Consumers' Gas Company Ltd. v. Minister Of National Revenue, (1986) 72 N.R. 206 (FCA)

• Judge: Pratte, Hugessen and MacGuigan, JJ.
• Court: Federal Court of Appeal (Canada)
• Case Date: December 02, 1986
• Jurisdiction: Canada (Federal)
• Citations: (1986), 72 N.R. 206 (FCA)

Consumers' Gas Co. v. MNR (1986), 72 N.R. 206 (FCA)

MLB headnote and full text

Her Majesty the Queen (appellant) v. Consumers' Gas Company Ltd. (formerly Hiram Walker-Consumers Home Ltd.) (respondent)

(No. A-133-86)

Indexed As: Consumers' Gas Company Ltd. v. Minister Of National Revenue

Federal Court of Appeal

Pratte, Hugessen and MacGuigan, JJ.

December 2, 1986.

Summary:

Consumers' Gas commonly relocated portions of its pipelines to accommodate customers and non-customers. Consumers' Gas was reimbursed for portions of the relocation costs. The Minister of National Revenue (M.N.R.) assessed the reimbursements as income. Consumers' Gas appealed.

The Federal Court of Canada, Trial Division, in a decision reported 2 F.T.R. 30, allowed the appeal and held that the reimbursements were not income, but receipts for capital account. The M.N.R. appealed. The Federal Court of Appeal dismissed the appeal.

Income Tax - Topic 1178

Income from business or property - Deductions - Capital cost allowance - Capital cost - What constitutes - Consumers' Gas commonly relocated portions of its pipelines to accommodate customers and non-customers - Consumers' Gas was reimbursed for portions of the relocation costs - The Federal Court of Appeal affirmed that the reimbursements were not income for tax purposes, but receipts for capital account - The court also held that this finding applied to reimbursements received from public authorities, not withstanding s. 13(7.1) of the Income Tax Act, which required special tax treatment for "assistance" from such authorities.

Cases Noticed:

Consumers' Gas Co. Ltd. v. M.N.R., [1984] 1 F.C. 779; 52 N.R. 106, refd to. [para. 2].

Ottawa Valley Power Company v. Minister of National Revenue, [1969] 2 Ex. C.R. 64, refd to. [para. 10].

Statutes Noticed:

Income Tax Act, S.C. 1974-75-76, c. 26, sect. 13(7.1) [para. 9].

Counsel:

Gaston Jorre and Sandra Phillips, for the appellant;

Mortimer S. Bistrisky, for the respondent.

Solicitors of Record:

F. Iacobucci, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the appellant;

Aird & Berlis, Toronto, Ontario, for the respondent.

This appeal was heard at Montreal, Quebec, on November 20 and 21, 1986, before Hugessen, Pratte and MacGuigan, JJ., of the Federal Court of Appeal. The following decision of the Federal Court of Appeal was delivered on December 2, 1986, by Hugessen, J.: