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Coopers & Lybrand Ltd., [1980] C.T.C. 367, 80 D.T.C. 6281 (F.C.A.), case should be referred to and if there is any liability, it is only for failing to deduct, not failing to remit. ... In that case Coopers & Lybrand was appointed receiver and distributed cheques to workers equal to their net pay. ... In the Coopers case, Coopers & Lybrand as receiver, was given a certain sum of money which it utilized to pay wages without making any deductions. ...

.: — The appellants Eric Detchon and Clifford Goodwin appeal income tax assessments for the 1985 and 1986 taxation years on the basis neither of them received a benefit in respect of employment pursuant to paragraph 6(l)(a) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) ... Registrar of Probates, [1990] A.C. 323 at 335, quoted in Craies on Statute Law, 7th edition, London: Sweet & Maxwell 1971 at page 87: Where there are two meanings, each adequately satisfying the meaning (of a statute), and great harshness is produced by one of them, that has a legitimate influence in inclining the mind to the other...it is more probable that the legislature should have used the word (“evade”) in that interpretation which least offends our sense or justice. ... Deputy Minister/Minister of National Revenue (Customs & Excise), [1965] C.T.C. 336, 65 D.T.C. 5179 at page 5189 (Ex. ...

& W.)-per cent by weight (f) silicone—ppm (g) nickel—ppm (h) vanadium-ppm (i) aluminum—ppm or (j) conradson carbon-per cent by weight. 8. ... (e) "UTL" has for many years been in the business of buying and selling finished fuel products namely bunker fuel oil, gasoline and furnace oil at both the wholesale and retail levels; it owns oil and storage tanks in Cornwall and Morrisburg, Ontario; (f) prior to November 21, 1980, "UTL" had been selling marine fuel oil which represented only a small percentage of its business less than lot of its gross revenue; (g) "UFL"’s only business is the sale of marine fuel oil purchased as a finished product and taken delivery of in part from its supplier and contractor namely "UTL" at the Morrisburg installation or elsewhere from other suppliers; (h) the main component of marine fuel oil is Bunker C fuel (also known as #6 oil) or #6 oil diluted with furnace oil (also known as #2 oil), (i) UTL purchases on its own account as inventory and stores separately #6 and #2 oil; (j) UFL has no #6 and #2 oil inventory; (k) when UTL fulfills a purchase order for marine fuel oil from UFL, #6 and #2 oil flow from their respective storage tanks into eventually a single pipe which loading rack leads to a loading rack; UTL remains at all times in complete control of these operations; (l) when UFL purchases marine fuel oil from a non-arm length suppliers (other than UTL), #2 oil is first loaded to the delivery truck and then #6 oil is added on top which service during delivery is provided free of charge; (m) during transportation by the trucks to their final destination, #6 and #2 continue to be shaken together without consequence to the purchased product namely marine fuel oil; (n) when UFL buys marine fuel oil from arm’s lengths suppliers, it pays a flat one price charge per litre of oil; there is no broken of the price into the suppliers individual cost components; the flat one price charge is standard practice in the industry; (o) when UTL sells oil to its customers (except its subsidiary UFL) it charges a flat one price charge per litre of oil; (p) now and then when UTL stores oil for its customers it charges a flat one price charge per litre of oil (namely for the oil, storage, machinery, labour, administration, etc.); the charges relating to insurance heating and financing the oil purchase are invoiced separately; (q) UTL’s only client who receives an itemized invoice which shows a breakdown of all charges is UFL; (r) UTL sends monthly invoices to UFL showing the following charges: (1) price for #6 and #2 oil (2) storage charges at $0.0022 per litre (3) transportation (when required) at 0.009 cents a litre (4) administration, accounting office at $10 per truck load (5) rental of mixing and pumping equipment, dispatching, supervision at loading & unloading, 48 hours per ship at $8 per hour plus 25 per cent employee benefits; (s) in computing its manufacturing and processing deduction, UFL proceeds to reallocate the charge described in subparagraph (r)(4) namely: Administration, accounting office at $10 per truck load in the following manner: $3.50 is considered to be administration accounting office; $6.50 is considered to be for rental of machinery and equipment; (t) in computing its manufacturing and processing deduction, UFL proceeds to reallocate the charge described in subparagraph (r)(5) namely: Rental of mixing & pumping equipment, dispatching, supervision at loading unloading; 48 hours per ship at $8 per hour plus 25 per cent employees benefits as only labour costs; (u) consequently for purposes of computing its manufacturing and processing deduction, UFL included the following items in the various elements comprising the basic formula: Cost of Capital-is comprised of storage charges (i.e., the rental of storage tanks) at $0.0022 per litre, and rental of the blending and pumping equipment at the rate of $6.50 per load. ...

