A-292-94
(A-2532-87)
| CORAM: THE HONOURABLE MR. JUSTICE MARCEAU |
| THE HONOURABLE MR. JUSTICE MacGUIGAN |
| THE HONOURABLE MADAM JUSTICE DESJARDINS |
IN THE MATTER of the Income Tax Act
BETWEEN:
ALCAN ALUMINUM LIMITED,
Appellant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
Hearing held in Montréal, Quebec, Wednesday, September 17, 1997.
Judgment rendered at the hearing, Wednesday, September 17, 1997.
REASONS FOR JUDGMENT OF THE COURT BY: MARCEAU J.A.
A-292-94
(A-2532-87)
| CORAM: THE HONOURABLE MR. JUSTICE MARCEAU |
| THE HONOURABLE MR. JUSTICE MacGUIGAN |
| THE HONOURABLE MADAM JUSTICE DESJARDINS |
IN THE MATTER of the Income Tax Act
BETWEEN:
ALCAN ALUMINUM LIMITED,
Appellant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT OF THE COURT
(Pronounced at the hearing in Montréal, Quebec,
Wednesday, September 17, 1997)
MARCEAU J.A.
We are all of the opinion that this appeal is without merit.
There is nothing to be gained, in our view, in repeating the analysis that the trial judge presented in his reasons for judgment, based on this agreement on the facts that the parties had filed on the record. We refer to that analysis, which we substantially approve. Our understanding of the legislation in question leads us to the logical conclusions, namely: (a) that the determination by a taxpayer under section 1205 of the Income Tax Regulations of what is referred to as the "earned depletion base" is to be done, in accordance with sections 1200 and 1201 of the said Regulations, on the basis of a computation that is to be made only at the end of the taxation year; and (b) that the amendment made to paragraph (b ) of section 1205 of the Regulations, which is to be taken, under the terms of the provision contained in section 15, as published in the Canada Gazette on December 9, 1981, as having come into force on December 12, 1979, shall accordingly apply to any determination of the depletion base that is to be made and is in fact made after that date, that is, for taxpayers whose taxation year ends after December 11, 1979, for the 1979 year and all subsequent years.
We will add three comments to this general approval of the impugned decision, bearing in mind the appellant"s submissions. This is not a broad application of the amendment but an application that is consistent with what the provision states, taking strictly into account the date on which it came into force as was clearly intended by Parliament. Such an application does not in any way run counter to the objectives contemplated by the provision. The encouragement to investment remains the same with the sole exception that it no longer goes so far as to enable a taxpayer, in determining his capital expenditures, to overlook what has already been repaid to him in tax credits through the operation of subsection 127(5) of the Act. And finally, it is clear that the immediate application of the amendment creates no inequality between similarly situated taxpayers. Investment in 1979 and the following years is subject to the same treatment for everyone, except that for those who are already in the system and have benefited from the provision for two years, a certain "recovery" will alter the overall result. The encouragement for the latter to increase their investment is perhaps, for that reason, less intense than it is for someone entering the system to invest. But to speak of injustice is, in our opinion, excessive. Rather, the deferred or limited application of the amendment could be unreasonable in its effect, by allowing the continued deduction of expenditures that have already been repaid.
The appeal will therefore be dismissed, with costs.
| Louis Marceau |
| J.A. |
Certified true translation
Christiane Delon
FEDERAL COURT OF APPEAL
A-292-94
(A-2532-87)
IN THE MATTER of the Income Tax Act
BETWEEN:
ALCAN ALUMINUM LIMITED,
Appellant,
- and -
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
OF THE COURT
| FEDERAL COURT OF APPEAL |
| NAMES OF COUNSEL AND SOLICITORS OF RECORD |
| FILE NO.:A-292-94 |
| APPEAL FROM A TRIAL DIVISION JUDGMENT RENDERED ON SEPTEMBER 17, 1997. TRIAL DIVISION FILE NO. T-2532-87 |
| STYLE:ALCAN ALUMINUM LIMITED, |
| Appellant |
| AND |
| HER MAJESTY THE QUEEN, |
| Respondent |
| PLACE OF HEARING:Montréal, Quebec |
| DATE OF HEARING:September 17, 1997 |
| REASONS FOR JUDGMENT OF THE COURT: (Marceau, MacGuigan and |
| Desjardins, JJ.A.) |
| READ AT THE HEARING BY: Marceau, J.A. |
| Dated:September 17, 1997 |
| APPEARANCES: |
| Wilfrid Lefebvrefor the appellant |
| Chantal Jacquierfor the respondent |
| SOLICITORS OF RECORD: |
| Ogilvy Renault |
| Montréal, Quebecfor the appellant |
| George Thomson |
| Deputy Attorney General |
| of Canada |
| Ottawa, Ontariofor the respondent |