Teitelbaum,
J.:—The
plaintiff,
Canadian
Pacific
Limited,
hereinafter
referred
to
as
C.P.,
appeals,
by
means
of
a
direct
action,
a
notice
of
reassessment
for
its
1977
and
1979
income
taxation
years.
At
the
commencement
of
the
hearing,
C.P.,
with
the
consent
of
the
defendant,
Her
Majesty
the
Queen,
hereinafter
referred
to
as
"Crown",
filed
an
agreed
statement
of
facts.
With
the
filing
of
the
agreed
statement
of
facts,
no
further
proof
was
made
by
either
party
hereto.
The
following
is
contained
in
the
agreed
statement
of
facts:
2.
The
action
relates
to
notices
of
reassessment
issued
by
the
Minister
of
National
Revenue
("the
Minister")
pursuant
to
the
Income
Tax
Act
in
respect
of
the
Plaintiff's
1977
and
1979
taxation
years.
3.
In
both
the
1977
and
1979
taxation
years,
the
Plaintiff
incurred
certain
expenditures
in
the
course
of
implementing
its
program
of
rehabilitation
and
restoration
of
its
lines
of
railway
in
Western
Canada.
The
expenditures
were
incurred
in
respect
of
bank
widening,
laying
of
ballast
and
other
track
material,
ties
and
trestles.
4.
The
Plaintiff
is
a
railway
company
subject
to
the
Railway
Act,
R.S.C.
1970,
c.
R-2,
for
which
a
Uniform
Classification
of
Accounts
has
been
prescribed
by
the
Canadian
Transport
Commission
pursuant
to
Section
328
of
that
Act.
5.
The
expenditures
referred
to
in
paragraph
3
above
were
incurred
by
the
Plaintiff
in
respect
of
the
repair,
replacement,
alteration
or
renovation
of
depreciable
property
of
a
prescribed
class
and
were
required
by
the
Uniform
Classification
of
Accounts
to
be
entered
in
the
books
of
the
Plaintiff
otherwise
than
as
an
expense.
6.
By
reason
of
the
facts
stated
in
paragraphs
3
and
5
herein,
the
Plaintiff
is
deemed,
pursuant
to
the
provisions
of
paragraph
36(b)
of
the
Income
Tax
Act,
to
have
acquired
in
each
of
the
taxation
years
1977
and
1979
depreciable
property
of
a
class
prescribed
by
regulation
at
a
capital
cost
equal
to
the
amount
of
the
expenditures
referred
to
in
paragraph
3
above
incurred
in
each
of
those
years
respectively.
7.
During
the
taxation
years
1977
to
1979,
the
Plaintiff,
with
respect
to
the
acquisition
of
such
depreciable
property,
received
assistance
from
the
government
in
the
following
amounts:
|
Taxation
|
|
|
year
|
Class
1
|
Class
3
Total
|
Total
|
|
1977
|
765,548
|
|
765,548
|
|
1977
|
7,688,019
|
|
7,688,019
|
|
1979
|
9,170,803
|
46,386
|
9,217,189
|
|
$17,624,370
|
$46,386
|
$17,670,756
|
The
said
assistance
was
paid
pursuant
to
an
agreement
between
Her
Majesty
the
Queen
in
right
of
Canada,
Canadian
National
Railway
Company
and
the
Plaintiff,
dated
September
15,
1977
and
as
extended
during
the
relevant
taxation
years.
A
copy
of
the
said
agreement,
not
including
the
appendices,
is
attached
to
this
Agreed
Statement
of
Facts.
The
1977
Taxation
Year
8.
(a)
On
or
about
the
26th
day
of
June,
1978,
the
Plaintiff
duly
filed
with
the
Minister
a
return
of
income
for
the
taxation
year
1977
in
which
it
declared
a
taxable
income
in
the
sum
of
$135,434,505.00
on
which
it
assessed
itself
as
liable
to
tax
in
the
sum
of
$60,480,833.00,
which
last
sum
it
tendered
in
payment
thereof.
