Interpretation Act

Section 8.1

Cases

BP Canada Energy Company v. Canada (National Revenue), 2017 FCA 61

federal power should be exercised harmoniously with provincial law

An order of the Federal Court pursuant to s. 231.7(1) that BP Canada was to disclose tax accrual working papers (or, at any rate, the uncertain tax positions which were reflected in its tax cushion), was reversed partly on the basis that it would be inconsistent with the operation of the self-assessment system for taxpayers to be required “to reveal their ‘soft spots’.”

After referencing financial reporting obligations of public companies under provincial securities legislation including the accurate reporting of accrued taxes and before noting concerns of CPA Canada that required disclosure to CRA of tax accrual working papers would reduce the candour of disclosures by companies to their external auditors, Noël CJ also stated (at paras. 86, 97):

By enacting subsection 231.1(1), Parliament could not have intended to vest the Minister with a power so sweeping that it would undermine those obligations. …

I recognize that we are not dealing here with a word in a federal statute which takes its meaning from provincial laws. Rather, we are dealing with a power created under federal legislation that was not intended to ride roughshod over provincial laws. The issue is one of harmonious interpretation: Parliament intended its laws to work with provincial laws, not against them.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.1 - Subsection 231.1(1) - Paragraph 231.1(1)(d) taxpayers should not be compelled to disclose to CRA the uncertain tax positions contained in their working papers 347

Jean Coutu Group (PJC) Inc. v. Canada (Attorney General), 2016 SCC 55, [2016] 2 S.C.R. 670

desriable for convergence of principles and outcomes inside and outside Quebec

After stating (at para. 47) that “despite their different origins, both rectification under Quebec civil law and rectification in equity are strict, in the sense that only the expression or transcription of contracts can be amended; contracts themselves cannot be reformulated,” Wagner J stated (at paras. 51-52):

I acknowledge that rectification under Quebec civil law and rectification in equity will not, however, always lead to the same result. This is because of differences between the principles of contract law specific to the two legal systems and variations in the facts from case to case.

Still, the natural convergence in principles and outcomes I have described above is generally desirable, particularly in the tax context. Taxpayers in both Quebec and the common law provinces are subject to the same federal taxation system. They could expect to encounter similar results when they seek to amend documents that express their agreement and lead to unintended tax consequences.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Rectification & Rescission rectification must give effect to common intention at time 757

Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56, [2016] 2 S.C.R. 720

convergence in civil/common law rectification

After concluding that the common law doctrine of rectification did not permit the parties to change their agreement so as to avoid unanticipated tax consequences, Brown J referenced the somewhat similar conclusion that was reached in the companion Jean Coutu appeal dealing with the attempted correction of a Quebec transaction, and stated (at para. 33) that “this convergence is undoubtedly desirable in the context of applying federal tax legislation,” and noted that, in particular, under both legal systems, taxpayers’ had no facility to redo their contracts retroactively should their tax planning fail.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Rectification & Rescission rectification not available to correct planning errors 572

Durocher v. Canada, 2016 CAF 299

Tax Court can review validity of contract in reviewing assessment

Before indicating that it was unnecessary to pass on whether it was beyond the competence of the Tax Court to declare that options were invalid under Quebec law, Noël CJ stated (at para. 42, TaxInterpretations translation):

[T]he role of the TCC, when confronted with an argument based on nullity in the context of an appeal under the ITA, cannot be assimilated to that of a Superior Court which has the power to “declare” a contract to be a nullity for all purposes pursuant to section 33, 35 and 142 of the Code of Civil Procedure… (see in comparison Markou v. The Queen, 2016 TCC 137, paras. 7-21 where the TCC was confronted with a similar problem in the context of litigation arising in a common law province… .)

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) option valid notwthstanding that its exercise in full by holder would be illegal 315
Tax Topics - General Concepts - Illegality proper for the Tax Court to pass on the alleged nullity of a contract in the context of passing on the correctness of an assessment 235

French v. Canada, 2016 FCA 64

Parliament may have intended what constitutes a gift outside Quebec to be partly informed by the Civil Code

The position that the resident taxpayer, who resided outside Quebec, could generate a credit for at least the cash portion of his “donations” made as part of a leveraged donation tax shelter was buttressed in his pleadings by advancing the proposition that Parliament did not intend for split gifts to receive significantly different treatment in the rest of Canada as contrasted to Quebec (where split gifts were accepted in the Civil Code) even before the introduction of the split gift rules in the Act effective after 2002.

In accepting a submission that these pleadings should not be struck, Noël JA stated (at para. 42) that “it cannot be said with certainty that the meaning of ‘gift’ prior to the 2002 amendments excluded the notion of split gift in the common law provinces,” and (at para. 44) that “it would have been open to Parliament to attribute to the word 'gift' a meaning which coincides with the civil law and...it is arguable that this is what Parliament intended.”

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts Parliament may have intended what constitutes a gift outside Quebec to be partly informed by the Civil Code 240

Quebec (Agence du revenu) v. Services Environnementaux AES inc., 2013 DTC 5174 [at 6466], 2013 SCC 65, [2013] 3 S.C.R. 838

In the course of finding that the taxpayers could avail themselves of a declaration under the Civil Code that their initial written documents did not reflect their "agreement of wills," LeBel J noted that, in general, the tax authorities' ability to rely on the written form of an agreement is subject to provincial law. After noting exceptions, he stated (at para. 45):

[T]ax law applies to transactions governed by, and the nature and legal consequences of which are determined by reference to, the common law or the civil law [of contract].

Locations of other summaries Wordcount
Tax Topics - General Concepts - Rectification & Rescission Quebec documents did not implement common intention to defer tax 812

Wolf v. Canada, 2002 DTC 6853, 2002 FCA 96

Before determining that the taxpayer was an independent contractor governed by Article XIV of the Canada-U.S. Income Tax Convention rather than providing dependent personal services described in Article XV, Décary J.A. stated (at p. 6867):

"Turning now to the interpretation of the concepts of 'independent contractors' and 'employees' in regard to a contract executed in Canada, one is to be reminded that common law rules will apply if the contract at issue is to be interpreted in accordance with the laws of a province other than Quebec and that the Civil Court of Quebec will apply if the contract at issue is to be interpreted in accordance with the laws of the Province of Quebec."

See Also

ARTV Inc. v. Agence du revenu du Québec, 2016 QCCQ 8757 (Cour du Québec)

tax law superimposed on the general law

ARTV would have been associated with its largest shareholder (Radio Canada) under the Quebec equivalent of s. 251(5)(b)(i) if the obligation of Radio Canada to acquire the ARTV shares of another shareholder (ARTE France) in the event ARTE France exercised a put right constituted a “right” to acquire those shares for s. 251(5)(b)(i) purposes. Before finding that ARTV had no such s. 251(5)(b)(i) right given inter alia that under the Quebec Civil Code the potential put exercise represented a “condition purement potestative” (i.e., a contractual condition the fulfillment of which was entirely in the control of ARTE France), Cameron JCQ stated (at para. 29, TaxInterpretation translation):

Tax law is, in a way, superimposed on the civil law and the corporate law, that which one could call the common or general law. When tax law is based on such law, one must have recourse first to the existing juridical concepts.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 251 - Subsection 251(5) - Paragraph 251(5)(b) a shareholder’s right to put its shares did not give the other shareholder a s. 251(5)(b)(i) “right” to acquire those shares 347

Markou v. The Queen, 2016 TCC 137

TCC has jurisdiction to determine existence of equitable remedy

C. Miller J rejected a Crown submission that he lacked the jurisdiction to determine whether, under Ontario law, a Quistclose trust attached to funds lent to help fund leveraged donations. Although the Tax Court lacks jurisdiction to declare that there is a Quistclose trust, it has the jurisdiction to determine whether taxpayer assessments are correct, and this requires that the “Tax Court… look at a taxpayer’s circumstances and make a determination as to what facts are true and what legal and equitable rights are available to the taxpayer” (para. 19).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) TCC had jurisdiction to determine that no lender equitable remedy (under Quistclose trust doctrine) attached to leveraged donation advances 393
Tax Topics - General Concepts - Payment & Receipt funds in leveraged donation scheme essentially advanced by lender directly to charity 102

Barejo Holdings ULC v. The Queen, 2015 DTC 1216 [at 1405], 2015 TCC 274, aff'd on other grounds 2016 FCA 304

quaere whether there is a federal law of "debt" or "charity"

An offshore fund ("SLT"), in which the taxpayer had an interest, invested in instruments (styled as "Notes") of non-resident subsidiaries of Canadian banks. The Notes did not bear interest and provided for a payment on maturity that reflected the performance of a matching actively-managed portfolio of assets held by affiliates of the obligors. If the Notes constituted "debt obligations" under s. 95(1) or "debt" under s. 94.1, the taxpayer (a unitholder of SLT) would be required to recognize its share of resulting foreign accrual property income of SLT.

