
of
having
to
construct
the
whole.
But,
Parliament
said
"of"
and,
consequently,
meant
to
allow
a
refund
for
materials
used
in
"construction
pertaining
to"
a
building.
|
"of"
|
—with
regard
to,
in
reference
to,
pertaining
to;
and,
|
|
“a
Building”
|
—that
which
is
built,
a
structure,
edifice.
|
The
plaintiff
does
not
agree
that
"construction
of
a
building"
means
"construction
of
a
new
building”
and
observes
that
the
statute
does
not
say
"new",
so
the
phrase
is
not
limited
in
any
way.
It
is
thus
capable
of
bearing
the
interpretation
"construction
or
assembling
of
parts,
pertaining
to
or
relating
to
a
building”,
new
or
otherwise,
so
as
to
include
new
construction,
additions,
alterations,
renovations,
major
repairs
which
pertain
more
to
construction
than
to
maintenance,
and
ancillary
maintenance.
Counsel
supports
his
position
by
referring
to
the
Statistics
Canada
and
National
Building
Code
definitions
of
construction"
which
include
such
terms
and
have
been
respectively
defined
as
follows:
creation,
renovation
and
repair
and
demolition
of
immobile
structures,
.
.
.
erection,
repair,
alteration,
enlargement,
addition,
demolition,
removal,
excavation,
with
respect
to
a
building.
Since
the
various
activities
undertaken
at
Crescent
Heights
School
were
all
part
and
parcel
of
an
ancillary
to
the
overall
project
and
the
plaintiff's
intention
to
achieve
a
functional
educational
facility,
they
were
related
to
the
"construction
of
a
functional
facility
of
education”.
The
plaintiff
suggests
that
it
had
three
options
available
to
it
to
meet
this
objective:
(1)
demolish
the
old
school
and
build
a
new
school
on
the
same
site;
(2)
find
a
new
site
and
construct
a
new
school;
or,
(3)
carry
out
the
project.
The
plaintiff
notes
that
the
same
object
may
be
achieved
by
utilizing
any
of
these
options,
however,
alternatives
(1)
and
(2)
qualify
for
a
refund,
but
alternative
(3)
qualifies
only
in
part
or
not
at
all.
This,
the
plaintiff
submits,
is
an
absurd
result.
Counsel
asks
me
to
consider
the
phrase
in
section
44.27
in
the
broadest
sense
that
the
language
will
bear
because
only
in
that
sense
can
it
be
in
accord
with
the
intention
of
Parliament,
and
only
in
a
broad
sense
can
it
avoid
what
seems
to
be
an
absurd
result.
Such
an
interpretation
is
also
in
accord
with
the
principle
that
exemptions
should
be
broadly
construed
in
favour
of
educational
and
charitable
institutions.
Finally,
the
plaintiff
contends
that
such
an
interpretation
can
be
understandably
applied.
Defendant's
Argument
The
defendant
submits
that
the
phrase
"construction
of
a
building":
must
be
limited
to
the
erection
of
an
entire
building.
Counsel
notes
that
the
phrase
“construction
of
a
building,
or
that
part
of
a
building”
has
been
used
in
section
44.24
of
the
Excise
Tax
Act
and
1(e)
of
Part
XII
of
Schedule
III
to
the
Act.
She
makes
reference
as
well
to
the
phrase
“buildings
or
other
structures"
found
in
sections
31
and
32
of
Schedule
V
to
the
Act.
Section
44.27
does
not
say
“construction
in
a
building”
or“
construction
of
a
part
thereof’
or
"construction
of
a
building
or
structure".
It
merely
says
construction”
and
the
defendant
maintains
that
its
interpretation
must
be
limited
to
the
erection
of
an
entire
building
and
not
a
part
of
a
building
or
another
structure.
The
defendant
argues
that
"construction
of
a
building”
means
"construction
of
a
new
building”.
Counsel
suggests
that
underlying
the
common
or
popular
meaning
of
the
term
"construction"
is
the
concept
of
creating
something
new.
Terms
such
as
"alteration",
“renovation”,
"repair"
and
"maintenance",
rather,
import
the
concept
of
changes
or
improvements
to
something
old,
such
as
an
existing
building.
It
is
the
defendant's
position
that
the
case
at
bar
concerns
additions,
alterations,
renovations
or
repairs
of
or
to
an
existing
building.
Because
these
activities
are
related
to
something
“
old”,
they
are
not
contemplated
by
section
44.27.
She
submits,
therefore,
that
materials
used
in
the
repair,
renovation
or
alteration
of
the
Crescent
Heights
School
do
not
fall
within
the
terms
of
the
refund
provision.
The
defendant
refers
as
well
to
federal
statutes
that
have
incorporated
such
other
terms
as
"alteration",
”
maintenance”,
”
repair",
improved":
Within
Schedule
III
of
the
Excise
Tax
Act
itself:
Part
IV
(Farm
and
Forest)
29.
