Citation: 2009 TCC 42
Date: 20090120
Docket: 2004-600(GST)G
2004-1606(GST)G
2004-1974(GST)G
BETWEEN:
MUNICIPAL DISTRICT OF SPIRIT RIVER NO. 133,
COUNTY
OF TWO HILLS NO. 21 and
COUNTY
OF LETHBRIDGE,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Miller J.
[1]
As a Tax Court Judge, I
am often called upon to decide matters wholly within the domain or expertise of
others. This case brought by the County of Lethbridge, Municipal District of Spirit River No. 133 and the County of Two
Hills No. 21 is a classic example of what I mean. Does regravelling a gravel
road constitute road maintenance? And why is this important tax-wise? Because
road maintenance is an exempt supply pursuant to subsection 21.1(d) of
Part VI of Schedule V of the Excise Tax Act precluding the
Appellants from claiming input tax credits.
[2]
The parties provided an
Agreed Statement of Facts. The Appellants presented the evidence of Mr. Brandon
Smith, a consultant to Alberta rural municipalities and Dr. Delwyn
Fredlund, an expert in unsaturated soils and the gravelling of unpaved roads.
The Respondent presented the evidence of Mr. Jim Coxford, an expert
on the process of gravelling roads.
[3]
It is worth repeating
parts of the Agreed Statement of Facts, though I will interject evidence from
documents and testimony where appropriate.
PART I: GENERAL FACTS APPLICABLE TO ALL THE APPELLANTS
1. At the relevant times the Province of Alberta (“Alberta”) entered into agreements
with the Appellant municipalities pursuant to the Public Highways
Development Act (“Highways Act”) whereby Alberta agreed to provide grants to the municipalities to carry out certain
projects and activities on roads owned by Alberta. One such program was the Rural Transportation Grant (“RTG”)
program.
2. Pursuant to the Excise Tax Act, R.S.C. 1985, c.
E-15 (the “Act”), the Appellant municipalities receive a public service
body rebate (“PSB”).
3. During the relevant period, the Appellant municipalities
claimed full input tax credits (“ITC”), less any PSB, with respect to GST paid
on property or services consumed, used or supplied in the course of carrying on
the eligible activities associated with the grant programs, including the RTG
program.
4. The Minister denied the ITC and, upon institution of the
Appeals, the following issues arose in determining whether the Appellants
were entitled to the ITC claimed:
(a) Whether, in the context of each grant
program, the Appellant municipalities made a supply to Alberta;
(b)
Whether the grant funding was consideration for
those supplies; and
(c)
If (a) and (b) were answered in the affirmative,
whether all or any of the supplies were exempt supplies pursuant to Section
21.1 of Part VI of Schedule V of the Act.
5. The parties proceeded before the Tax Court of Canada
pursuant to section 58 of the Tax Court of Canada Rules (General Procedure)
for the determination of questions of law in respect of the first two
issues.
6. In a decision dated February 14, 2006, the Honourable
Justice R.D. Bell of the Tax Court of Canada determined that with respect
to each of the grant programs in issue, the Appellants did make a supply to Alberta. Further the Court held that with
the exception of the Canada-Alberta Infrastructure Program and the
Bridge/Culvert Agreements Program that the grant funding was consideration for
that supply.
7. In light of the determinations made by the Tax Court on
the issues before it and this Agreed Statement of Facts, the parties have
narrowed down the remaining issue to whether ITC amounts related to gravelling
costs claimed through the RTG program between the years 1997 to 2001 were
exempt supplies pursuant to section 21.1 of Part VI of Schedule V of the Act.
8. Thus, the legal issue in the appeals is whether road
gravelling (excepting “spot gravelling”) constitutes an exempt supply pursuant
to section 21.1(d) of Part VI of Schedule V of the Act.
PART II: THE RTG PROGRAM
9. The objective of the RTG program is to assist rural
municipalities with local road systems.
Section 7.1 of the Administrative Guidelines for the
Rural Transportation Grant
reads as follows:
7.1
Objective
To assist Alberta
counties, municipal districts, Métis Settlements and the Special Areas by
providing annual grants for lasting improvements to their local road system. To
assist rural municipalities in the development of a network of roads to a
uniform standard commensurate with demand and need; to increase safety of the
travelling public through dust control; and, to ensure required
engineering is undertaken for approved projects.
10. Under the RTG program, the municipalities were required to
provide to Alberta, for its
review and approval, a listing of proposed work for the upcoming year,
generally on or before April 1 of the upcoming year.
