Drafting Style

Table of Contents


Canada v. Dr. Kevin L. Davis Dentistry Professional Corporation, 2023 FCA 76

imprecise drafting is not typical of taxing statutes

In the course of finding that the single-supply doctrine should not be applied to treat the supply of an orthodontic appliance and a related supply of orthodontic services to a patient as a single supply of exempt healthcare services (the orthodontic services), Woods JA stated (at para. 42):

It is highly unlikely that Parliament would explicitly provide that any supply of an orthodontic appliance is zero-rated if the intention is that the supply is restricted to the wholesale level. Such imprecise drafting is not typical of taxing statutes in general or in the ETA.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part II - Section 11.1 single-supply doctrine should not be applied to orthodontic supplies 337
Tax Topics - Excise Tax Act - Schedules - Schedule V - Part II - Section 5 orthodontist was supplying orthodontic services separately from zero-rated orthodontic devices 221

Loblaw Financial Holdings Inc. v. Canada, 2020 FCA 79, aff'd 2021 SCC 51

no additional requirements should be inferred in legislation drafted with “mind-numbing detail”

At issue was whether a Barbados bank subsidiary (Glenhuron ) of the taxpayer, which used equity funds received from its Canadian parent to invest in short-term debt obligations, conducted its business principally with persons with whom it dealt at arm’s length, as required in s. 95(1) - investment business - (a). In rejecting the Crown’s submission that there was a requirement that there be an element of competition involved in the receipt of funds by Glenhuron, Woods JA stated (at para. 58):

[This] is an example of a court inferring a purposive interpretation from unexpressed legislative intent. ,,, As stated by the Supreme Court of Canada: “This Court has consistently held that courts must therefore be cautious before finding within the clear provisions of the [ITA] an unexpressed legislative intention ...” (Shell …) . The emphasis in the Tax Court’s reasons on an unexpressed intention of competition is not appropriate in this case which involves a FAPI scheme that is drafted with mind-numbing detail.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Investment Business - Paragraph (a) a Barbados bank sub conducted its business of investing in short-term debt principally with arm’s length persons 602
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business receipt of equity funds from parent was not part of Barbados bank’s business 188
Tax Topics - Statutory Interpretation - Redundancy/reading in words error to apply an unexpressed intention 172
Tax Topics - General Concepts - Separate Existence subsidiary did not manage its funds on behalf of parent 161
Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Foreign Accrual Property Income fundamental purpose of FAPI is to capture passive income 164

A.Y.S.A. Amateur Youth Soccer Association v. Canada (Revenue Agency), 2007 DTC 5527, 2007 SCC 42, [2007] 3 S.C.R. 217

textual approach where precise drafting

Before going on to find that there was no inference that because Parliament had specifically accorded favourable tax treatment to some types of Canadian amateur athletic associations, athletic associations could not qualify as being charitable, Rothstein J. stated (at para. 16) that "because of the degree of precision and detailed characteristics of many tax provisions, an emphasis has often been placed on textual interpretation where taxation statutes are concerned".

65302 British Columbia Ltd. v. Canada, 99 DTC 5799, [1999] 3 S.C.R. 804

avoid policy conjectures in detailed and complex statute

After quoting commentary that "'it would introduce intolerable uncertainty into the Income Tax Act if clear language and a detailed provision of the Act were to be qualified by unexpressed exceptions derived from a court's view of the object and purpose of the provision", Iacobucci J. stated (at pp. 5809-5810):

"This is not an endorsement of a literalist approach to statutory interpretation, but a recognition that in applying the principles of interpretation to the Act, attention must be paid to the fact that the Act is one of the most detailed, complex, and comprehensive statutes in our legislative inventory and courts should be reluctant to embrace unexpressed notions of policy or principle in the guise of statutory interpretation."

Hickman Motors Ltd. v. Canada, 97 DTC 5363, [1997] 2 S.C.R. 336, [1998] 1 CTC 213

absence of specific-hold period was telling

In finding that revenue-producing assets did not have to be held for any minimum period of time or generate a relatively large amount of revenue in order to satisfy the requirements of Regulation 1102(1)(c), L'Heureux-Dubé J. stated (at pp. 5377-8):

"In as technical a piece of legislation as the ITA, had Parliament or the executive wanted to specify any minimum period of time, materiality requirement, or financial statement content requirement, they would have used clear language to that effect."