Before finding that the Notes were debt for ITA purposes, Boyle J stated (at paras. 10, 12):

It is not clear that there is a federal meaning of the concept of debt, and neither of the parties asked the Court to adopt one. There is arguably some support in the Supreme Court of Canada decision in Vancouver Society of Immigrant and Visible Minority Women v. M.N.R. [1999] 1 S.C.R. 10 for the proposition that a common-law term used in the Act, like "charity" in that case, could or should perhaps be recognized to have a uniform federal meaning that may not accord precisely with provincial meanings. I was not asked to and do not propose to take that route in this reference.

… the Notes themselves are expressly to be governed by and interpreted and enforced in accordance with the laws of England… . No expert evidence was provided to the Court on the English law applicable to the Notes… . This generally means that the Court is to assume that English law thereon is the same as Canadian law. [F.n. To the extent that applicable Canadian law might be Quebec provincial law, it can be noted that Article 1425 of the Civil Code of Quebec suggests that in interpreting a contract, the common intention of the parties may be more significant than adherence to the literal meaning of the words of the contract chosen by the parties.]

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(11) - Investment Contract "notes" which tracked actively-managed reference pool of assets were "debt" 697
Tax Topics - Income Tax Act - Section 94.1 - Subsection 94.1(1) "notes" which tracked actively-managed reference pool of assets were "debt" and "indebtedness" 176
Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Investment Property "notes" which tracked actively-managed reference pool of assets were "debt" and "indebtedness" 176

French v. The Queen, 2015 TCC 35

tax results in common and civil law need not be uniform

The taxpayer participated in the same donation scheme as in Kossow. The taxpayer, who was not a Quebec resident, sought to apply the Quebec civil law concept that "a remunerative gift ... constitutes a gift ... for the value in excess of that of the remuneration." His notice of appeal argued that consistency in the law ought to prevent the Income Tax Act from applying differently in different jurisdictions.

C Miller J granted the Minister's motion to strike the civil law argument from pleadings, calling it "hopeless" (para. 22). Sections 8.1 and 8.2 of the Interpretation Act specifically reject uniformity in favour of bijuralism, to say nothing of the Harmonization Act, jurisprudence preceding the enactment of ss. 8.1 and 8.2 (see St. Hilaire, 2001 FCA 63), published articles, and s. 94 of the Constitution Act, 1867.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts tax results in common and civil law need not be uniform 126

Snively v. The Queen, 2011 TCC 196 (Informal Procedure)

In finding that the appellant was subject to liability as a director under s. 323 of the ETA because the appellant was deemed to be a director by s. 115(4) of the Business Corporations Act (Ontario), Paris J stated (at para.27):

It is well established that, since "director" is not a defined term in the ETA, it is appropriate to look to a corporation's incorporating legislation for determining whether a person was a director of a corporation at a particular time for the purposes of section 323.

Administrative Policy

1 December 2015 Internal T.I. 2015-0588381I7 F - Classification of US-LLCs

8.1 effected no change/2 step-approach should be inter-provincial

In rejecting a submission that in light of Backman and the introduction of s. 8.1 of the Interpretation Act, and on the basis of a comparison of the attributes of a partnership under the Quebec Civil Code (“QCC”) and those U.S. LLCs, the LLCs were partnerships for purposes of the application of the Act to a Quebec-resident member, CRA stated (TaxInterpretations translation):

[T]he Federal Court of Appeal recognized in 9041-6868 Québec Inc. v. Canada (2005 FCA 334, para. 5) that the addition of section 8.1 of the Interpretation Act occurred for clarification purposes, and that this legislative amendment was not intended to change the state of applicable law. …

[I]f it were determined that such a comparative analysis supported the conclusion that a US LLC must be considered as a partnership for the purpose of application of the Act, we suggest that it would not be appropriate to adopt a classification approach to entities and foreign arrangements which could result in a different classification according to the province or territory of the residence (or permanent establishment) of the taxpayer holding an interest in the entity or the arrangement. …

[I]t appears to us, based in particular on the conflict of law rules, that the provincial and territorial laws of property and civil rights in Canada provide for mutual recognition of different types of entities or arrangements established under the respective jurisdictions of the various provinces and territories, thus providing an expanded base for analysis that is uniform across Canada for the purposes of applying the two-step approach.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Corporation status of Delaware, NY and Florida LLCs as corps not affected by Quebec residence of member 317
Tax Topics - Income Tax Act - Section 96 corporation/partnership classification of foreign entity not affected by Quebec residence of member 223

Section 10

Cases

Caplan v. The Queen, 95 DTC 709 (TCC)

Bell TCJ. found that if s. 160(1) had not been amended to speak in the present tense rather than in the past tense, a subsequent discharge from bankruptcy of a transferor of property would not have retroactively eliminated liability of the transferee under s. 160(1).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) bankruptcy order of discharge retroactively released transferor of tax liability 122

See Also

Barker v Baxendale Walker Solicitors (a firm) & Anor, [2017] EWCA Civ 2056

“is” implied “or becomes”

Before going on to find that a tax solicitor was negligent in not warning that his interpretation of s. 28(4)(d) of the Inheritance Tax Act 1984 (including the meaning to be accorded to “is” and “at any time”) might be incorrect, Asplin LJ stated (at para. 46):

Furthermore, I do not share the Judge's concerns … about the need, on Mr Barker's construction, to imply "or becomes" into paragraph (d) or to construe "is" in (d) in a way which means that it has to apply at all times throughout the life of the trust. … Paragraph (d) is intended to apply in relation to any person whether in (a), (b) or (c). Therefore, it needs to be read in a way which covers all of the temporal circumstances covered in those earlier paragraphs. I can see no reason why "is" should not be read in an "ambulatory" fashion or for that matter, that "or becomes" should not be implied.

Words and Phrases
is
Locations of other summaries Wordcount
Tax Topics - General Concepts - Negligence and Fiduciary Duty tax solicitor was negligent in not advising of the risk of an alternative interpretation 411

Section 11

Cases

Ginsberg v. Canada, 96 DTC 6372, [1996] 3 CTC 63 (FCA)

After noting that recent decisions have diminished the importance of the distinction between directory and mandatory provisions, Desjardins J.A. found that failure of the Minister to assess with all due dispatch as required by s. 152(1) did not invalidate a late assessment by the Minister.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(1) 19
Tax Topics - Income Tax Act - Section 165 - Subsection 165(3) Minister's failure to act with all due dispatch is not a basis for vacating an assessment 112
Tax Topics - Income Tax Act - Section 166 45

Meuse v. The Queen, 94 DTC 6640 (FCTD)

The statement in s. 6(2)(d) of the Act, that "for the purposes of this subsection, it shall be assumed, unless the taxpayer establishes otherwise in the prescribed form, that the aggregate number of kilometres referred to in subparagraph (c)(i)" was not less than 1,000 km. per month, was mandatory given jurisprudence on the meaning of the word "shall".

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 15 - Subsection 15(5) 75

The Queen v. Adelman, 93 D.T.C 5376 FCtd

The statement in Regulation 4700 that an election under ITAR 26(7) "shall" be made on the form prescribed was imperative rather than directory. In addition to referring to s. 11 of the Interpretation Act, Strayer, J. applied the decision in Re Manitoba Language Rights, [1985] 1 S.C.R. 721.

Baron v. Canada, 93 DTC 5018, [1993] 1 S.C.R. 416

In finding that the word "shall" in s. 231.3(3) was imperative, Sopinka J. stated (p. 5026):

"As this Court said in Re Manitoba Language Rights, [1985] 1 S.C.R. 721, at p. 737, the presumption that the word 'shall' is intended to be mandatory should be followed unless:

'such an interpretation of the word 'shall' would be utterly inconsistent with the context in which it has been used and would render the sections irrational or meaningless.'"

Words and Phrases
shall

Jack Herdman Ltd. v. MNR, 83 DTC 5274, [1983] CTC 272 (FCA)

A provision in the Excise Tax Act stating that a refund "may" be granted gave the Minister the discretion to refuse refund applications.

See Also

Haight v. The Queen, 2000 DTC 2571 (TCC)

In finding that the word "shell" in s. 166.1(2) was directory rather than mandatory (so that a letter to the Tax Services Office that did not specify reasons for the failure to file a notice of objection within the 90-day period was treated as an application for an extension), Bell T.C.J. stated (at p. 2576):

"Section 166.1 obviously is designed to afford relief to a taxpayer who disagrees with an assessment. Although it sets out specif requirements it should not, in these circumstances, be interpreted to foreclose the possibility of an earnest taxpayer, unsophisticated in tax matters, being able to proceed with an appeal. That is simply unjust."

