Hansard, explanatory notes, etc.

Cases

Canada v. Oxford Properties Group Inc., 2018 FCA 30

statement that amendment was for “clarification” was self-serving

After finding on other grounds that an amendment (in s. 88(1)(d)(ii.1)) was consistent with the pre-amendment object and spirit of the s. 88(1)(d) bump rules, Noël CJ stated (at paras. 92-93):

...I reach this conclusion without placing any reliance on the Budget Supplementary Information document ... . The Crown relies on the distinction drawn in this publication between remedial amendments and clarifying amendments and emphasizes the assertion that in this case the amendments “clarify” the prior law (…Economic Action Plan 2012, pp. 414-415 ….)

While publications of this type, including Explanatory Notes, are considered as permissible extrinsic aids ... I do not believe that this particular publication, which the Crown urges upon us, should be given any weight in this case. This is because, as acknowledged at p. 415 of this publication, it was issued at a time when officials of the Department of Finance were aware that structures like the one here in issue were being challenged by the Minister. This raises the obvious concern that the publication may be self-serving, particularly in a GAAR context, where the object, spirit and purpose of the pre-amendment law is the matter in issue. As such, the opinion expressed in this publication must be disregarded.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) using the s. 88(1)(d) bump on newly-formed rental property LPs to avoid indirect recapture income under s. 100(1) was abusive 925
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) s. 88(1)(d) bump is intended to permit the transfer of ACB that otherwise would be lost to another property that is taxed in the same way 349
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) - Paragraph 98(3)(c) s. 98(3)(c) bump is intended to avoid gain realization where there has been no economic gain 259
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) 3-year time limitation in s. 69(11) did not establish safe harbor for avoidance of recapture on sale after that period 366
Tax Topics - Income Tax Act - Section 100 - Subsection 100(1) purpose is to ensure that latent recapture will be recognized on sale to tax exempt 244
Tax Topics - Income Tax Act - Section 97 - Subsection 97(2) object includes ultimate taxation of the deferred gain 224
Tax Topics - Income Tax Act - Section 171 - Subsection 171(1) GAAR question as to determining a provision’s object was subject to correctness standard 155
Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(2) determination of whether amendment merely clarified requires review of pre-amendment state of law 135
Tax Topics - Income Tax Act - Section 245 - Subsection 245(2) consequential s. 245(2) adjustment must be scaled to the abuse 381

Canada (National Revenue) v. Thompson, 2016 SCC 21, [2016] 1 S.C.R. 381

Hansard indicated an intent for an amendment to trench on privilege

Before finding that CRA was precluded from requiring an Alberta lawyer to provide detailed accounts receivables listings for his clients on constitutional grounds, the Court found that such accounting records were clearly intended in the s. 232(1) definition of solicitor-client privilege to be excluded from the protection for such privilege by the exclusion in the definition of that term for accounting records. This was further supported by the legislative history(Hansard confirmed that the accounting record exception was introduced to override the Brown decision ([1963] C.T.C. 1), which fouind that trust account and other accounting records were protected as they might contain privileged information.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 232 - Subsection 232(1) - Solicitor-Client Privilege exclusion for accounting records was invalid even where CRA demands related to enforcement action against the lawyer 495
Tax Topics - Statutory Interpretation - Redundancy/reading in words presumption against tautology 114

Hillis v. Canada (Attorney General), 2015 FC 1082

regard to object rather than political statements

After noting that the American authorities had been particularly concerned about tax evasion in seeking FATCA agreements, Martineau J stated (at para. 50):

Nevertheless, a statute should not be interpreted by politicians' statements used to rally public opinion, but rather by its object and the words used by the legislator.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 25 FATCA requirements were reciprocal and were primarily imposed on financial institutions 166
Tax Topics - Treaties - Income Tax Conventions - Article 26A Art. 26 of US Convention did not prohibit FATCA information exchanges 158
Tax Topics - Treaties - Income Tax Conventions - Article 27 FATCA information exchanged automatically irrespective of any substantive U.S. tax liability was "relevant" to U.S. tax administration 361

