Sobier T.C.J.:
1 The Appellant appeals from the assessment by the Minister of National Revenue (the “Minister”) with respect to a denial of an input tax credit above the amount of $1,680 in connection with the purchase by the Appellant of a 1994 F-250 Ford extended cab truck (the “Vehicle”), and not the full input tax credit claimed by the Appellant.
2 There is no doubt that the Vehicle is commonly known as a pick-up truck. The dispute arises from the Minister's characterization of the Vehicle as a “passenger vehicle”. The definition of “passenger vehicle” and “automobile” are of importance.
3 Those definitions in part read as follows:
“automobile” means
and we will now go down to paragraph (e), and that is:- (e) a motor vehicle of a type commonly called a van or pick-up truck or a similar vehicle
(i) that has a seating capacity for not more than the driver and 2 passengers and that, in the taxation year in which it is acquired, is used primarily for the transportation of goods or equipment in the course of gaining or producing income, or
(ii) the use of which, in the taxation year in which it is acquired, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income.
4 A “passenger vehicle” means, in effect, an “automobile” that is acquired or leased after June 17th, 1987. If the Vehicle comes within the definition of automobile, the assessment was correct since it would be a passenger vehicle. There is no argument that the Vehicle was used exclusively for commercial purposes. The issue is drawn along the lines set forth in paragraph (e) of the definition of “automobile” set forth in sub-section 248(1) of the Income Tax Act from whence the definition of “passenger vehicle” comes in the Excise Tax Act.
5 The Vehicle will not be regarded as an automobile and therefore a passenger vehicle, if it can be demonstrated that it either has a seating capacity for not more than the driver and two passengers, and was used in the year in which it was acquired primarily for the transportation of goods or equipment in the course of gaining or producing income or it was used in the year it was acquired, all or substantially for the transportation of goods, equipment or passengers in the course of gaining or producing income.
6 Sub-paragraph (e)(i) is restrictive in its dealing with capacity to carry persons, i.e. the driver and not more than two passengers, but it is less restrictive in the use test “used primarily for the transportation of goods or equipment”. Sub-paragraph (e)(ii) does not put a limit on passenger capacity but is more restrictive in the use test, the use of which is all or substantially all for the purpose of transportation of goods, equipment or passengers, in the course of gaining or producing income.
7 The Appellant is a farmer with a 1,420-acre farm in the Vermilion district of eastern Alberta. He raises beef cattle and mixed grains.
8 The Appellant gave evidence as to the use of the Vehicle and illustrated this by providing a log of its use in May, June and July of 1995. Although the year in question is 1994, the Appellant stated that its use in 1994 was the same as 1995 but added that in the fall there might have been increased use for transporting cattle.
9 The Appellant stated that the Vehicle came equipped with a trailer package valued at over $5,000 and this package not only included a hitch and lights but came with a larger engine and slip differential required for pulling trailers over rough terrain in muddy situations. He used a 20-foot trailer for hauling cattle to and from pasture and to market.
10 The truck also came with a tool storage box which contained a winch, booster cables, jack, fencing supplies and tools, hammers, an axe, shovels and flares. From time to time the Vehicle carried salt and minerals, containers for samples, antibiotics and syringes for the animals and other goods and equipment. He would also carry feed supplies, building materials and veterinarian supplies.
11 The log showed that he used the truck for various purposes. He would go to Vermilion to do his banking, pick up parts, return parts, pick up seed. He would check his crops in the early growing season for germination and to identify weeds. He would take back samples of weeds in containers in order to identify them and choose the proper weed killers.
12 He undertook pasture checks to see that the fences and gates were in good repair in order to keep the cattle in. He used the Vehicle to borrow and return equipment from neighbours. He trailered horses, bulls and cows. He travelled to Edmonton to check out used equipment and to North Battleford to check out baler prices. He drove the Vehicle many times to check his crops during the later growing season. There was no personal use of the Vehicle.
13 From his evidence, I would categorize the Vehicle as being a general farm utility vehicle. It was the Appellant's evidence that on all occasions, no matter what the purpose of the trip was, the Vehicle always carried the tools and other equipment contained in the tool storage box.
14 As to the interior configuration of the Vehicle, in the front it had two bucket seats and a fold-down arm rest which could be used as a seat. It came equipped with a fold-down rear seat with three safety belts, indicating that it could handle three passengers, albeit not terribly comfortably.
15 The Appellant maintained that the rear seat which gives the Vehicle its name as “extended cab truck” was practically always in the down position and, therefore, is not suitable for carrying passengers. He stated that he put business papers and other articles such as supplies on the turned-down seat.
16 I will deal first with the exception stated in sub-paragraph (i) of paragraph (e) of the definition of automobile in sub-section 248(1) of the Income Tax Act, which states that if it is commonly called a pick-up truck or similar vehicle, its seating capacity shall not be for more than a driver and two passengers, and the operative words here are “seating capacity”. It matters not that the seats were not used, they were there, and using the plain meaning of the words, the Vehicle had the capacity or ability of carrying the driver and four or perhaps five passengers and, therefore, it is not material what use was made of the Vehicle since its seating capacity ruled out the application of sub-paragraph (i); therefore, one must examine the provisions of sub-paragraph (ii), which reads in part:
the use of which, in the taxation year in which it is acquired, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income.
17 What must be transported are goods, equipment or passengers. Not only must we examine what was transported but also the meaning of the word “transportation”. There is no doubt that goods and equipment were transported from time to time, but there were many times when no goods or equipment were moved about except for the equipment in the tool box. Trips to the bank and equipment dealers as well as checking fields and crops do not involve the transportation of goods or equipment except those in the tool box. Most family cars have jacks, tools, flares, booster cables, et cetera, but when driving to work, one cannot be said to be transporting those items.
18 Transport and transportation is not meant in the mere sense of conveying or moving without purpose. There must be something more extensive than mere conveying, carrying or moving incidental to the use of the Vehicle in order for it to be said to be transportation. There must be a purpose in moving or conveying goods or equipment in order for it to be said to be transporting them.
19 While the Vehicle may have been used primarily for commercial purposes and in the transportation of goods, et cetera, it was not used all or substantially all the time for those purposes. Its use must be more than passing. By using the word “all”, we are invited to give a meaning to the word “use” which means all of the time or only for that purpose. The insertion of the word “substantially” in this sub-paragraph is to make the word “all” less intrusive and less encompassing but still of greater weight than merely primarily.
20 In looking at the reasons for many of the trips, it can be seen that the reasons were not to transport goods and equipment but also to conduct other business such as banking, purchasing, crop and pasture checking, which uses were at least as often as transporting goods and equipment.
21 Accordingly, the Vehicle meets the definition of the word “automobile” and “passenger vehicle” and, therefore, the assessment was correct and the appeal is dismissed.
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