Savard v. R., [1998] 1 CTC 2430, [1997] DTC 1279

Garon T.C.J. :

These are appeals from income tax assessments for the 1990, 1991, 1992 and 1993 taxation years. By those assessments the Minister of National Revenue disallowed the deduction of rental losses amounting to $1,346 in 1990, $1,279 in 1991 and $1,219 in 1992. The amount claimed as a depreciation deduction for the 1993 taxation year was not specified. These losses resulted from depreciation claimed by the appellant on rental properties owned by Société en commandite Lévis St-Augustin Enr., in which he is one of the special partners.

In more precise terms, the issue is whether the immovable properties in question in which the appellant owned an undivided share through the aforementioned limited partnership were at the relevant times properties falling within class 31 [1] of Schedule II of the Income Tax Regulations (“the Regulations”).

The essential facts were described in the testimony of Roger Tremblay, real estate developer, Gaétan Bergeron, a securities dealer, and Jacquelin Girard, a special partner in Société en Commandite Lévis St-Augustin Enr.

On December 30, 1986 the limited partnership Habitat Le Gustin Enr. received a purchase offer from an entity, Les Placements E.C.P. Inc., [2] [TRANSLATION] “in trust for a group”, according to the wording used in the offer. The offer was made for the purchase of four apartment buildings, three of which were located in Lévis and the third in St-Augustin de Desmaures — a municipality located in the suburbs of Québec — which the appellant maintained were multiple-unit residential buildings within the meaning of Class 31 of the Regulations. These apartment buildings contained a total of 81 apartments. The breakdown of the purchase offer for the suggested price of $2,875,000 was as follows:

This offer, dated December 30, 1986, the three “addenda” also dated December 30, 1986 and the fourth “addendum” dated January 21, 1987 were signed by Sylvie Fortin and Roger Tremblay on behalf of the entity Les Placements E.C.P. Inc.

This offer and its “addenda” contained several conditions, including the following:

(a) the purchasers would have to obtain $400,000 financing within a reasonable time;

(b) [TRANSLATION] “the final formation of a group must be completed before 20/4/87”;

(c) [TRANSLATION] “a good faith deposit of $50,000” had to be made by the purchasers and applied against the purchase price: under clause 13 of one of the “addenda” of December 30, 1986 this deposit would be a deposit accruing to the sellers if the transaction could not be completed by the buyers;

(d) this offer [TRANSLATION] “replace[d] and cancel[led] that of Placements Belle-Vie Inc.”.

This purchase offer of December 30, 1986 had been preceded by another purchase offer dated December 7, 1986 from the company Les Placements Belle-Vie Inc., through Roger Tremblay and Sylvie Fortin, under the terms of which the company undertook to purchase the four properties in question for $280,000 on behalf of a group.

On February 5, 1987 Roger Tremblay, acting on behalf of the entity Les Placements E.C.P. Inc. in trust, sent Habitat Le Gustin Enr. a letter with the letterhead “Les Experts Conseils En Placement TREFOR Inc.”, in which he informed the sellers that [TRANSLATION] “a stop payment order” had been made on the cheque for the $50,000 deposit on the ground that title to the properties to be purchased [TRANSLATION] “was not entirely clear”. On April 23, 1987 the sellers through their counsel, in a letter written both to Les Placements E.C.P. Inc. and to Roger Tremblay, asked that the deposit be paid again [TRANSLATION] “by noon on April 27, 1987 at the latest” and that the sale of the properties in question [TRANSLATION] “be completed by noon on April 30, 1987 at the latest”. On May 5, 1987 counsel for the sellers sent Roger Tremblay and Sylvie Fortin a formal demand requiring them to pay the sellers the sum of $175,000 [TRANSLATION] “representing the amount of the deposit you undertook to pay and damages sustained by our client following and as a result of your failure to do so”.