Section 12

Cases

Gastrebski v. The Queen, 94 DTC 6355 (FCA)

Linden J.A. found it inadvisable to limit the meaning of the word "event" in s. 19(1) of the Income Tax Application Rules to sudden or trumatic occurrences in the nature of accidents, in light of s. 12 of the Interpretation Act.

Hale v. The Queen, 92 DTC 6473 (FCA)

The Canada-U.K. Convention, like the Income Tax Act, was governed by s. 12 of the Interpretation Act.

Re Stern, 85 DTC 5002, [1984] CTC 647 (FCTD)

It was found that granting the Crown leave to require a third party to participate by joinder as a defendant in an action was the result that would best attain the objects of ss.174 and 175 of the Income Tax Act.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 174 - Subsection 174(4.1) 94

Fradet v. The Queen, 83 DTC 5445, [1983] CTC 424 (FCTD), aff'd 86 DTC 6411, [1986] 2 CTC 321 (FCA)

The amount of proceeds of disposition was assessed "realistically", notwithstanding the absence of a specific provision authorizing the deduction from the proceeds, the amount of accounts whose collectibility was doubtful.

Stirling v. The Queen, 83 DTC 5252, [1983] CTC 220 (FCTD), rev'd 85 DTC 5199, [1985] 1 CTC 275 (FCA)

In order to give effect to the spirit of the Act, the "cost" of gold bullion was interpreted as including carrying charges (such as interest) notwithstanding the absence of a specific adjustment for carrying charges in section 53(1) (with the exception of the adjustment for land carrying charges in section 53(1)(h)).

Commr. of N.W.T. v. Pine Point Mines Ltd., [1981] 5 WWR 420 (N.W.T.S.C.)

"[W]hen there is a provision in a statute that every Act shall be deemed remedial and shall receive such fair, large and liberal construction as will best ensure the attainment of the object of the Act, according to its true intent, meaning and spirit .... these words do not diminish the rule that a statute imposing a tax must be in clear, unambiguous language, and should be strictly construed".

See Also

Hillier v. The Queen, 2000 DTC 2145 (TCC) (Informal Procedure)

Bowman TCJ. applied s. 12 in finding that a reference in s. 118.2(2)(l.2) of the Act to reasonable expenses relating to "renovations or alterations to a dwelling" included costs of constructing a new dwelling that were attributable to the medical condition of the taxpayer's daughter.

APL Oil & Gas Ltd. v. The Queen, 96 DTC 1666 (TCC)

An assessment that erroneously referred to the taxation year of the taxpayer as ending on January 2, 1987 rather than December 31, 1986 was deemed to be valid under s. 152(8) of the Income Tax Act, after a brief reference was made to s. 12 of the Interpretation Act.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(8) 25

Radage v. The Queen, 96 DTC 1615 (TCC)

After citing s. 12 and before finding that the taxpayer was entitled to the disability credit, Bowman TCJ. stated (at p. 1625):

"If there is doubt on which side of the line a claimant falls, that doubt should be resolved in favour of the claimant."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.4 - Subsection 118.4(1) 64

Section 14

Cases

Brill v. The Queen, 96 DTC 6572 (FCA)

Linden J.A. found support for his interpretation of s. 79(c) by referring to the marginal notes, and stated (at p. 6575) that although the marginal notes "'form no part of an enactment', it is permissible to consider them as part of the context of the legislation as a whole".

Fraser Companies, Ltd. v. The Queen, 81 DTC 5051, [1981] CTC 61 (FCTD)

"Despite section 13 of the Interpretation Act to the effect that marginal notes form no part of the enactment but shall be deemed to have been inserted for convenience of reference only they do, in most instances, and in this instance, accurately reflect the general sense of the language of the subsection and may therefore, be referred to for that purpose." Thus, s. 56(2) is designed to prevent "Indirect Payments".

Subsection 15(1)

Cases

Qit-Fer et Titane Inc. v. The Queen, 92 DTC 6071 (FCTD), aff'd on different grounds 96 DTC 6213 (FCA)

Rouleau J. applied s. 15(1) of the Interpretation Act in finding that because ss.125.1(3)(b)(v), (vi) and (vi.1) excluded the production of ferric oxide and titanium dioxide from "manufacturing or processing" the sale of such production also was excluded from "the selling... of goods manufactured or processed in Canada" referred to in s. 125.1(3)(b)(x) of the Income Tax Act. Accordingly, because the taxpayer's sales of ferric oxide and titanium dioxide could not be included in its sales of goods manufactured or processed in Canada for purposes of s. 125.1(3)(b)(x), its secondary activity of manufacturing iron powder did not qualify.

Androwich v. The Queen, 90 DTC 6084 (FCTD), briefly aff'd 93 DTC 5275 (FCA)

"Where a term is defined in a particular statute, as 'earned income' is defined in the ITA, that definition prevails over its ordinary or dictionary definition."

Subsection 15(2)

Cases

The Queen v. Canadian Marconi Co., 91 DTC 5626 (FCA)

In finding that the definition in s. 248(1) of the Income Tax Act of "assessment" was not conclusive, Mahoney J.A. stated (p. 5629):

"That definitional section cannot, in my view, prevail to render the terms assessment and reassessment entirely interchangeable in a provision that clearly distinguishes between them and expressly provides differently in respect of them."

Scott v. The Queen, 91 DTC 5268 (FCTD), varied 94 DTC 6193 (FCA)

Walsh J. stated, in dealing with the definition of "office" in s. 248(1) which deemed a director to be an officer, stated (p. 5275):

"While a statute requires strict interpretation and this is especially so of a complex statute such as the Income Tax Act, it is nevertheless necessary to look at this statute as a whole and what it seeks to accomplish rather than relying on any specific section and especially the definitions in section 248 in order to reach an interpretation which would defeat the intent of the Act."

Holiday Luggage Mfg. Co. Inc. v. The Queen, 86 DTC 6601, [1987] 1 CTC 23 (FCTD)

Joyal, J. stated "that statutory definitions of terms contained in Part XVII - Interpretation of the Income Tax Act may be far from conclusive when applied to the same term found or used elsewhere in an excessively long and complex piece of legislation," and held that "corporation" in s. 256 did not include an off-shore corporation, notwithstanding the definition of "corporation" in s. 248(1).

Quemont Mining Corp. Ltd. v. MNR, 66 DTC 5376, [1966] CTC 570 (Ex. Ct.), aff'd 70 DTC 6046 (SCC)

Although Regulation 701(2)(a) defined "income derived from mining operations" to mean income calculated under the federal Act, the clear meaning of "income from mining operations" in Regulation 701(1)(a) was mining income calculated as provided by provincial statute. Accordingly, there was a contrary intention as contemplated in s. 15(2) of the Interpretation Act.

Settled Estates Ltd. v. Minister of National Revenue, 60 DTC 1128, [1960] CTC 173, [1960] S.C.R. 606

Although s. 63(2) of the pre-1972 Act (the predecessor of s. 104(2)) deemed executors to be individuals for certain purposes, that provision had no application to s. 68(1)(a) of the pre-1972 Act "because a plain intention to the contrary is to be gathered from the context of the section itself" (p. 1130).

Section 16

Cases

Canada v. Castro, 2015 DTC 5113 [at 6266], 2015 FCA 225, rev'g sub nom. David v. The Queen, 2014 DTC 1111 [at 3236], 2014 TCC 117

Regs read in context of enabling legislation

In denying charitable credits for the cash contributions on the basis that inflated amounts shown on the receipts rendered them invalid under the applicable Regulations, Scott JA stated (at para. 79):.

It is a well-established principle that delegated legislation, such as the Regulations, is to be interpreted in accordance with the general principles of interpretation, in addition to being read in the context of its enabling Act.

See summary under Reg. 3501(6).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts inflated charitable receipt not a "benefit" vitiating a gift (donative intent issue not properly raised) 145
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(2) inflated charitable receipt was invalid 171
Tax Topics - Income Tax Act - Section 248 - Subsection 248(32) inflated charitable receipt not an "advantage" 114
Tax Topics - Income Tax Regulations - Regulation 3501 inflated charitable receipt was invalid 171
Tax Topics - Statutory Interpretation - Interpretation Act - Section 32 inflated charitable receipt not an "advantage" 114

Stearns Catalytic Ltd. v. The Queen, 90 DTC 6286 (FCTD)

McNair J. stated that he proposed to ignore the words "directly or indirectly" modifying the word "use" in paragraph a(i) of Class 29 of Schedule II in light of the absence of those words in the corresponding provision of the Act, given the principle that "the 'intent of the statute transcends and governs the intent of the regulation'" (p. 6294).

International Nickel Co. of Canada Ltd. v. MNR, 71 DTC 5332 (FCTD)

After referring to what then was s. 15 of the Interpretation Act, Cattanach J. stated (at p. 5346):

"In my view the word 'development' in the context in which it appears in Regulation 1205 indicates that the word is used in the same sense that it is used in section 83A of the Act."