Canada v. Tallon, 2015 DTC 5082 [at 6023], 2015 FCA 156

Hansard referred to in purposive interpretation

Before concluding (at para. 43) that under a purposive interpretation of ss. 118.2(2)(g) and (h), "medical services" did not include "the salutary effects of the warm Thai and Indonesian climates," Ryer JA referred (at para. 40) with approval to the description in Tokarski, 2012 TC 115, of the stated purpose of these provisions in Hansard.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.2 - Subsection 118.2(2) - Paragraph 118.2(2)(g) warm climate not a "medical service" 176
Tax Topics - Statutory Interpretation - Consistency stipulation on "medical services" in one paragraph carried over to another paragraph in same subsection that did not include that stipulation 85

Imperial Oil Ltd. v. Canada, 2004 DTC 6702, 2004 FCA 361, rev'd 2006 SCC 46

rev'd on other grounds 2006 SCC 46

LeBel J. stated (at para. 58):

"The Minister also relies on statements made in the House of Commons at the time of the addition of s.20(1)(f) to the ITA, and on Technical Notes issued by the Department of Finance to explain the addition of, and amendments to, s.20(1)(f). Putting aside the question of the weight that should be given to these interpretative aids, the difficulty with the Minister's arguments is that although both sources support the view that discounts were in the contemplation of Parliament when it enacted s.20(1)(f), neither goes so far as to suggest that s.20(1)(f) is restricted to discounts. Since this is the very restriction the respondents are contesting, the interpretative aids invoked by the Minister are not dispositive of the issue, although they may shed some light on Parliament's intention."

Silicon Graphics Ltd. v. Canada, 2002 DTC 7113, 2002 FCA 260

Sexton J.A. stated (at p. 7119) that "Technical Notes are not binding on the courts, but they are entitled to consideration."

Rooke v. Canada (Attorney General), 2002 DTC 6442, 2002 FCA 393 (FCA)

Sharlow J.A. found that there is no ambiguity in section 122.3 that would justify recourse to material such as Hansard, Minutes of Proceedings of Evidence of the Standing Committee on Finance, Trade and Economic Affairs, Budget Papers and Technical Notes published by the Department of Finance.

Will-Kare Paving & Contracting Ltd. v. Canada, 2000 DTC 6467, 2000 SCC 36, [2000] 1 S.C.R. 915 (SCC)

Reference was made to Hansard to determine Parliament's objective.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 29 supplied asphalt was merely an accession to customers' real property 146
Tax Topics - Statutory Interpretation - Ordinary Meaning 65

Longley v. The Queen, 99 DTC 5549 (B.C.S.C.)

After referring to the statement in Finlay v. Minister of Finance, [1993] 1 S.C.R. 1080, at 1111 that legislative "debates may nevertheless serve to confirm the appropriateness of a particular statutory interpretation", Quijano J. determined, upon examining the House of Commons debates, that the purpose of s.127(3) "was to make public the sources of funding of political parties and to encourage more participation of small donors in those parties".

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) 41

Canada v. McMynn, 97 DTC 5325 (FCA)

Before going on to find that the taxpayer's claim for investment tax credits did not satisfy the clear requirements of what then was s.127(9)(a), Linden J.A. stated (at p. 5327):

"The use of the Budget paper was not helpful in this case, because the words used in it were more general than those employed in the legislation itself. There is no ambiguity in the meaning of the words used in the Act so as to invite reliance on the Budget paper."

The Queen v. Fibreco Export Inc., 95 DTC 5412 (FCA)

After finding that the trial judge had erred in excluding evidence as to administrative practice and parliamentary history, Hugessen J.A. went on to state (at p. 5414):

"Parliamentary debates and evidence of administrative practice are only useful as interpretative tools where the text is ambiguous. They cannot be used, as appellant's counsel seeks to do, to create ambiguity. In our view, this text is not ambiguous."

The Queen v. Coopers & Lybrand Ltd., Trustee of Hawboldt Hydraulics (Canada) Inc., 94 DTC 6541 (FCA)

In interpreting the meaning of the phrase "for the purpose of manufacturing goods for sale or lease" as they then appeared in s.127(10(c)(i) and in s.(a)(i) of Class 29, Isaac C.J. referred to a speech of the Minister of Finance in opening the debate on the second reading of the relevant bill and from that inferred that "Parliament's objective in enacting the legislation was encouragement of increased production of manufactured and processed goods to be placed on the domestic and international markets in competition with foreign manufacturers" (p. 6548).