Roofs,
chutes
ladders,
wall
sections
with
or
without
doors
incorporated
therein,
materials
and
parts
therefor;
all
of
the
foregoing
for
the
construction
or
repair
of
silos
.
.
.
or
of
tanks
or
vessels
.
.
.
Part
XI
(Miscellaneous)
1.
Articles
and
materials
.
.
.
for
the
construction,
maintenance
or
operation
of
a
military
or
defence
establishment
in
Canada
.
.
.
Part
IX
(Marine
and
Fisheries)
1.
Boats
.
.
.
and
articles
and
materials
for
use
exclusively
in
the
manufacture,
equipment
or
repair
thereof.
Part
XVII
(Transport
Equipment)
8.1
Ships
and
other
marine
vessels,
.
.
.
articles
and
materials
for
use
exclusively
in
the
manufacture,
equipping
or
repair
of
those
tax
exempt
goods.
In
the
Public
Works
Act,
R.S.C.
1985,
c.
P-38:
8.
The
Chief
Engineer
or
the
Chief
Architect
shall
(a)
prepare
maps,
plans
and
estimates
for
all
public
works
that
are
about
to
be
constructed,
altered
or
repaired;
9
.(1)
...
(f)
the
heating,
maintenance
and
keeping
in
repair
of
the
Government
buildings
and
any
alteration
requisite
therein,
and
the
supplying
of
furniture
and
fittings
or
repairs
to
those
buildings,
.
.
.
(h)
all
other
property
that
now
belongs
to
Canada
and
the
works
and
properties
acquired,
constructed,
extended,
enlarged,
repaired
or
improved
at
the
expense
of
Canada,
or
for
the
acquisition,
construction,
repairing,
extending,
enlarging
or
improving
of
which
any
public
money
is
voted
and
appropriated
by
Parliament.
.
.
12.
The
Minister
shall
direct
the
construction,
maintenance
and
repair
of
all
harbours,
roads
or
parts
of
roads,
bridges,
slides
and
other
public
works
or
buildings
constructed
or
maintained
at
the
expense
of
Canada
that
are
placed
under
the
Minister's
management,
charge
and
direction.
13.
Nothing
in
this
Act
authorizes
the
Minister
to
cause
expenditure
not
previously
sanctioned
by
Parliament,
except
for
such
repairs
and
alterations
as
the
necessities
of
the
public
service
demand.
In
section
2
of
the
Government
Contract
Regulations,
SOR/87-402
under
the
Financial
Administration
Act,
R.S.C.
1985,
c.
F-11.
"construction
contract”
means
a
contract
entered
into
for
the
construction,
repair,
renovation
or
restoration
of
any
work
except
a
vessel.
.
.
Since
each
word
is
susceptible
of
a
separate
and
distinct
meaning,
and
because
these
words
do
not
appear
in
section
44.27,
the
presumption
must
be
that
the
legislator
did
not
intend
to
include
such
work.
The
defendant
acknowledges
that
the
work
carried
out
during
the
course
of
the
project
varies
from
minimal
or
no
work
in
some
areas
of
the
school
to
the
substantial
work
carried
out
in
the
central
core.
She
submits
however
that
the
substantial
nature
of
the
work
is
not
determinative
of
whether
there
was
construction
of
a
building.
Counsel
notes
that
the
building
never
ceased
to
exist
and
continued
in
operation
throughout
the
course
of
construction.
She
states
that
the
project
did
not
allow
for
an
increased
student
population
but
was
rather
to
achieve
a
“facility
which
was
.
.
.
functional,
adequate,
modern
and
better
able
to
operate”.
She
stresses
that
the
contract
itself
provides
that
the
work
is
for
"Renovation
of,
addition
to,
and
portable
classrooms
for
Crescent
Heights
Senior
High
School”.
No
mention
is
made
of
construction
of
a
building”.
Finally,
the
defendant
states
that
if
the
phrase
"construction
of
a
building”
is
given
the
broad
interpretation
suggested
by
the
plaintiff,
section
44.27
would
become
vague
to
the
point
of
lacking
any
practical
definition.
Excise
officials
would
be
put
in
the
position
of
having
to
assess
the
magnitude
of
building
or
repair
work
that
may
or
may
not
constitute
“
construction
of
a
building”
in
a
particular
case
without
having
any
requisite
technical
expertise
in
the
architectural
or
construction
trades.
Analysis
It
is
beyond
dispute
that
in
enacting
section
44.27
Parliament
was
intending
to
benefit
this
plaintiff
by
an
exemption
from
tax.
Such
a
policy
is
not
difficult
to
understand.
In
addition
to
the
obvious
reason
of
supporting
education,
there
is
an
avoidance
of
double
taxation.