See Also

Weyerhaeuser Company Limited v. The Queen, 2007 TCC 65

"in respect of" in Regulation read narrowly to conform with "for" in statute

Before going on to interpret Reg. 105 narrowly and find that it was intra vires (by interpreting the reference therein to fees “in respect of” Canadian-performed services” as referring to fees “for” such services as authorized by ITA s. 153(1)(g), Bowie J quoted with approval the statement made by Cartwright J (as he then was) in The Queen v. McKay, [1965] S.C.R. 798 at 803-4:

... if an enactment, whether of Parliament or of a legislature or of a subordinate body to which legislative power is delegated, is capable of receiving a meaning according to which its operation is restricted to matters within the power of the enacting body it shall be interpreted accordingly. An alternative form in which the rule is expressed is that if words in a statute are fairly susceptible of two constructions of which one will result in the statute being intra vires and the other will have the contrary result the former is to be adopted.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 105 - Subsection 105(1) no withholding on reimbursements for disbursements/no requirement for documentary support for allocations in NRs' invoices/travel time to Canada not re Cdn services 477
Tax Topics - Statutory Interpretation - Regulations narrow construction of Reg. so as to be intra vires 188

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

L'Heureux-Dubé J. stated (at p. 5368) that reading s. 20(1)(a) "without considering the regulations would not be in accordance with appropriate principles of statutory interpretation".

Section 17

Cases

Canada v. Nova Scotia Power Inc., 2003 DTC 5090, 2003 FCA 33

Section 4 of the Power Commission Act (Nova Scotia) provided that the Nova Scotia Power Commission " ("NSPC") "shall continue as a body corporate and as agent of Her Majesty The Queen in right of the province" under the name of "Nova Scotia Power Corporation. The respondent, which had acquired the undertaking of NSPC, sought to establish that NSPC was not an agent of the Crown, so that purported elections made by NSPC under s. 21 of the Act, to step up the capital cost of the depreciable assets transferred to the taxpayer pursuant to s. 85(5.1) of the Act, would be valid.

Pelletier J.A. noted (at p. 5096) that a finding that an entity is a Crown agency does not automatically lead to the conclusion that the entity enjoys Crown immunity (under s. 17 of the Interpretation Act or otherwise) and indicated (at p. 5096) that:

"Once a corporation is found to be an agent of the Crown, the question of Crown immunity turns on the scope of the corporation's mandate and whether, on the facts, it was acting within that mandate."

Here, NSPC had acquired and operated the assets pursuant to its objects of developing for Nova Scotia the maximum use of power on an economic and efficient basis with the result that the questions put to the Court should be answered on the basis that NSPC was acting within its authorize purpose so as to benefit from Crown immunity.

In Re Gaston H. Poulin Contractor Ltd., 92 DTC 6338 (Ont. Ct. J. (Commercial List))

The Companies Creditors Arrangement Act (Canada) was found not to bind the Crown in that there are no provisions of that Act which would indicate a clear intention to bind the Crown and given the lack of evidence that the intent and purpose of that Act would be wholly frustrated by its non-application to the Crown.

C.I.B.C. v. The Queen, 84 DTC 6426, [1984] CTC 442 (FCTD)

To the extent that s. 178 of the Bank Act gives a bank priority over the Crown, the Crown's rights are not affected since by virtue of the s. 178 security the Crown has no interest in the subject property.

The Queen v. Epstein, 84 DTC 6259, [1984] CTC 270 (FCTD)

The word "mortgagor" was given its common-law meaning rather than the extended meaning accorded to it by the Mortgages Act (Ontario).

Dauphin Plains Credit Union Ltd. v. Xyloid Industries Ltd., 80 DTC 6123, [1980] CTC 247, [1980] 1 S.C.R. 1182

"It is a well established rule that provincial enactments are presumed to be intended to avoid interference with federal legislation". The Payment of Wages Act (Manitoba) did not affect the interepretation of S.153 of the Act.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) receiver-manager included 23
Tax Topics - Income Tax Act - Section 159 - Subsection 159(2) 34
Tax Topics - Income Tax Act - Section 227 - Subsection 227(5) 39
Tax Topics - Income Tax Act - Section 88 - Subsection 88(3) "liquidation" includes forced (and not just voluntary) distribution of all the assets of a company 286

The Queen v. Ogden Enterprises Ltd., [1980] CTC 106 (N.B.C.A.)

It was found that the provincial Legislature unquestionably had the power to declare the nature of the relationship between the provincial Crown and a vendor with respect to taxes collected by him under the Social Services and Education Tax Act (N.B.), notwithstanding that such declaration brought the provincial Crown within the definition of a "secured creditor" under the Bankruptcy Act, a federal statute.

Section 26

Administrative Policy

9 October 2015 APFF Roundtable Q. 21, 2015-0598291C6 F - Filing deadline for various forms

where a return filing deadline falls on a Saturday, the deadline for related forms also is extended to the Monday

As Saturdays are "public holidays" as defined in s. 35 of the Interpretation Act, this means that if the return filing deadline of the taxpayer falls on a Saturday (e.g., Saturday, April 30, 2016), the filing deadline for related forms to be filed by that deadline (e.g., Forms T2057, T1134 and T5013) will be extended to the following Monday. The situation where there is a maximum number of months (e.g., 15 months) following the end of the taxation year to file a form is handled in the same manner.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) where a return filing deadline falls on a Saturday, the deadline for the T2057 also is extended to the Monday 54

TPM-05R – Requests for Contemporaneous Documentation 28 March 2014

19. [extension if holiday] When the last day to comply falls on a holiday, the taxpayer has until the next day that is not a holiday to comply, according to section 26 of the Interpretation Act. A holiday includes statutory and provincial holidays, Saturdays, and Sundays….

Section 27

Subsection 27(3)

Administrative Policy

10 March 2016 Internal T.I. 2015-0614161I7 - Extended reassessment period 152(4)(b)

normal or extended reassessment period ends on the anniversary date

A Canadian-controlled private corporation was issued an original notice of assessment for a particular taxation year on December 31, 2013. Is the last day to issue a reassessment to the corporation under s. 152(4)(b) December 31, 2019? CRA responded:

The “normal reassessment period”…[ends] three years after the day of sending the notice of an original assessment or an original notification that no tax is payable by the taxpayer for the year. In this regard, subsection 27(3) of the Interpretation Act states that where a time is expressed to begin or end at, on or with a specified day, or to continue to or until a specified day, the time includes that day. Accordingly, under paragraph 152(3.1)(b)…where an original assessment is issued on December 31, 2013, the normal reassessment period ends on December 31, 2016 (i.e., 3 years after that date). The courts confirmed this in Brunette, [2001] 1 C.T.C. 2008 (TCC) [Docket: 98-2080-IT-I].

Paragraph 152(4)(b)…provides that a…reassessment… may be made after the taxpayer’s normal reassessment period…only if the…reassessment…is made before the day that is 3 years after the end of the normal reassessment period for the taxpayer in respect of the year… .

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(b) extended reassessment period ends on the assessment anniversary date 40
Tax Topics - Income Tax Act - Section 152 - Subsection 152(3.1) normal reassessment period ends on the assessment anniversary date 35

Subsection 27(4)

See Also

Toronto Dominion Bank v. B.C. (Commissioner of Income Tax), 2017 BCCA 159

filing deadline period started being counted from the day following the year end

The 2012 taxation year of the taxpayer (“TD”) ended on October 31, 2012. Under s. 24(1) of the International Business Activity Act (B.C.), it was required to file its 2012 tax return (in which it claimed a refund based on operating an international financial business in B.C.) “within 18 months after the end of the taxation year or within a later period approved by the commissioner.” S. 25(5) of the Interpretation Act provided that “in the calculation of time…the first day must be excluded and the last day included.”

TD provided its 2012 return to a courier in Toronto on April 30, 2014, and the return was not received by the Commissioner (in Victoria) until the next day, May 1, 2014. Before finding that TD’s return had been filed one day late, Frankel JA noted (at para. 41) the TD submission that:

because when a taxation year ends “at the last instant of the last day of the taxation year”, the first day on which a taxpayer can do anything is November 1st…[so that] November 1st is the “first day” and, therefore, the day excluded by operation of s. 25(5) of the Interpretation Act

and then stated (at para. 44):

Although a taxation year ends at the last instant of the last day of that year, it nevertheless ends on that day. Consequently, TD was required to file its return within 18 months after October 31, 2012. By operation of s. 25(5) of the Interpretation Act, October 31, 2012, is excluded, [and] the time for filing began to run on November 1, 2012, and expired on April 30, 2014.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2) Commissioner improperly restricted herself to applying only the published guidelines on extending a return-filing deadline 273
Tax Topics - Income Tax Act - Section 37 - Subsection 37(11) May 1, 2014 was not within 18 months of year-end October 31, 2012 56

Section 28

Cases

MNR v. Kayelle Management (Yukon) Inc., 94 DTC 6116 (FCA)

Because s. 157(1) of the Act contemplated that time should not be computed on a calendar-year or a calendar-month basis, ss. 28 and 35(1) of the Interpretation Act did not apply due to the presence of the contrary intention referred to in s. 3(1) of the Interpretation Act.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 157 - Subsection 157(1) 149

Administrative Policy

TPM-05R – Requests for Contemporaneous Documentation 28 March 2014

17. [s. 247(4)(c): "within 3 months"] Under paragraph 28(c) of the Interpretation Act, the day on which the three-month period expires will bear the same calendar day number as the specified day….