The Queen v. Morrissey, 89 DTC 5080 (FCA)

After reviewing statements made by the Minister of Finance with respect to the introduction of what now is s.31(1), Mahoney J. noted (p. 5084) that he was "persuaded that the government's intentions as told to Parliament in 1951 and 1952 may indeed not have been realized", given the interpretation of s.31(1) in Moldowan v. The Queen, 77 DTC 5213 (SCC). He concluded (p. 5085):

"The judiciary must interpret what Parliament has said, not necessarily what it may have intended to say."

Pepper v. Hart, [1992] BTC 591 (HL)

A statement by the Financial Secretary to the Treasury when the Finance Bill 1976 was being considered clearly indicated that a construction which otherwise would have been given by the House of Lords to section 63 of that Act did not accord with Parliament's intention. Lord Oliver stated (p. 599) that the Parliamentary history could be consulted as an aid to statutory construction:

"Only where the expression of the legislative intention is genuinely ambiguous or obscure or where a literal or prima facie construction leads to a manifest absurdity and where the difficulty can be resolved by a clear statement directed to the matter in issue."

Harvey C. Smith Drugs Ltd. v. The Queen, 92 DTC 6349 (FCTD), aff'd 95 DTC 5026 (FCA)

"Explanations given, particularly by departmental officials, in Senate or House of Commons Committee Proceedings may shed light on ambiguous statutory provisions. These must be used with care, however, since it is known that such proceedings take on an advocacy flavour ... Although one would not want to discount entirely statements by Ministers in the House of Commons these often will be even less reliable." (p. 6353)

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Resolving Ambiguity 87

British Columbia Telephone Co. Ltd. v. The Queen, 92 DTC 6129 (FCA)

In giving relatively little weight to possible inferences to be drawn from Budget Papers, MacGuigan J.A. stated (at p. 6132 and at 6134):

"... In its balancing exercise, a Court should give greater weight to clear words supported by their immediate context than to larger assertions of parliamentary intention, particularly those based on extrinsic evidence, which our Courts have always approached with extreme caution.

... I cannot think, that therefore in the weighing process necessary for interpretation, the vague and limited language of the Budget Paper could have been intended to outweigh the much clearer ordinary language employed by Parliament in Class 3(j) ..."

Vancouver Art Metal Works Ltd. v. The Queen, 91 DTC 5643 (FCTD), rev'd 93 DTC 5116 (FCA)

rev'd on other grounds 93 DTC 5116 (FCA)

Jerome A.C.J., before referring to the budget speech of the Minister of Finance, noted that although it is "improper to look at Parliamentary Debate for the purpose of statutory interpretation", one may do so to "set the context, to clarify the purpose of the enactment" (p. 5644).

Gulf Canada Ltd. v. The Queen, 90 DTC 6622 (FCTD), aff'd 93 DTC 6123 (FCA)

After noting that "budget speeches and similar sources are useful in indicating the 'mischief' or condition at which the legislature was directing its attention" (p. 6628) McNair J. went on to note that "budget speeches are not intended as comprehensive and technical aids to interpretation" (p. 6628).

National Corn Growers Association v. Canadian Import Tribunal (1988), 58 DLR (4th) 642 (FCA), aff'd [1990] 2. SCR 1324.

"[C]ourts are entitled to look at parliamentary proceedings only to ascertain the 'mischief' that the legislation was designed to cure or address ... consequently, the statements made an introduction by the Minister and a senior official [of the Special Import Measures Act] show that the 'mischief' was for Canada to obtain rules, as generally outlined in the GATT and the Subsidies and Countervailing Duties Agreement, to deal with trade problems." (p. 649)

Re McFarland (1987), 39 DLR (4th) 703 (Ont. H.C.)

White, J. found that he could "take heed of extrinsic law reform material in construing the word 'spouse' as found in s.44 of the Succession Law Reform Act."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 252 - Subsection 252(3) 17

Alberta Institute on Mental Retardation v. The Queen, 87 DTC 5306, [1987] 2 CTC 70 (FCA)

Statements of the Minister of Finance in a Budget Speech and in Committee as to the purpose and intended scope of the related-business provisions of s.149.1 were relied upon.

