Regulations/Statutory Delegation

Cases

Canada v. The Mark Anthony Group Inc., 2019 FCA 183

an exemption provision should not be interpreted to give CRA discretion as to its scope

An excise duty exemption applied to Canadian cider if it could be said that it was “produced in Canada and composed wholly of agricultural or plant product grown in Canada.” This quoted requirement, if interpreted literally, would be commercially impossible to comply with if it was to be tested at the time of packaging the beverage, because by that time there invariably would have been something added to the beverage, such as a preservative, that was not an agricultural product. In rejecting the CRA position in this regard, Webb JA stated (at para. 28):

The Crown’s interpretation … [is] that all ingredients that are included in the packaged product must be agricultural or plant products grown in Canada, except those that are permitted to be added by the CRA, on the basis that they are “incidental”. This would result in a delegation of authority to the CRA to decide what wine will qualify for the exemption. … [I]t would not have been the intent of Parliament to implicitly delegate this authority to the CRA.

Webb JA went on to find that the quoted wording was to be applied only to each alcoholic component of the blended product, e.g., the alcoholic product of the cider fermentation process, or any spirits that were added to fortify the cider.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Federal - Excise Act, 2001 - Section 135 - Subsection 135(2) - Paragraph 135(2)(a) all-ingredients test applied to each alcoholic component – not to all components 304

See Also

Placer Dome Canada Ltd. v. Ontario (Minister of Finance), 2006 DTC 6532, 2006 SCC 20, [2006] 1 S.C.R. 715

addition of regulation did not significantly expand scope of tax

A definition of "hedging" was introduced, first by way of Regulation and, subsequently by amendment to the MIning TAx Act (Ontario) which had the effect of expanding the concept of mine produciton to include profits from relateed cash-settled derivative contracts. Respecting the intra vires of the introduction by Regulation, LeBel stated (at para. 38):

PDC raised several arguments, based on the statutory and constitutional limits on the power of the Lieutenant Governor in Council at the time, about the meaning of “hedging” when it was first introduced in the Regulation. Specifically, PDC argues that no power had been vested in the Lieutenant Governor in Council to make regulations imposing a new tax or expanding the existing tax base, and that any such attempt would have been contrary to s. 53 of the Constitution Act, 1867 , which requires that bills imposing any tax originate in the House of Commons. Both of these arguments depend for their validity on the proposition that the 1975 Regulation created a new tax or expanded the tax base. I am not satisfied that the 1975 Regulation can be so construed — it did not alter the primary definition of “gross receipts” in the Act, but merely clarified the method by which a subsidiary, discretionary amount was to be assessed. This does not, in my view, constitute a change of the radical nature that PDC suggests.

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. shifting CRA position could not be relied upon except to evidence ambiguity 73
Tax Topics - Statutory Interpretation - Redundancy/reading in words presumption against tautology 114
Tax Topics - Statutory Interpretation - Resolving Ambiguity residual presumption in favour of the taxpayer 125
Tax Topics - Income Tax Regulations - Regulation 1204 - Subsection 1204(1) - Paragraph 1204(1)(b) cash-settled derivatives had the effect of fixing mine production] 399
Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Futures/Forwards/Hedges “hedging “ includes cash settled derivatives including options 415

Weyerhaeuser Company Limited v. The Queen, 2007 TCC 65

narrow construction of Reg. so as to be intra vires

Before going on to interpret Reg. 105 narrowly and find that it was intra vires, 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.

Bowie J went on to find (at para. 13) that even if such a narrow construction of the Regulation was not possible, he would have "read down" the Regulation to accord with what was contemplated under the authorizing provision (ITA s. 153(1)(g)), as was done in analogous circumstances in the B.C. Ferry case (2001 FCA 146).

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 - Interpretation Act - Section 16 "in respect of" in Regulation read narrowly to conform with "for" in statute 159