18. [ "within 3 months" examples] [W]hen a request is served on April 30, the taxpayer has until July 30 to provide the documentation, not July 31. However, if a request is served on January 31, the taxpayer has until April 30 to provide the documentation… If the request is served on November 30, the taxpayer has to provide the documentation by February 28 of the following calendar year (or February 29 in the case of a leap year).

Subsection 31(3)

Cases

MacMillan Bloedel Ltd. v. Min. of Fin. (B.C.), [1982] CTC 269 (BCCA)

S.23(3) of the Interpretation Act (B.C.) (similar to s. 31(3)) does not apply to an administrative power of a quasi-judicial character that is exercised by a Minister in relation to a particular taxpayer for a particular year. In such a situation the Minister is functus after having exercised his discretion to allow an expense when the original assessment is made, and is precluded from later re-exercising his discretion.

Section 32

Cases

Canada v. Castro, 2015 DTC 5113 [at 6266], 2015 FCA 225, rev'g sub nom. David v. The Queen, 2014 DTC 1111 [at 3236], 2014 TCC 117

inflated charitable receipt not an "advantage"
rev'g on other grounds sub nom. David v. The Queen, 2014 DTC 1111 [at 3236], 2014 TCC 117

A group of individuals made cash contributions to a registered charity on the basis that the charity would issue charitable receipts to them for 10 times the amount of their contributions.

Scott JA agreed with Woods J below that the inflated charitable receipts did not constitute a benefit (so as to vitiate the cash amount of the contributions as "gifts" on general principles), and similarly found that the the inflated receipts were not "advantages" so as to invalidate the contributions under s. 248(30)(a). However, he denied a charitable credit for the cash contributions on the basis that the inflated amounts shown on the receipts rendered the receipts invalid.

See summary under s. 118.1(1) – total charitable gift.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts inflated charitable receipt not a "benefit" vitiating a gift (donative intent issue not properly raised) 145
Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(2) inflated charitable receipt was invalid 171
Tax Topics - Income Tax Act - Section 248 - Subsection 248(32) inflated charitable receipt not an "advantage" 114
Tax Topics - Income Tax Regulations - Regulation 3501 inflated charitable receipt was invalid 171
Tax Topics - Statutory Interpretation - Interpretation Act - Section 16 Regs read in context of enabling legislation 70

Mitchell v. Canada, 2002 DTC 7502, 2002 FCA 407

A letter was found to be a waiver for purposes of s. 152(4)(a)(ii) notwithstanding that it was not contained on a prescribed form.

See Also

Robertson v. The Queen, 97 DTC 449 (TCC)

s. 32 deals with departures from form rather than content

S.32 was of no assistance to cure a purported election under s. 39(4) because "section 32 is concerned with variations in the form itself and not with its content" (p. 452) whereas the taxpayer had used the prescribed form but without the required content.

Billard Fisheries Ltd. v. The Queen, 96 DTC 1577 TCC

In considering the potential application to the taxpayer of Regulation 105(2), which required persons paying remuneration to fishermen to withhold and remit source deductions if the fishermen had elected in prescribed form, Margeson TCJ. found (at p. 1584) after citing s. 32 that "it was not necessary for the prescribed form to be filed if the same result that the form was intended to bring about was achieved by the filing of another form or forms", he went on to find that the taxpayer was not liable because, here, no documents were produced which indicated that the fishermen had elected.

Acton v. The Queen, 95 DTC 170 (TCC)

The requirement on the taxpayer to apply for a carry-back of non-capital losses through the filing of a prescribed form was satisfied when he requested the forms in a letter to Revenue Canada and Revenue Canada responded in writing indicating that none was necessary as the adjustments would be processed by Revenue Canada. After referring to s. 32, Bowman J. stated (p. 109):

"In light of the Department's acceptance of the letter of June 22, 1993, it would be unconscionable to insist on the further filing of a prescribed form at this point."

Subsection 33(2)

Cases

Sheldon Inwentash and Lynn Factor Charitable Foundation v. Canada, 2012 FCA 136

Dawson J.A. rejected a submission that the definition in s. 149.1(1) of a public foundation should be read in the singular, so that the requirement therein that more than 50% of the trustees deal with all the other trustees at arm's length could be satisfied where there was only one trustee. She stated (at para. 44):

In my view, the use of the terms "more than 50%", "deal with each other" and "at arm's length" all evidence a contrary intention to the application of subsection 33(2) of the Interpretation Act to the definition under review.

Heath v. The Queen, 90 DTC 6009 (BCSC)

s.232(1)(e), which refers to the accounting record of a lawyer, was interpreted to refer to the accounting records of a firm of lawyers.

Healy v. The Queen, 79 DTC 5060, [1979] CTC 44 (FCA)

In order to give effect to the overall objective of s. 8(4) of the Income Tax Act, "establishment" was applied in its plural sense, whereas "municipality" was applied in its singular sense.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(4) 119

Electric Power Equipment Ltd. v. MNR, 67 DTC 5322 (Ex Ct)

In light of s. 31(j) of the Interpretation Act, R.S.C. 1952, C. 158, Sheppard D.J. found that the reference in s. 39(4)(d) to "one of those persons" referred to the previous reference in that section to "one person" controlling a corporation in addition to referring to a further reference in that section to a "group of persons" controlling another corporation.

MNR v. Ontario Paper Co. Ltd., 58 DTC 1046, [1958] CTC 71 (Ex Ct), briefly aff'd 59 DTC 1327 (SCC)

Kearney J. found that the word "amount" in s. 11(1)(f) of the pre-1972 Act should be interpreted as referring to "amount or amounts" in light of s. 31(j) of the Interpretation Act, R.S.C. 1927, c. 1: and that in like manner, the word "plan" should be read to include more than one plan.

Army & Navy Department Stores Ltd. v. Minister of National Revenue, 53 DTC 1185, [1953] CTC 293, [1953] 2 S.C.R. 496

In finding that reference to control by a person did not include control by persons, Cartwright J. stated (pp. 1192-1193):

"When section 127 by clause (b) provides that corporations controlled directly or indirectly by the same person shall be deemed not to deal with each other at arm's length it appears to me to negative the view that corporations are to be deemed not to deal with each other at arm's length when controlled not by the same person but by the same group of persons. Expressio unius exclusio alterius. When the wording of clause (b) of section 127 is contrasted with that of clause (a) it seems to me impossible to read the word 'person' in clause (b) as including the plural".

See Also

Melinte v. The Queen, 2008 TCC 185 (Informal Procedure)

Clause (a)(iii)(B) of the definition of "qualifying residential unit" in s. 256.2(1) of the Excise Tax Act applies to residential units that are to be used for one year or more "as a place of residence of individuals, each of whom is given continuous occupancy of the unit... ." Webb J stated (at para. 11):

It does not seem reasonable that Parliament would have intended that only units used simultaneously by more than one person would qualify and therefore there is no reason to not apply the Interpretation Act to include a single individual.

See summary under ETA - s. 256.2 for the facts.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 256.2 - Subsection 256.2(1) - Qualifying Residential Unit - Paragraph (a) - Subparagraph (a)(iii) purchaser was required only to satisfy reasonable expectation rather than actual use test 547

Abdalla v. The Queen, 2011 DTC 1247 [at 1412], 2011 TCC 328 (Informal Procedure)

Webb J. found that a s. 118.5(1)(b)(i), which disallows deductions of fees for courses of study outside of Canada if they are "paid in respect of a course less than 13 consecutive weeks duration," did not apply in situations where the student took several consecutive courses over a period of at least 13 weeks. He reasoned (at para. 22) that the singular "course" includes the plural.

