Stelco Inc. v. Minister of National Revenue, (1998) 226 N.R. 390 (FCA)

• Judge: Stone, Linden and Robertson, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: May 04, 1998
• Jurisdiction: Canada (Federal)
• Citations: (1998), 226 N.R. 390 (FCA)

Stelco Inc. v. MNR (1998), 226 N.R. 390 (FCA)

MLB headnote and full text

Temp. Cite: [1998] N.R. TBEd. JN.017

Stelco Inc. (appellant/plaintiff) v. Her Majesty The Queen (respondent/defendant)

(A-13-97)

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

Federal Court of Appeal

Stone, Linden and Robertson, JJ.A.

May 14, 1998.

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, in a decision reported 125 F.T.R. 114, dis­missed the appeals. Stelco appealed.

The Federal Court of Appeal dismissed the appeal.

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 under s. 83(5) of the Income Tax Act, 1952 (income derived from the operation of a mine) - For the taxation years 1970, 1971 and 1972, Stelco claimed full capital cost allowance in respect of prime metal assets under con­struction and not in use, in cal­culating its taxable income from other sources - Rev­enue Canada reassessed Stelco, claiming that Stelco could not deduct the capital cost allowance attribu­table to Griffith from its non-mining income - The Federal Court of Appeal affirmed Revenue Canada's reassessment.

Income Tax - Topic 7529

Exemptions - Particular exemptions - Mines - [See Income Tax - Topic 1183 ].

Words and Phrases

Operation of a mine - The Federal Court of Appeal 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 1 to 6.

Cases Noticed:

Falconbridge Nickel Mines Ltd. v. Minis­ter of National Revenue (1972), 72 D.T.C. 6337 (F.C.A.), refd to. [para. 5].

Westar Mining Ltd. v. Minister of National Revenue (1992), 141 N.R. 145; 92 D.T.C. 6358 (F.C.A.), refd to. [para. 5].

Statutes Noticed:

Income Tax Act, R.S.C. 1952, c. 148, sect. 83(5) [para. 1].

Income Tax Application Rules, S.C. 1970-71-72, c. 63, Part III, sect. 28(1), sect. 28(1.1) [para. 1].

Counsel:

Burton Kellock and Jay Prestage, for the appellant;

Wendy Burnham, for the respondent.

Solicitors of Record:

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

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

This appeal was heard on May 4, 1998, by Stone, Linden and Robertson, JJ.A., of the Federal Court of Appeal. On May 14, 1998, Robertson, J.A., delivered the following decision for the Court of Appeal.