Date: 20100322
Docket: A-143-09
Citation: 2010 FCA 82
CORAM: BLAIS C.J.
NADON J.A.
TRUDEL J.A.
BETWEEN:
VILLE
DE GATINEAU
Appellant
and
HER
MAJESTY THE QUEEN
Respondent
Heard at Montréal,
Quebec, on March 22,
2010.
Judgment delivered from the Bench at Montréal, Quebec, on March 22, 2010.
REASONS FOR JUDGMENT OF THE COURT BY: TRUDEL
J.A.
Date:
20100322
Docket:
A-143-09
Citation:
2010 FCA 82
CORAM: BLAIS
C.J.
NADON
J.A.
TRUDEL
J.A.
BETWEEN:
VILLE DE
GATINEAU
Appellant
and
HER MAJESTY
THE QUEEN
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Montréal, Quebec, on March 22, 2010)
TRUDEL J.A.
[1]
This
is an appeal from an Amended Judgment by Paris J. of the Tax Court of Canada
[2009 TCC 130] regarding input tax credits (ITCs) claimed by the appellant
under subsection 169(1) of the Excise Tax Act, R.S.C. 1985, c. E-15. The
business activities are related to the appellant’s waste water treatment plan.
[2]
The
ITC is the mechanism used to ensure that the costs of doing business include no
GST. The appellant converts the solid waste that is produced from the waste
water into fertilizer pellets that are sold to third parties. This being a
commercial activity, the Minister of National Revenue has allowed the appellant
full ITCs for the GST paid on supplies used to operate that part of the waste
treatment plant.
[3]
As
stated by the Tax Court Judge, the Minister has also allowed the appellant a
public service body rebate under section 259 of the Act amounting to 57.14% of
the total GST in operating the remaining part of the plant.
[4]
The
debate relates to the additional ITCs claimed by the appellant representing the
difference between the ITCs already allowed by the Minister and 100% of the GST
paid by the City on expenditures incurred to run the entire plant and on all
the inherent capital expenditures.
[5]
The
Tax Court Judge found that the appellant was not entitled to these additional ITCs
because the water treatment operations (except for the production of the
fertilizer pellets) were a supply of an exempt municipal comprehensive service
entailing both collection and treatment. To reach his conclusion, the Tax Court
Judge relied upon section 21 of Part VI of Schedule V to the Act.
[6]
The
appellant argues that section 21 is not triggered because there is no close
nexus between the municipal service at issue, that is the water treatment
plant, and the real property of the landowners and occupants. The treatment of
the waste water is performed as part of its commercial activity of
manufacturing fertilizer pellets.
[7]
The
appellant is of the view that its residents abandon and relinquish all of their
interest in and control over waste water. The waste water which is treated by
the City belongs to it. The owners and occupants do not care what happens to
the waste water once it leaves their homes. They get none of this clean water
back.
[8]
These
arguments were all in front of the Tax Court Judge. We have not been persuaded
that he committed errors of law or any other errors when he concluded as he
did.
[9]
Therefore,
this appeal will be dismissed with costs.
“Johanne
Trudel”
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND
SOLICITORS OF RECORD
DOCKET: A-143-09
(APPEAL
FROM A JUDGMENT OF THE TAX COURT OF CANADA DATED MARCH 4, 2009, DOCKET NO.
2007-2623(GST)G.
STYLE OF CAUSE: VILLE
DE GATINEAU v.
HER
MAJESTY THE QUEEN
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: March 22, 2010
REASONS FOR JUDGMENT OF THE
COURT BY: BLAIS, C.J.
NADON J.A.
TRUDEL
J.A.
DELIVERED FROM THE BENCH BY: TRUDEL J.A.
APPEARANCES:
|
Michael Kaylor
|
FOR
THE APPELLANT
|
|
Benoît Denis
|
FOR
THE RESPONDENT
|
SOLICITORS
OF RECORD:
|
Lapointe Rosenstein
Montréal, Quebec
|
FOR THE APPELLANT
|
|
Larivière Meunier
Montréal,
Quebec
|
FOR THE RESPONDENT
|
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