Several letters from the municipalities were produced,
setting forth the upcoming projects. It is informative to repeat part of one of
those letters. The following is an excerpt from a letter from the County of Lethbridge to Alberta Transportation dated June 27,
1997,
which reads in part:
We wish to thank you for the allocation of a Transportation
Grant to the County of Lethbridge in the amount of $388,207.
The grant funds are greatly appreciated and needed in order to
assure the safety of the traveling public through proper design construction
and maintenance of the road system infrastructure.
[emphasis added]
11. Projects such as grading/re-grading, gravelling, base
course, paving, seal coat, signing, pavement markings, and dust abatement were
eligible activities under the RTG program.
Under 7.3.3 of the Administrative Guidelines for the
Rural Transportation Grant, maintenance is listed as an activity that is not
eligible for funding.
12. Upon review of the listing of proposed work, Alberta advised the municipality of the
grant allocation. Funding was provided for 100% of approved projects up to the
municipality’s annual allocation.
The municipalities would file a final accounting with
the province, confirming how the funds were spent.
PART III: THE AGREEMENTS
13. Section 21 of the Highways Act authorizes the
Province to enter into an agreement with any municipality to contribute to the
cost of construction or maintenance of any street or road.
14. Memorandum of Agreements (“Agreements”) were entered into
between the Province and each of the Appellants pursuant to section 21 of the Highways
Act in which funds were granted to the Appellants for projects approved
under the RTG program.
The preamble to the Memorandums of Agreement between the Province of Alberta and the municipalities states:
Whereas,
under Section 21 of the Public Highways Development Act, the Province may enter
into an agreement with any urban or rural Municipality for the construction of
any street or road, that is subject to its direction, control and management; …
…
PART IV: ROAD GRAVELLING
17. In the prairie portion of Alberta, gravel roads are generally comprised of a gravel top layer
and a clay sub-grade or bottom layer.
18. Road gravelling involves one of two processes. The first
process, which forms the remaining issue in these appeals is the application of
a gravel lift either: 1) on top of newly constructed clay sub-grade, or 2) on
top of an existing layer of gravel and existing clay sub-grade. The second
process is “spot gravelling” which involves placing gravel on a problem area of
a road.
19. The Appellants had discretion to decide when and where to
apply gravel lifts to the roads.
20. The method used to apply gravel lifts to an existing road
is gravel-truck. The gravel-truck is loaded with gravel at a gravel pit or a
gravel stockpile site. The gravel truck drives to the gravel road. The
gravel truck then raises its box or opens its gates and drives slowly along the
road until it’s [sic] load is emptied. This is done repeatedly until
sufficient gravel is placed on the selected section of road.
21. During the relevant period, all gravel lifts were applied
to existing gravel roads. Some gravelling occurred on secondary highways.
It was Mr. Smith’s evidence that 95% of the roads in
question were at least 10 years old. The regravelling on mature roads was
applied every three to five years.
PART V: THE APPELLANTS
(A) COUNTY
OF TWO HILLS NO.
21
…
28. If the road gravelling activities undertaken by Two Hills
under the RTG program are not exempt supplies pursuant to section 21.1 of Part
VI of Schedule V of the Act, the parties agree that Two Hills is further
entitled to input tax credits (net of PSB rebate) in respect of the RTG program
in the amount of $66,053.56.
(B)
MUNICIPAL DISTRICT OF SPIRIT RIVER NO. 133
…
35. If the road gravelling activities undertaken by Spirit
River under the RTG program are not exempt supplies pursuant to section 21.1 of
Part VI of Schedule V of the Act, the parties agree that Spirit River is
entitled to further input tax credits (net of PSB rebate) in respect of the RTG
program in the amount of $29,235.44.
(C)
COUNTY OF LETHBRIDGE
…
43. If the road gravelling activities undertaken by Lethbridge
under the RTG program are not exempt supplies pursuant to section 21.1 of Part
VI of Schedule V of the Act, the parties agree that Lethbridge is further entitled to input tax credits (net of PSB rebate) in
respect of the RTG program in the amount of $68,512.52.
[4]
I turn now to the two
experts’ reports. Their evidence was an interesting study in contrast. Dr.