(b)
In
computing,
for
purposes
of
claiming
capital
cost
allowances,
the
undepreciated
capital
cost
of
the
relevant
classes
of
depreciable
property,
the
Plaintiff
did
not
reduce
the
capital
cost
of
the
depreciable
property
by
the
amount
of
the
assistance
it
received
as
outlined
in
paragraph
7
herein.
(c)
By
reassessment,
notice
of
which
is
dated
February
16,
1983,
the
Minister
allowed,
inter
alia,
a
deduction
claimed
by
the
Plaintiff
under
paragraph
20(1)(a)
of
the
Income
Tax
Act
for
capital
cost
allowances
in
respect
of
the
depreciable
property
of
the
Plaintiff
referred
to
in
paragraph
6
herein
on
the
basis
that
the
provisions
of
subsection
13(7.1)
of
the
Income
Tax
Act
were
to
be
applied
so
as
to
reduce
the
capital
cost
of
the
depreciable
property
so
acquired
by
the
amount
of
assistance
received
by
the
Plaintiff
from
a
government
and
outlined
in
paragraph
7
herein.
(d)
On
or
about
the
14th
day
of
April,
1983,
the
Plaintiff
filed
with
the
Minister
a
notice
of
objection
to
his
reassessment
of
tax
in
which
it
objected,
inter
alia,
to
the
disallowance
of
capital
cost
allowances
as
claimed
by
the
Plaintiff
in
its
return
of
income.
(e)
By
notice
of
reassessment
dated
February
27,
1986,
the
Minister
revised
the
previously
reassessed
taxable
income
of
the
Plaintiff
as
a
result
of
adjustments
which
are
not
in
issue
in
this
action
but
left
undisturbed
his
previous
reassessment
in
relation
to
the
disallowance
of
capital
cost
allowances
hereinabove
referred
to.
The
1979
Taxation
Year
9.
(a)
On
or
about
the
30th
of
June,
1980,
the
Plaintiff
duly
filed
with
the
Minister
of
National
Revenue
a
return
of
income
for
the
taxation
year
1979,
in
which
it
declared
a
taxable
income
in
the
sum
of
$182,414,676.00,
on
which
it
assessed
itself
as
liable
to
tax
in
the
sum
cf
$61,906,750.00,
which
last
sum
it
tendered
in
payment
thereof.
(b)
In
computing,
for
purposes
of
claiming
capital
cost
allowances,
the
undepreciated
capital
cost
of
the
relevant
classes
of
depreciable
property,
the
Plaintiff
did
not
reduce
the
capital
cost
of
the
depreciable
property
by
the
amount
of
the
assistance
it
received
as
outlined
in
paragraph
7
herein.
(c)
By
reassessment,
notice
of
which
is
dated
April
19,
1984,
the
Minister
disallowed,
inter
alia,
a
deduction
claimed
by
the
Plaintiff
under
paragraph
20(1)(a)
of
the
Income
Tax
Act
for
capital
cost
allowances
in
respect
of
the
depreciable
property
of
the
Plaintiff
referred
to
in
paragraph
6
hereof
on
the
basis
that
the
provisions
of
subsection
13(7.1)
of
the
Income
Tax
Act
were
to
be
applied
so
as
to
reduce
the
capital
cost
of
the
depreciable
property
so
acquired
by
the
amount
of
assistance
received
by
the
Plaintiff
from
a
government
and
outlined
in
paragraph
7
herein.
(d)
On
or
about
the
6th
day
of
July,
1984,
the
Plaintiff
filed
with
the
Minister
a
notice
of
objection
to
his
reassessment
on
tax
in
which
it
objected,
inter
alia,
to
the
Minister’s
disallowance
of
capital
cost
allowances
as
claimed
by
the
Plaintiff
in
its
return
of
income.