Friesen v. Canada, 95 DTC 5551, [1995] 3 S.C.R. 103

Major J. accepted the following comments in P.W. Hogg's Notes on Income Tax:

"It would introduce intolerable uncertainty into the Income Tax Act if clear language and a detailed provision of the Act were to be qualified by unexpressed exceptions derived from a court's view of the object and purpose of the provision ... . When a provision is couched in specific language that admits of no doubt or ambiguity in its application to the facts, then the provision must be applied regardless of its object and purpose."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) loss recognized on decline in value of land held as an adventure 142
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Inventory property held in an adventure was inventory 83
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate undeveloped land held in speculative venture 142
Tax Topics - Statutory Interpretation - Certainty 97
Tax Topics - Statutory Interpretation - Inserting Words interpretation should not effectively add words 104
Tax Topics - Statutory Interpretation - Ordinary Meaning common usage of a technical term given weight 80
Tax Topics - Statutory Interpretation - Resolving Ambiguity 97
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business s. 10(1) applied to an adventure in the nature of trade even if that deemed business was not “carried on” 75
Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) property not generating income does not convert to capital property unless s. 13(7) or 45(1) applies 209

Reeson Investments Ltd. v. The Queen, 90 DTC 6420, [1990] 2 CTC 190 (FCTD)

"Given the various specific drafting terms (references and cross-references to various sections) in which the provisions of the Act are usually couched, it seems difficult to understand why, if it had been intended to prevent the transfer of ABIL as between members of the controlled group, this was not explicitly articulated in the provisions." (p. 6426)

Attorney General of British Columbia v. Canada Trust Co. et al., [1980] 2 S.C.R. 466, [1980] CTC 338

Before going on to find that a charging provision in the Succession Duty Act (BC) in substance imposed tax on resident beneficiaries rather than property, Dickson J. stated (at p. 350):

"The fact that the Legislation chose to proceed by piecemeal amendments, resulting in an inelegant jumble of tax bases and internal inconsistencies, is no reason to frustrate the obvious intention of the Legislature."

Covert et al. v. Minister of Finance of Nova Scotia, [1980] CTC 437, [1980] 2 S.C.R. 774

Succession duty imposed by Nova Scotia on Nova Scotia residents of an Alberta corporation whose wholly-owned subsidiary received the residue of the estate of their Nova Scotia-domiciled grandfather, was not a tax on property outside the province but, rather, a tax upon persons within the province measured by the benefits which they derived as a result of the bequest made to the Alberta corporation. Accordingly, the provisions imposing such tax were intra vires the Legislature of Nova Scotia.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 132 - Subsection 132(7) beneficial entitlement in property of a subsidiary 185

See Also

IncoLimited v. The Queen, 2004 TCC 373, aff'd 2005 DTC 5110, 2005 FCA 44

Sarchuk J. stated (at p. 2852) before going on to find that the interpretation by the taxpayer of s. 152(1.2) was contrary to the plain meaning of that provision when read in context:

"It has also been observed that the plain meaning approach of itself is not a total rejection of purposive interpretation but is simply a recognition that object and purpose can play only a limited role in the interpretation of a statute that is as precise and detailed as the Act."

Ipsco Inc. v. The Queen, 2002 DTC 1421 (TCC)

In declining to find that lump sum damages received by the taxpayer represented proceeds of disposition in the absence of such proceeds being specifically defined in the definition of proceeds of disposition, Rowe D.J. stated (at p. 1431):

"Legislation weighing more than a kilogram does not have much room in it for liberal, general interpretation, particularly when the road to the resolution of a specific issue is well-marked and the voyage is undertaken in accordance with a detailed map and a handy guidebook."

Consoltex Inc. v. The Queen, 97 DTC 724, [1997] 2 CTC 2846 (TCC)

In finding that expenditures on yarn should not be computed for investment tax credit purposes as being net of related sale proceeds, Bowman TCJ. stated (at p. 736):

"The Income Tax Act is a sophisticated régime that deals with great specificity with outlays and receipts as, for example, in the complex interaction of the resource provisions in section 59 and section 66 and 66.8. I do not think that it is appropriate to drive a coach-and-four through the Act by requiring a netting of expenditures with sale proceeds."

Dale v. The Queen, 94 DTC 1100, [1994] 1 CTC 2303 (TCC), aff'd supra.

Crown counsel argued that because s. 66.1(6)(a) specifically referred to a right to shares in addition to shares, it could be inferred that the absence of similar language in the opening words of s. 85(1) implied that the reference therein to share consideration did not include a right to receive shares. Bowman TCJ. stated (p. 1111):

"In a statute such as the Income Tax Act which increasingly resembles a patchwork quilt produced by different quilters working independently of each other, such comparisons may not necessarily be determinative."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) 78
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) shares must be issued within a reasonable time 232


Williams, "The Finance Act 1993: Incredible Drafting, Extraordinary Prose", British Tax Review, 1993, No. 6, p. 483.