Pacific Abrasives & Supply Inc. v. British Columbia et al., (2010) 291 B.C.A.C. 135 (CA)

• Judge: Finch, C.J.B.C., Levine and Groberman, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: May 04, 2010
• Jurisdiction: British Columbia
• Citations: (2010), 291 B.C.A.C. 135 (CA);2010 BCCA 369

Pacific Abrasives & Supply v. B.C. (2010), 291 B.C.A.C. 135 (CA);

    492 W.A.C. 135

MLB headnote and full text

Temp. Cite: [2010] B.C.A.C. TBEd. AU.009

Pacific Abrasives & Supply, Inc. (respondent/petitioner) v. Her Majesty The Queen in Right of the Province of British Columbia and the Minister of Provincial Revenue of the Province of British Columbia (appellants/respondents)

(CA036914; 2010 BCCA 369)

Indexed As: Pacific Abrasives & Supply Inc. v. British Columbia et al.

British Columbia Court of Appeal

Finch, C.J.B.C., Levine and Groberman, JJ.A.

August 6, 2010.

Summary:

At issue on appeal from assessments of the Minister of Provincial Revenue, was whether slag, a waste product produced in the mining and refining of copper ore, was a mineral for the purposes of taxation under the Mineral Tax Act.

The British Columbia Supreme Court, in a decision reported at [2009] B.C.T.C. Uned. 156, found that slag was not a mineral for purposes of taxation under the Act. The Province appealed.

The British Columbia Court of Appeal allowed the appeal.

Mines and Minerals - Topic 9603

Taxation - General - Legislation - At issue on a taxpayer's appeal from assessments of the Minister of Provincial Revenue, was whether slag, a waste product produced in the mining and refining of copper ore, was a mineral for the purposes of taxation under the Mineral Tax Act - The Act's definition was imported from the definition in s. 1 of the Mineral Tenure Act which defined "mineral" as "... an ore of metal, or a natural substance that can be mined, that is in the place or position in which it was originally formed or deposited or is in talus rock, and includes (a) rock and other materials from mine tailings, dumps and previously mined deposits of minerals" - A chambers judge held that slag was not a natural substance and that s. 1(a) was limited to "natural substances", thereby excluding slag - The Crown appealed - The taxpayer asserted that because the ministerial power to prescribe a mineral by regulation, as referred to in ss. 1(c) and 1(g) and defined in s. 2 of the Mineral Tenure Act, was limited to rocks and natural substances, it could not have been the legislature's intention to prescribe a broader range of materials under s. 1(a) - The British Columbia Court of Appeal, in allowing the appeal, stated that there were two problems with the taxpayer's assertion - First, the ministerial power to expand a statutory definition did not necessarily mark the outer boundaries of what could be included by statute itself - It was neither unusual nor inconsistent for a Minister to be granted less power than the legislature itself chose to exercise - Second, the broader statutory framework and the underlying purpose and context of the definition provided a principled reason why the scope of what was specifically included under s. 1(a) was greater that what could be included by the Minister through regulation - The court discussed the purpose of s. 1(a), including the policy reasons for excluding synthetic materials from the initial threshold definition set out in the section's introductory words - The interpretation was supported by, inter alia, the manner in which the broad provincial power to tax mining was framed by s. 92A(4) of the Constitution Act (1867), enacted in 1982 - See paragraphs 27 to 41.

Mines and Minerals - Topic 9606

Taxation - General - Minerals defined - [See Mines and Minerals - Topic 9603 ].

Mines and Minerals - Topic 9606

Taxation - General - Minerals defined - At issue on appeal from assessments of the Minister of Provincial Revenue, was whether slag, a waste product produced in the mining and refining of copper ore, was a mineral for the purposes of taxation under the Mineral Tax Act - The Act's definition was imported from the definition in s. 1 of the Mineral Tenure Act which defined "mineral" as "... an ore of metal, or a natural substance that can be mined, that is in the place or position in which it was originally formed or deposited or is in talus rock, and includes (a) rock and other materials from mine tailings, dumps and previously mined deposits of minerals" - A chambers judge held that slag was not a natural substance - The judge interpreted "includes" as describing a subset of a "whole" having the characteristics of "an ore of metal, or a natural substance that can be mined" - Accordingly, s. 1(a) was limited to "natural substances", thereby excluding slag - The British Columbia Court of Appeal allowed an appeal - There was no basis to limit the effect of "includes" in the manner applied by the chambers judge - The clear and unambiguous meaning of "other materials from ... previously mined deposits of minerals" included slag - See paragraphs 1 to 18.