Lor-Wes Contracting Ltd. v. The Queen, 85 DTC 5310, [1985] 2 CTC 79 (FCA)

"Hansard may be used, like the report of a commission of enquiry, in order to expose and examine the mischief, evil or condition to which the Legislature was directing its attention". Reference was made to a budget statement of the Minister of Finance in order to establish that the investment tax credit provisions were introduced in order to stimulate investment.

Canterra Energy Ltd. v. The Queen, 85 DTC 5245, [1985] 1 CTC 329 (FCTD), rev'd 87 DTC 5019, [1987] 1 CTC 89 (FCA)

Budget documents are admissible, but they may be accorded little weight because the details of implementation may change between the Budget date and the date of enactment of the relevant regulation or statutory provision.

Edmonton Liquid Gas Ltd. v. The Queen, 84 DTC 6526, [1984] CTC 536 (FCA)

Reference was made to an address made by the Minister of Finance to the House of Commons, in order to establish that subparagraph 66.1(6)(a)(ii) was intended to encourage exploration through a 100% write-off for Canadian exploration expenses.

R. v. Redpath Industries Ltd., 84 DTC 6349, [1984] CTC 483 (Que. S.C.)

The Carter Commission Report and a Finance White Paper were referred to for the purpose of establishing the mischief which the F.A.P.I. rules were designed to remedy.

F.C.T. v. Whitfords Beach Pty. Ltd., 82 A.TC 4031 (A.H.C.)

Reference may be made to what was said in Parliament for the purpose of determining the mischief which legislation was introduced to remedy. (per Mason, J.)

See Also

Alberta v ENMAX Energy Corporation, 2018 ABCA 147

purpose inferred in part from Legislative Assembly statement of Minister

The Court inferred from a response (quoted at para. 21) to an MLA question given by the Minister of Energy in the Alberta legislature - that there was an intention to create “level playing field” between municipally-owned power companies and taxable competitors – that it was contrary to the purpose of a legislative rule requiring such otherwise-exempt companies to make payments in lieu of taxes, to be able to “shelter” their earnings by paying junk-bond interest rates on financing from their exempt parents.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest on a loan from a tax-exempt parent should be at an arm’s length rate reflecting implicit parental credit support 470
Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) arm’s length interest rate to sub could not be manipulated by structuring the loan as a junk bond without implicit parental credit support 264
Tax Topics - General Concepts - Tax Avoidance right to structure affairs to reduce taxes (or, here, payments in lieu) inapplicable where consumer assistance purpose defeated 172
Tax Topics - Income Tax Act - Section 67 test of whether the amount was objectively reasonable 229

Nestlé Canada Inc. v. The Queen, 2017 TCC 33

acceptance of oral Crown statement as to provision's purpose

After noting that ETA s. 181(2) effectively required customers to overpay GST/HST on their purchases, with the supplier then using coupons to effectively rebate the overpayment and claim a matching input tax credit, Lamarre ACJ stated (at para. 39):

The reason for implementing this practice was explained by counsel for the Respondent in his oral submissions, in which he referred the Court to the policy underlying the treatment of discount coupons. The object of the practice was to simplify the treatment of coupons for small grocers, who, in the 1990s, did not have easy access to cash registers that, for the purpose of the application of the GST/HST, could distinguish between coupons for taxable supplies and coupons for non-taxable (or zero-rated) supplies.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 181 - Subsection 181(1) - Coupon the mere posting and honouring by Costco of dollar-amount discounts for which it was reimbursed by Nestlé Canada did not come within the GST/HST coupon rules 300
Tax Topics - Excise Tax Act - Section 232.1 reductions in sales price to refund discounts provided by wholesaler were promotional allowances 182

Gerbro Holdings Company v. Canada, 2016 TCC 173, briefly aff'd 2018 FCA 197

Minister's statement was false

Lamarre ACJ stated (at para. 113):