An action brought in the Quebec Superior Court on the same day by Marcel Bédard et al. [3] was served on Roger Tremblay, Sylvie Fortin and Les Placements Belle-Vie Inc., in which the sellers claimed a total of $175,000, consisting of items described in paragraph 11 of the Statement of Claim as follows:

[TRANSLATION]

(a) the sum of $75,000 for damages sustained by the plaintiffs following and as a result of the failure by the signatories of the initial promise to purchase to carry out their obligations;

(b) the sum of $50,000, representing the amount of the cheque filed as Exhibit P-3, namely a deposit to be paid pursuant to the promise filed as Exhibit P-2;

(c) the sum of $50,000 for multiple damage and hardship sustained by the PLAINTIFFS following and as a result of the DEFENDANTS’ failure to carry out their obligations...

In paragraph 9 of the Statement of Claim it is alleged that [TRANSLATION] “Les Placements E.C.P: Inc. does not exist and has never existed”. On the same point, the defendants for their part said the following in paragraph 9 of their [TRANSLATION] “Argument”:

[TRANSLATION]

9. It was even stipulated regarding the company Les Placements E.C.P. Inc. that the whole thing was a company being formed, and it never had to be formed since the condition required for completing the transaction never materialized, as the defendants ROGER TREMBLAY and SYLVIE FORTIN were unable to obtain a second mortgage in the amount of $400,000 and the entire financing as contemplated in the promise to purchase could not be completed, with the result that the said promise was automatically canceled.

On September 29, 1987 Habitat Le Gustin Enr. made an offer of sale to Denis Ouellet in his capacity as a real estate broker for the Montreal Trust Company, in which it was indicated inter alia that the selling price of the properties in question was $2,860,000, the commission to be paid on such a transaction amounted to $50,000, the transaction should be completed by November 15, 1987 at the latest and all prior offers would be canceled if the transaction contemplated by the offer was concluded. On October 1, 1987 E.C.P. Trefor Inc. accepted this offer in a letter signed by Roger Tremblay and mentioned that confirmation by Les Placements Immobiliers M.B.J. Inc. would be sent to Denis Ouellet by October 6, 1987. On October 8, 1987 Les Placements Immobiliers M.B.J. Inc. confirmed, through its representatives Gaétan Bergeron and Gilles Jauvin, that the company was prepared to close the deal.

Finally, the contract of sale was signed on December 18, 1987. In this sale made by Habitat Le Gustin Enr. the purchasers were Société en commandite St-Augustin Enr., acting through its partners, namely the general partner, the limited company 2530-4577 Québec Inc., created on September 15, 1987, and Gaétan Bergeron, the initial partner. Les Placements E.C.P. Trefor Inc., represented by Roger Tremblay, intervened in this deed of sale. It is mentioned in the deed that Mr. Tremblay [TRANSLATION] “states that he acted for the present purchaser in his purchase offer dated December 30, 1986, and in all documents further thereto”.

According to what is indicated in the contract of sale of the properties in question on December 18, 1987, Société en commandite Lévis St-Augustin Enr. was formed pursuant to a declaration registered in the office of the prothonotary for the judicial district of Chicoutimi on September 29, 1987.

According to certain evidence, the price of $2,875,000 mentioned in the December 30, 1986 purchase offer was lowered to $2,860,000 at the time of the sale on December 18, 1987 because of the fact that Montreal Trust had reduced its real estate broker’s commission from $50,000 to $35,000.

Appellant’s arguments

In support of his principal proposition that the four apartment buildings were properties falling within Class 31 of Schedule II of the Regulations, the appellant maintained that the purchase of the properties was made pursuant to the purchase offer of December 30, 1986 signed by Roger Tremblay on behalf of Les Placements E.C.P. Inc.

According to counsel for the appellant, Mr. Tremblay signed a pre-con- stitutive deed for a limited partnership to be formed. She described this legal act in civil law as a “promesse de porte-fort” [guarantee promise] for a group to be formed. According to counsel for the appellant, the offer of sale of September 29, 1987 was not a new offer: she regarded it instead as an extension of the purchase offer of December 30, 1986 which remained in effect when the contract of sale of December 18, 1987 was concluded. The properties in question thus met the requirements of the amended version of Class 31 of Schedule II of the Regulations.