Fredlund, an eminent academic specializing in unsaturated soils, presented a
theoretical approach to gravelling, relying on his own research, study papers
and theses of his graduate students over the years. Mr. Coxford presented a
practical approach having driven throughout the municipalities on the roads in
issue and relying on his experience in the road construction industry,
including 16 years working on the Alaska highway
project. With one notable exception they did not so much disagree with one
another as simply approach the issue from two different planets. The notable
exception was that Dr. Fredlund suggested that the gravel added to a gravel
road is lost over time not just due to traffic displacing it, but also due to
the coarse gravel becoming fine gravel, mixing into the clay layer beneath the
surface gravel, causing a strengthening of the road generally. Mr. Coxford,
upon inspecting the roads, concluded that the gravel was displaced almost
entirely by traffic; he found little, if any, mixing at the interface of the
gravel and clay, concluding that gravelling was to “return the granular
surfacing material to its original thickness and strength”.
[5]
The thrust of Dr.
Fredlund’s opinion was best captured in his answer to the following question:
Question 4.) Would lifts of gravel applied subsequent to the
initial lift of gravel incorporated into a gravel road constitute a
‘betterment’ to the road?
Yes. Lifts of gravel applied subsequent to the initial lift of
gravel result in a ‘betterment’ to the road in that the integrity of the
road surface is improved. The benefits associated with gravelling a road
are only partially realized through the initial gravel application. Gravelling
a road should be viewed as a “process” that embraces several applications of
gravel and leads towards the completed construction of the gravel road. The
“betterment” of the roadway, or the benefits associated with gravelling a road,
can only be realized as integrity is built into the subsurface mixture of clay
and gravel. Additional lifts of gravel subsequent to the initial application of
gravel result in structural improvement to the road.
[6]
Dr. Fredlund included a
chart to describe the process of gravel road construction, which suggested
improved quality of the road with the first few applications of gravel over the
first few years of the road’s existence, to what he called the transition
stage. After those first few years, the chart indicates “sustained quality”,
although in examination Dr. Fredlund suggested that even the later applications
of gravel resulted in an increase in the strength or integrity of the road due
to some mixing at the interface. However, he also acknowledged in cross‑examination
that regravelling did bring the road to the requisite design standard, or the
standard reached at the transition stage.
[7]
Mr. Coxford did a first
hand inspection of the roads, including excavating test holes in the roads
themselves. He reached two conclusions. First, that deterioration of the gravel
surface layer was mainly as a result of traffic removing gravel from the road,
and second, that mixing of gravel with the subgrade material was minimal to
non-existent.
[8]
Mr. Coxford also
referred me to the “Highway Maintenance Guidelines and Level of Service Manual”
provided by the Province of Alberta to highway maintenance contractors.
Section 3.4 of that manual deals with surface regravelling. The first paragraph
reads as follows:
The excessive loss of gravel from a roadway results in loss of
traction, a reduction in strength, rutting, and deterioration of the roadway
surface and side slopes. Gravelled roadways require regravelling, on average,
once every three years. In the late fall of each year the department will
inspect all gravel roads for the purpose of condition rating. Part of the
condition rating process will be to determine which roadways will require
regravelling in the following year. A roadway will be considered for
regravelling when it exhibits any of the following characteristics: …
Issue
[9]
Are the gravelling
activities of the Appellants the supply of a service of repairing or
maintaining roads? If so, the Appellants are not entitled to claim input tax
credits in connection with such exempt supplies.
Analysis
[10]
Section 21.1 of Part VI
of Schedule V of the Excise Tax Act, which sets out exempt supplies, reads:
21.1 A supply
made by a municipality or a board, commission or other body established by
a municipality of a service of
(a) installing,
replacing, repairing or removing street or road signs or barriers, street or
traffic lights or property similar to any of the foregoing;
(b) removing
snow, ice or water;
(c) removing,
cutting, pruning, treating or planting vegetation;
(d) repairing
or maintaining roads, streets, sidewalks or similar or adjacent property;
or [emphasis added]
(e) installing
accesses or egresses.
[11]
This is not complicated
language, yet the Appellants suggest that if “repair or maintenance” can
support more than one reasonable meaning, the ordinary meaning should play a
lesser role and a textual, contextual and purposive analysis should be
preferred. The law at times seems to delight in contorting itself into unimaginable
and complicated positions to accommodate a result, when stepping back and
adopting a simple common sense approach will lead directly to the correct
answer. Is regravelling a mature gravel road every three to five years road
maintenance? I certainly think so. The Government of Alberta in its own highway
maintenance guidelines obviously thinks so. The County of Lethbridge in its
own letters to the Province in connection with the RTG clearly thinks so. I
would even suggest the reasonable Albertan driving by the gravel truck on a
balmy summer day, while the truck regravels the surface, would think so. Indeed,
the answer lies in the very question: how could something to be done every
three years in the long life of a road be anything other than maintenance? So,
why has this become so difficult and complicated?
