Interpretation Act

After quoting form ss. 8.1 and 8.2 of the Interpretation Act and before going on to analyze the intended meaning of s. 227(4.1) in light of both civil and common law concepts of trust and ownership, Côté J stated (at paras. 40-41):

In other words, where Parliament uses a private law expression and is silent as to its meaning, courts must refer to the applicable provincial private law. This is known as the principle of complementarity. However, as both these sections also make clear, Parliament is free to derogate from provincial private law and create a uniform rule across all provinces (see R. Sullivan, Sullivan on the Construction of Statutes (6th ed. 2014), at pp. 158-59).

In this case, Parliament has expressly chosen to dissociate itself from provincial private law. Section 227(4.1) says that it operates “[n]otwithstanding any other provision of this Act, the Bankruptcy and Insolvency Act (except sections 81.1 and 81.2 of that Act), any other enactment of Canada, any enactment of a province or any other law”. In Caisse populaire Desjardins de l’Est de Drummond v. Canada, 2009 SCC 29, [2009] 2 S.C.R. 94, the majority found that, through these words, Parliament has created a standalone scheme of uniform application across all provinces (paras. 11‑13). The nature of the deemed trust created by s. 227(4.1) must thus be understood on its own terms.

BCI was a BC Crown agent which was formed to manage and hold investments for the provincial pension plans. The governing Act (the “PSPSA”) and Regulation created a statutory trust under which each pension plan only had an entitlement to units in the investment pools managed by BCI and did not have ownership in any investment pool assets. CRA took the view (and ultimately assessed BCI for $40M in uncollected GST on the basis) that ETA s. 267.1(5)(a) deemed the statutory trust to be a person separate from BCI as agent for the provincial Crown, so that the investment services of BCI were supplied to that separate person.

Before going on to find that such assessments would contravene s. 125 of the Constitution Act, 1867 but for the effect of an Intergovernmental Agreement between B.C. and the federal government, Karakatsanis J stated (at paras. 56-57):

Counsel emphasized that because the PSPPA and the Regulation state that the Portfolio assets are “held in trust,” the Portfolios must be treated as a trust for the purposes of the ETA.

I disagree. The term “trust” is not defined in the ETA . Absent express direction to the contrary, undefined terms in a taxation statute must be interpreted according to their established and accepted legal meaning … . [S]. 8.1 of the Interpretation Act provides that, “unless otherwise provided by law, if in interpreting an enactment it is necessary to refer to a province’s rules, principles or concepts forming part of the law of property and civil rights, reference must be made to the rules, principles and concepts in force in the province at the time the enactment is being applied”. Since the ETA does not define the term “trust” and the concept of a trust undoubtedly forms part of the law of property and civil rights, reference must be made to the concept as its exists in British Columbia law. On this basis, unless the Portfolios would be considered a trust at private law, they cannot be a “person” within the meaning of s. 123(1) .

In finding that amounts paid by mutual funds to an offshore financing entity were to be characterized as consideration for a financing service notwithstanding that, for securities law purposes, they were permitted on the basis that they were allowed as being payments for management fees, Woods JA stated (at para. 58):

[T]he manner in which the arrangement would be interpreted for securities purposes does not affect the characterization of the legal relationships for taxation purposes.

The taxpayer and the three other members of the “Raposo clan” were involved in the sale of cocaine in the Gatineau area. CRA took the position that, as a member of a partnership, the taxpayer was solidarily liable under ETA s. 272.1(5) for uncollected GST on the cocaine sales. It took the position that in order for there to be a partnership, it was sufficient for the elements of the definition of a contract of partnership in Art. 2186 of the Civil Code to be satisfied, and that it did not matter that Art. 1413 provided: “A contract whose object is prohibited by law or contrary to public order is null." It considered that it was contrary to the principle of “tax neutrality” that the consequences of the activities should be affected by whether or not they were unlawful and on which province they took place.

Montigny JA considered these contentions to be contrary to s. 8.1 of the Interpretation Act, which provided that a federal provision referencing property law rules should reference those of the applicable province “unless otherwise provided by law.” Examples of federal provisions which effected such ouster “by law” were ss. ITA s. 160 and ETA s. 325, which through using the broad term “transfer” rather than “sale,” “the legislator was assured that any activity, lawful or not, was covered”, whereas the legislator “did not do the same in section 272.1” (TaxInterpretations translation, para. 56).

Montigny JA also stated (at para. 40):

[I]t matters little, taking into account section 8.1 and 8.2 of the Interpretation Act, that the same fact could give rise to different result from province to province. …[T]his would arise only as an ordinary consequence of living in a federation, and in particular a bijuralist federation.

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.

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.

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.

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… .)

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.”

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].

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."

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.

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".

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.

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.'"

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

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.

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

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.

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.

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)).

"[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".

Before going on to accord a restrictive interpretation to s. 149(1)(d.5) based on the wording of the marginal note to s. 149(1)(c), which contained similar wording, Mactavish JA stated (at para. 54):

[I]n accordance with section 14 of the Interpretation Act … marginal notes do not form part of a statute, and are only inserted for ease of reference. It is nevertheless permissible to consider them as part of the interpretative process, although they may be accorded lesser weight than other interpretive aids: Brill ... .

