Date: 20000526
Docket: A-140-99
CORAM: LINDEN, J.A.,
SEXTON, J.A.,
MALONE, J.A.
BETWEEN:
JABEL IMAGE CONCEPTS INC.
(O/A ACADEMY OF LEARNING)
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Docket: A-141-99
BETWEEN:
PEACH HILL MANAGEMENT LTD.
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Docket: A-142-99
BETWEEN:
COASTAL PACIFIC FLIGHT CENTRE LTD.
0/A COASTAL PACIFIC AVIATION
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Docket: A-143-99
BETWEEN:
OTTER TRAINING SCHOOL LIMITED
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
MALONE, J.A.
[1] This is an application for judicial review of a decision of Judge E.A. Bowie, a Judge of the Tax Court of Canada, dated February 3, 1999. In that decision, the learned Tax Court Judge determined that certain fee revenues received by the appellants from contract students sponsored by one or more government agencies did not qualify for a goods and services tax ("GST") rebate under subsection 259(3) of the Excise Tax Act .1
[2] The appellants are all post-secondary educational institutions which carry on business for profit. All would qualify for GST rebates for claim periods prior to April 23, 1996, provided they bring themselves within the definition of "public college" in subsection 123(1) of the Act .2 The claim periods under approval vary among the appellants and span the period July 1, 1991 to March 31, 1996. None of the appellants received money during the relevant claim periods from any government or municipality in the form of grants or subsidies.
[3] Bowie, T.C.J. concluded that the appellants were not public colleges because they were not "funded by a government"; that phrase requiring that the recipients receive funds from the government in the form of grants or subsidies, rather than as fees for services rendered.
[4] The sole issue before us is whether the Tax Court Judge made a reviewable error in finding that the appellants were not "public colleges" and therefore ineligible for GST rebates under subsection 259(3) of the Act .
[5] An error of law is alleged in the interpretation of the relevant provisions of the Act. It is argued that the definition of "government funding" contained in section 2 of the Public Service Body Rebate (GST) Regulations was ignored.3 That definition includes money paid by the government "as consideration for making property or services available .... where supplies of the property or services.... are exempt supplies".
[6] The appellants referred us to amendments made by Parliament in 1997 in connection with the definitions of both "public college" and "selected public service body" which they argue altered the meaning of those words. It is contended that this is more than a mere clarification of policy. If not, then they argue that the question must be asked "why were the amendments only made retroactive to April 23, 1996?".4 This, however, does not advance their case as an amendment to a statute does not imply a change in the law. In particular subsection 45 (2) of the Interpretation Act5 is responsive to this argument:
45. (2) The amendment of an enactment shall not be deemed to be or to involve a declaration that the law under that enactment was or was considered by Parliament or other body or person by whom the enactment was enacted to have been different from the law as it is under the enactment as amended.
45. (2) La modification d"un texte ne constitue pas ni n n"implique une déclaration portant que les règles de droit du texte étaient différentes de celles de sa version modifiée ou que le Parlement, ou toute autre autorité qui l"a édicté, les considérait comme telles.
[7] The primary argument being advanced by the appellants is that the words "funded by a government" (subsection 123(1) of the Act ) is equivalent to the words "government funding" (subsection 2(a)(ii) of the GST Regulations) and therefore one need look no further. The appellants argue that since they clearly fit within subsection 2(a)(ii) of the Regulations they are consequently recipients of government funding and therefore are public colleges entitled to GST rebates prior to the 1997 amendments. It is submitted that these words are clear and plain and accordingly must be given legal and practical effect.
[8] The general scheme of Part IX of the Act is that persons making taxable supplies of goods or services must collect GST on the supply. Generally, persons registered under the Act are entitled to claim a credit of the GST they expend (input tax credits) against the GST they collect and remit the balance to the Receiver General.6 If, rather than making taxable supplies, a supplier makes exempt supplies as defined in Schedule V of the Act, the supplier neither collects the GST nor is entitled to any input tax credits. Part III of Schedule V provides, inter alia, that educational services are exempt supplies.
[9] In determining the meaning of a term in a taxing statute, one must consider the plain and ordinary meaning of the words in the context in which they are used, harmoniously with the object and scheme of the Act, and the intention of Parliament.7 I am of the view that the ordinary meaning of the phrase "funded by a government", in the context of the definition of "public college", is the receipt of grants, subsidies or other assistance from the government. In support of that conclusion, I note that all other persons entitled to rebates under subsection 259(1) are non-profit institutions (ie. hospitals, municipalities and non-profit schools and universities) that do not earn taxable income.