(e)
By
notice
of
reassessment
dated
February
27,
1986,
the
Minister
revised
the
Plaintiff's
previously
reassessed
taxable
income
as
a
result
of
adjustments
which
are
not
in
issue
in
this
action
but
left
undisturbed
thereby
his
previous
reassessment
in
relation
to
the
disallowance
of
capital
cost
allowances
hereinbefore
referred
to.
10.
The
parties
are
in
agreement
that
the
issue
for
determination
in
this
action
is
whether
in
the
computation
of
the
capital
cost
allowances
to
which
the
Plaintiff
is
entitled
in
respect
of
the
1977
and
1979
taxation
years
there
was
to
be
taken
into
account
so
as
to
reduce
the
capital
cost
of
the
depreciable
property
referred
to
in
paragraph
6
herein,
the
amounts
of
assistance
received
by
the
Plaintiff
from
a
government
and
outlined
in
paragraph
7
herein.
The
issue,
as
stated
in
paragraph
10
of
the
agreed
statement
of
facts,
is
to
determine
whether
C.P.,
in
the
computation
of
the
capital
cost
allowances
to
which
C.P.
is
entitled
for
the
1977
and
1979
taxation
years,
must
take
into
account,
so
as
to
reduce
the
capital
cost
of
the
depreciable
property,
the
amounts
of
assistance
received
by
C.P.
from
the
Government
of
Canada.
C.P.
submits
that
section
36
of
the
Income
Tax
Act
(I.T.A.)
does
not
require
it
to
reduce
the
capital
cost
of
the
depreciable
property
by
any
sums
of
money
it
received
as
a
grant
from
the
Government
of
Canada.
C.P.
submits
that
the
rejection,
of
the
capital
cost
allowance,
by
the
Minister
of
National
Revenue
for
the
1977
and
1979
taxation
years
is
wrong
“in
a
matter
of
law".
C.P.'s
submission
is
the
following:
The
Government
of
Canada
gave
C.P.
financial
assistance.
C.P.
in
its
tax
returns
claimed
capital
cost
allowance
on
the
full
amount
expended
by
it
without
deducting
the
amount
received
as
assistance.
C.P.
states
that
it
relies,
for
the
reason
not
to
deduct
the
assistance
received,
on
a
special
provision
of
the
Income
Tax
Act,
that
special
provision
being
section
36.
It
is
C.P.'s
submission
that
it
comes
within
the
terms
of
section
36
when
it
does
not
deduct
the
amount
received
as
a
grant
from
the
Government
of
Canada.
For
C.P.'s
1977
and
1979
taxation
years,
section
36
of
the
Income
Tax
Act
read
as
follows:
36.
Where
any
amount
in
respect
of
an
expenditure
incurred
by
a
taxpayer
on
or
in
respect
of
the
repair,
replacement,
alteration
or
renovation
of
depreciable
property
of
the
taxpayer
of
a
prescribed
class
is,
under
a
uniform
classification
and
system
of
accounts
and
returns
prescribed
by
the
Canadian
Transport
Commission
pur-
suant
to
the
Railway
Act,
required
to
be
entered
in
the
books
of
the
taxpayer
otherwise
than
as
an
expense.
(a)
no
deduction
may
be
made
in
respect
of
that
expenditure
in
computing
the
income
of
the
taxpayer
for
a
taxation
year;
and
(b)
for
the
purposes
of
section
13
and
regulations
made
under
paragraph
20(1)(a),
the
taxpayer
shall
be
deemed
to
have
acquired,
at
the
time
the
expenditure
was
incurred,
depreciable
property
of
a
class
prescribed
by
regulation
at
a
capital
cost
equal
to
that
amount.
C.P.
submits
that
the
words
“shall
be
deemed"
in
paragraph
36(b)
is
to
be
interpreted
to
mean
that
for
the
purpose
of
determining
capital
cost
allowances,
the
total
expenditure
is
to
be
taken
into
account.
C.P.
submits
there
is
no
need
to
take
into
account
any
Federal
Government
assistance
or
grant.