The Appellant points to statements of the then Minister of Finance...to convince the Court that the [offshore investment fund property] rules were not meant to apply to non-resident entities engaging in a bona fide active business [citing 1984 Budget papers]. ... Doré v. Verdun....[1997] 2 S.C.R. 862, [stated] at paragraph 14, that a Minister's comments could be used to support an interpretation, but cautioned that such comments "are not binding on the courts, and their weight can vary, inter alia in light of other factors that may assist in interpreting..." Minister Lalonde's statement, while true in most factual circumstances, will prove to be false where the underlying investments of a foreign investment business are nonetheless portfolio investments.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 94.1 - Subsection 94.1(1) offshore hedge fund investments were chosen in the main for commercial reasons (e.g., manager reputation), so that s. 94.1 did not apply 345
Tax Topics - General Concepts - Onus no taxpayer burden to displace assumptions of mixed fact and law 65
Tax Topics - Other Legislation/Constitution - Federal - Tax Court of Canada Rules (General Procedure) - Section 145 - Subsection 145(3) expert's report did not include all the underlying data 109

Eclipse Film Partners (No. 35) LLP v Revenue and Customs Commissioners, [2014] BTC 503, [2013] UKUT 0639 (TCC), aff'd [2015] EWCA Civ 95

Explanatory Notes more valuable than white papers

After reviewing Explanatory Notes prepared by the Tax Law Rewrite Project at the Inland Revenue, which indicated that the provision before him was not intended to change the law, Sales J quoted approvingly (at para. 92) obiter comments of Lord Steyn in R (Westminster City Council) v National Asylum Support Service, [2002] UKHL 38; [2003] LGR 23 at [5]:

Again, there is no need to establish an ambiguity before taking into account the objective circumstances to which the language relates. Applied to the subject under consideration the result is as follows. Insofar as the Explanatory Notes cast light on the objective setting or contextual scene of the statute, and the mischief at which it is aimed, such materials are therefore always admissible aids to construction. They may be admitted for what logical value they have. Used for this purpose Explanatory Notes will sometimes be more informative and valuable than reports of the Law Commission or advisory committees, Government green or white papers, and the like. After all, the connection of Explanatory Notes with the shape of the proposed legislation is closer than pre-parliamentary aids which in principle are already treated as admissible: see Cross, Statutory Interpretation, 3rd ed (1995), pp 160-161. If used for this purpose the recent reservations in dicta in the House of Lords about the use of Hansard materials in aid of construction are not engaged…

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business speculative element of trade 213
Tax Topics - Statutory Interpretation - Consolidations construed in integrated manner 146

Krause v. The Queen, 2004 DTC 3265, 2004 TCC 594 (Informal Procedure)

Before going on to indicate that the practice of referring to Department Finance Notes appear to be "fairly well entrenched", Bowman A.C.J. stated (at p. 3270):

"It does not seem appropriate to resolve ambiguities in the statutory language by having recourse to notes written by unnamed officials in the Department of Finance explaining what the Department of Finance thought it was achieving, or what it hoped to achieve."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.5 - Subsection 118.5(1) attendance online 90

Canada Trustco Mortgageco v. The Queen, 2003 DTC 587 (TCC)

Miller T.C.J indicated that in determining the policy of provisions for purposes of considering the application of the general anti-avoidance rule, there was a greater likelihood of success if extrinsic evidence that shed light on the legislators' rationale in adopting the provision was reviewed, and stated (at p. 601):

"What text writers and tax commentators say is the government policy is obviously not as edifying as what the government itself says; what the government says after the fact is not as enlightening as what the government says at the time of introduction of the provisions."

R. v. Secretary of State, Ex P. Spath Holme, [2001] 1 All ER 195 (HL)

Reference to Hansard for the purpose of determining whether a statutory power was given by Parliament only on the basis that it would be exercised on a limited basis could not be made in this case both because the legislation in question was not ambiguous or obscure and did not lead to an absurdity, and because the Hansard statements in question did not provide any clear guidance on the scope of the provision.

Canadian Occidental U.S. Petroleum Corp. v. The Queen, 2001 DTC 295 (TCC)

Before noting that a technical interpretation of the Department of National Revenue contained an interpretation of s.17(3) which he had rejected, Bowman A.C.J. stated (at p. 299):

"... departmental practice may be of assistance in resolving a doubt in favour of a taxpayer. There can be no justification for using it as a means of resolving a doubt in favour of the very department that formulated the practice."

Articles

Bennion, "How They all got it Wrong in Pepper v. Hart", British Tax Review, 1995, No. 3, p. 325.

Bale, "Parliamentary Debates and Statutory Interpretation: Switching on the Light or Rummaging in the Ashcans of the Legislative Process", The Canadian Bar Review, March 1995, Vol. 74, No. 1, p. 1.