Urie,
J.
(MacGuigan,
J.
concurring):—This
appeal
is
from
a
judgment
of
the
Trial
Division
which
allowed
the
appeal
of
the
respondent
from
reassessments
for
income
tax
made
by
the
Minister
of
National
Revenue
(the
"Minister")
in
respect
of
the
respondent's
1977
and
1978
taxation
years.
By
the
reassessments
the
Minister
reclassified
certain
pipes
and
valves
which
had
been
claimed
by
the
respondent
as
assets
within
Class
8
of
Schedule
B
of
the
Income
Tax
Regulations,
subject
to
depreciation
at
the
rate
of
20
per
cent,
as
being
assets
within
Class
2
of
Schedule
B
of
the
said
regulations
on
the
basis
that
they
constituted
"pipelines"
as
set
out
in
Class
2(b)
or
"were
distribution
equipment
and
plant
required
primarily
for
the
distribution
of
gas"
under
Class
2(d),
in
each
of
which
categories
the
applicable
depreciation
rate
was
6
per
cent.
The
Facts
The
respondent,
as
its
name
implies,
was
incorporated
in
Alberta
by
a
special
act
of
the
legislature
of
that
province
where
it
has
its
head
office,
in
the
City
of
Calgary.
Its
principal
business
is
the
transmission
of
natural
gas
within
the
boundaries
of
the
Province
of
Alberta
utilizing
a
network
of
pipes
permanently
welded
together
and
for
the
most
part
buried
underground
to
transmit
its
customers
gas.
There
are
four
aspects
to
the
natural
gas
industry,
namely:
exploration,
production,
transmission
and
distribution.
Exploration
involves
searching
and
drilling
for
and
finding
natural
gas.
Production
entails
drilling
wells
and
gathering
natural
gas
from
the
wells
following
which,
usually,
the
gas
is
processed
at
a
gas
plant
at
the
end
of
a
gathering
system.
Transportation,
which
is
also
referred
to
as
transmission,
starts
at
a
point
commonly
referred
to
as
a
“field
gate"
which
is
located
near
the
processing
plant.
Transmission
ends
when
the
gas
enters
a
distribution
system.
In
the
case
of
the
respondent's
transmission
system,
it
connects
with
another
company's
transmission
system
for
further
shipment.
Distribution
starts
where
the
transmission
ends,
commonly
at
a
point
called
the
“city
gate”.
In
effect,
the
respondent,
by
transmitting
the
natural
gas
owned
by
its
customers,
received
from
the
facilities
of
the
producers,
acts
as
a
sort
of
common
carrier
for
the
transportation
of
gas
to
the
facilities
of
other
natural
gas
transmission
companies.
«
The
transmission
of
natural
gas
is
effectuated
through
what
is
termed
"mainline
pipes"
for
which
purpose
the
respondent,
in
common
with
other
transmission
companies,
utilizes
compressors
at
intervals
along
the
mainline
pipes.
Inlet
valves
control
the
flow
of
the
natural
gas
at
the
commencement
of
the
pipe
connecting
the
mainline
pipe
to
the
compressor
(called
yard
pipe)
and
outlet
valves
control
the
flow
of
natural
gas
from
the
co-
mapressors
upon
its
return
to
the
mainline
pipe.
There
are
other
valves
between
the
mainline
pipe
and
the
compressor
unit.
Meters
are
employed
to
measure
natural
gas
volumes.
The
meters
are
located
in
series.
There
are
valves
at
the
inlet
and
outlet
side
of
the
meters.
There
are
pipes
between
the
inlet
valves
and
the
valves
at
the
entry
to
the
meters,
as
well
as
between
the
valves
at
the
exit
from
the
meters
and
the
outlet
valves.
In
its
tax
returns
for
the
1977
and
1978
taxation
years,
the
respondent
claimed
that
the
yard
pipe
and
metering
pipe,
as
well
as
the
valves
on
the
yard
pipe
and
metering
pipe,
were
assets
within
Class
8
of
Schedule
B
of
the
Regulations
and
thus
subject
to
depreciation
at
a
rate
of
20
per
cent.
It
also
classified
as
integral
parts
of
its
compressor
stations,
the
compressors,
compressor
meters,
suction
scrubbers,
cyclone
separators,
liquids
drain
tanks,
utility
gas
pipes,
fuel
gas
pipes
and
power
gas
pipes
and
the
meters
as
Class
8
assets.
The
Minister
did
not
reclassify
any
of
the
latter
assets,
confining
his
reclassification
to
the
yard
pipe,
metering
pipe
and
valves
thereon
as
Class
2
assets
(hereinafter
called
the
pipes
and
valves
in
issue).