The appellant argued, alternatively, that the amended version of the Regulations as regards Class 31 applied retroactively and that the appellant had vested rights. In support of this proposition, the appellant maintained that the amendment of Class 31 contained some retroactivity because it set out new legal provisions applicable to facts which had all taken place before it came into effect. The provision containing this amendment was published in the Canada Gazette on January 3, 1990 and came into force the same day. The amended version added new elements such as the conditions under which property was eligible for Class 31 of Schedule II of the Regulations.

According to counsel for the appellant, this new provision affecting class 31 could not be retroactive because it did not meet the requirements laid down by s. 221(2) of the Act, and in particular para. d) of that section. She pointed out that the White Paper which was tabled on June 18, 1987 was not an announcement [“mesure” in the French version] within the meaning of s. 221(2)(d), merely a proposal. Similarly, she added that the announcement referred to in s. 221(2)(d), in the context of the facts at issue here, would be the filing of the draft Regulations made public on December 16, 1987 in the form of an appendix to the documents on tax reform. It follows, in the appellant’s submission, that the amended Regulations cannot apply before December 16, 1987.

Respondent’s arguments

After noting that the properties in question were purchased after June 18, 1987, which was not in dispute, the respondent noted that the purchase of these properties on December 18, 1987 was not made in accordance with an obligation in writing entered into by the appellant before June 18, 1987. In support of this proposition, she submitted that the purchase offer of December 30, 1986 became invalid and was replaced by a new offer, an offer of sale made in a letter of September 29, 1987 to a real estate broker, not to the persons mentioned in the offer of December 30, 1986. In the respondent’s submission, certain important undertakings in the offer of December 30, 1986 were not fulfilled. Further, the acts of the parties to the offer of December 30, 1986 confirmed that those parties no longer felt bound by the offer. In this connection, she mentioned the fact that the sellers brought an action for damages, not an action in execution of title. She relied on Mr. Tremblay’s testimony, showing that the intending purchaser was prevented from carrying out the undertakings contemplated by the offer of December 30, 1986. In particular, she referred to the deposit of $50,000 which was not made, the financing that was not obtained and the group of investors that was not formed. In the respondent’s submission, these were all essential conditions.

The appellant himself contracted no obligation before June 18, 1987: the limited partnership in which the appellant was one of the partners was not formed until September 29, 1987. In the submission of counsel for the respondent, clause 27 of the contract of sale of December 18, where it is stated by Les Placements E.C.P. Tréfor Inc. that that entity [TRANSLATION] “acted for the present purchaser in his purchase offer of December 30, 1986, and in all documents further thereto” does not reflect the actual situation. She noted that the sale was not made to Les Placements E.C.P. Inc. She drew the Court’s attention to the allegations contained in paragraphs 7, 8 and 9 of the [TRANSLATION] “Argument”, in which the defendants expressly argued that the December 30, 1986 purchase offer had become null and void. Finally, she relied on the point that the offer of sale of September 29, 1987 states that all earlier offers were automatically canceled and that [TRANSLATION] “only the transaction to be carried out will survive”.

On the question of the retroactivity of the amendment made to the wording of Class 31 of Schedule II of the Regulations, the respondent indicated that Order SOR/90-22 amending the Regulations contained a provision on retroactivity. That provision is to be found in s. 24(12) of the schedule to the Order.

The respondent maintained that the Order amending the Regulations meets the requirements mentioned in s. 221(2)(d) of the Act, as the amendment was publicly announced on June 18, 1987 by the publication in the Canada Gazette of a White Paper on tax reform. The draft Regulations were then tabled in the House of Commons on December 16, 1987 and published in the Canada Gazette on January 3, 1990. In the respondent’s submission the government had the right under s. 221(2)(d), in view of the public announcement made by the Government of Canada through the White Paper on June 18, 1987, to make application of the Regulations SOR/90-22 retroactive [TRANSLATION] “in respect of property acquired on or after January 1, 1987”.