Mines and Minerals - Topic 9606

Taxation - General - Minerals defined - At issue on a taxpayer's appeal from assessments of the Minister of Provincial Revenue, was whether slag, a waste product produced in the mining and refining of copper ore, was a mineral for the purposes of taxation under the Mineral Tax Act - The Act's definition was imported from the definition in s. 1 of the Mineral Tenure Act which defined "mineral" as "... an ore of metal, or a natural substance that can be mined, that is in the place or position in which it was originally formed or deposited or is in talus rock, and includes (a) rock and other materials from mine tailings, dumps and previously mined deposits of minerals" - A chambers judge held that slag was not a natural substance and that s. 1(a) was limited to "natural substances", thereby excluding slag - The Crown appealed - The taxpayer asserted that "and includes" had a dual effect - One aspect confirmed a mineral as being either an "ore or metal" or a "natural substance that can be mined" - The other aspect expanded the definition to additional locations away from the mine site where rock and other natural materials would be taxed, while leaving the natural/synthetic divide intact - The British Columbia Court of Appeal stated that there was a fundamental inconsistency in the taxpayer's assertions - The introductory words provided no basis to distinguish between the definition's twin aspects - A more coherent interpretation was that if s. 1(a) could not fit within the introductory definition, it did not - Section 1(a) should not be read as a subset of a "whole" when it was incapable of encompassing that subset without arbitrary modification - Rather, "and includes" expanded the definition beyond what would be captured by the introductory words and, specifically, to include those materials listed in s. 1(a) - See paragraphs 19 to 23.

Mines and Minerals - Topic 9606

Taxation - General - Minerals defined - At issue on a taxpayer's appeal from assessments of the Minister of Provincial Revenue, was whether slag, a waste product produced in the mining and refining of copper ore, was a mineral for the purposes of taxation under the Mineral Tax Act - The Act's definition was imported from the definition in s. 1 of the Mineral Tenure Act which defined "mineral" as "... an ore of metal, or a natural substance that can be mined, that is in the place or position in which it was originally formed or deposited or is in talus rock, and includes (a) rock and other materials from mine tailings, dumps and previously mined deposits of minerals" - A chambers judge held that slag was not a natural substance and that s. 1(a) was limited to "natural substances", thereby excluding slag - The Crown appealed - The taxpayer asserted that s. 1(a) imposed a condition that "other materials" had to be natural substances on the basis that "rock" in the phrase "rock and other materials" operated to confine "other materials" to other rock-like materials - The British Columbia Court of Appeal rejected the assertion - It seemed arbitrary to use one of the many characteristics of a rock to limit the meaning of "other materials" - Rock and slag might be distinct in their origin, but they might be quite similar in terms of appearance, weight, industrial application or other characteristics - The "natural" characteristic of rock was neither predominant nor clear enough to treat rock-like and non-synthetic as interchangeable - Further, the taxpayer's position was inconsistent with the language used elsewhere in the definition - See paragraphs 24 to 26.

Statutes - Topic 1603

Interpretation - Extrinsic aids - General - Constitutional context - [See Mines and Minerals - Topic 9603 ].

Statutes - Topic 1607

Interpretation - Extrinsic aids - General - Policy of legislation - [See Mines and Minerals - Topic 9603 ].

Statutes - Topic 2407

Interpretation - Interpretation of words and phrases - By context - [See Mines and Minerals - Topic 9603 ].

Statutes - Topic 2456

Interpretation - Interpretation of words and phrases - Interpretation and definition clauses - Use of words "include" and "including" - [See second and third Mines and Minerals - Topic 9606 ].

Statutes - Topic 2584

Interpretation - Interpretation of words and phrases - Ejusdem generis rule - When rule applies - General words following particular words - [See fourth Mines and Minerals - Topic 9606 ].

Statutes - Topic 2614

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Legislative or statutory context - [See Mines and Minerals - Topic 9603 ].

Words and Phrases

Includes - The British Columbia Court of Appeal discussed the meaning of "includes" as used in the definition of "mineral" in s. 1(a) of the Mineral Tenure Act, R.S.B.C. 1996, c. 292 - See paragraphs 18 to 23.

Words and Phrases

Mineral - The British Columbia Court of Appeal discussed the meaning of "mineral" as defined in s. 1(a) of the Mineral Tenure Act, R.S.B.C. 1996, c. 292, and imported by the Mineral Tax Act, R.S.B.C. 1996, c. 291 - See paragraphs 18 to 41.

Cases Noticed:

Placer Dome Canada Ltd. v. Ontario (Minister of Finance), [2006] 1 S.C.R. 715; 348 N.R. 148; 210 O.A.C. 342; 2006 SCC 20, refd to. [para. 14].

Teck Corp. v. British Columbia (2004), 204 B.C.A.C. 221; 333 W.A.C. 221; 2004 BCCA 514, refd to. [para. 32].

Statutes Noticed:

Mineral Tenure Act, R.S.B.C. 1996, c. 292, sect. 1(a) [para. 9].

Authors and Works Noticed:

Gamble, Taxation of Canadian Mining (2004), p. 14-3 [para. 36].

Meekison, J. Peter, Romanow, Roy J., and Moull, William D., Origins and Meaning of Section 92A: The 1982 Constitutional Amendment on Resources (1985), pp. 43, 44 [para. 38].

Moull, William D., The Legal Effect of the Resource Amendment - What's New in Section 92A, in Meekison, J. Peter, Romanow, Roy J., and Moull, William D., Origins and Meaning of Section 92A: The 1982 Constitutional Amendment on Resources (1985), pp. 43, 44 [para. 38].

Counsel:

S.M.L. Kirkpatrick, for the appellant;

J.D. Fraser, for the respondent.

This appeal was heard at Vancouver, British Columbia, on May 4, 2010, by Finch, C.J.B.C., Levine and Groberman, JJ.A., of the British Columbia Court of Appeal. Levine, J.A., delivered the following judgment for the court on August 6, 2010.