Canpar Holdings Ltd. v. Saskatchewan (Minister of Energy and Mines), (1987) 60 Sask.R. 128 (CA)

• Judge: Wakeling, Gerwing and Sherstobitoff, JJ.A.
• Court: Court of Appeal (Saskatchewan)
• Case Date: October 16, 1987
• Jurisdiction: Saskatchewan
• Citations: (1987), 60 Sask.R. 128 (CA)

Canpar Holdings Ltd. v. Sask. (1987), 60 Sask.R. 128 (CA)

MLB headnote and full text

Canpar Holdings Ltd. (appellant) v. The Government of Saskatchewan as represented by the Minister of Energy and Mines (respondent)

(No. 8765)

Indexed As: Canpar Holdings Ltd. v. Saskatchewan (Minister of Energy and Mines)

Saskatchewan Court of Appeal

Wakeling, Gerwing and Sherstobitoff, JJ.A.

October 16, 1987.

Summary:

Canpar Holdings received certain payments from Dome Petroleum and Provo Gas Producers pursuant to agreements with these companies. Tax was assessed by the Minister of Energy and Mines on these payments under the Oil Well Income Tax Act. Canpar challenged the Minister's assessment, arguing that the payments in question were royalties which were deductible from oil well income pursuant to s. 8(1) of the Act.

The Board of Revenue Commissioners upheld the Minister's assessment. Canpar appealed.

The Saskatchewan Court of Queen's Bench, in a decision reported at (1985), 39 Sask.R. 12, dismissed the appeal. Canpar appealed.

The Saskatchewan Court of Appeal in the following decision allowed the appeal. The court held that the payments received by Canpar were oil well income pursuant to s. 4 of the Act. The court held that the payments were a royalty pursuant to s. 8(1) of the Act and therefore deductible from income.

Income Tax - Topic 3901

Interpretation - General - Deductions - In a minority judgment, a judge of the Saskatchewan Court of Appeal stated that taxing statutes should no longer be construed strictly against the taxpayer; rather the statute should be construed according to its plain meaning - See paragraphs 56 and 57.

Mines and Minerals - Topic 8161

Oil and gas - Royalty agreements - What constitute - The Saskatchewan Court of Appeal examined two agreements whereby Canpar Holdings was to receive certain payments from Dome Petroleum and Provo Gas Producers - The court held, contrary to the decision of the trial judge, that the payments constituted royalties within the meaning of the Oil Well Income Tax Act - See paragraphs 26 to 52.

Mines and Minerals - Topic 9623

Taxation - Income - What constitutes - Canpar Holdings received certain payments from Dome Petroleum and Provo Gas Producers pursuant to agreements with these companies - Canpar claimed these payments were deductible from income pursuant to the Oil Well Income Tax Act - The Saskatchewan Court of Appeal upheld a decision of the trial judge that the payments were oil well income pursuant to s. 4 of the Act - See paragraphs 13 to 25.

Mines and Minerals - Topic 9644

Taxation - Deductions - Royalties - The Saskatchewan Court of Appeal discussed the meaning of the word "royalty" as it appeared in s. 8(1) of the Oil Well Income Tax Act, R.S.S. 1978, c. O-3.1 - See paragraphs 26 to 52; 58 to 66.

Mines and Minerals - Topic 9644

Taxation - Deductions - Royalties - Canpar Holdings received certain payments from Dome Petroleum and Provo Gas Producers pursuant to agreements with these companies - Canpar claimed that these payments were royalties deductible from income under s. 8(1) of the Oil Well Income Tax Act - The Saskatchewan Court of Appeal examined the agreements between the parties and held that these payments were royalties and therefore deductible from income pursuant to s. 8(1) - See paragraphs 26 to 52; 58 to 66.

Words and Phrases

Royalty - The Saskatchewan Court of Appeal discussed the meaning of the word "royalty" as it appeared in s. 8(1) of the Oil Well Income Tax Act, R.S.S. 1978, c. O-3.1 - See paragraphs 26 to 52; 58 to 66.

Cases Noticed:

Premium Iron Ores Limited v. Minister of National Revenue (1966), 66 D.T.C. 5280, dist. [para. 14].

Snyder v. Minister of National Revenue, [1939] S.C.R. 384, dist. [paras. 14, 47].

Bensette and Campbell v. Reece, [1973] 2 W.W.R. 497, consd. [para. 30].

Ross v. Minister of National Revenue, [1950] Ex. C.R. 411, consd. [para. 35].

B. & B. Royalties Ltd. v. Minister of National Revenue, [1940] Ex. C.R. 90, consd. [para. 35].

Saskatchewan Minerals v. Keys, [1972] 2 W.W.R. 108, consd. [para. 38].

Northrim Mines Ltd., Re (1982), 43 A.R. 1 (N.W.T.S.C.), consd. [para. 41].

Emerald Resources v. Sterling Oil Properties Management Ltd. (1969), 3 D.L.R.(3d) 630, consd. [para. 42].

Minister of National Revenue v. Bartlett (1972), 72 D.T.C. 6293 (F.C.A.), refd. to [para. 47].

Miller, Pyrcz and Roberts Ltd. v. Minister of National Revenue (1959), 59 D.T.C. 67 (T.A.B.), refd. to [para. 47].

Toronto General Trust Corporation v. Corporation of the City of Ottawa, [1935] S.C.R. 531, refd. to [para. 56].

W.A. Schaeffer Pen Company Limited v. Minister of National Revenue, [1953] Ex. C.R. 251, refd. to [para. 56].

Stubart Investments Limited v. Minister of National Revenue, [1984] 1 S.C.R. 536; 53 N.R. 241; 84 D.T.C. 6305 [para. 56].

Statutes Noticed:

Oil Well Income Tax Act, R.S.S. 1978, c. O-3.1, sect. 4 [paras. 10, 13]; sect. 7(1), sect. 7(2) [para. 10]; sect. 8 [para. 26]; sect. 8(1) [paras. 10, 62 to 65]; sect. 8(2) [para. 45].

Authors and Works Noticed:

Williams and Meyers, Manual of Oil and Gas Terms (6th Ed. 1984), p. 539 [para. 47].

Counsel:

R.J. Thrasher, for the appellant;

G.G. Blue, for the respondent.

This appeal was heard before Wakeling, Gerwing and Sherstobitoff, JJ.A., of the Saskatchewan Court of Appeal. The decision of the Court of Appeal was delivered on October 16, 1987, when the following decisions were filed:

Gerwing, J.A. (Wakeling, J.A., concurring) - see paragraphs 1 to 54;

Sherstobitoff, J.A. - see paragraphs 55 to 67.