The Minister argued that there was evidence that Parliament drew a distinction between the singular and plural in this part of the Act - the definition of "qualifying educational program" in s. 118.6(1) requires that students "not spend less than ten hours per seek on courses for work in the program... ." Webb J. stated (at para. 24):

In this definition only the plural form of "courses" is used. It does not seem to me that a program would not be a qualifying educational program if it otherwise satisfies this definition but each student spends his or her time on only one course and not multiple courses. It seems to me that the use of the plural in this definition would include the singular and therefore it would seem logical that the use of the singular "a course" in subparagraph 118.5(1)(b)(i) of the Act would include the plural.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.5 - Subsection 118.5(1) "course" duration requirement could be satisfied by multiple consecutive "courses" 96

Rye v. Rye, [1962] A.C. 496 (HL)

S. 72(3) of the Law and Property Act 1925 provided that "a person may convey land to or vest land in himself." It was accepted that "the singular ‘person' must include the plural so that two persons may…convey land to, or vest lands in themselves" (p. 505, per Viscount Simonds).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) contract between a partner and partnership is invalid 174

Administrative Policy

25 June 2018 Internal T.I. 2017-0737151I7 - Application of paragraph 40(3.5)(c)

reference to merger to form one corporation included three

Subject to exceptions, if a capital loss realized on the transfer by Canco of shares of a controlled foreign affiliate is suspended under s. 40(3.4), the loss will cease to be suspended when that CFA is wound-up. One of such exceptions is in s. 40(3.5)(c)(i), which effectively provides that there is no de-suspension if the CFA is merged such that there is a corporation formed on the merger (which then is deemed to own the CFA’s shares). CRA found that s. 40(3.5)(c)(i) applies if the CFA is wound-up into its three shareholders, having regard to ss. 33(2) and 3(1) of the Interpretation Act

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 40 - Subsection 40(3.5) - Paragraph 40(3.5)(c) - Subparagraph 40(3.5)(c)(i) the wind-up of a CFA into three shareholders is a merger to form three corporations 429

2016 Ruling 2016-0632001R3 - Replacement Property

reference to "the" replacement property included 2 replacement properties

CRA has ruled that where the expropriation proceeds of a farm will be used to purchase two nearby farms (with the scale of the farming business also to be expanded), the two new farms would qualify as replacement properties for s. 44 purposes.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 44 - Subsection 44(5) - Paragraph 44(5)(a) two properties to be used in expanded farming business will be replacement property for single former property 293

26 February 2015 CBA Roundtable, Q. 13

2 related agreements qualify as “an agreement”

CRA stated that it “may consider…two agreements to constitute a single joint venture agreement” for the purpose of the requirement in ETA s. 273(1) that in order for a registrant to qualify as the “operator” under a GST joint venture election it must inter alia be a participant in the joint venture “under an agreement, evidenced in writing, with” a co-venturer. In particular, where a joint venture starts off comprising two co-owners, and then in a subsequent year they enter into an agreement with a property manager or other “operator” which deals only with the property management subject matter rather than also repeating all the rights and obligations under the original co-ownership agreement, joint venture elections potentially could be made in the second year with the manager qua operator.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 273 - Subsection 273(1) JV + management agreements can qualify as “an agreement”/“co-ownership agreement” can be a JV agreement 292

28 May 2015 External T.I. 2015-0582901E5 - 149(1)(o.2) Pension corporation

reference to beneficiaries includes single beneficiary

S. 149(1)(o.2)(iv)(B) refers to "one or more trusts all the beneficiaries of which are registered pension plans." In light of s. 33(2) of the Interpretation Act, CRA considers that s. 149(1)(o.2)(iv)(B) will be satisfied where the shareholder is a trust with a single registered pension plan beneficiary. See summary under s. 149(1)(o.2)(iv).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(o.2) - Subparagraph 149(1)(o.2)(iv) trust/seg fund shareholder can have only one beneficiary 142

2013 Ruling 2012-0463471R3 - Single Reclamation Trust

site pluralized

The definition in s. 211.6(1) of a "qualifying environmental trust" refers to trust that is maintained solely for the purpose of funding the reclamation of "a" qualifying site. Favourable rulings respecting the settlement of a single new reclamation trust with respect to multiple mining sites of the taxpayer.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 211.6 - Subsection 211.6(1) - Qualifying Environmental Trust consolidation of trusts for different sites 118

4 May 1995 Memorandum 950960 [provision contemplates only singular]

provision contemplates only singular

The words of s. 26(7) [now 33(2)] "do not in our view act to pluralize words contained in a provision of the Act which obviously addresses itself solely to the singular (e.g., the provisions relating to principal residence)."

Subsection 33(3)

Cases

Qit-Fer et Titane Inc. v. The Queen, 92 DTC 6071 (FCTD), aff'd on different grounds 96 DTC 6213 (FCA)

Rouleau J. found that in Coca-Cola Ltd. v. Deputy Minister of National Revenue for Customs and Excise, 84 DTC 6081, [1984] CTC 75 (FCA), the Court refused to entertain an argument, apparently based on s. 33(3) of the Interpretation Act, that the expression "manufacture or production" should be interpreted by reference to the definition of the expression "manufacturer or producer" in s. 2 of the Excise Tax Act. Rouleau J. added (p. 6073):

"In so doing, the court also seems to infer that 'manufacture or production' were not in themselves parts of speech and grammatical forms of 'manufacturer or producer' ..."

Subsection 34(2)

Cases

Knox Contracting Ltd. v. The Queen, 86 DTC 6417, [1986] 2 CTC 194 (NBQB)

S.443 only has specific application to the Criminal Code and is incapable of being read to apply to the Income Tax Act.

The Queen v. Print Three Inc., 85 DTC 5303, [1985] 2 CTC 48 (Ont CA)

Since s. 231(4) was in breach of s. 8 of the Charter, there was no code of search and seizure in the Income Tax Act and resort accordingly could be had to the search and seizure provisions of the Criminal Code.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 231.3 - Subsection 231.3(3) 128

Thomson v. Minister of National Revenue, 2 DTC 812, [1946] S.C.R. 209

The amendment of a provision effective after the taxation year in question to refer to ordinary residence "at any time in the year" rather than "during" the year was found by Kerwin J (at p. 819 DTC) not to establish that any change in meaning was intended, so that in the taxation year in question a reference to ordinary residence "during" the year did not establish a requirement that the taxpayer be ordinarily resident in Canada throughout the year.

Section 35

Subsection 35(1)

Broadcasting

Administrative Policy

27 March 2018 External T.I. 2017-0715561E5 - Withholding tax on royalties for streamed content

Interpretation Act definition of broadcasting not applicable to Treaty interpretation of those words

Canco streams movies and TV shows (the “digital content”) to its Canadian and foreign subscribers (who pay monthly fees) through a TV video stream and a digital content library. Art. 12 of the Canada-U.K Treaty exempted copyright royalties, but there was an exclusion from this exemption for payments in respect of motion pictures or of works on film, videotape or other means of reproduction for use in connection with television broadcasting. CRA rejected an argument that the definition of “broadcasting” and “radiocommunication” in the Interpretation Act had the effect of making this exclusion inapplicable to TV shows, stating:

Definitions in the Interpretation Act do not apply automatically to every treaty or legislative enactment. Subsection 3(1) of the Interpretation Act indicates that a provision of the Interpretation Act may not apply if a contrary intention appears (either expressly in the text or as part of the context of the provision being applied). Furthermore, Article 3(2) of the Canada-U.K. Tax Treaty indicates that the meaning of a term under Canada’s domestic laws may not apply if the context requires otherwise. We are of the view that the text, context and purpose of Article 12(3)(a) of the Treaty indicate that an ordinary meaning was intended to be given to the words “television” and “broadcasting” and that their meaning, under either domestic or international law, is broad enough to include the digital streaming of television content.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212 - Subsection 212(5) NR fee for streamed films and TV shows taxable under s. 212(5) only re Canadian use or reproduction 307
Tax Topics - Treaties - Income Tax Conventions - Article 12 television and broadcasting included digital streaming 330

Corporation

Articles

Angelo Discepola, Robert Nearing, "A Reply to the CRA's Classification of Florida and Delaware LLLPs and LLPs as Corporations", 2016 Conference Report (Canadian Tax Foundation), 24:1-39

Implicit treatment by Interpretation Act of LLP/LLLPs as not being corporations (p. 24:28)

[S]ection 35 of the Interpretation Act…supports partnership treatment of LLLPs and LLPs. The IA definition provides that the word "corporation" "does not include a partnership that is considered to be separate legal entity under provincial law."… [T]he better view is that the IA definition confirms that a partnership that is considered to be a separate legal entity should nevertheless be considered to be a partnership. …

[T]here is a strong argument that the IA definition applies for greater certainty to ensure that LLLPs and LLPs are not treated as corporations. Further, the phrase "a partnership which is considered to be a separate legal entity under provincial law" does not necessarily limit the application of the IA definition to partnerships governed by provincial law. On the contrary, the IA definition arguably applies when provincial private international law requires foreign law to be taken into account in considering the treatment of a foreign partnership that is a separate legal entity. [fn 106: See Gerling Global …. v. Canadian Occidental…, 1998 ABQB 714. In this case, the court indicated that Alberta's conflict-of-law rules …required that it look to Delaware law to determine whether a Delaware partnership was a "legal entity" under Alberta law….]