The
parties
agree
that
the
sole
function
of
the
pipes
and
valves
in
issue
related
to
the
compressor
stations
is
to
move
the
natural
gas
from
the
pipeline
into
the
compressor
unit
where
it
is
compressed
to
facilitate
its
transmission
and
then
to
move
the
natural
gas
back
to
the
pipelines.
The
Minister
based
his
reassessments
on
the
assumption
that
the
pipes
and
valves
in
issue
were
properly
described
as
“pipeline”.
The
alternative
claim
that
the
assets
in
issue
were
“manufacturing
and
distributing
equipment
and
plant
acquired
primarily
for
the
production
or
distribution
of
gas"
was
first
raised
in
the
appellant’s
amended
pleadings.
The
issue
The
sole
issue
in
this
appeal
is
whether
the
pipes
and
valves
in
issue
are
within
Class
2
or
Class
8
of
Schedule
B
of
the
Income
Tax
Regulations
("the
Regulations”).
The
relevant
clauses
of
Class
2
are
(b)
and
(d)
which
read
as
follows:
Property
that
is
(b)
a
pipeline,
other
than
gas
or
oil
well
equipment,
unless,
in
the
case
of
a
pipeline
for
oil
or
natural
gas,
the
Minister
in
consultation
with
the
Minister
of
Energy,
Mines
and
Resources,
is
or
has
been
satisfied
that
the
main
source
of
supply
for
the
pipeline
is
or
was
likely
to
be
exhausted
within
15
years
from
the
date
on
which
operation
of
the
pipeline
commenced.
(d)
manufacturing
and
distributing
equipment
and
plant
(including
structures)
acquired
primarily
for
the
production
or
distribution
of
gas,
except
(i)
a
property
included
in
Class
10,
13
or
14,
(ii)
a
property
acquired
for
the
purpose
of
producing
or
distributing
gas
that
is
normally
distributed
in
portable
containers,
or
(iii)
a
property
acquired
for
the
purpose
of
processing
natural
gas
before
delivery
to
a
distribution
system.
Class
8(d)
reads:
Property
not
included
in
Class
2,
7,
9
or
30
that
is
(d)
a
tangible
capital
asset
that
is
not
included
in
another
class
in
this
Schedule
except:
(i)
land
or
any
part
thereof
or
any
interest
therein,
(ii)
an
animal,
(iii)
a
tree
shrub,
herb
or
similar
growing
thing,
(iv)
a
gas
well
(other
than
a
gas
well
that
is
part
of
the
equipment
of
a
farm
and
from
which
the
gas
produced
is
not
sold),
(v)
a
mine,
The
issue
expressed
in
terms
of
the
factual
situation,
is
whether
all
pipes
and
valves
located
between
the
inlet
and
outlet
connections
of
the
main
pipeline
and
to
and
from
the
compressor
station
(and
metering
facilities)
are
to
be
treated
as
integral
parts
of
the
“pipeline”
or
of
the
compressor
station
(or
the
metering
facilities),
for
the
purposes
of
capital
cost
allowance.
The
Trial
Judgment
At
the
trial
the
respondent
called
two
expert
witnesses
and
the
appellant
one,
the
evidence
of
all
of
whom
was
directed
primarily
to
what
the
word
"pipeline"
signified
in
terms
of
common
usage
in
the
natural
gas
industry.
The
learned
trial
judge,
Dubé,
J.
quoted
the
following
description
of
a
pipeline
set
out
in
the
affidavit
of
Donald
G.
Olafson,
an
officer
of
the
respondent.
The
word
"pipeline"
in
terms
of
common
industry
usage
describes
the
cross
country
pipe
utilized
to
convey
natural
gas.
A
pipeline
can
describe
either
a
mainline
or
a
branch
line.
It
would
include
the
pipe
and
components
and
appurtenances
attached
to
it
including
isolating
valves.
It
would
not
include
a
compressor
station
or
measurement
facility
isolated
by
isolating
valves
from
the
pipeline.
A
compressor
station
starts
at
the
downstream
side
of
the
station
suction
side
valve
and
ends
at
the
upstream
side
of
the
station
discharge
valve.
The
pipe
and
valves
in
issue
serve
the
compressor
station.
Without
the
station
they
would
be
unneces-
sary.
When
stations
are
retired
for
any
one
of
a
number
of
operating
reasons
these
pipes
and
valves
are
almost
always
retired.
On
this
and
some
of
the
other
evidence
adduced
from
Mr.