On the question of retroactivity, the respondent maintained that the amendment of the provision creating Class 31 of Schedule II of the Regulations in respect of the appellant [TRANSLATION] “was intended only to withdraw for the future the right to make certain deductions which he could previously have used”. Accordingly, the respondent claimed that the appellant did not have a vested right for the future to deduct, in calculating his income, depreciation on property in Class 31 of Schedule II of the Regulations as anticipated before the amendment of the Regulations by the aforementioned Order of December 14, 1989. Regarding retroactivity, the respondent referred to the well-known Supreme Court of Canada judgment in Gustavson Drilling (1964) Ltd. v. Minister of National Revenue (1976), [1977] 1 S.C.R. 271 (S.C.C.).

Counsel for the respondent added that when the amended version of Class 31 is applied to the taxation years at issue, that is 1990 and subsequent years, retroactivity is not an issue.

Analysis

The Income Tax Act provides in s. 20(1 )(a) that a taxpayer is entitled to a depreciation deduction, so far as is allowed by regulation, in calculating his income for a taxation year from a business or property. That paragraph reads as follows:

(7) Notwithstanding paragraphs 18( 1 )(a), (6) and (A), in computing a taxpayer’s income for a taxation year from a business or property, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto:

(a) Capital cost of property. — such part of the capital cost to the taxpayer of property, or such amount in respect of the capital cost to the taxpayer of property, if any, as is allowed by regulation...

Section 1100 of the Regulations gives a taxpayer the right to a depreciation deduction in calculating income from a business or property, and for this purpose creates various classes of property and specifies a maximum deduction rate for property in a particular class. Section 1 100(1)(a) reads in part as follows:

1100. (1) For the purposes of paragraphs 8( 1 )(/) and (p) and 20(1)(a) of the Act, the following deductions are allowed in computing a taxpayer’s income for each taxation year:

Rates

(a) subject to subsection (2), such amount as he may claim in respect of property of each of the following classes in Schedule II not exceeding in respect of property

(xxii) of Class 31, 5 per cent,

of the undepreciated capital cost to him as of the end of the taxation year (before making any deduction under this subsection for the taxation year) of property of the class...

As we know, the properties at issue in the instant case are, according to the appellant, properties covered by Class 31.

The provision creating Class 31 of Schedule II of the Regulations immediately prior to the amendment by the Order of the Governor General in Council on December 14, 1989, P.C. 1989-2464 SOR/90-22, read in part as follows:

Property that is a multiple-unit residential building in Canada that would otherwise be included in Class 3 or Class 6 and in respect of which

(a) a certificate has been issued by Canada Mortgage and Housing Corporation certifying

(b) not more than 20 per cent of the floor space is used for any purpose other than the purposes referred to in paragraph (a);

(c) the certificate referred to in paragraph (a) was issued on or before the later of

(i) December 31, 1981, and

(ii) the day that is 18 months after the day on which the installation of footings or other base support of the building was commenced; and

(d) the construction of the building proceeds, after 1982, without undue delay, taking into consideration acts of God, labour disputes, fire, accidents or unusual delay by common carriers or suppliers of materials or equipment...

As I have just indicated, this wording on Class 31 was amended by the Order of December 14, 1989, P.C. 1989-2464, SOR/90-22. That amend- ment is contained in s. 21 of the schedule to the Order which provides the following:

Class 31 in Schedule IT to the said Regulations is amended by adding thereto the following:

and that was acquired by the taxpayer

(e) before June 18, 1987, or

(f) after June 17, 1987 pursuant to

(i) an obligation in writing entered into by the taxpayer before June 18, 1987, or

(ii) the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice required to be filed with a public authority in Canada and filed before June 18, 1987 with that public authority.

Section 24(12) of that Schedule deals with how this amendment applies in terms of time as follows:

24.(12) Section 21 is applicable in respect of property acquired after June 17, 1987.

The Order and its schedule were published in the Canada Gazette on January 3, 1990.

To understand the practical dimensions of the problem before the Court, we must recall that property which falls within Class 31 of Schedule II of the Regulations (as well as Class 32 property) were given special treatment at the time. Section 1100(11) of the Regulations provides essentially that a taxpayer cannot deduct the part of the loss resulting from depreciation on the rental property. However, that rule does not apply to rental property contained in Classes 31 and 32 of Schedule II of the Regulations, in view of the provisions of s. 1100(14) of the Regulations applicable to the taxation years at issue. No one disputes that if the properties in question in the instant case came within Class 31 the appellant could validly have claimed a depreciation deduction in calculating his income for each of the years 1990, 1991 and 1992 in the amounts indicated in the first paragraph of these reasons.