Subsection 45(2)

Cases

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

determination of whether amendment merely clarified requires review of pre-amendment state of law

In the course of 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 para. 86):

Whether an amendment clarifies the prior law or alters it turns on the construction of the prior law and the amendment itself. As explained, the Interpretation Act prevents any conclusion from being drawn as to the legal effect of a new enactment on the prior law on the sole basis that Parliament adopted it. Keeping this limitation in mind, the only way to assess the impact of a subsequent amendment on the prior law is to first determine the legal effect of the law as it stood beforehand and then determine whether the subsequent amendment alters it or clarifies it.

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 885
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 - Hansard, explanatory notes, etc. statement that amendment was for “clarification” was self-serving 199

CIBC World Markets Inc. v. Canada, 2011 FCA 270

subsequent provision illustrates the missing words in current provision

Stratas JA found that in the years in question there was no provision requiring that the choice of method by the registrant for computing input tax credits be irrevocable, noted that such an absence was telling as "Parliament knows how to signal those legal consequences," (para. 42) and that, in fact, such a provision was subsequently enacted (para. 44):

The words of new subsection 141.02(17) of the Act are exactly the sort of precise words that one would expect to see if the respondent's interpretation in this appeal were sound. But in the version of the Act at issue in this appeal, words such as that are not present.

Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(5) no implied irrevocability of choice of method 167
Tax Topics - Statutory Interpretation - Inserting Words no implied irrevocability of election 22

Zen v. Canada (National Revenue), 2010 DTC 5109 [at 6979], 2010 FCA 180

In finding that the Minister need not make a second s. 227(10) assessment to recover interest from an earlier assessment, Evans J.A., writing for the Court, remarked in obiter dicta that a 1983 amendment to s. 227(10), replacing the Latin phrase "mutatis mutandis" (meaning "changing that which needs to be changed") with the English phrase "such modifications as circumstances require," probably did not effect a substantive change in the law. The amendment in question was contemporaneous with a series of other amendments that replaced Latin phrases with English equivalents. He stated at para. 53:

It is reasonable to conclude that when Parliament in 1983 replaced the Latin phrase in subsection 227(10) with "plain" English and French words it merely intended to make the provision more accessible. This suggests that the change was in the nature of a consolidation of the law. There is a strong presumption that consolidations are not intended to make substantive changes to the law: Ruth Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham, Ontario: LexisNexis Canada Inc., 2008) at 655-59.

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

After referring to a subsequent amendment to the definition of Canadian-controlled private corporation, Sexton J.A. stated (at p. 7118) that "the Interpretation Act does not preclude the Court from drawing an inference that amendments to legislation are intended to change the legislation where the internal and external evidence warrants such a conclusion."

Waltz v. The Queen, 2001 DTC 462 (TCC)

Dussault T.C.J. stated (at p. 468) that s. 45(2)

"Does not mean however that it cannot be inferred from the context of an amendment that the previous law has in fact been amended."

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 79 140

The Queen v. Mara Properties Ltd., 95 DTC 5168 (FCA), rev'd 96 DTC 6309, [1996] 2 S.C.R. 161

The enactment of s. 249(4) in 1987, whose provisions would have prevented the taxpayer from acquiring a corporation with an accrued but unrealized loss on inventory and receiving the benefit of that loss on a rollover basis under s. 88(1), was found to have not necessarily altered the previous state of the law in light of s. 45(2) of the Interpretation Act.

MCA Television Ltd. v. The Queen, 94 DTC 6375 (FCTD)

MacKay J. found that no assistance as to the meaning of the phrase "motion picture films" should be derived from subsequent amendments to the Canada-U.S. Income Tax Convention in light of s. 45(2) of the Interpretation Act.

Woodward Stores Ltd. v. The Queen, 91 DTC 5090 (FCTD)

Before finding that the introduction of paragraph 12(1)(x) effected a change in the law, Joyal J. stated (p. 5100):

"[s.45(2)] simply states that there is no presumption that a legislative amendment indicates a change in the law. This cannot mean that an amendment can never be interpreted as reflecting a change in the law, especially when there is external evidence to that effect."

Indalex Ltd. v. The Queen, 86 DTC 6598, [1986] 2 CTC 482 (FCA)

It was noted that the use of "for greater certainty" language in S.164(4.1) precluded the application of the maxim inclusio unius est exclusio alterius to the provision that thereby was enacted.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 164 - Subsection 164(4.1) 103

French Shoes Ltd. v. The Queen, 86 DTC 6359, [1986] 2 CTC 132 (FCTD)

In light of s. 45(2) of the Interpretation Act, it was held that it was not permissible to infer that the enactment of s. 12(1)(x) was an admission that before the amendment, inducement payments were not income.

The Queen v. B.B. Fast & Sons Distributors, 86 DTC 6106, [1986] 1 CTC 299 (FCA)

A comparison of s. 256(1)(e) with s. 39(4) of the pre-1972 Act helped establish that in s. 256(1)(e) Parliament intended that the shareholding of one member of a group was insufficient to fulfill the cross-shareholding requirement in s. 256(1)(e).

The Queen v. Canada Southern Railway Co., 86 DTC 6097, [1986] 1 CTC 284 (FCA)

An amendment to regulation 805(1) was not intended to change its meaning.

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 805 101

Oceanspan Carriers Ltd. v. The Queen, 85 DTC 5621, [1986] 1 CTC 114 (FCTD), aff'd in part 87 DTC 5102, [1987] 1 CTC 210 (FCA)

The enactment of s. 111(8)(c) did not effect a change in substance to the Act.

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Territorial Limits non-application to previous non-resident existence 39

British Columbia Forest Products Ltd. v. The Queen, 84 DTC 6391, [1984] CTC 409 (FCTD), rev'd 85 DTC 5577, [1986] 1 CTC 1 (FCA)

Semble, that it does not transgress ss. 45(2) and (3) of the Interpretation Act to refer to a subsequent amendment to a provision to establish that there was some "mischief" in that provision that was cured by that amendment.

Falconbridge Nickel Mines Ltd. v. Min. of Rev. (Ont.), [1981] CTC 120 (Ont.C.A.)

A provision providing that the Minister of Revenue "may" refund overpayments of taxes, was amended to read that taxes that have been overpaid "shall" be refunded if certain conditions are met. The Court derived assistance from this change in rejecting an argument that the word "may" in the pre-amendment provision should be interpreted to mean "shall".

The Queen v. Dorchester Drummond Corp. Ltd., 79 DTC 5163, [1979] CTC 219 (FCTD)

It was impermissible to infer from the enactment of subsection 18(2), which provided for the capitalization of realty taxes in situations where the property was being held as a capital investment, that prior to its enactment such taxes were deductible expenses.

See Also

Oxford Properties Group Inc. v. The Queen, 2016 TCC 204, rev'd 2018 FCA 30

subsequent amendment shed light on scope of previous version

In connection with rejecting an argument that it was an abuse to bump an LP interest under s. 88(1)(d) and sell the bumped LP interest to a tax-exempt without recognizing the underlying recapture of depreciation, D'Arcy J noted that a subsequent amendment accomplished that result and stated (at paras 153 and 148):

[N]ew subparagraph 88(1)(d)(ii.1) is relevant when determining whether the object, spirit and purpose of paragraphs 88(1)(c) and (d) were frustrated by the Oxford Transactions. …

The amendment limits the amount by which the amalgamated company may bump the cost of any qualifying partnership interest held by the subsidiary.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) no abuse in using 88(1)(d) bump to avoid s. 100 after 3-year s. 69(11) period 537
Tax Topics - Income Tax Act - Section 248 - Subsection 248(10) subsequent sale part of series as it utilized the benefit of previous LP packaging transactions 371
Tax Topics - Income Tax Act - Section 97 - Subsection 97(2) purpose not to tax underlying recapture on subsequent LP unit sale 415
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) purpose: to push down ACB of shares of sub to qualifying non-depreciable property 474
Tax Topics - Income Tax Act - Section 100 - Subsection 100(1) S. 100 operates only on outside basis gain 278
Tax Topics - Income Tax Act - Section 69 - Subsection 69(11) Parliament provided safe harbour for sales after 3 years 196
Tax Topics - Income Tax Act - Section 98 - Subsection 98(3) - Paragraph 98(3)(c) purpose: to preserve high outside basis through push down 285

Mathieu v. The Queen, 2014 TCC 207

may look at subsequent amendment to determine whether it changed the law

After rejecting a Crown submission that option surrender benefits realized by the taxpayer (which it acknowledged were not taxable under s. 7(1)) were instead taxable under s. 6(1)(a), Paris J noted the subsequent enactment of s. 7(1)(b.1) to make the benefits of this type taxable, referred to s. 45(2), and stated (at paras. 83,85, TaxInterpretations translation):

Although the simple fact that there is an amendment to the law does not give rise to a presumption of an intent to change the law, the Court should take into account the nature of the amendment and the surrounding circumstances in deciding if the object of the amendment was to change the law. …[I]t is evident that the addition of paragraph 7(1)(b.1) effected a change to section 7 and not a clarification.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 251 - Subsection 251(2) - Paragraph 251(2)(a) separated wife was related 165
Tax Topics - Income Tax Act - Section 7 - Subsection 7(3) - Paragraph 7(3)(a) non-arm's length option surrender proceeds were exempted by s. 7(3)(a) 144
Tax Topics - Statutory Interpretation - Specific v. General Provisions stock option rules more specific than employee benefits 51

Black v. The Queen, 2014 DTC 1046 [at 2882], 2014 TCC 12, briefly aff'd 2014 FCA 275

amendments usually change the Act

In 2002, the taxpayer was resident both in Canada and the U.K. for domestic tax purposes, but by virtue of Art. 4, para. 2(a) of the Canada-U.K Income Tax Convention (the "Convention") he was a resident of the U.K. for purposes of the Convention. S. 250(5) of the Act, which otherwise might have explicitly deemed his non-residence under the Convention to apply for purposes of the Act, did not apply to him in 2002.