[12]
It has become
complicated for a variety of reasons: first, because the provisions of the Excise
Tax Act that are in play (sections 21 and 21.1) were not directed at the
unique position of the gravel activities of municipalities being considered a
supply to the Province; second, because Mr. Smith saw an opening for counties
to get more than the public service body rebate to which they were entitled;
third, because language is imperfect and certainly that applies to legislative
language; fourth, because experts disagree. I could go on – I will not. I will
though go through a more thorough analysis called for by the very capable
arguments of counsel, addressing the complicating factors, yet reaching the
same common sense result.
[13]
To be clear at the
outset, it is not for the Province of Alberta and the municipalities to
determine what is road maintenance for purposes of the Excise Tax Act
(it is certainly up to them to determine what are eligible projects for
purposes of the RTG), nor is it for experts to make that determination, nor is
it to be found determinatively in dictionaries: no, it is up to this Court,
taking all those factors into account. As was so well put by the Federal Court
of Appeal in Shaklee Canada Inc. v. Minister of National Revenue:
16 Statutes are presumed to be written for the people they
affect, and Courts will strive for interpretations that respect as much as
possible this presumption within the constraints of other competing, contextual
factors.
17 The goal of all of these rules is to give effect to
Parliament’s intent. To aid this process, Courts often refer to dictionaries.
They may also consider the testimony given by expert witnesses, or other
relevant aids such as academic and government publications. It is important to
remember, however, that none of these aids are decisive. In the final analysis,
a Court must exercise its own judgment in weighing all the relevant factors in
the factual and legislative context of the case.
[14]
I will approach this
task by first determining, without reference to any agreements between the Province of Alberta and the Appellants, whether the gravel
activities constitute road maintenance. Once determining that the activities do
constitute maintenance, I will then consider whether this conclusion should be
overturned by reliance on the wording of the agreements between the Province of Alberta and the Appellants. I will conclude with a brief consideration of the
policy implications of sections 21 and 21.1.
[15]
A good starting point
is the definition section of the Alberta Public Highway Development Act. Notwithstanding that
Appellants’ counsel urged me not to consider this issue in terms of road
maintenance versus road construction, he did provide me with a definition of
both of those terms as set out in that Act:
1(b) “construction” means the
construction or reconstruction of a highway and the doing of whatever other
work is necessary to put a highway in a condition for use by vehicles, but does
not include maintenance;
…
1(k) “maintenance” means the preservation
and repair of a highway and any other work necessary to keep the highway in
serviceable condition; …
[16]
I agree that it is
unnecessary to ask, if not road maintenance then what is it? The only question
is whether it is road maintenance. Is it the preservation and repair of a road
to keep the road in serviceable condition? Dictionary definitions also capture
the concept of preservation. The Canadian Oxford Dictionary defines “maintain”
as “preserve or provide for preservation of a road in good repair”. The Respondent’s
Oxford Dictionary definition stated “keep in good condition by checking or
repairing regularly”. The Appellants argue that there is no element of
improvement in these definitions and, given the evidence that suggests there
was some improvement, it must be something other than maintenance. I disagree.
The Appellants are implying far more in the word improvement than is
justified. Putting gravel on the road is certainly not going to make the road
worse: the road will be better for the gravel lift, but it will still be in
substance a serviceable gravel road. The distinction comes by adding the term
“lasting” to improvement, and also in considering improvement to take something
beyond what it already is. I think the Appellants’ argument fails on both
fronts.
[17]
Was the improvement
lasting? No. There seems to be agreement amongst everyone involved, including
the experts, that regravelling is required on a regular basis. One gravel lift
cannot be said to be lasting; indeed, as soon as that first vehicle drives over
the road, the road surface starts to deteriorate. That is not lasting.
[18]
Nor does a gravel lift
take the road to the state of a different road. I heard no evidence that the gravel
lifts resulted in the speed limits being increased or different vehicles being
allowed on the road. The road remained a gravel road servicing the same traffic
in the same manner both before and after the gravel lift.