C.P.
submits
"that
the
grant
is
irrelevant,
the
Statute
means
what
it
says"
and
that
is,
C.P.
“shall
be
deemed
to
have
acquired,
at
the
time
the
expenditure
was
incurred,
depreciable
property
of
a
class
prescribed
by
regulation
at
a
capital
cost
equal
to
that
amount”,
the
full
amount
it
expended
It
is
C.P.'s
submission
that
because
the
Crown
agreed
that
C.P.
is
deemed,
pursuant
to
paragraph
36(b)
to
have
acquired,
in
the
taxation
years
1977
and
1979,
depreciable
property
of
a
class
prescribed
by
regulation
at
a
capital
cost
equal
to
the
amount
of
the
expenditures
for
implementing
its
program
of
rehabilitation
and
restoration
of
its
lines
of
railway,
the
amount
of
government
assistance
is
not
to
be
taken
into
consideration
(see
paragraphs
3
and
6,
agreed
statement
of
fact).
I
do
not
agree
with
C.P.'s
submission.
Paragraph
36(b)
of
the
Act
must
be
read
in
conjunction
with
the
whole
of
section
13.
Section
13
must
be
considered
when
attempting
to
determine
the
value
of
the
depreciable
property
acquired.
Section
36
is
not
an
isolated
section
of
the
Income
Tax
Act.
The
mere
fact
that
the
section
was
enacted
to
specifically
relate
to
railway
companies
does
not,
in
my
opinion,
do
away
with
the
effects
of
section
13.
If
Parliament
had
wished
to
specifically
exclude
Railway
Companies
from
the
effect
of
section
13
and
more
specifically,
Subsection
17(7.1),
it
would
have
done
so
by
having
so
stated.
Subsection
13(7.1),
as
it
presently
reads,
states:
Subsection
13(7.1)
(7.1)
Deemed
capital
cost
of
certain
property.
—For
the
purposes
of
this
Act,
where
a
taxpayer
has
deducted
an
amount
under
subsection
127(5)
or
(6)
in
respect
of
a
depreciable
property
or
has
received
or
is
entitled
to
receive
assistance
from
a
government,
municipality
or
other
public
authority
in
respect
of,
or
for
the
acquisition
of,
depreciable
property,
whether
as
a
grant,
subsidy,
forgiveable
loan,
deduction
from
tax,
investment
allowance
or
as
any
other
form
of
assistance
other
than
(a)
an
amount
authorized
to
be
paid
under
an
Appropriation
Act
and
on
terms
and
conditions
approved
by
the
Treasury
Board
in
respect
of
scientific
research
expenditures
incurred
for
the
purpose
of
advancing
or
sustaining
the
technological
capability
of
Canadian
manufacturing
or
other
industry,
(b)
an
amount
deducted
as
an
allowance
under
section
65,
or
(b.1)
an
amount
included
in
income
by
virtue
of
paragraph
12(1)(u)
or
56(1)(s),
the
capital
cost
of
the
property
to
the
taxpayer
shall
be
deemed
to
be
the
amount
by
which
the
aggregate
of
(c)
the
capital
cost
thereof
to
the
taxpayer,
determined
without
reference
to
this
subsection
and
subsection
(7.4),
and
(d)
such
part,
if
any,
of
the
assistance
as
has
been
repaid
by
the
taxpayer,
pursuant
to
an
obligation
to
repay
all
or
any
part
of
that
assistance,
in
respect
of
that
property
before
the
disposition
thereof
by
him
exceeds
the
aggregate
of
(e)
all
amounts
deducted
under
subsection
127(5)
or
(6),
and
(f)
the
amount
of
the
assistance
the
taxpayer
has
received
or
is
entitled
to
receive
in
respect
of
that
property
before
the
disposition
thereof
by
the
taxpayer.
The
specific
paragraph
dealing
with
the
question
of
assistance
is
to
be
found
in
subsection
13(7.1)(f).