[10] In the English language the verb "to fund" means "to provide with money" or "to put into a fund", as opposed to the payment of money as consideration for the services performed under a contract.8 My interpretation of the phrase "funded by a government" is also supported by the words used in the French version of the legislation "reçoit des subventions d"un gouvernement ou d"une municipalité". The word "subvention" indicates that to be a public college the monies received must be in the nature of a grant, subsidy or other assistance. The plain and ordinary meaning of the words "reçoit des subventions" could not include payments made pursuant to a contract carried out for business reasons. The word "subvention" means "secours financier que l"Etat ou une association accorde à un groupement ou à une personne." The closest English equivalents are the words "grant" or "subsidy".9
[11] Earlier decisions of this Court also support this result, having decided that the receipt of money as a result of an ordinary business contract negotiated between the parties for business reasons cannot be considered to be a grant or subsidy.10
[12] I also reject the appellants" argument that the phrases "funded by a government" and "government funding" are equivalent, and that, as a result, the definition of "government funding" assists in determining the meaning of "funded by a government". When an Act uses different words in relation to the same subject such a choice by Parliament must be considered intentional and indicative of a change in meaning or a different meaning.11 For the purpose of delineating the eligibility for the GST rebates, Parliament has chosen to make a distinction between "government funding" and "funded by a government". It follows that the terms "funded by a government" and "government funding" are not equivalent.
[13] No errors of law were committed by the Tax Court Judge. I would dismiss this application for judicial review. No cost were sought.
(Sgd.) "A.M. Linden"
J.A.
(Sgd.) "J. Edgar Sexton"
J.A.
(Sgd.) " B. Malone"
J.A.
May 26, 2000
Vancouver, British Columbia
Date: 20000526
Docket: A-140-99
CORAM: Linden J.A.
Sexton, J.A.
Malone, J.A.
BETWEEN:
JABEL IMAGE CONCEPTS INC.
(O/A ACADEMY OF LEARNING)
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Docket: A-141-99
BETWEEN:
PEACH HILL MANAGEMENT LTD.
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Docket: A-142-99
BETWEEN:
COASTAL PACIFIC FLIGHT CENTRE LTD.
0/A COASTAL PACIFIC AVIATION
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Docket: A-143-99
BETWEEN:
OTTER TRAINING SCHOOL LIMITED
Appellant
- and -
HER MAJESTY THE QUEEN
Respondent
Heard at Vancouver, British Columbia, on May 25, 2000
JUDGMENT delivered at Vancouver, British Columbia, on May 26, 2000
REASONS FOR JUDGMENT BY: MALONE, J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
| DOCKET: A-140-99 Jabel Image Concepts Inc v. HMQ |
A-141-99 Peach Hill Management Ltd. v. HMQ
| A-142-99 Coastal Pacific Flight Centre Ltd v. HMQ |
A-143-99 Otter Training School Limited v. HMQ
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: May 25, 2000
REASONS FOR JUDGMENT BY MALONE, J.A.
| CONCURRED IN BY: Linden, J.A. |
Sexton, J.A.
| DATED: May 26, 2000 |
APPEARANCES:
| Mr. Stephen P. Grey For the Appellant |
Ms. Elizabeth Junkin
| Ms. Denise Dinsdale For the Respondent |
SOLICITORS OF RECORD:
Stephen P. Grey Law Corporation
Barristers and Solicitors
| Richmond, BC For the Appellant |
Morris Rosenberg
Deputy Attorney
| General of Canada For the Respondent |
1R.S.C. 1985 c. E-15, Parts VIII and IX, and Schedules V to X (hereinafter "The Act")
2"Public college" is included in the expression "selected public service body" as defined in subsection 259(1); the latter being among the persons permitted to apply for a rebate of a prescribed percentage of GST paid. Prior to April 23, 1996, "public college" was defined as "an organization or that part of an organization that operates as a post-secondary college or post-secondary technical institute a) that is funded by a government or municipality, and b) the primary purpose of which is to provide programs of instruction in one or more fields of vocational, technical or general education.
4An Act to amend the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the Income Tax Act, the Debt-Servicing and reduction Account Act and related Acts, S.C. 1997, c. 10 subsection 1(7).
6Sections 165, 169, 221 and 240 of the Act.
7Alberta (Treasury Branches) v. M.N.R., [1996] 1 S.C.R. 963; Friesen v. Canada, [1995] 3 S.C.R. 103
8Concise Oxford Dictionary of Current English, 7th ed. s.v. "fund".
9Le Nouveau Petit Robert, Dictionnaire alphabétique et analogique de la langue française, (Paris: Dictionnaires Le Robert 1996), s.v. "subvention".
Collins Robert French-English English-French Dictionary, 4th ed., s.v. "subsidy".
10Ottawa Valley Power Company v. Minister of National Revenue, [1969] 2 Ex. C.R. 64, (1969) 69 DTC 5166; aff"d [1970] S.C.R. 941.
11Glaxo Wellcome Inc. v. H.M.T.Q. 96 D.T.C. 1159 (T.C.C.), aff"d [1998] 234 N.R. 26 (F.C.A.);
R. Sullivan, Dreidger on the Construction of Statutes, 3rd ed. (Toronto: Butterworths, 1994), at. 163- 165.