:—The appellant appeals from the assessments for its 1981, 1982,1983 and 1984 taxation years, whereby the Minister of National Revenue (the “ Minister”): (a) reclassified property acquisitions claimed by the appellant as being assets of the category of Class 29 of Schedule II of the Income Tax Act Regulations (the “ Regulations”), used directly or indirectly by the appellant principally in the manufacture or processing of goods for sale or lease into assets of the category of Class 8 of Schedule Il of the Regulations; (b) limited inventory allowances claimed by the appellant under paragraph 20(1)(gg) of the Income Tax Act, R.S.C. 1952, c. 148 (am. ... (B) the least of the amounts determined under paragraphs 125(1)(a) to (d) in respect of the corporation for the year, (C) two times the aggregate of amounts deducted under subsection 126(2) from the tax for the year otherwise payable under this Part by the corporation, and (D) the amount, if any, by which the aggregate of the corporation's Canadian investment income for the year and its foreign investment income for the year (within the meanings assigned by subsection 129(4)) exceeds the amount, if any, deductible under paragraph 111(1)(b) from the corporation’s income for the year; and 125:1(3)(a) “ Canadian manufacturing and processing profits" of a corporation for a taxation year means such portion of the aggregate of all amounts each of which is the income of the corporation for the year from an active business carried on in Canada as is determined under rules prescribed for that purpose by regulation made on the recommendation of the Minister of Finance to be applicable to the manufacturing or processing in Canada of goods for sale or lease; and (b) manufacturing or processing" does not include (x) any manufacturing or processing of goods for sale or lease, if, for any taxation year of a corporation in respect of which the expression is being applied, less than ten per cent of its gross revenue from all active businesses carried on in Canada was from (A) the selling or leasing of goods manufactured or processed in Canada by it, and (B) the manufacturing or processing in Canada of goods for sale or lease, other than goods for sale or lease by it. ...

Analysis The applicable section of the Act reads as follows: 125.1(3)(a) " Canadian manufacturing and processing profits” of a corporation for a taxation year means such portion of the aggregate of all amounts each of which is the income of the corporation for the year from an active business carried on in Canada as is determined under rules prescribed for that purpose by regulation made on the recommendation of the Minister of Finance to be applicable to the manufacturing or processing in Canada of goods for sale or lease; and... ... In order to qualify for the deduction, a corporation must come within the meaning of the words “ manufacturing or processing in Canada of goods for sale or lease", jurisprudence has dealt extensively with these last words of the section, and I thus propose to detail what was said about each. ... " In Webster Third New International Dictionary published in 1964 the word "process" is defined as follows, “to subject to a particular method, system or technique of preparation, handling or other treatment designed to effect a particular result: put through a special process as (1) to prepare for market, manufacture or other commercial use by subjecting to some process (-ing cattle by slaughtering them) (-ed milk by pasteurizing it) (-ing grain by milling) (-ing cotton by spinning): In Webster's Second New International Dictionary published in 1959 the following definition of the word ” process" appears, "To subject (especially raw material) to a process of manufacturing, development, preparation for market, etc.; to convert into marketable form as live stock by slaughtering, grain by milling, cotton by spinning, milk by pasteurizing fruits and vegetables by sorting and repacking. ...