Olafson,
the
trial
judge
had
this
to
say:
In
his
view,
people
involved
in
the
industry
use
the
terms
"pipeline
system"
to
describe
the
overall
operation.
The
term
''pipeline"
means
the
main
pipe
which
runs
cross-country,
including
valves,
gauges,
etc.
but
excluding
compressor
stations
and
metering
facilities.
The
term
“mainline”
is
used
as
opposed
to
“branch
line”
or
“lateral
line",
(emphasis
added)
Those
are
precisely
the
terms
used
in
the
Canadian
Standards
Association
Z-184
Code
for
the
year
1986.
The
word
pipeline
is
defined
as
follows
at
page
42:
Pipeline
means
those
facilities
through
which
gas
is
conveyed
and
includes
pipe,
components,
and
appurtenances
attached
to
the
pipe
up
to
and
including
the
isolating
valves
used
at
pressure
limiting,
pressure
regulating,
pressure
relief,
measurement,
and
compressor
stations.
The
description
of
“pipeline
system"
appears
as
follows
at
page
43:
Pipeline
system
means
pipelines,
stations,
and
other
facilities
required
for
the
storage,
transportation,
and
measurement
of
gas.
The
Code
defines
"compression
station”
as
follows
at
page
38:
Compression
station
means
equipment
installed
for
the
purpose
of
increasing
the
pressure
in
a
pipeline
system
and
includes
piping
and
auxiliary
devices
such
as
valves,
compressors,
control
instruments,
enclosures,
and
ventilating
equipment.
The
two
relevant
terms
with
reference
to
distribution
are
described
at
page
39:
Distribution
line
means
a
pipeline
in
a
distribution
system
that
conveys
gas
to
individual
service
lines
or
other
distribution
lines.
Distribution
system
means
the
distribution
and
service
lines,
and
their
associated
control
devices,
through
which
gas
is
conveyed
from
transmission
lines
or
from
local
sources
of
supply
to
a
customer's
meter.
Similar
evidence
was
tendered
by
the
respondent
from
the
witness
Wayne
D.
Neuss,
an
independent
expert
which
was
carefully
reviewed
by
Mr.
Justice
Dubé.
The
appellant's
expert,
J.R.
Eckmeier,
an
independent
consultant,
filed
a
report
in
lieu
of
an
affidavit
which
was
entitled
"Discussion
Paper
Industry
Standards
and
Practices
with
respect
to
Gas
Pipeline
Systems"
which
evoked
from
the
trial
judge
this
comment:
It
is
noteworthy
that,
not
only
in
the
title,
but
throughout
his
report
he
uses
the
expression
“pipeline
system"
in
the
same
manner
as
the
two
previous
witnesses
and
the
1986
Z-184
Code
to
describe
the
entire
system
including
all
components
such
as
the
pipeline,
the
compressors,
the
metering
facilities,
etc.
whereas
the
word
“pipeline”
appears
intermittently
to
describe
the
long
cross-country
pipe.
In
support
of
his
contention
that
the
"yard
pipe”
was
"more
akin
to
the
mainline
piping
than
it
is
to
the
compressor
installation”,
Mr.
Eckmeier
relied
on
definitions
of
“pipeline”
in
the
National
Energy
Board
Act,
R.S.C.
1970,
c.
N-6
and
amendments
thereto
and
The
Province
of
Albert
Residence
Act,
1975.
Upon
this
reliance
the
trial
judge
had
this
to
say:
In
my
view,
the
various
definitions
of
"pipeline"
in
the
federal
and
provincial
acts
serve
merely
the
purposes
of
those
acts
and
do
not
govern
the
interpretation
of
the
Income
Tax
Act.
The
Act
must
be
construed
according
to
its
own
definitions,
or
the
ordinary
meaning
of
the
words
used,
or
the
common
usage
by
the
people
in
the
relevant
industry.
Subsection
1104(2)
of
the
Income
Tax
Regulations
defines,
for
the
purposes
of
allowances
in
respect
of
capital
cost,
the
following
properties:
2
(a)
a
"railway
system"
(b)
a
"telephone
system"
(c)
a
“telegraph
system"
(d)
a
"tramway
or
trolley
bus
system"
The
subsection
does
not
follow
at
paragraph
2(e)
with
a
“pipeline
system",
but
with
“gas
or
oil
well
equipment”
which
includes
equipment,
structures
and
"pipelines".
If
Parliament
intended
to
treat
the
property
in
question
as
part
of
a
"pipeline
system"
it
would
have
done
so
under
paragraph
2(e).
The
best
that
can
be
said
is
that
the
draftsmanship
leads
to
confusion.
