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It was also unique in the sense that we didn't apply for what would be considered a normal cost of service recovery on the expenditures. ... (g) In respect of amounts approved for recovery in the Cost of Service under the Phase I Tariff arising from the mainline preliminary expenditures, details specifying and illustrating how the amount to be amortized and the revenue generated therefrom will be accounted for on the books of Foothills (Yukon) and its subsidiaries: I shall refer to that paragraph later: 3(k) A letter of commitment to the Canadian Government indicating that a repayment of amounts received under the Phase I Tariff in respect of the mainline preliminary expenditures will be refunded to the Alberta producers when Alaskan gas flows through the Foothills (Yukon) system; I now quote from the reasons for decision (Exhibit 5) at page 27: Decision Having considered the evidence and arguments, the Board concludes that the prebuild tariff should include some charges with respect to the preliminary expenditures. ... That does not mean I have not considered them. Counsel for the defendant also relied on paragraphs 12(1)(a) and (b) and subsection 12(2) of the Income Tax Act. ...

In the first place, it could have reported the proceeds as income and the resulting reserves as income reserves and then waited for the initial assessment by the Department confirming that view and then, subsequently, issue a notice of objection to the effect that the proceeds and the resulting reserves should be considered as capital. ... Where the taxpayer reports that an item of revenue is to be treated in a certain manner, after having carefully considered the matter, is not negligent in doing so and does not in any way intend to deceive the Department, the law under a self assessing system cannot be taken as imposing on that taxpayer the duty of reporting receipts in a manner which the Department views as the correct one and which the reporting taxpayer bona fide believes to be incorrect. ... It is hardly necessary to add that the respondent's tax returns cannot be considered "proceedings under this Act. ...

That is why the appellant considered himself as both a salaried employee and a self-employed person. ... The fact that the appellant wanted to ensure that he would be able to continue generating income from the corporations he now controls with his brother might have been (and most probably was) something he considered when he launched his lawsuit. ... M.N.R., 89 DTC 233, to argue that interest on money borrowed, insurance premiums and property taxes cannot be considered as being the equivalent of, or as being, in the nature of, office rent under subparagraph 8(1)(i)(ii) of the ITA ...

In reaching this conclusion I have considered carefully the nature of the Imperial contract which is said by the plaintiff to have been at the centre of its profit-making apparatus. ... Thus the termination of the contract did not deny the plaintiff the subsidies which it considered essential to the viability of its business. Those subsidies had already been lost and the compensation of $1,370,000 paid pursuant to the termination agreement cannot be considered in any way as a replacement for this supposed foundation of the business. ...

This was a criminal matter however and the applicability of section 24 of the Charter was considered in this light. ... While certainly I would not wish to create a precedent of general application to the effect that questions of this nature can be considered in advance rather than being left for consideration by the trial judge, it appears to me that on the facts of this case and in view of the very complete argument on the question which has been made it is in the interest of justice and the inherent jurisdiction of this Court over its process that in the circumstances of this particular case the Charter of Rights argument invoked by plaintiff relating to production of said document should be considered and dealt with. ...

Rather than attempt to summarize it, I shall set out the relevant portions of the agreed statement of facts: (a) The long term financing requirements for 1974 were first formally considered at a meeting of the Board of Directors of the plaintiff on February 18, 1974. ... (g) The transaction did not close on May 28, 1974 and the Board of Directors met June 4, 1974, considered the restrictions being imposed and authorized the Executive Committee to approve all terms and conditions of a borrowing not exceeding U.S.$75,000,000 at a rate not exceeding 8 3/4 per cent. ... The term of financing was considered to be long term by the plaintiff and its auditors. ...

Furthermore, it was submitted that this general rule is now codified in subsection 18(9) of the Act, of which the relevant provisions read as follows: 18(9) Notwithstanding any other provision of this Act, (a) in computing a taxpayer’s income for a taxation year from a business or property (other than income from a business computed in accordance with the method authorized by subsection 28(1)), no deduction shall be made in respect of an outlay or expense to the extent that it can reasonably be regarded as having been made or incurred (i) as consideration for services to be rendered after the end of the year, (ii) as, on account or in lieu of payment of, or in satisfaction of, interest, taxes (other than taxes imposed on insurance premiums), rent or royalty in respect of a period after the end of the year, or (iii) as consideration for insurance in respect of a period after the end of the year, other than (A) where the taxpayer is an insurer, consideration for reinsurance, and (B) consideration for insurance on the life of an individual under a group term life insurance policy where all of part or the consideration is for insurance that is (or would be if the individual survived) in respect of a period that ends more than 13 months after the consideration is paid; (b) such portion of each outlay or expense (other than an outlay or expense of a corporation, partnership or trust as, on account of, in lieu of payment of or in satisfaction of, interest) made or incurred as would, but for paragraph (a), be deductible in computing a taxpayer's income for a taxation year shall be deductible in computing the taxpayer’s income for the subsequent year to which it can reasonably be considered to relate;... ... To remove any uncertainty, subsection 18(9) of the Act was enacted into law on February 26, 1981 effective from December 11, 1979 and requires a taxpayer to match certain specific expenditures to the taxation year to which they can reasonably be considered to relate. The Department takes the view that subsection 18(9) was enacted for greater certainty and notwithstanding that it does not cover deferred charges or all types of expenses that can be prepaid, it is considered that the Income Tax Act (even as it read prior to the introduction of subsection 18(9)) always required and continues to require that all costs that could clearly be related to future periods be expensed in those periods, if they are material and if failure to defer the expense would distort the net profit not only of the year during which the expense was incurred but also of the subsequent year or years to which the benefit relates. ...

I am satisfied that the intermodal operation was sufficiently distinct to be considered a separate business for present purposes. ... Considerable effort was made during the trial to demonstrate that the NAR had been guilty of fundamental breach of the contract, that the plaintiff seriously considered suing NAR accordingly, and that the payment made by NAR was in reality in lieu of damages for fundamental breach as a "settlement" of a potential law suit. ... There remains the question of whether if this was received as capital it should be regarded as a non-taxable capital receipt, or whether it should be considered an “eligible capital amount" taxable in accordance with section 14 of the Income Tax Act, or as proceeds of a disposition of property and thus potentially subject to treatment as a capital gain. ...

Once the scaling slips were presented to the taxpayers, the work of the contractors was considered complete. ... The amount of the holdback was based on an estimate of the labour portion of the contract, which was considered a reasonable basis for estimating the workers' compensation liabilities of the contractors. ... Hugessen J.A. and Pratte J.A. concluded that the principle in Guay applied and that the holdbacks could not be considered part of the cost of the property or deducted as expenses until the engineer certified his satisfaction with the work. ...

  [21]     The Appellant’s counsel contends that the amount of accrued interest would be included twice in income in each of these cases if the deemed disposition of the amounts receivable by the taxpayers are considered to give rise to a receipt of an amount in lieu of interest.   ... The Queen [4], where the Court considered the meaning of the phrase “in lieu of” in the context of paragraph 212(1)(d) of the Act ... Paragraph 12(1)(c) uses language that is substantially similar to the language of paragraph 212(1)(d) considered by the Court in Transocean ...