Stelco Inc. v. Minister of National Revenue, (1996) 125 F.T.R. 114 (TD)

• Court: Federal Court (Canada)
• Case Date: November 05, 1996
• Jurisdiction: Canada (Federal)
• Citations: (1996), 125 F.T.R. 114 (TD)

Stelco Inc. v. MNR (1996), 125 F.T.R. 114 (TD)

MLB headnote and full text

In Re the Income Tax Act.

Stelco Inc. (plaintiff) v. Her Majesty the Queen (defendant)

(T-4118-80; T-4119-80; T-1167-83)

Indexed As: Stelco Inc. v. Minister of National Revenue

Federal Court of Canada

Trial Division

Jerome, A.C.J.

December 23, 1996.

Summary:

Revenue Canada reassessed Stelco for the taxation years 1970, 1971 and 1972, disallowing the capital cost allowance claimed by Stelco. Stelco appealed the reassessments.

The Federal Court of Canada, Trial Division, dismissed the appeals.

Income Tax - Topic 1183

Income from a business or property - Deductions - Capital cost allowance - Limitations on - Stelco obtained iron ore from several sources, including the Griffith mine which was wholly owned by Stelco - From December 1969 to November 1972, Griffith was exempt from taxation - For the taxation years 1970, 1971 and 1972, Stelco claimed full capital cost allowance in respect of prime metal assets under construction and not operational - Revenue Canada argued that Stelco could not deduct the capital cost allowance attributable to Griffith - The Federal Court of Canada, Trial Division, upheld Revenue Canada's reassessment - See paragraphs 11 to 23.

Words and Phrases

Operation of a mine - The Federal Court of Canada, Trial Division, discussed the meaning of the phrase "operation of a mine" as it appears in s. 83(5) of the Income Tax Act, R.S.C. 1952, c. 148 - See paragraphs 18 to 19.

Cases Noticed:

Canadian Rock Salt Co. v. Minister of National Revenue, [1974] C.T.C. 725; 5 N.R. 209 (F.C.A.), refd to. [para. 15].

Johnson's Asbestos Corp. v. Minister of National Revenue (1965), 65 D.T.C. 5089 (Ex. Ct.), refd to. [para. 16].

Falconbridge Nickel Mines Ltd. v. Minister of National Revenue (1972), 72 D.T.C. 6337 (F.C.A.), refd to. [para. 18].

Westar Mining Ltd. v. Minister of National Revenue (1992), 141 N.R. 145; 92 D.T.C. 6358 (F.C.A.), refd to. [para. 19].

Statutes Noticed:

Income Tax Act, R.S.C. 1952, c. 148, sect. 83(5) [para. 11].

Income Tax Act Regulations (Can.), Income Tax Regulations, sect. 28 [para. 12].

Income Tax Regulations - see Income Tax Act Regulations (Can.).

Counsel:

Jerry A. Prestage, for the plaintiff;

Wendy Burnham, for the defendant.

Solicitors of Record:

Blake, Cassels & Graydon, Toronto, Ontario, for the plaintiff;

George Thomson, Deputy Attorney General of Canada, Ottawa, Ontario, for the defendant.

These appeals were heard on November 5, 1996, at Toronto, Ontario, before Jerome, A.C.J., of the Federal Court of Canada, Trial Division, who delivered the following judgment on December 23, 1996.