Paragraph
36(b)
is
not
a
charging
section,
it
does
not
levy
a
tax
nor
does
it
determine
what
amount
may
be
claimed
as
a
deduction
from
income
by
way
of
capital
cost
allowance.
It
is
a
deeming
or
definition
clause
which
deems
or
defines,
for
income
tax
purposes,
certain
expenditures,
which
might
otherwise
be
deductible
from
taxable
income
as
an
expense,
as
additions
to
depreciable
property
for
the
reason
that
they
are
required
to
be
treated
in
that
manner
by
the
system
of
accounts
prescribed
for
railway
companies
by
the
Canadian
Transportation
Commission.
In
other
words,
it
directs
that
the
railway
companies
keep
their
accounts
for
income
tax
purposes,
in
this
respect,
in
the
same
way
as
they
keep
their
accounts
for
the
Canadian
Transport
Commission.
Subsection
13(7.1)
specifically
provides
for
the
manner
in
which
that
deemed
depreciable
property
is
to
be
treated
for
the
purpose
of
capital
cost
allowance
where
there
have
been
grants
or
assistance
from
the
Government
in
respect
of
its
acquisition.
The
provision
contained
in
subsection
13(7.1)
reduces
the
cost
of
depreciable
property
for
capital
cost
allowance
purposes
by
the
amount
of
any
government
assistance.
The
effect
is
to
tax
back
a
portion
of
the
benefit
granted
either
by
the
same
government
or
by
any
other
government.
In
1952
I.T.A.
subsection
13(7.1)
was
paragraph
20(6)(h)
which
read:
For
the
purpose
of
this
section
and
regulations
made
under
paragraph
(a)
of
subsection
(1)
of
Section
11,
the
following
rules
apply:
(h)
where
a
taxpayer
has
received
or
is
entitled
to
receive
a
grant,
subsidy
or
other
public
authority
in
respect
of
or
for
the
acquisition
of
property,
the
capital
cost
of
the
property
shall
be
deemed
to
be
the
capital
cost
thereof
to
the
taxpayer
minus
the
amount
of
the
grant,
subsidy
or
other
assistance.
In
the
tax
reform
effected
by
S.C.
1970-71-72,
c.
63,
this
provision
became
paragraph
13(7)(e)
which
read:
(7)
For
the
purpose
of
this
section
and
any
regulations
made
under
paragraph
20(1)(a)
the
following
rules
apply:
(e)
where
a
taxpayer
has
received
or
is
entitled
to
receive
from
a
government,
municipality
or
other
public
authority,
in
respect
of
or
for
the
acquisition
of
property,
a
grant,
subsidy
or
other
assistance
other
than
an
amount
authorized
to
be
paid
under
an
Appropriation
Act
and
on
terms
and
conditions
approved
by
the
Treasury
Board
for
the
purpose
of
advancing
or
sustaining
the
technological
capability
of
Canadian
manufacturing
or
other
industry,
the
capital
cost
of
the
property
shall
be
deemed
to
be
the
capital
cost
thereof
to
the
taxpayer
minus
the
amount
of
the
grant,
subsidy
or
other
assistance.
In
1977
subsection
13(7.1)
read:
Subsection
13(7.1)
(7.1)
Deemed
capital
cost
of
certain
property.
