Date: 20020926
Docket: A-576-01
Neutral citation: 2002 FCA 350
CORAM: ROTHSTEIN J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
- and -
SUNCOR ENERGY INC.
Respondent
Heard at Toronto, Ontario, on Thursday, September 26, 2002.
Judgment delivered from the Bench at Toronto, Ontario, on Thursday, September 26, 2002.
REASONS FOR JUDGMENT OF THE COURT BY: EVANS J.A.
Date: 20020926
Docket: A-576-01
Neutral citation: 2002 FCA 350
CORAM: ROTHSTEIN J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
- and -
SUNCOR ENERGY INC.
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Toronto,
Ontario, on Thursday, September 26, 2002)
EVANS J.A.
[1] The issue in this appeal is whether Judge Bell of the Tax Court of Canada committed a reviewable error in determining that Suncor Energy Inc.'s 1990 expenditure of $746,000.00 on the construction of the dykes enclosing tailings ponds in an oil sands mining operation should be treated as a current expense deductible in computing its profit for that year, pursuant to subsection 9(1) of the Income Tax Act. The Crown had taken the position that the expenditure was a capital outlay eligible for capital cost allowance under paragraph 20(1)(a) of the Act as the acquisition of a "structure" within the meaning of Schedule II, class 10(g) of the Income Tax Regulations.
[2] It was agreed by counsel that the Judge identified the correct legal tests for determining how the expenditure should be characterized. The disagreement concerns his application of those tests to the facts. In the absence of a more general question of precedential value, and in the circumstances of this case, the application of the law to the facts was an essentially factual exercise: Housen v. Nikolaisen, 2002 SCC 33.
[3] Despite counsel's able submissions, we are not satisfied that the Judge made a palpable or overriding error in characterizing the expenditure by Suncor in 1990 on the construction of dykes from compacted tailings, and from other waste from the mine, as a current expense incurred for the removal of the waste produced by mining in that year. Removing this waste was integral to the operation of the mine.
[4] For these reasons, the appeal will be dismissed with costs.
"John Evans"
J.A.
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: A-576-01
STYLE OF CAUSE: HER MAJESTY THE QUEEN
Appellant
- and -
SUNCOR ENERGY INC.
Respondent
DATE OF HEARING: THURSDAY, SEPTEMBER 26, 2002
PLACE OF HEARING: TORONTO, ONTARIO
REASONS FOR JUDGMENT
OF THE COURT BY: EVANS, J.A.
DELIVERED FROM THE BENCH AT TORONTO, ONTARIO ON THURSDAY, SEPTEMBER 26, 2002.
DATED: THURSDAY, SEPTEMBER 26, 2002
APPEARANCES BY: Mr. William L. Softley
Ms. Julia Parker
For the Appellant
Mr. Al Meghji
Mr. Gerlad Grenon
For the Respondent
SOLICITORS OF RECORD: Morris Rosenburg
Deputy Attorney General of Canada
For the Appellant
Donahue Ernst & Young
Barristers & Solicitors
1000 Ernst & Young Tower
440 - 2nd Avenue S.W.
P.O. Box 2558, Station M
Calgary, Alberta
T2P 5E5
For the Respondent
FEDERAL COURT OF APPEAL
Date: 20020926
Docket: A-576-01
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
- and -
SUNCOR ENERGY INC.
Respondent
REASONS FOR JUDGMENT
OF THE COURT