School
facilities
are
financed
through
municipal
and
provincial
taxation
programmes,
but
in
the
end
there
is
only
one
taxpayer.
Adding
a
level
of
federal
sales
tax
to
the
burden
is
clearly
counter-productiv
ence,
the
exemption
conferred
by
section
44.27.
The
issue,
then,
is
the
precise
extent
of
this
exemption.
It
would
be
a
simple
matter
for
Parliament
to
exempt
school
boards
from
tax
on
all
materials
used
in
school
facilities,
but
it
did
not
do
so.
Instead,
Parliament
limited
the
exemption
to“
construction
of
a
building”.
The
plaintiff
asks
that
I
include
in
construction
such
activities
as
repairs
and
renovations
or
alterations,
but
Parliament
again
did
not
use
such
language.
The
defendant,
quite
properly,
emphasizes
that
the
words
renovations,
repairs
and
maintenance"
occur
in
several
other
federal
statutes.
More
importantly,
they
are
used
in
other
sections
of
the
very
Excise
Tax
Act
which
governs
the
dispute
in
this
action.
I
cannot
conclude,
therefore,
that
Parliament
was
unmindful
of
these
other
activities
which
the
plaintiff
asks
me
to
include
in
the
term
"construction
of
a
building”.
The
failure
to
make
specific
reference
to
them
in
the
exempting
provisions
for
construction
of
a
building
is
fatal
to
the
plaintiff's
submission.
I
am
convinced
that
the
ordinary,
grammatical
context
of
the
phrase
"construction
of
a
building"
is
not
restricted
to
construction
"of
a
new,
entire
building”.
Neither
does
it
involve
“all
construction
activities
related
to
a
school”.
Based
on
the
dictionary
definitions
provided
by
counsel,
it
is
evident
that
the
word
"construction"
includes
additions.
On
the
other
hand,
it
is
clear
that"
maintenance",
the
action
of
keeping
up
or
keeping
in
good
order,
is
not
construction.
The
disputed
portions
of
the
project
concern
renovations
or
at
the
most
reconstruction
primarily
within
the
framework
of
an
old
building.
The
contract
provides
for
renovation
of
and
addition
to
and
portable
classrooms
for
Crescent
Heights
Senior
High
School”.
I
note
as
well
that
the
facility
functioned
as
a
school
throughout
the
entire
period
of
the
project.
When
I
couple
that
argument
with
the
numerous
references
made
by
counsel
for
the
defendant
to
the
use
of
the
terms"
renovation”
and
repair"
in
both
the
Excise
Tax
Act
and
in
other
federal
statutes,
I
am
driven
to
the
conclusion
that
total
exemption
simply
has
not
been
spelled
out
in
specific
terms
in
the
legislation.
Conclusion
The
Minister's
determination
that
the
exemption
should
be
confined
to
construction
as
opposed
to
renovation
or
repairs
is
consistent
with
the
lan-
guage
of
the
statute.
Accordingly,
the
issues
which
I
have
been
asked
to
determine
will
be
resolved
as
follows:
1.
The
meaning
of
the
phrase
”
for
use
exclusively
in
the
construction
of
a
building”
for
that
institution
in
section
44.27
of
the
Excise
Tax
Act
encompasses
construction
of
new
entire
buildings,
and
additions,
for
such
institutions.
It
also
includes
work
that
does
not
entail
renovation,
repair
or
maintenance,
but
which
is
necessary
for
such
additions
to
become
operational.
2.
The
entire
project
would
not
qualify
for
a
refund
of
tax
paid
on
materials
used
pursuant
to
section
44.27
of
the
Excise
Tax
Act.
3.
In
the
context
of
this
project,
the
Minister
was
correct
in.
allowing
exemptions
for
additions
to
the
building
envelope
including
the
gymnasium
and
science
addition,
mechanical
room
corridor
link,
the
bridge
link
and
the
portable
classrooms.
The
Minister
was
also
correct
in
disallowing
the
exemption
for
materials
used
for
renovations.
Counsel
indicated
that
once
I
answered
the
legal
questions
in
principle,
they
expected
to
agree
on
the
exact
figures.
In
the
absence
of
such
agreement
or
a
trial,
each
project
may
have
to
be
examined
individually
if
there
are
materials
which
do
not
fit
clearly
into
either
of
the
two
categories
that
I
have
identified
in
these
answers.
Counsel
should
prepare
a
formal
judgment
for
signature
and
in
the
event
that
they
are
unable
to
agree
upon
the
form
and
content,
I
will
arrange
for
the
matter
to
be
addressed.
In
the
absence
of
representation
to
the
contrary,
it
would
not
appear
to
be
an
appropriate
case
for
any
award
for
costs.
Action
dismissed.
Email this Content