After
giving
short
shrift
to
the
appellant's
reliance
on
the
dictionary
meanings
of
"pipeline"
and
of
"system",
His
Lordship
made
the
following
finding:
The
weight
of
the
evidence
is
clearly
to
the
effect
that
the
word
“pipeline”
in
the
industry
means
the
long
cross-country
pipeline
carrying
gas
or
oil.
When
it
is
intended
to
refer
to
the
whole
system,
the
people
involved
call
it
a
“pipeline
system",
which
makes
more
sense.
It
should
also
be
noted
that
the
two
experts
produced
by
the
plaintiff
were
straightforward
and
unshakable.
On
the
other
hand,
as
mentioned
before,
the
expert
called
by
the
Crown
was
at
times
confused
between
the
meaning
of
"pipeline"
and
“pipeline
system",
not
only
in
his
written
report
but
also
in
cross-
examination.
It
is
also
significant
that
the
design
factors
for
the
pipeline
pipes
and
the
yard
pipes
are
different.
Their
life
expectancy
is
different.
The
security
requirements
are
different.
The
efficiency
standards
are
different.
As
to
the
alternative
contention
of
the
appellant
that
the
yard
pipes
are
property
that
is
"distributing
equipment
and
plant
acquired
primarily
for
the
production
or
distribution
of
gas"
within
the
meaning
of
Class
2(d)
of
the
Schedule
to
the
Regulations,
the
learned
trial
judge
made
the
following
finding:
In
the
case
at
bar,
it
has
been
fully
established
that
the
plaintiff
is
in
neither
the
manufacturing
nor
the
distributing
business,
being
solely
limited
to
"transmission"
or
"transportation".
The
plain
meaning
and
the
commercial
usage
of
the
words
“manufacturing”
and
“distributing”
clearly
do
not
include
“transmitting”
or
"transporting"
which
terms
refer
to
a
totally
different
operation.
The
Arguments
and
the
Conclusion
While
the
appellant
attacks
the
trial
judgment
on
six
bases,
in
essence
counsel
argues
that
the
learned
trial
judge
erred
in
defining
the
word
"pipeline"
as
it
appears
in
Class
2(b)
of
the
Regulations,
in
accordance
with
the
meaning
of
that
word,
and,
as
well,
the
term
"pipeline
system”,
as
those
terms
are
understood
by
those
involved
in
the
oil
and
gas
industry
rather
than
in
accordance
with
their
grammatical
and
ordinary
sense.
Alternatively,
it
is
argued
that
if
the
pipes
and
valves
in
issue
are
not
pipeline
they
are
“distributing
equipment
and
plant
required
primarily
for
the
production
or
distribution
of
gas"
under
Class
2(d)
of
the
Schedule
to
the
Regulations.
I
There
can
be
no
doubt
that
in
the
interpretation
of
statutes
in
Canada
the
general
principle
enunciated
by
Estey,
J.
in
Stubart
Investments
Limited
v.
The
Queen,
[1984]
C.T.C.
294
at
316;
84
D.T.C.
6305
at
6323,
followed
in
this
Court
in
numerous
cases,
such
as
Canterra
Energy
Ltd.
v.
The
Queen,
[1987]
1
C.T.C.
89
at
93;
87
D.T.C.
5019
at
5022
and
Lor-Wes
Contracting
Ltd.
v.
M.N.R.,
[1986]
1
F.C.
346
at
352;
[1985]
2
C.T.C.
79
requires
that
the
statutory
language
employed
in
particular
sections
of
an
enactment
must
be
inter
preted
in
the
context
of
the
statute
as
a
whole.
Mr.
Justice
Estey
relied
on
the
view
espoused
by
E.A.
Driedger,
the
learned
author
of
Construction
of
Statutes,
2d.
ed.
(1983)
who,
at
page
87
of
his
book,
said:
Today
there
is
only
one
principle
or
approach,
namely,
the
words
of
an
Act
are
to
be
read
in
their
entire
context
and
in
their
grammatical
and
ordinary
sense
harmoniously
with
the
scheme
of
the
Act,
the
object
of
the
Act,
and
the
intention
of
Parliament.
This
principle
is
expressed
repeatedly
by
modern
judges,
as,
for
example,
Lor
Reid
in
Westminster
Bank
Ltd.
v.
Zang
[[1965]
A.C.
182,
at
p.
222]
and
Culliton
C.J.
in
R.
v.
Mojelski,
[(1968)
65
W.W.R.
565
at
p.
570].
Earlier
expressions,
though
in
different
form,
are
to
the
same
effect;
Lord
Atkinson
in
Victoria
(City)
v.
