8 April 1998 GST/HST Interpretation 11640-3 - Emergency Repairs to Railway Rolling Stock

I refer to Maria Forte-Long's E-Mail message of March 12, 1997, addressed to Mr. Randy Nanner, Manager of Border Issues, concerning section 6.1 of Part V of Schedule VI to the Excise Tax Act (the Act) as it applies to the supply of emergency repairs to railway rolling stock used in the course of a business to transport passengers or property. I apologize for the lateness of this response.

In particular, Ms. Forte-Long requests that we confirm the following:

1. Whether section 6.1 provides that the emergency services made to unregistered non-resident persons can be provided by anyone, including service providers who are not carriers.

2. What is meant by the terms "railway" and "railway rolling stock" (not defined in the Act)?

3. Are containers considered as railway rolling stock when mounted or set on railcars?

Interpretation of Section 6.1

Section 6.1 of Part V of Schedule VI to the Act was brought-in specifically to place emergency service providers, who are not in the business of transporting passengers or property, on the same footing as emergency service providers who are in the business of transporting passengers or property and who also provide such services to unregistered non-residents in respect of railway rolling stock.

Prior to April 24, 1996, section 6 of Part V of Schedule VI to the Act provided that emergency repair service providers would have had to use the conveyances or cargo containers in a business of transporting passengers or property at the time the emergency services were provided. Therefore, non-carrier service providers were placed at a competitive disadvantage. Section 6.1 of Part V of Schedule VI to the Act now corrects this inequity by allowing for relief of the GST to any emergency repair service provider.

Meaning of "Railway" and "Rolling Stock"

Technical information Bulletin B-075, at page 28, under the heading "Emergency repair services - railway rolling stock", states, in the second to last sentence of the relevant paragraph, that railway rolling stock does not include railway locomotives.

Pursuant to paragraph 15(2)(b) of the Interpretation Act, where an enactment contains an interpretation section or provision, it shall be read and construed as being applicable to all other enactments relating to the same subject-matter (in pari materia), unless a contrary intention appears.

As there appears to be no contrary indication in the Act that excludes locomotives from the meaning of "railway rolling stock" (which is not defined in the Act), one must look towards the ordinary definition included either in the dictionaries or other legislation that define or otherwise deal with railways and rolling stock.

XXXXX[.] Accordingly, the Canada Transportation Act, 1996, c. 10, (CTA), as amended, which consolidates the National Transportation Act and the Railway Act, specifically applies to the transportation industry, including railways. It would, therefore, be appropriate to look at this particular piece of legislation for purposes of confirming what is meant by "railway" and "rolling stock".

Section 6 of the CTA, the interpretation section, provides that "rolling stock", as the term applies to railways, includes a locomotive, engine, motor car, tender, snow-plough, flanger, and any car or railway equipment that is designed for movement on its wheels on the rails of a railway.

Division I of Part III of the CTA, at section 87, defines "railway" as meaning a railway within the legislative authority of Parliament and includes branches, extensions, sidings, railway bridges, tunnels, stations, depots, wharves, rolling stock, equipment stores, or other things connected with the railway, and communications or signaling systems and related facilities and equipment used for railway purposes. XXXXX Furthermore, a policy proposal respecting the inclusion of locomotives in the meaning of the expression "railway rolling stock" was recently approved by the Publications and Policy Review Committee at Headquarters. As a result, any departmental publication that refers to railway rolling stock will be amended to include locomotives.

Containers and Rolling Stock

As one can see, the term "container" does not appear in either of the above definitions. Rather a container would be considered as tangible personal property that is to be transported by the railway rolling stock, when mounted or set on railcars.

For any information concerning the above, please contact me at (613) 957-8220.

Yours truly,

Daniel E. B. Chamaillard
Senior Rulings Officer
Border Issues
General Operations and Border Issues Division
Rulings and Interpretations Directorate
Policy and Legislation Branch