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".

"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".

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.

"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."

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."

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."

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).

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.

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).

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).

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).

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."

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.

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.

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

"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.

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.

Two months after their marriage, the taxpayer received (on January 8, 1993) from her husband (“CC”) the transfer of a property valued in excess of his subsequently assessed tax liabilities for various taxation years including his 1989 year. CRA also received a waiver for his 1989 year on the Monday immediately after the Sunday of the expiry of the normal reassessment period.

In finding that s. 26 of the Interpretation Act (which provided that “Where the time limited for the doing of a thing expires or falls on a holiday, the thing may be done on the day next following that is not a holiday”), did not have the effect of deeming the waiver to have been received during the normal reassessment period expiring on the Sunday, Owen J stated (at paras. 155-156):

The Respondent is relying on a rule the purpose of which is to relieve a person faced with a deadline to do something–such as object to or appeal from an assessment–from breaching that deadline because the deadline falls on a holiday.

A taxpayer filing a waiver is not facing a deadline that would preclude the taxpayer from doing anything. A waiver is valid “only if” it is filed within the normal reassessment period. The deadline relates solely to the validity of the waiver itself, not to the doing of something by the person filing the waiver.

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.

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.

A week after being informed by CRA that its US parent, which was its agent pursuant to s. 177, had been claiming input tax credits (ITCs) which should have been claimed by it, the appellant (353) filed a single global GST/HST return covering a four-year period from August 1, 2012 to August 31, 2016 without allocating the reported items (perhaps only ITC claims) between quarterly reporting periods. Régimbald J found that since the global return did not permit CRA to allocate the ITC claims between reporting periods, s. 32 of the Interpretation Act did not assist 353 so that the return “was therefore invalid” (para. 95).

D'Arcy J had found that the taxpayer’s late-filing (by six weeks) of Schedule 31 meant that its SR&ED credits for the year in issue were properly denied – even though the information needed to calculate the credits was in its return and on Form 661, which it had filed on a timely basis. In confirming this decision and in rejecting the taxpayer’s submission that s. 32 cured the late filing, Nadon JA stated (at para. 13):

[T]he clear intent of section 32 of the Interpretation Act is, in my respectful view, to avoid penalizing a taxpayer who has complied substantively with a statutory provision which requires the filing of a prescribed form containing prescribed information. In other words, section 32 applies where the taxpayer has filed the prescribed information, but has not used the prescribed Form to do so. Nonetheless, the taxpayer has substantially complied with the requirements of the form by providing the Minister the information which the Minister needs in regard to the taxpayer’s claim. In this case, there can be no doubt that the appellant did not file the prescribed information by June 30, 2010. In other words, the appellant had not filed any form setting out the prescribed information for the purpose of claiming an investment tax credit in relation to its SR and ED expenditures by the deadline.

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.

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.

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.

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.

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.

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.

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.

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".

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' ..."

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

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.

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.

In rejecting the taxpayers’ submission that the introduction of s. 160(5) confirmed its narrow reading of s. 160(1), Noël C.J. stated (at para. 62) that “[n]ew enactments cannot be presumed to alter the state of the law or involve a declaration as to the previous state of the law” and “that the amendment, as it relates to the precise issue with which we are concerned, can only be read as a measure that confirms the prior state of the 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.

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.

The taxpayer, who had been assessed under s. 227(10) for his joint liability under s. 227.1 for the taxes of the corporation of which he was a director, argued that s. 227.1 only made him jointly liable for the corporation’s unpaid tax debt, and that s. 161 did not make him liable for interest on that assessment because his liability under s. 227.1 was not for “taxes payable” by him, so that such interest was required to be assessed, which was not done. Evans JA agreed (at para. 40) with this proposition, but noted that s. 227(10) provided that the Part I provisions, including s. 161, applied “with any modifications that the circumstances require.” After noting (at para. 49) that Ketz v. The Queen, 79 DTC 5142 (F.C.T.D.) had indicated that authorities on interpreting mutatis mutandis, which the current drafting of s. 227(10) had replaced, “restrict the scope of the phrase mutatis mutandis to necessary changes in points of detail, as opposed to changes to the very substance of the provision in question” and (at para. 50) that the phrase “with any modifications that the circumstances require” had been considered in Lord Rothermere Donation v. The Queen, 2009 TCC 70, to “enable … more extensive changes to be made to a statutory provision than were permitted by mutatis mutandis” so that it was “no longer … limited to points of detail,” Evans J.A. remarked (at paras. 53-54):

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.

On the other hand, the amendments to the pre-1983 version were enacted by Parliament as a small part of a large series of amendments to the ITA, and the change to the English text in 1997 was made for reasons other than the elimination of Latin. These considerations suggest that the amendments to subsection 227(10) may have been intended to have had a substantive effect.

However, he found that there was no need to express a concluded opinion on the scope of the current phrase given that, even under a narrow interpretation, "the modifications required to make subsection 161(1) applicable to assessments under subsection 227(10) in respect of liability imposed by subsection 227.1(1) do not change the very substance of subsection 161(1)" (para. 59), so that such modifications applied.

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."

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."

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.

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.

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."

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.

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.

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).

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

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

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.

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".

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.

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.

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.