After noting a Crown submission that s. 250(5) effected a change to the Act, Rip CJ stated (in f.n. 33):

Subsections 45(2) and 44(f) of the Interpretation Act…provide that the repeal and the re‑enactment of a provision are not presumed to change the law. However, amendments, repeals and re‑enactments to the Act usually represent a change in the law due to the nature, object and context of the Act: see Century Services Inc. v. Canada (A.G.), [2010] 3 S.C.R. 379; 2010 SCC 60 at para. 54, per Deschamps J., at para. 129, and… Silicon Graphics Ltd. v. R., 2002 FCA 260 at para. 43.

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Other/Conflicting Statutes presumption against inconsistency 91
Tax Topics - Treaties - Income Tax Conventions - Article 29 Treaty residence not domestically applicable 271
Tax Topics - Treaties - Income Tax Conventions - Article 4 Treaty residence not domestically applicable 234

Silicon Graphics Ltd. v. The Queen, 2001 DTC 379 (TCC), rev'd supra.

Teskey T.C.J. rejected a submission that he should look to a subsequent amendment of the Act to determine the proper interpretation of provisions before him.

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

After rejecting a submission that he should look to a subsequent version of s. 17 of the Act in light of s. 45 of the Interpretation Act, Bowman A.C.J. stated (at p. 299):

"Quite apart from section 45 of the Interpretation Act and the jurisprudence on the point, there are cogent reasons for not looking to subsequent legislation as an aid to interpretation. Different people looking at the same subsequent amendment could come to precisely the opposite conclusion about its effect."

HSC Research Development Corp. v. The Queen, 95 DTC 225 (TCC)

O'Connor TCJ. noted (at p. 231) that "notwithstanding subsection 45(2), the courts have taken account of amendments in construing the amended statute", and went on to find (at p. 232) that "there is internal and external evidence to show that the addition of subsection 256(5.1) [to the Act] effected a change in the law."

Sameden Oil of Canada, Inc. v. Provincial Treasurer of Alberta (1993), 102 DLR (4th) 125 (Alta. C.A.)

A provision of the Alberta Corporate Tax Act requiring a taxpayer to "deliver" a return by a given date was replaced by a requirement that the taxpayer "file" the return by that date. In rejecting an argument that such amendment implied that a taxpayer no longer was required to ensure that the Treasurer of Alberta received the return by the specified date, Stratton J.A. noted that s. 33(2) of the Interpretation Act, R.S.A. 1980, c. I-7 specifically negated such a conclusion.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(7) 101

CIR v. Hang Seng Bank Ltd., [1990] BTC 482 (PC)

Lord Bridge applied the statement in Cape Brandy Syndicate v. IRC, [1921] 2 K.B. 403 at 414 "'that subsequent legislation on the same subject may be looked to in order to see what is the proper construction to be put upon an earlier Act where that earlier Act is ambiguous'".

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) situs of trading business was where trades occurred 185

Subsection 45(3)

Cases

Water's Edge Village Estates (Phase II) Ltd. v. Canada, 2002 DTC 7172, 2002 FCA 291

prompt amendment evidenced intent to end anomaly

Noël J stated (at para. 47):

Counsel argued that the prospective addition of subsection 96(8) demonstrates unequivocally that the transactions in issue did not offend the object and spirit of the Act at the time when they took place. I rather think that this amendment demonstrates that Parliament moved as quickly as it could to close the loophole exploited by the appellants precisely because the result achieved was anomalous having regard to the object and spirit of the relevant provisions of the Act.

Metro Can Construction Ltd. v. The Queen, 2000 DTC 6495, 2001 FCA 227

McDonald J.A. indicated that although Bathurst Paper Limited v. New Brunswick [1972] S.C.R. 471 indicated that subsequent amendments might be considered as part of the legislative history bearing on the construction on the amended statute, this did not mean, in light of s. 45(3) of the Interpretation Act, that subsequent amendments could themselves serve as a declaration concerning the previous state of the law. Accordingly, he found that subsequent amendments to s. 80 of the Act were only relevant to interpreting the section as it previously read insofar as they were part of the general legislative history of the section.

See Also

Univar Holdco Canada ULC v. The Queen, 2016 TCC 159

policy of current version of s. 212.1(4) confirmed by proposed amendment

After finding that the exception in s. 212.1(4) to the application of s. 212.1(1) (respecting situations where a non-resident corporation sells its shares of a Canadian corporation to a Canadian purchaser which controls it) “should not apply in the situation where a non-resident owns shares of the Canadian resident purchaser corporation", V. Miller J referred to a proposed amendment to s. 212.1(4) which explicitly added an exclusion where there was such non-resident ownership, and stated (at para. 97):

[T]his proposed amendment…is a relevant consideration in ascertaining the purpose underlying the provision at issue in this appeal. The proposed amendment does not retroactively change the law but simply amends the subsection while embodying its underlying rationale as it existed at the time of the transactions in this appeal [then citing Water’s Edge].

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212.1 - Subsection 212.1(4) creating a sandwich structure in order to access s. 212.1(4) was an abuse of the s. 212.1(1) anti-surplus stripping rule 593
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) exception to an anti-avoidance provision should not be interpreted to undercut that anti-avoidance 243

Articles

Jared Mackey, "The Role of Subsequent Legislative Amendments in the GAAR Analysis", 24 Can. Current Tax, January 2013, p. 37.

Subsequent amendments established current abuse (p.38)

There is a line of authority in cases involving the GAAR in which courts considered subsequent legislative amendments as additional evidence that a taxpayer's transactions offend the object, spirit, and purpose of the Act….Examples of this approach can be seen in the decisions of the Federal Court of Appeal in Duncan v. The Queen …, [fn 5: Sub nom water's Edge Village Estates (Phase II) Ltd., …2002 FCA 291….] the Tax Court in Triad Gestco Ltd. v. The Queen…, [fn 6: …2011 TCC 259…aff'd …2012 FCA 258…] and, in the context of a provincial general anti-avoidance rule, the Court of Québec in Ogt Holdings Ltd. c. Québec (Sous-ministre du Revenu) …. [fn 7: …2006 QCCQ 6328, aff'd…, 2009 QCCA 191. …]

Subsequent amendments reflect change of policy (p. 40)

There is another line of authority in the context of GAAR cases where subsequent amendments served as evidence that Parliament initially sought to permit or encourage certain transactions or tax structures but then changed its tax policy by denying them. [fn 18: This was the finding in Gwartz, [2013[ T.C.J. No. 114, 2013 TCC 86, and Fredette, … 2001 DTC 621 (T.C.C.).]…

For example, in Fredette v. The Queen …, [fn 19:… 2001 DTC 621 (T.C.C.).] the taxpayer used tiered partnerships to create a multi-year deferral of rental income….

Refusal to rely (p. 41)

In a further category of GAAR cases, some courts have taken a third approach and refused to rely on subsequent amendments as evidence of whether the taxpayer abused or misused the object, spirit, and purpose of the Act. This approach is best exemplified in the decisions of the Tax Court in Landrus v. The Queen … [fn 25: … 2008 TCC 274, para. 121; aff'd …2009 FCA 113.] and 1207192 Ontario Ltd. v. The Queen …, [fn 26: …2011 TCC 383; aff'd… 2012 FCA 259, paras. 78-79.] the Federal Court of Appeal in Triad Gestco, and the Québec Court of Appeal in Ogt Holdings [fn 27: Affirming the lower court's decision and applying the GAAR to the taxpayer's transaction, the Court of Appeal saw a clear tax policy without resorting to the subsequent amendment for additional evidence (at para. 35): "It is not relevant that Parliament has subsequently amended the statute to officially prohibit the scheme employed by [the taxpayers], as the scheme caused anomalous, unforeseen results before the amendment and was therefore abusive".]