Bishop
of
Vancouver
Island,
[[1921]
A.C.
384,
at
p.
387]
put
it
this
way:
In
the
construction
of
statutes
their
words
must
be
interpreted
in
their
ordinary
grammatical
sense,
unless
there
be
something
in
the
context,
or
in
the
object
of
the
statute
in
which
they
occur,
or
in
the
circumstances
with
reference
to
which
they
are
used,
to
show
that
they
were
used
in
a
special
sense
different
from
their
ordinary
grammatical
sense.
In
Johns-Manville
Canada
Inc.
v.
The
Queen,
[1985]
2
S.C.R.
46
at
72;
[1985]
2
C.T.C.
111
at
126
Mr.
Justice
Estey
preferred
the
following
refinement
to
that
principle:
.
.
.
Such
a
determination
is,
furthermore,
consistent
with
another
basic
concept
in
tax
law
that
where
the
taxing
statute
is
not
explicit,
reasonable
uncertainty
or
factual
ambiguity
resulting
from
lack
of
explicitness
in
the
statute
should
be
resolved
in
favour
of
the
taxpayer.
In
relation
to
the
arguments
advanced
in
this
case,
the
question
becomes
what
is
the
grammatical
and
ordinary
meaning
of
the
word
"pipeline"
and,
as
well,
to
whom
and
what
should
a
Court
turn
to
ascertain
the
grammatical
and
ordinary
meaning
of
words
or
terms
in
a
statute?
In
his
book,
Mr.
Driedger,
at
pages
5,
6
and
7
made
these
observations:
.
.
.
A
meaning
may
be
said
to
be
ordinary
if
it
is
to
be
found
in
the
dictionary.
But
there
may
be
many
meanings.
Compilers
of
dictionaries
usually
place
first
in
the
list
of
meanings
of
a
word
the
meaning
most
commonly
used.
This
meaning
is
variously
called
the
ordinary,
common,
popular
or
primary
meaning.
Pollock
B.
in
Grenfell
v.
Commissioners
of
Inland
Revenue,
[(1876)
1
Ex.
D.
242,
at
p.
248]
said
that
if
a
statute
contains
language
that
is
capable
of
being
construed
in
a
popular
sense,
it
is
not
to
be
construed
according
to
the
strict
or
technical
meaning
of
the
language
contained
in
it,
but
.
.
.
is
to
be
construed
in
its
popular
sense.
Thus,
in
A.-G.
for
Ontario
v.
Mercer,
[(1883)
8
A.C.
767
at
p.
778]
the
Earl
of
Selborne
L.C.
said
that
"every
word
ought,
prima
facie,
to
be
construed
in
its
primary
and
natural
sense,
unless
a
secondary
or
more
limited
sense
is
required
by
the
subject
or
the
context".
And
Lord
Atkinson
in
Victoria
(City)
v.
Bishop
of
Vancouver
Island
[[1921]
2
A.C.
284
at
p.
387]
said:
In
the
construction
of
statutes
their
words
must
be
interpreted
in
their
ordinary
grammatical
sense,
unless
there
be
something
in
the
context,
or
in
the
object
of
the
statute
in
which
they
occur,
or
in
the
circumstances
with
reference
to
which
they
are
used,
to
show
that
they
were
used
in
a
special
sense
different
from
their
ordinary
grammatical
sense.
In
Great
Western
Railway
Co.
v.
Carpalla
United
China
Clay
Co.
Ltd.
[[1909]
1
Ch.
218
at
p.
236]
Farwell
L.J.
said
that:
A
written
instrument
must
be
"construed
according
to
its
sense
and
meaning,
as
collected
in
the
first
place
from
the
terms
used
in
it,
which
terms
are
themselves
to
be
understood
in
their
plain,
ordinary,
and
popular
sense,
unless
they
have
generally
in
respect
to
the
subject-matter,
as
by
the
known
usage
of
trade,
or
the
like,
acquired
a
peculiar
sense
distinct
from
the
popular
sense
in
the
same
words.
.
.
.
”
[Emphasis
added.]
The
interpretation
problem
here
is
not
strictly
one,
in
my
view,
which
requires
a
determination
of
whether
a
word
used
in
a
statue
is
used
in
its
ordinary
sense
or
in
its
strictly
technical
sense,
as
was
required,
for
example,
in
the
Canterra
Energy
case,
supra.
It
is
more
fundamental.
It
is
a
word
in
fairly
common
usage,
employed
here
in
a
Schedule
to
a
regulation
of
a
statute
which
is
applicable
to
all
corporations
which
may
be
entitled
to
claim
capital
cost
allowance
on
various
of
its
[sic]
assets.