For
the
purposes
of
this
Act,
where
a
taxpayer
has
received
or
is
entitled
to
receive
assistance
from
a
government,
municipality
or
other
public
authority
in
respect
of,
or
for
the
acquisition
of,
depreciable
property,
whether
as
a
grant,
subsidy,
forgivable
loan,
deduction
from
tax,
investment
allowance
or
as
any
other
form
of
assistance
other
than
(a)
an
amount
authorized
to
be
paid
under
an
Appropriation
Act
and
on
terms
and
conditions
approved
by
the
Treasury
Board
in
respect
of
scientific
research
expenditures
incurred
for
the
purpose
of
advancing
or
sustaining
the
technological
capability
of
Canadian
manufacturing
or
other
industry,
(b)
an
amount
deducted
as
an
allowance
under
section
65,
or
(b.1)
an
amount
received
under
a
program
that
is
a
prescribed
program
of
the
government
of
Canada
relating
to
home
insulation
for
the
purposes
of
paragraph
56(1)(s),
the
capital
cost
of
the
property
to
the
taxpayer
shall
be
deemed
to
be
the
amount
by
which
the
aggregate
of
(c)
the
capital
cost
thereof
to
the
taxpayer,
otherwise
determined,
and
(d)
such
part,
if
any,
of
the
assistance
as
has
been
repaid
by
the
taxpayer
pursuant
to
an
obligation
to
repay
all
or
any
part
of
that
assistance,
exceeds
(e)
the
amount
of
the
assistance.
In
1979,
it
read:
Subsection
13(7.1)
(7.1)
Deemed
capital
cost
of
certain
property.
For
the
purposes
of
this
Act,
where
a
taxpayer
has
deducted
an
amount
under
subsection
127(5)
or
(6)
in
respect
of
a
depreciable
property
or
has
received
or
is
entitled
to
receive
assistance
from
a
government,
municipality
or
other
public
authority
in
respect
of,
or
for
the
acquisition
of,
depreciable
property,
whether
as
a
grant,
subsidy,
forgivable
loan,
deduction
from
tax,
investment
allowance
or
as
any
other
form
of
assistance
other
than
(a)
an
amount
authorized
to
be
paid
under
an
Appropriation
Act
and
on
terms
and
conditions
approved
by
the
Treasury
Board
in
respect
of
scientific
research
expenditures
incurred
for
the
purpose
of
advancing
or
sustaining
the
technological
capability
of
Canadian
manufacturing
or
other
industry,
(b)
an
amount
deducted
as
an
allowance
under
section
65,
or
(b.1)
an
amount
received
under
a
program
that
is
a
prescribed
program
of
the
Government
of
Canada
relating
to
home
insulation
for
the
purposes
of
paragraph
56(1)(s),
the
capital
cost
of
the
property
to
the
taxpayer
shall
be
deemed
to
be
the
amount
by
which
the
aggregate
of
(c)
the
capital
cost
thereof
to
the
taxpayer,
otherwise
determined,
and
(d)
such
part,
if
any,
of
the
assistance
as
has
been
repaid
by
the
taxpayer
pursuant
to
an
obligation
to
repay
all
or
any
part
of
that
assistance,
exceeds
the
aggregate
of
(e)
all
amounts
deducted
under
subsection
127(5)
or
(6)
in
respect
of
that
property,
and
(f)
the
amount
of
the
assistance.
The
present
section
36
was
originally
enacted
by
S.C.
1956,
c.
39,
s.
24(1)
and
became,
as
an
amendment
to
the
Income
Tax
Act
1952,
subsection
84A(3)
of
the
Income
Tax
Act
1952.
It
read:
(3)
Where
any
amount
in
respect
of
an
expenditure
incurred
by
a
taxpayer
on
or
in
respect
of
the
repair,
replacement,
alteration
or
renovation
of
depreciable
property
of
the
taxpayer
of
a
class
prescribed
by
regulations
of
the
Governor
in
Council
made
for
the
purposes
of
this
section
is,
under
any
uniform
classification
and
system
of
accounts
and
returns
prescribed
by
the
Board
of
Transport
Commissioners
for
Canada
pursuant
to
the
Railway
Act,
required
to
be
entered
in
the
books
of
the
taxpayer
otherwise
than
as
an
expense,
(a)
no
deduction
may
be
made
in
respect
of
that
expenditure
in
computing
the
income
of
the
taxpayer
for
a
taxation
year,
and
(b)
for
the
purposes
of
section
20
and
regulations
made
under
paragraph
(a)
of
subsection
(1)
of
section
11,
the
taxpayer
shall
be
deemed
to
have
acquired,
at
the
time
the
expenditure
was
incurred,
depreciable
property
of
that
class
at
a
capital
cost
equal
to
that
amount.