[19]
The Appellants rely on
Dr. Fredlund’s testimony to suggest there is a level of improvement which would
characterize the regravelling as something other than maintenance. Dr.
Fredlund’s evidence was that the first few lifts were really part of the initial
road construction, strengthening the road and rendering it impermeable to a
stage that he called the transition stage, or as the Respondent put it, to the
required design standard level. The fact is, I am not dealing with these first
few gravel lifts. I am faced with the subsequent regravelling on mature roads,
which Dr. Fredlund’s own chart refers to as “sustaining quality”. I acknowledge
that he clarified his position by testifying that even in those subsequent
gravel lifts some strengthening of the road occurred by the mixing process. Certainly,
that was the theory. Mr. Coxford, who actually drove over the roads and tested
them, advised that the mixing was minimal to non-existent. I conclude that the
regravelling had no strengthening impact and that both the purpose and result
of the regravelling was to replace displaced gravel. All to say, the experts’
evidence confirms my layperson’s view of the regravelling. It was nothing more
than preservation of the gravel road, and under any definition that is
maintenance.
[20]
I find further justification
for this conclusion in the Province of Alberta’s very own guidelines quoted
earlier. The Province has included in its maintenance guidelines a whole
section on surface regravelling, confirming that roadways require regravelling
every three years. No mention is made of lasting improvement or that the
regravelling process results in a new or reconstructed road. It is simply
maintenance.
[21]
The parties did refer
to cases dealing with road repairs, but they do not add to my understanding of
road maintenance.
[22]
I turn now to whether
my conclusion is impacted by the agreements between the Province of Alberta and the Appellants. To recap, section 21 of the Public Highways
Development Act states that the Minister may agree with municipalities to
“contribute to the cost of construction and maintenance of any street or road”.
The preambles of the agreements themselves refer only to “construction of
any street or road”. Further, the RTG guidelines specifically in section 7.3.3
cite “maintenance” as an activity not eligible for funding, while specifically
stating “gravelling” is an eligible project. This leaves an implication that
the Province did not consider “gravelling” to be maintenance for purposes of
funding the municipalities. The Province, however, was not addressing the Excise Tax Act.
Further, the agreement could possibly be interpreted that gravelling, being
specifically cited as eligible, was an express exception to the ineligible
maintenance projects. I heard no evidence from either officials of the Appellants
or the Province of Alberta to assist in the interpretation
of these provisions. I simply am not swayed by the language.
[23]
The Appellants relied
on the following comment from Hidden Valley Golf Resort Association v.
R.,
citing the case of Dyrham Park Country Club v. Customs and Excise
Commissioners, [1978] V.A.T.T.R. 244 (U.K.) at 252:
In our opinion, where the parties enter into a transaction involving
a supply by one to another, the tax (if any) chargeable thereon falls to be
determined by reference to the substance of the transaction, but the substance
of the transaction is to be determined by reference to the real character of
the arrangements into which the parties have entered.
[24]
The real character of
the arrangements I would suggest is that gravelling should receive financing.
How the gravelling might have been characterized by the parties does not go to
the real character of the deal. It certainly is not persuasive for purposes of
the Excise Tax Act.
[25]
I am influenced in
reaching this conclusion by the letter of the County of Lethbridge to the
Province, blatantly referring to the gravelling as maintenance. This supports
my view that the gravelling is to be read as maintenance, even in the context
of the RTG guidelines, as an exception to the category of ineligible projects.
[26]
I am further confirmed
in this view by Alberta’s highway maintenance guidelines alluded
to earlier, which recognize regravelling as maintenance. The RTG
guidelines and the agreements between the Province of Alberta and the Appellants are not sufficient to satisfy me that
the gravelling activity is anything other than maintenance for purposes of the Excise
Tax Act.
[27]
Finally, I wish to
address the policy implications in sections 21 and 21.1 of the Excise Tax
Act. It is clear from the Government’s technical notes in July 1997
that section 21 exempts road maintenance provided to property owners as a
standard municipal service, though did not cover the situation of supplying
such services to individual households on a fee for service basis. So, a new
section 21.1 was introduced making all supplies of such services exempt when provided
by a municipality. The Government notes state:
New section 21.1 of Part VI of Schedule V exempts the supply of a
number of services when made by a municipality or by a board, commission or
other body established by a municipality. Services currently exempt under
section 21 of this Part include road repair and maintenance, snow removal and
tree pruning where they are provided to property owners as a standard
municipal service. However, section 21 does not exempt these services where
they are supplied to individual households on a fee-for-service basis. New
section 21.1 makes all supplies of these services exempt when provided by a
municipality or by a body established by a municipality. [emphasis
added]
Section 21 of Part VI of Schedule V contains a general exemption for
standard municipal services provided to property owners in a particular locale. This includes such services as road building and street
lighting. In most municipalities, these services are financed from general
revenues. In some cases, the municipality may identify the cost of the
service separately to the resident. This provision is intended to ensure
that such charges are not taxable.