In support of this, counsel for the appellants refer to Front & Simcoe Ltd. v. ... In Front & Simcoe, the appellant was trying to characterize as something else, payment of an amount which was previously made to it and which under certain circumstances could be liquidated damages. ... The Queen, [1985] 2 C.T.C. 79; 85 D.T.C. 5310 (F.C.A) and Versatile Machine & Tool Manufacturing Co. v. ...

& A. Ranching Co. Ltd. v. M.N.R., 25 Tax A.B.C. 423; 61 D.T.C. 43 (T.A.B.). ... (g) Payments based on production or use. — any amount received by the taxpayer in the year that was dependent upon the use of or production from property whether or not that amount was an instalment of the sale price of the property (except that an instalment of the sale price of agricultural land is not included by virtue of this paragraph); The forerunner to this paragraph was paragraph 6(1)(j) of the 1952 Income Tax Act from which much of the jurisprudence in this area springs. ... The Queen, [1978] C.T.C. 157; 78 D.T.C. 6128, Dubé, J. of the Federal Court — Trial Division summarized the case law on the issue. ...

Marsh & McLennan, Ltd., [1983] C.T.C. 231; 83 D.T.C. 5180, saying: The issue was whether the money invested was "property used or held in the course of carrying on a business” within the meaning of the exclusion in subparagraph 129(4)(a)(ii) of the Income Tax Act. ... Thompson & Company, Limited (1927), 13 T.C. 83, on the facts of this case there was between the broker’s business and the investment an interconnection, an interlacing, an interdependence, a unity embracing the investments and the business.” ... The Company engaged in reviewing alternate uses for its funds — loans, real estate, mortgages or company shares; reviewing applications for funds and inspecting properties involved where either mortgages or percentage purchases of rental commercial real estate was involved; liquidating certain types of investments from time to time and reinvesting in other forms of security; dealing with, consulting and being consulted by brokers seeking to find investment capital; and held a seat with other percentage investors on a “management committee" which, however distant from the day-to-day operations of the rental properties, nevertheless took a continuing interest in the security and good administration of the total investment. ...

His calculation is as follows: City Acquisition Price (Dec. 1973) $775,000 Less: Dominion Riverdale site — time adjusted from August 1972 to December 1973 is: $100,000 x()* $136,710 34,094 Balance Attributable to Subject Lands $638,290 Time Adjusted to December 1971: 638,290 x 0.6960 = $444,250 The indicated value, using this analysis, was rounded off by Mr Strung to $444,000, an amount corresponding to that determined using comparable sales in the previous determination of value. ... The indicated land value excluding any bonus (and improvements included in the bonus) was calculated by Mr Strung, using the $444,000 as the value of the subject property including a bonus, as follows: Preliminary Estimates $444,000 Less: Bonus @ 40 per cent $177,600 Amount Attributable to Land Excluding Bonus $266,400 $6.30 per square foot 42,330 The $266,400 should be compared to the $253,000 value estimated for the subject property as residential property as at December 31, 1971 by Mr M S McGee, who testified as the respondent’s expert witness as to value. ...

Emphasis added With respect to each of the foregoing examples, it was the position of Revenue Canada that sufficient connection would exist to a reserve to locate the income there and grant the tax exemption. [8] On March 7, 1994, the Assistant Deputy Minister, Legislative & Intergovernmental Affairs Branch, Revenue Canada, wrote to the Awasis agency confirming that its employees were not exempt from income tax on their employment income because: As you know, draft guideline # 4 requires an organization to meet various criteria in order for its employees to be tax exempt. ... To paraphrase the comments of Linden J. in Clarke — to attribute great significance to the fact that the employees were physically situated off the reserve, obscures the true nature of the employment income in this case. ...