This
was
amended
by
S.C.
1966-67
c.
69
s.
24
substituting
"Canadian
Transport
Commission"
for
the
“Board
of
Transport
Commissioners
for
Canada".
In
the
tax
reform
effected
by
S.C.
1970-71-72,
c.
63,
this
(subsection
84A(3))
became
section
36
and
read
as
it
reads
at
the
present
time.
I
believe
that
this
provision
has
always
related
to
the
rules
for
depreciable
property
and
the
calculation
of
capital
cost
allowance
found
in
the
present
section
13.
The
fact
that
subsection
84A(3)
(present
section
36)
came
into
force
subsequent
to
the
provisions
of
paragraph
26(6)(h)
(present
subsection
13(7.1))
cannot
be
and
should
not
be
interpreted
as
to
mean
that
the
provisions
presently
contained
in
subsection
13(7.1)
have
no
application
to
railways
receiving
government
grants
in
acquiring
depreciable
property.
Although
there
does
not
seem
to
be
any
jurisprudence
dealing
with
section
36
of
the
Income
Tax
Act
with
a
similar
factual
situation
to
the
present
one,
I
believe
it
worth
while
to
refer
to
the
case
of
Canadian
Pacific
Limited
v.
The
Queen,
[1976]
C.T.C.
221;
76
D.T.C.
6120.
This
case
considered
the
pre-1970
version
of
the
Income
Tax
Act
so
section
36
was
subsection
84A(3)
and
section
13
was
section
20.
At
page
253
(D.T.C.
6140)
of
the
Trial
Court
decision,
the
case
having
gone
to
appeal,
Mr.
Justice
Walsh
considered
the
application
of
paragraph
20(6)(h)
(now
13(7.1))
and
determined
that
it
was
not
applicable
as
there
was
no
government
subsidy.
He
appears
to
imply
that
the
section
of
the
Act
applies
to
railways,
however,
it
simply
does
not
apply
to
the
factual
situation
then
before
him.
Defendant's
counsel
further
contended
that
if
the
net
cost
argument
cannot
be
accepted
then
we
must
look
at
paragraph
20(6)(h)
at
least
with
respect
to
the
items
in
Category
1(a).
The
question
that
arises
is
whether
Canadian
Pacific
received
or
was
entitled
to
receive,
"from
a
government,
municipality,
or
other
public
authority,
in
respect
of
or
for
the
acquisition
of
property,
a
grant,
subsidy
or
other
assistance
.
.
.
for
the
purposes
of
advancing
or
sustaining
the
technological
capability
of
a
Canadian
manufacture
or
other
industry”.
Although
the
argument
was
not
raised
before
me
I
would
seriously
doubt
whether
the
sums
which
Canadian
Pacific
received
from
public
authorities
for
the
relocation
of
railway
tracks
or
telecommunication
lines
were
“for
the
purpose
of
advancing
or
sustaining
its
technological
capability”
since
in
each
case
the
evidence
indicated
that
it
was
Satisfied
with
the
lines
as
they
were
and
merely
moved
them
to
accommodate
the
public
authority
in
question.
In
any
event,
I
do
not
find
that
these
payments
can
be
considered
as
"a
grant,
subsidy
or
other
assistance".
[Emphasis
is
mine.]
In
the
case
before
me,
the
parties
have
agreed
that
the
sum
received
by
C.P.
is
a
"grant,
subsidy
or
other
assistance".
I
am
satisfied
that
section
36
does
not
preclude
the
application
of
subsection
13(7.1).
Section
36
refers
to
section
13.
Section
13
must
be
presumed
to
apply
to
section
36.
I
am
satisfied
that
the
reduction
in
the
capital
cost
by
the
amount
of
any
government
grant
should
apply
to
the
case
of
railways.
Plaintiff's
action
is
dismissed
with
costs.
Action
dismissed.
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