Marketing Expenditures

Table of Contents


Oxford Shopping Centres Ltd. v. The Queen, 79 DTC 5458, [1980] CTC 7, aff'd 81 DTC 5065, [1981] CTC 128 (FCA)

A large lump sum payment was made by the taxpayer to the City of Calgary in consideration of (i) the City improving the system of roads around the taxpayer's shopping centre and (ii) an implied promise of the City not to assess the taxpayer for local improvement taxes in respect of the cost of such improvements. The expenditure was treated as having been made because of the taxpayer's "object of promoting its business by enhancing the popularity of its shopping centre" and thus was analogous to an advertising or promotional expense. Also relevant to the finding of Thurlow, A.C.J., that the expenditure was not on capital account, was the fact that under commercial accounting principles it would not be treated as giving rise to a tangible asset (as opposed to an intangible deferred charge).

Minister of National Revenue v. Algoma Central Highway, 68 DTC 5096, [1968] CTC 161, [1968] S.C.R. 447

The taxpayer, in order to generate more traffic along a portion of its railway which ran through unpopulated lands owned by it and the Crown, commissioned a general geological survey, over a period of five years, of the mineral possibilities of those lands. In finding that the fees paid were fully deductible, Fauteux J. quoted from the decision of the Privy Council in B.P. Australia that "'it is a common sense appreciation of all the guiding features which must provide the ultimate answer'".