Simplot Chemical Co. v. Manitoba, (1987) 47 Man.R.(2d) 167 (QB)

• Judge: Glowacki, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: May 07, 1987
• Jurisdiction: Manitoba
• Citations: (1987), 47 Man.R.(2d) 167 (QB)

Simplot Chemical v. Man. (1987), 47 Man.R.(2d) 167 (QB)

MLB headnote and full text

Simplot Chemical Company Ltd. v. Manitoba

(Suit No. 615/84)

Indexed As: Simplot Chemical Co. v. Manitoba

Manitoba Court of Queen's Bench

Glowacki, J.

May 7, 1987.

Summary:

The plaintiff fertilizer manufacturer brought an action against the Manitoba Government seeking a declaration that the natural gas used in its ammonia and nitric acid plants was exempt from taxation under the provisions of the Retail Sales Tax Act and the Revenue Act and a declaration that the taxes imposed under the Acts were indirect taxes.

The Manitoba Court of Queen's Bench dismissed the action.

Constitutional Law - Topic 6824

Provincial jurisdiction - Direct taxation within the province - Direct tax - What constitutes - The Manitoba Court of Queen's Bench stated that to ascertain whether a tax was direct or indirect, the courts had to look at the general tendencies of the tax as a whole and not the particular circumstances of the individual taxpayer - See paragraph 39.

Constitutional Law - Topic 6824

Provincial jurisdiction - Direct taxation within the province - Direct tax - What constitutes - The Manitoba Court of Queen's Bench held that the taxes imposed pursuant to the provisions of the Revenue Act, C.C.S.M., c. R-140 and the Retail Sales Tax Act, C.C.S.M., c. R-150, were direct taxes within the legislative competence of the Province of Manitoba.

Sales and Service Taxes - Topic 81

Sales tax - Taxing powers - Interpretation - General - The Manitoba Court of Queen's Bench stated that taxing statutes were subject to the rules of strict interpretation - See paragraph 14.

Sales and Service Taxes - Topic 545

Sales tax - Exemptions - Catalysts or direct agents in manufacture - The plaintiff, a fertilizer manufacturer, used natural gas in its nitric acid plant - The gas was consumed when it was combined with the offensive fumes to create substances which could be safely disposed of into the environment and to produce heat - The plaintiff claimed that the gas was not taxable as part of the manufacturing process - The Manitoba Court of Queen's Bench held that the gas was taxable under the Retail Sales Tax Act, C.C.S.M., c. R-150, because it did not become part of the product, and was not a catalyst or direct agent.

Sales and Service Taxes - Topic 2603

Gasoline and motive fuel tax - General - Fuel - What constitutes - A fertilizer manufacturer used natural gas in the production of ammonia - A low pressure gas was used to heat pipes thereby providing the heat for a chemical reaction to take place - The manufacturer claimed that the low pressure gas was exempt from taxation - The Manitoba Court of Queen's Bench held that the gas was a fuel and was taxable under the provisions of the Revenue Act, C.C.S.M., c. R-140.

Cases Noticed:

Bank of Toronto v. Lambe (1887), 12 App. Cas. 575, apprvd. [para. 37].

Cairns Construction Ltd. v. Government of Saskatchewan, [1960] S.C.R. 619, appld. [para. 39].

Simpson-Sears Ltd. v. New Brunswick, [1982] 1 S.C.R. 144; 41 N.R. 489; 30 N.B.R.(2d) 151; 70 A.P.R. 151, appld. [para. 42].

Statutes Noticed:

Constitution Act, 1867, sect. 92(2) [para. 36].

Financial Administration Act, C.C.S.M., c. F-55, sect. 77 [para. 34].

Retail Sales Tax Act, C.C.S.M., c. R-150, sect. 2(1)(b) [para. 23]; sect. 2(1)(i) [para. 22]; sect. 2(1)(k) [para. 23]; sect. 2(1)(p) [para. 21]; sect. 3(1) [para. 18]; sect. 4(1)(w) [para. 26]; sect. 4(1)(y) [para. 28]; sect. 4(2) [para. 19].

Revenue Act, C.C.S.M., c. R-140, sect. 2(e) [para. 5]; sect. 2(h) [para. 7]; sect. 3(1) [para. 4].

Authors and Works Noticed:

Maxwell on the Interpretation of Statutes (12th Ed.), p. 256 [para. 14].

Mill, John Stuart, Political Economy [para. 37].

Precise Oxford Dictionary (7th Ed.) [para. 9].

Shorter Oxford English Dictionary (3rd Ed.) [para. 9].

Webster's Seventh New Collegiate Dictionary [para. 9].

Webster's Ninth New Collegiate Dictionary [para. 9].

Counsel:

F.O. Meighen, Q.C., and L. Donald, for the plaintiff;

N.D. Shende, Q.C., for the defendant.

This case was heard before Glowacki, J., of the Manitoba Court of Queen's Bench, who delivered the following decision on May 7, 1987.