[emphasis added]
[28]
Clearly, these
provisions simply do not contemplate a supply by a municipality to the
Provincial Government. Section 259 rebates are to address such services by a
municipality, but this Court has ruled that the gravelling is a supply, and I
must therefore apply these provisions in a manner no one contemplated. As a
supply, there is no question it is a supply of a service. It is only then to be
determined if the nature of the supply is road maintenance. I have concluded it
is, and, therefore, the conditions of subsection 21.1(d) are met and the
supply is exempt. I am satisfied the result is the result that is within the
spirit and object of the Excise Tax Act vis-à-vis public sector bodies.
We in the tax community – judges, tax lawyers, tax accountants, tax
consultants, tax legislators and taxpayers deal with the most complicated and
complex legislation in the statutes. We should perhaps resist the urge to dipsy
doodle through the legislation seeking imaginative means to use legislative
complexities in an unintended manner to achieve a desired result, further
complicating these already complex laws.
Conclusion
[29]
The parties have
agreed:
25. For the relevant period the parties agree that Two Hill’s [sic]
is entitled to input tax credits (net of PSB rebate) for the grant programs
no longer in dispute, as follows:
Street Improvement Program $6,246.99
Rural Road Study Initiative Program $1,208.12
Resource Road/New Industry Program $7,392.29
Secondary Highways Transition Agreement $
0.00
Bridge/Culvert Agreements Program $
0.00
26. For the relevant period the parties agree that Two Hills is
entitled to input tax credit (net of PSB rebate) in respect of RTG program
amounts no longer in dispute, in the amount of $25,298.79.
27. For the relevant period the parties agree that Two Hills
is not entitled to input tax credit (net of PSB rebate) in respect of RTG
program amounts no longer in dispute in the amount of $20,951.12. …
32. For the relevant period the parties agree that Spirit River is entitled to input tax credits (net of PSB rebate) for the grant
programs no longer in dispute as follows:
Rural Road Study Initiative Program $
1,194.74
Resource Road/New Industry Program $22,898.45
Canada-Alberta Infrastructure Program $
0.00
Bridge/Culverts Agreement Program $
0.00
33. For the relevant period the parties agree that Spirit River is entitled to input tax
credit (net of PSB rebate) in respect of RTG program amounts no longer in
dispute in the amount of $28,003.17.
34. For the relevant period the parties agree that Spirit River is not
entitled to input tax credit (net of PSB rebate) in respect of RTG program
amounts no longer in dispute in the amount of $3,314.89. …
40. For the relevant period the parties agree that Lethbridge is entitled to input tax credits
(net of PSB rebate) for the grant programs no longer in dispute as follows:
Rural Road Study Initiative Program $
293.03
Resource Road/New Industry Program $60,830.60
Secondary Highways Transition Agreement $
0.00
Bridge/Culvert Agreements Program $
0.00
41. For the relevant period the parties agree that Lethbridge is entitled to input tax credit
(net of PSB rebate) in respect of RTG program amounts no longer in dispute in
the amount of $90,702.36.
42. For the relevant period the parties agree that Lethbridge is not entitled to input tax
credit (net of PSB rebate) in respect of RTG program amounts no longer in
dispute in the amount of $28,909.77.
[30]
With respect to the
gravelling activities at issue before me, I have concluded such activities are
exempt supplies and therefore:
(i) Two Hills is not
entitled to further input tax credits in the amount of $66,053.56.
(ii) Spirit River is not entitled to further input tax credits in
the amount of $29,235.44.
(iii) Lethbridge is not entitled to further input tax credits in the
amount of $68,512.52.
[31]
The parties indicated
at the conclusion of the trial that they may wish to make representations as to
costs depending on the outcome. I therefore make no award of costs at this
stage, reserving the right to do so, pending submissions from counsel.
Signed at Ottawa, Canada, this 20th day of January
2009.
“Campbell J. Miller”
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