The amended wording of Schedule II of the Regulations defining Class 31 lays down a number of conditions for a multiple-unit residential building to fall within that class. Such a building would ordinarily fall within Classes 3 or 6 of Schedule II of the Regulations, as the case might be.

The conditions which are of particular interest for the purposes of the instant case are those set out in paras, (e) and (f) of the provision regarding that class, paragraphs which I again reproduce for the sake of convenience:

and that was acquired by the taxpayer

(e) before June 18, 1987, or

(f) after June 17, 1987 pursuant to

(i) an obligation in writing entered into by the taxpayer before June 18, 1987, or

(ii) the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice required to be filed with a public authority in Canada and filed before June 18, 1987 with that public authority.

The immovable properties at issue here were acquired after June 18, 1987. As we know, on the evidence Société en commandite Lévis St-Augustin Enr. became owner of these properties on December 18, 1987. Therefore, the appellant, one of the special partners in that partnership, could not have become a co-owner before that date. The condition of para.

(e) of the new provision defining class 31 was therefore not met and there was no dispute on this point.

As regards application of the condition in para, (f) of the definition of Class 31 regarding multiple-unit residential buildings, stated as an alternative, the discussion related only to subpara. (1): subpara, (ii) was not discussed.

To answer this question it must be determined whether the acquisition of the properties in question by Société en commandite Lévis St-Augustin Enr. on December 18, 1987 was made “pursuant to an obligation in writing entered into” by that partnership before June 18, 1987.

To begin with, a review of the various documents in evidence indicated that the contract of sale of December 18, 1987 involving the four properties at issue here followed an offer of sale by Habitat Le Gustin Enr. made in a letter dated December 29, 1987 to a Montreal Trust real estate broker, Denis Ouellet. This offer contained the following:

[TRANSLATION]

All clauses and conditions which were mentioned in earlier offers made through you and involving Habitat Le Gustin Enr. will be automatically canceled and only the transaction to be carried out will survive.

This offer was accepted by a letter dated October 1, 1987, signed by Roger Tremblay for Les Experts Conseils en Placement Trefor Inc. This accept- ance was conditional on confirmation by Les Placements Immobiliers M.B.J. Inc.

So far as earlier offers are concerned, and in particular that of December 30, 1986 signed by Les Placements E.C.P. Inc. and made to Denis Ouellet of Montreal Trust, it should be noted that in the action brought by Marcel Bédard et al. [TRANSLATION] “doing business under the name and trade name of Habitat Le Gustin Enr.” the plaintiffs were asking in particular for resolution of the promise to purchase of December 30, 1986 and the defendants, Les Placements Belle-Vie Inc., Roger Tremblay and Sylvie Fortin, alleged in their [TRANSLATION] “Argument” that the purchase offer of December 30, 1986 became [TRANSLATION] “null and void” for the reasons there stated.

It is thus reasonable to conclude that the sale of December 18, 1987 followed the offer of sale of September 29, 1987, not the purchase offer of December 30, 1986. This conclusion is also supported by the following additional evidence:

(a) the purchase offer of December 30, 1986 signed by Sylvie Fortin and Roger Tremblay was made on behalf of Les Placements E.C.P. Inc., a company which did not exist when the offer of sale of September 29, 1987 was made to a Montreal Trust real estate broker and communicated to Les Experts Conseils Trefor Inc., represented by Roger Tremblay;

(b) the purchase offer of December 30, 1986 differed in several respects from the offer of sale of September 29, 1987, in particular as to price, conditions, terms of payment and so on;

(c) the offer of sale of September 29, 1987 was not regarded by the parties in question simply as a modified version of the offer of December 30, 1986: on the contrary, both parties concerned considered in their pleadings in connection with the action brought by Marcel Bédard et al. that the offer of December 30, 1986 should be resolved, in the plaintiffs’ view, and was null and void, in the defendants’ view.