The
Income
Tax
Act
itself
applies
to
all
taxpayers
earning
taxable
income.
Class
2
in
Schedule
B
certainly
does
not
relate
solely
to
the
natural
gas
industry.
It
relates
also
to
electrical
generating
equipment,
oil
pipeline
and
distributing
equipment
for
water
and
heat.
Clause
(b)
relates
to
pipelines
without
reference
to
what
is
transmitted
through
them
be
it
gas,
oil,
water,
steam
or
solids.
I
would
have
thought
that
in
construing
it
in
its
"popular
sense"
would
mean
that
sense
“which
people
conversant
with
the
subject
matter
with
which
the
statute
is
dealing
[in
this
case
those
utilizing
the
service
of
the
pipeline
for
the
transmission
of
gas,
oil,
water,
steam
or
solids]
would
attribute
to
it"
not
the
popular
sense
derived
from
the
perception
of
the
man
in
the
street
not
conversant
with
either
the
user
industries
or
pipelines.
Even
if
it
were,
I
find
it
difficult
to
conceive
that
such
a
man
would
view
a
compressor
station
or
metering
facilities
as
part
of
a
pipeline
in
its
most
fundamental
sense.
The
whole
of
Schedule
B
is
directed
to
special
factual
situations
where
terms
are
used
in
respect
of
depreciable
assets
which
have
particular
meanings
to
those
conversant
with
those
assets.
For
example,
Class
3
refers
to
property
that
is
a
dock,
a
wharf,
a
jetty
and
a
trestle,
all
of
which
to
a
person
unfamiliar
with,
or
having
only
a
passing
familiarity
with,
such
structures,
might
appear
to
be
synonymous.
However,
to
persons
familiar
with
maritime
structures
they
probably
have
specific
meanings
which
are
the
ordinary
meanings
to
them
so
that,
again,
I
would
have
thought
that
it
would
be
from
persons
conversant
with
such
structures
that
evidence
might
be
adduced
to
assist
in
resolving
disputes
as
to
the
meanings
of
the
terms.
Dictionary
meanings
are,
of
course,
relevant,
as
other
aids
to
construction
just
as
the
evidence
of
those
conversant
with
the
industry
provides
assistance
to
the
ultimate
arbiter,
the
Court.
In
this
case,
the
learned
trial
judge
permitted
evidence
to
be
adduced
as
to
the
meanings
of
the
term
within
the
natural
gas
industry.
If
the
industry
involved
had
been,
for
example,
the
oil
industry,
the
experts
undoubtedly
would
have
been
those
familiar
with
that
industry.
Since
it
is
the
gas
industry
which
is
involved
witnesses
conversant
with
that
industry
were
called
upon
to
testify
as
to
their
understanding
of
the
meanings
of
the
terms.
Having
seen
and
heard
the
witnesses
called
by
each
of
the
parties,
he
expressed
a
preference
for
the
evidence
of
the
respondent's
two
experts
to
that
of
the
appellant's
witness
and
accepted
their
evidence
as
to
meanings
of
the
terms.
While
both
the
Grenfell
case
and
the
Great
Western
Railway
case,
which
were
referred
to
in
the
quotations
from
Mr.
Driedger's
book
earlier
set
out
herein,
provide
authorities
from
the
English
courts
for
the
propriety
of
ascertaining
the
known
usage
in
trade
as
to
the
meanings
of
words
and
terms
in
statutes,
this
Court
too
has
provided
some
supporting
authority
in
Controlled
Foods
Corporation
Limited
v.
The
Queen,
[1980]
C.T.C.
491;
80
D.T.C.
6373.
In
that
unanimous
judgment
it
was
said
at
page
495
(D.T.C.
6376)
of
the
report
that:
.
.
.
a
line
of
authorities
of
Canadian
jurisprudence
extending
back
as
far
as
60
years,
has
held
that
“it
is
not
improper
to
consider
as
an
aid
the
generally
accepted
commercial
view
of
the
operation
under
review"
.
.
.
I
am
of
the
opinion
that,
as
a
matter
of
law,
he
[the
Trial
Judge]
correctly
found
that
to
determine
the
questions
here
in
issue,
he
was
entitled
to
examine
the
generally
accepted
commercial
view
of
the
nature
of
a
restaurant
operation
as
well
as
the
dictionary
definitions
of
those
terms.
It
is
true
that
the
Court
cited
as
one
of
the
authorities
for
this
proposition
the
decision
of
this
Court
in
The
Royal
Bank
of
Canada
v.
