Words and Phrases - "building"
18 May 2022 Internal T.I. 2018-0788761I7 F - Amortissement – Travaux sur un bien loué et F&T
The taxpayer, which subleased premises containing “Shells” consisting essentially of foundations, walls and roofs, installed wall and floor coverings and performed electrical, ventilation and plumbing work to make the premises suitable for use in its manufacturing and processing (“M&P”) operations. It took the position that the costs of the property added to the Shells for this work should be included in Class 29 rather than Class 13.
Among other requirements, in order to be a Class 29 property, the above property needed to qualify as a Class 8(b) property (e.g., tangible property attached to a building and acquired for the purpose of manufacturing or processing) and not a Class 1(q) property (a building or other structure including component parts). The Directorate agreed with the taxpayer that a property which otherwise was a Class 13 (leasehold) property could qualify as a Class 8 property (before then being potentially assimilated to Class 29), but went on to indicate that the above alterations to the Shells would be sufficient to deem the taxpayer’s leasehold interests to be a building or other structure, by virtue of Reg. 1102(5)(a)(iii). Regarding Regs. 1102(5)(a)(i) and (ii), it stated:
In light of the meaning of the terms "building" and "structure" in paragraph 1 of IT-79R3, a Shell, which is a structure with walls and a roof, may generally be considered a building or other structure for purposes of subsection 1102(5). Consequently, the Taxpayer is not considered to have erected a building, i.e., the Shell, for purposes of subsection 1102(5) where that building was erected by another taxpayer.
As for the concept of "addition", we are of the view that it generally refers to an extension to a leased building or other leased structure.
4 April 2005 Ruling Document No. 52246
Ruling that a subsidized seniors' apartment was substantially renovated, so that s. 191(3) deemed the builder to make a taxable supply of the building. Given the limited degree of structural connectivity with an adjoining structure, the two structures were to be treated as separate buildings.
British Columbia Forest Products Ltd. v. MNR, 71 DTC 5178, [1971] CTC 270 (SCC)
Supporting piers, reinforced concrete foundations and chest walls which facilitated and were necessary for the production of paper nonetheless had no separate existence as tangible capital assets and instead formed part of buildings. Accordingly, they qualified as Class 3 rather than Class 8 assets.
Tanks and recovering units were "structures" and also fell within Class 3.
Sun Life Assurance Co. of Canada v. R., 97 DTC 422, [1997] 3 C.T.C. 2593 (TCC)
Bowman TCJ. followed his earlier decision in Cadillac Fairview Corp. Ltd. in finding that density rights purchased by the taxpayer from a nearby church were an addition to the cost of land rather than building notwithstanding accounting evidence that such expenditures should have been added to the cost of the building and notwithstanding that, unlike the other case, a building actually was constructed.
Swan Lake Recreation Resort Ltd. v. Registrant, Kamloops Land Title Office (1999), 174 DLR (4th) 549 (BCSC)
Before going on to find that a mail box was not a "building" for purposes of the Condominium Act (B.C.), Cowan J. stated (at p. 565):
"In my view, the word 'building' ordinarily means a structure which is designed for use as a habitation or other purposes of occupation, or for the storage of commodities. Further, a 'building' ordinarily is relatively permanent, and relatively large in size."
Dew Engineering & Development Ltd. v. The Queen, 96 DTC 1765 (TCC)
A portable laboratory composed of five modules connected to one another by bolts (and that were almost identical to the components of the walkways used at the Ottawa International Airport) was found (at p. 1770) not to be a building given that it was "not installed and intended to remain in a particular location".
Mailloux v. Canada (Minister of National Revenue), docket A-390-98 (FCA)
Because a hair dryer was a large building, expenditures for its acquisition did not qualify notwithstanding that it was an experimental prototype. In response to a submission that it was a structure not a building, Létourneau noted that it met the (French) dictionary definition of a building as "any construction intended to serve as shelter and protection" or "construction, generally of large dimensions, ... used to accommodate humans, animals or things".
IT-79R3 "Capital Cost Allowance - Buildings or other Structures"
Meaning of building/structure
1. "Building" is a term of wide range covering any structure with walls and a roof affording protection and shelter. The word "structure" includes anything of substantial size that is built up from component parts and intended to remain permanently on a permanent foundation. ... British Columbia Forest Products ... concluded that the word "structure" when used in the context of "building or other structure" does not mean only a structure in the nature of a building. Bridges or hydro-electric transmission towers, for example, while clearly not buildings, are structures.