It follows from the foregoing that the obligation of Société en commandite Lévis St-Augustin Enr. to acquire the immovable properties in question did not exist before October 1, 1987, the day on which the offer of sale was accepted by E.C.P. Trefor Inc. These properties were accordingly acquired by Société en commandite Lévis St-Augustin Enr. pursuant to an obligation contracted after June 17, 1987. As the condition mentioned in para. (f)(i) of the new definition of Class 31 of Schedule II of the Regulations has not been met, those properties are not part of Class 31 as worded in the Order of December 14, 1989, P.C. 1989-2464 SOR/90-22.

Accordingly, the first argument made by the appellant cannot stand.

The Court must now consider the appellant’s second argument, namely that the Regulations cannot validly be retroactive to 1987.

S. 221(2) of the Income Tax Act essentially states that Regulations pursuant to the Income Tax Act take effect in principle at the time they are published in the Canada Gazette. However, that section provides for four exceptions; it reads as follows:

(2) Effect. A regulation made under this Act shall have effect from the date it is published in the Canada Gazette or at such time thereafter as may be specified in the regulation unless the regulation provides otherwise and it

(a) has a relieving effect only;

(b) corrects an ambiguous or deficient enactment that was not in accordance with the objects of this Act or the Income Tax Regulations;

(c) is consequential on an amendment to this Act that is applicable before the date the Regulation is published in the Canada Gazette;

or

(d) gives effect to a budgetary or other public announcement, in which case the regulation shall not, except where paragraph (a),(b) or (c) applies, have effect

(i) before the date on which the announcement was made, in the case of a deduction or withholding from an amount paid or credited, and

(ii) before the taxation year in which the announcement is made, in any other case.

Based on the arguments of the parties in their submissions to the Court, the only paragraph likely to apply in the circumstances is para. (d).

First of all, it was admitted that the tabling of the White Paper and press release accompanying it were published on June 18, 1987.

Part 4 of the White Paper, titled “Proposals for Reform”, states in part the following:

Overview

The major thrusts of the proposals for reform are as follows:

The special CCA provisions [4] applicable to multiple unit residential buildings (MURBs) will not be available for acquisitions after June 17, 1987 and will be terminated after the 1990 taxation year for properties already held by the taxpayer.

The press release in question also referred to the tabling of Notice of a Ways and Means Motion. The same press release later indicated that a number of tax reform proposals involved amendments to the Regulations. The following can be noted:

Some of these changes to the Income Tax Regulations will be effective either on June 18, 1987 or with respect to events that occur on or after that date. These include:

elimination of the multiple unit residential building (MURB) incentive effective for MURBs acquired after June 17, 1987 other than pursuant to an agreement entered into before that date (existing MURB owners will continue to benefit from the MURB provisions for taxation years ending before 1991)...

The draft Regulations giving effect inter alia to this White Paper proposal on multiple-unit residential buildings were made public in the form of an appendix to the tax reform documents. The draft Regulations were tabled in the House of Commons on December 16, 1987.

In light of the preceding factual background, the question is whether the amendment to the Regulations concerning multiple-unit residential buildings can be retroactive to December 16, 1987, the date on which the draft Regulations were made public, or to June 18, 1987, when the White Paper and attached press release were tabled.

The following passage from the text Canadian Tax Research? [5] by David Sherman, dealing with methods used to make amendments to tax legislation, is of particular interest:

Tax changes are also proposed through routes other than a budget. A “technical amendments” bill, containing several hundred supposedly uncontroversial corrections and amendments, has been produced about once a year for the last several years. As well, we have White Papers (not to be confused with White Elephants). The major income tax reform that was completed in 1988 was introduced with a White Paper in June 1987. A White Paper is a statement of government intention that is expected to be modified after discussion and comment from the public. This is to be distinguished from a Green Paper, which is a discussion paper that does not necessarily reflect government policy. Neither a White Paper nor a Green Paper is actually printed in any particular colour.

[Writer’s references omitted.]

