Principal Issues: Whether the following activities are construction or manufacturing and processing: 1) a road contactor processes material and places the material on a road 2) a contractor is engaged by a road manufacturer or other entity to simply process material in a pit and is not involved in any aspect of the usage or placement of the material.
Position: 1) Construction. 2) Part of the process would be manufacturing and processing.
Reasons: As explained in Interpretation Bulletin IT-411R, paragraph 1, construction activities are considered to be those normally associated with the on-site fabrication and erection of buildings, roads, bridges, parking lots, driveways, etc., which are intended to be permanently affixed to the land on which they are built.
The term "manufacturing or processing", pursuant to subsection 125.1(3) and regulation 1104(9), excludes producing industrial minerals. As explained in Interpretation Bulletin IT-145R (consolidated), paragraph 9, producing industrial minerals is considered to include all activities connected with the mining, excavating and extracting the mineral material from the mine or pit area, including any primary crushing operation required to make it transportable from the mine or pit area as well as the transporting of the material from the mine or pit. Subsequent activities such as crushing, washing, screening and sorting of the mineral material in order to make the product of the mine or pit marketable are considered to be processing activities.