Minister of National Revenue v. TCG International Inc., (1996) 122 F.T.R. 246 (TD)

• Judge: Gibson, J.
• Court: Federal Court (Canada)
• Case Date: September 17, 1996
• Jurisdiction: Canada (Federal)
• Citations: (1996), 122 F.T.R. 246 (TD)

MNR v. TCG Intl. Inc. (1996), 122 F.T.R. 246 (TD)

MLB headnote and full text

Her Majesty The Queen (plaintiff) v. TCG International Inc., formerly Trans Canada Glass Ltd. (defendant)

(T-152-94)

Indexed As: Minister of National Revenue v. TCG International Inc.

Federal Court of Canada

Trial Division

Gibson, J.

October 22, 1996.

Summary:

TCG received a $400,000 lease inducement payment in 1985. It was not tied to tenant leasehold improvements or any other particular form of expenditure. The Minister of National Revenue reassessed the $400,000 as income. TCG appealed.

The Tax Court of Canada allowed the appeal. The Minister appealed.

The Federal Court of Canada, Trial Division, allowed the appeal.

Income Tax - Topic 1104

Income from a business or property - Income - General - Monies received as inducement - TCG received a $400,000 lease inducement payment in 1985 - It was not tied to tenant leasehold improvements or any other particular form of expenditure - The Minister of National Revenue reassessed the $400,000 as income - The Federal Court of Canada, Trial Division, affirmed the reassessment - The court rejected TCG's arguments that: the Minister was bound by the terms of an income tax bulletin, current at the time, which allegedly supported TCG's position; and amendments to the Income Tax Act, which took effect shortly after the transaction and clearly brought such inducement payments into income, should be interpreted as indicating that at the relevant time the inducement payment was not an income receipt.

Income Tax - Topic 3904

Interpretation - General - Interpretation bulletins or information circulars - Effect of - The Federal Court of Canada, Trial Division, stated that "[i]t is trite law that income tax bulletins are not binding on the Minister of National Revenue ... . They cannot have the effect, as administrative instruments, of modifying the law as enacted by Parliament." - See paragraph 13.

Cases Noticed:

Woodward Stores Ltd. v. Minister of National Revenue (1991), 40 F.T.R. 241; 91 D.T.C. 5090 (T.D.), refd to. [para. 6].

Suzy Creamcheese (Canada) Ltd. v. Minister of National Revenue (1992), 56 F.T.R. 15; 92 D.T.C. 6291 (T.D.), refd to. [para. 6].

French Shoes Ltd. v. Minister of National Revenue (1986), 4 F.T.R. 140; 86 D.T.C. 6359 (T.D.), refd to. [para. 6].

Ikea Ltd. v. Canada (1993), 94 D.T.C. 1112 (Tax C.C.), folld. [para. 6].

Westfair Foods Ltd. v. Minister of National Revenue (1990), 40 F.T.R. 207; 91 D.T.C. 5073 (T.D.), refd to. [para. 11, footnote 1].

Counsel:

Brent Paris, for the plaintiff;

Marvin R.V. Storrow, Q.C., and Bill MacLagan, for the defendant.

Solicitors of Record:

George Thomson, Deputy Attorney General of Canada, Ottawa, Ontario, for the plaintiff;

Blake, Cassels & Graydon, Vancouver, British Columbia, for the defendant.

This appeal was heard on September 17, 1996, at Vancouver, British Columbia, by Gibson, J., of the Federal Court of Canada, Trial Division, who delivered the following decision on October 22, 1996.