As I have already indicated, the appellant argued that the White Paper proposal regarding multiple-unit residential buildings is not an announcement [“mesure”] referred to in s. 221(2)(d), but rather a proposal. The respondent, for her part, argued that the tabling of the White Paper was the making by the Government of Canada of the announcement referred to in s. 221(2)(d). In view of these arguments, the two versions [6] of s. 221(2) of the Act should be set out:

221(2) Prise d’effet. Les règlements d’application de la présente loi ont effet à compter de leur publication dans la Gazette du Canada ou après s’ils le prévoient. Un règlement peut toutefois avoir un effet rétroactif, s’il comporte une disposition en ce sens, dans les cas suivants:

[...]

d) il met en oeuvre une mesure — budgétaire ou non — annoncée publiquement, auquel cas, si l’alinéa a), b) ou c) ne s’appliquent pas par ailleurs, il ne peut avoir d’effet:

(i) avant la date où la mesure est ainsi annoncée s’il y a déduction ou retenue sur des montants versés ou crédités,

(ii) sinon, avant l’année d’imposition au cours de laquelle la mesure est ainsi annoncée.

221(2) Effect. A regulation made under this Act shall have effect from the date it is published in the Canada Gazette or at such time thereafter as may be specified in the regulation unless the regulation provides otherwise and it

[...]

(d) gives effect to a budgetary or other public announcement, in which case the regulation shall not, except where paragraph (a), (6) or (c) applies, have effect

(i) before the date on which the announcement was made, in the case of a deduction or withholding from an amount paid or credited, and

(ii) before the taxation year in which the announcement is made, in any other case.

Looking at the English version of s. 221(2)(J), there seems to be no question that the foregoing passage from the White Paper announces an amendment to the Regulations regarding the definition of property in Class 31 of Schedule II of the Regulations. The phrase in the English version “budgetary or other public announcement” has a very general scope and undoubtedly includes an announcement made by the tabling of the White Paper.

Looking at the French version of s. 221(2)(J), it seems less clear that the tabling of the White Paper is a “mesure”. One may wonder what “mesure” means in the context of that paragraph. One of the meanings given to the word by the Grand dictionnaire encyclopédique Larousse, vol. 7, is the following:

[TRANSLATION]

Something done to produce a given result.

This concept of a “mesure” in the context of s. 221(2)(J) seems to the Court to be wide enough to cover the case of an announcement made in the White Paper regarding the new provisions for multiple-unit residential buildings. As the writer David Sherman indicated in the preceding passage from his text, the purpose of a White Paper is to make known the government’s intentions on a particular matter. The government’s intentions that the depreciation deduction for multiple-unit residential buildings should no longer be available for property acquired after June 17, 1987 are very clearly stated in the White Paper of June 18, 1987. In the context of s. 221(2)(d), it seems clear that the word “mesure” in the phrase “mesure — budgétaire ou non” should be given a very broad meaning as referring to any provision or means adopted by the government to subsequently amend the existing legislation on a particular matter. The interpretation of the word “mesure” which I have just suggested makes it possible to entirely reconcile the application of the French and English versions of s. 221(2)(d) of the Act.

Even assuming that the appellant is right in saying that the tabling of the White Paper is not a “mesure” in the context of s. 221 (2)(^Z) of the Act, and that the only “mesure” covered by that paragraph could be the tabling of the draft Regulations in the House of Commons on December 16, 1987, the fact remains that the Regulations may be retroactive to January 1, 1987 if of course such an interpretation of the amended version of the Regulations as they now read is possible. It states in s. 221(2)(J) that the Regulations “shall not ... have effect ... before the taxation year in which the announcement is made...”. Stated in a positive form, s. 221(2)(d) implicitly authorizes the Governor in Council to adopt regulations which can come into force on the first day of the taxation year in which the announcement is made. If, as the appellant suggested in the instant case, the tabling of the draft Regulations on December 16, 1987 is the announcement contemplated by s. 221(2)(d), the Regulations could apply as of January 1, 1987 if the wording of the amendment permits such an interpretation.

I therefore conclude that the second argument made by the appellant regarding retroactivity is also ill-founded.

For these reasons, the appeals from the assessments for the 1990, 1991, 1992 and 1993 taxation years are dismissed.

Appeal dismissed.