M.N.R.,
[1979]
C.T.C.
342;
79
D.T.C.
5263,
which
was
subsequently
reversed
by
the
Supreme
Court
of
Canada
on
other
grounds.
However,
the
validity
of
using
that
form
of
construction
aid
was
not
challenged
or
commented
upon
by
Mclnytre,
J.
in
the
Supreme
Court
judgment.
What
I
find
ultimately
decisive
in
this
case
is
that
Dubé
J.
had
before
him
evidence
of
the
dictionary
meanings
of
the
word
“pipeline”
and
of
the
word
“system”
used
in
conjunction
with
pipeline.
While
he
referred
only
to
the
definitions
in
the
Shorter
Oxford
Dictionary
it
appears
clear
that
counsel
for
the
parties
referred
him
to
definitions
in
other
English
and
American
dictionaries.
In
my
view,
and,
I
think
impliedly
in
his
view,
the
dictionary
meanings
to
which
both
he
and
this
Court
were
referred
varied
sufficiently
that
they
could
fairly
be
described
as
inconclusive.
He
was,
therefore,
entitled
to
accord
those
meanings
little
weight
and
to
accept
the
evidence
of
the
respondent's
experts
as
persons
familiar
with
the
subject,
that
the
pipes
and
valves
in
issue
in
their
ordinary
signification
were
integral
parts
of
the
compressor
stations
and
metering
facilities
rather
than
integral
parts
of
the
pipeline.
His
findings
that
the
weight
of
the
evidence
is
clearly
to
the
effect
that
the
word
"pipeline
in
the
industry
means
the
long
cross-country
pipeline
carrying
gas
or
oil.
When
it
is
intended
to
refer
to
the
whole
system,
the
people
involved
call
it
a
“pipeline
system",
which
makes
more
sense.
encompasses
not
only
the
concept
of
the
pipes
and
valves
in
issue
in
practice
being
integral
to
the
compressor
station
and
not
to
the
mainline
itself
but
also
that
they
are
part
of
the
function
of
the
former
rather
than
the
latter,
contrary
to
what
was
argued
by
the
appellant.
There
was,
in
my
view,
ample
evidence,
which
Dubé
J.
accepted,
to
support
those
findings.
Further
buttressing
that
evidence,
of
course,
was
evidence
of
the
terminology
employed
in
the
Canadian
Standards
Association
Z-184
Code
for
the
year
1986,
to
which
reference
was
made
in
the
excerpt
from
the
trial
judgment
earlier
referred
to.
In
essence
it
provides
an
industry
dictionary
or
lexicon
for
those
familiar
with
the
industry
who
thus
are
"conversant
with”
that
industry.
The
terms
therein,
incidentally,
were
utilized
by
the
appellant's
expert,
Mr.
Eckmeier,
as
well
as
by
the
respondent's
two
experts.
Counsel
for
the
appellant
argued,
as
an
alternative,
that
if
the
industry's
use
of
the
word
“pipeline”
was
to
be
adopted,
then
the
trial
judge
erred
in
finding
that
the
interpretation
of
the
gas
industry
should
be
applied
to
the
word
“pipeline”
since
the
regulation
is
applicable
to
any
pipeline
used
in
any
industry,
i.e.
the
scope
of
Class
2
makes
it
clear
that
various
industries
are
subject
to
the
subsection
and,
accordingly,
the
interpretation
of
the
gas
industry
alone
is
inappropriate.
The
short
answer
to
that
submission
is
that
there
was
no
suggestion,
let
alone
evidence,
that
the
meaning
of
the
term
“pipeline”
differs
from
industry
to
industry.
The
respondent
adduced
evidence
from
those
familiar
with
its
industry,
which
the
trial
judge
was
entitled
to
accept
or
reject.
One
of
the
bases
for
rejection
could
have
been,
of
course,
that
the
meanings
attributable
to
the
terms
in
the
gas
industry
were
not
those
necessarily
applicable
in
the
transmission
by
pipeline
of
oil,
steam,
water
or
any
other
commodity.
The
appellant
made
no
effort
to
adduce
evidence
to
support
such
a
proposition.
The
trial
judge
was
entitled,
therefore,
to
accept
or
reject
the
only
evidence
from
those
conversant
with
the
subject
that
he
had
before
him.
He
chose
to
accept
it
and
I
do
not
think
that,
in
the
circumstances
to
which
I
have
already
referred,
it
can
be
said
that
he
erred
in
doing
so.
For
all
of
the
foregoing
reasons,
I
am
of
the
opinion
that
the
trial
judge
did
not
err
in
holding
the
pipes
and
valves
in
issue
did
not
fall
into
Schedule
B,
Class
2
assets
but
rather
ought
to
have
been
property
classified
under
Class
8
of
Schedule
B
of
the
Regulations.
II
The
appellant’s
alternative
position
if
its
Class
2(b)
argument
fails,
as
it
has,
is
that
the
pipes
and
valves
in
issue
constitute
“distributing
equipment
and
plant
acquired
primarily
for
the
production
or
distribution
of
gas"
in
accordance
with
Class
2(d)
of
Schedule
B.
The
basis
for
the
appellant's
contention
is
that
the
words
“distributing”,
“distributed”
and
“distribution”,
all
of
which
appear
in
Class
2,
are
used
to
describe
property
acquired
by
taxpayers
involved
in
the
production
and
distribution
of
electricity,
heat,
water
and
gas.
Consequently,
the
words
are
to
be
construed,
in
counsel's
submission,
in
their
ordinary
and
grammatical
sense
and
not
in
a
technical
sense
applicable
in
a
particular
industry.
"Distribution"
is
defined
in
the
Shorter
Oxford
English
Dictionary,
in
part,
as:
the
action
of
distributing,
dealing
out,
or
bestowing
in
portions
among
a
number;
apportionment,
allotment
.
.
.
the
dispersal
among
consumers
of
commodities
produced,
opposite
to
production.
Given
this
meaning,
in
appellant
counsel's
submission,
the
terms
"distributing
equipment"
and
“distribution
system”
in
Class
2(d)
encompass
all
equipment,
plant
and
structures
in
the
transmission
phase
of
the
natural
gas
industry.
There
can
be
no
doubt,
and
the
trial
judge
found
as
a
fact
that,
the
respondent
is
neither
a
producer
nor
manufacturer
of
gas.
It
is
not
disputed
that
its
sole
business
is
to
transmit
(i.e.,
to
transport)
natural
gas
produced
and
owned
by
others
through
its
pipelines
for
delivery
on
behalf
of
the
owner
to
the
facilities
of
other
natural
gas
transmission
companies.
It
does
not
apportion
or
allot
in
portions
among
a
number.
Nor
is
it
a
distributor,
or
involved
in
the
distribution
of
gas,
in
the
sense
in
which
those
terms
are
used
in
the
natural
gas
industry.
Distribution,
according
to
the
evidence
means
conveying
gas
to
individual
user
lines
or
to
other
distribution
lines.
It
is
a
function
entirely
different
from
the
transmission
or
transportation
of
gas.
As
observed
earlier,
the
service
performed
by
the
respondent
is
akin
to
that
of
common
carrier
without
any
relationship
with
the
ultimate
user.
Therefore,
the
function
performed
by
the
respondent
is
not
distribution
within
either
the
dictionary
meaning
of
that
word
or
in
the
sense
in
which
the
term
is
used
in
the
industry.
On
those
facts
then,
this
case
differs
from
those
involved
in
Northern
and
Central
Gas
Corporation
Limited
v.
The
Queen,
[1987]
2
C.T.C.
241
at
245;
87
D.T.C.
5439
at
5442.
Unlike
the
respondent
here,
the
appellant
in
that
case
purchased
natural
gas
from
a
gas
transmission
company
for
delivery
to
it
near
North
Bay,
Ontario,
and
from
where
it
was
transported
on
a
transmission
line
owned
by
it.
A
liquified
natural
gas
plant
also
owned
by
the
appellant
was
used
to
store
the
natural
gas
purchased
by
the
appellant
in
low-demand
periods
for
sale
to
the
appellant's
customers
during
high
demand
months.
The
gas
was
stored
in
liquid
form
for
reconversion
and
delivery
to
its
customers.
In
these
circumstances,
this
court
found
that
the
liquified
natural
gas
plant
there
in
issue
was
“acquired
primarily
for
the
distribution
of
gas.”
Here,
no
matter
whether
the
dictionary
or
industry
meaning
of
"distribution"
or
“distributing”
is
utilized,
the
respondent
is
not
engaged
therein.
The
pipes
and
valves
in
issue,
consequently,
are
neither
manufacturing
nor
distributing
equipment.
Neither
were
they
acquired
primarily
(or
otherwise)
for
the
production
or
distribution
of
gas.
The
two
preconditions
for
the
classification
of
property
under
Class
2(d)
of
Schedule
B
have
not,
therefore,
been
met.
The
appellant
thus
fails
on
the
second
ground
of
its
appeal.
Accordingly,
the
appeal
should
be
dismissed
with
costs.
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