Teck Corp. v. British Columbia, 2004 BCCA 514

• Judge: Rowles, Hall and Levine, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: October 06, 2004
• Jurisdiction: British Columbia
• Citations: 2004 BCCA 514;(2004), 204 B.C.A.C. 221 (CA)

Teck Corp. v. B.C. (2004), 204 B.C.A.C. 221 (CA);

  333 W.A.C. 221

MLB headnote and full text

Temp. Cite: [2004] B.C.A.C. TBEd. OC.028

Teck Corporation (appellant) v. Her Majesty the Queen in Right of the Province of British Columbia (respondent)

(CA030296; 2004 BCCA 514)

Indexed As: Teck Corp. v. British Columbia

British Columbia Court of Appeal

Rowles, Hall and Levine, JJ.A.

October 6, 2004.

Summary:

A taxpayer claimed, in computing its taxable income under the British Columbia Income Tax Act, a deduction for a percentage of the extra-provincial mining taxes it paid. The Minister denied the claim. The taxpayer appealed.

The British Columbia Supreme Court, in a decision reported [2002] B.C.T.C. 1459, dismissed the appeal. The taxpayer appealed.

The British Columbia Court of Appeal dismissed the appeal.

Income Tax - Topic 1140.2

Income from a business or property - Deductions - General - Federal or provincial royalty payments - Section 18(1)(a) of the federal Income Tax Act permitted a deduction only for an outlay or expense made or incurred for the purpose of earning income - Section 18(1)(m) of the same Act prohibited a deduction for a federal or provincial statutory royalty or tax relating to the production in Canada of mines or minerals - Section 8 of the Income Tax Act (B.C.) provided that a taxpayer was to recompute its taxable income for provincial income as if s. 18(1)(m) of the federal Act were not enacted - A taxpayer claimed, in computing its taxable income under the British Columbia Act, a deduction for a percentage of the extra-provincial mining taxes it paid - The British Columbia Court of Appeal affirmed the dismissal of the claim - The extra-provincial mining taxes were income taxes which were not deductible according to s. 18(1)(a) of the federal Act because they were not outlays or expenses incurred for the purpose of gaining or producing income - Thus, the enactment of s. 18(1)(m) of the federal Act did not have the effect of prohibiting their deduction and s. 8 of the B.C. Act, requiring the recomputation of taxable income as if s. 18(1)(m) had not been enacted, did not result in an allowable deduction for provincial income tax purposes.

Cases Noticed:

65302 British Columbia Ltd. v. Minister of National Revenue, [1999] 3 S.C.R. 804; 248 N.R. 216, consd. [para. 25].

Antosko v. Minister of National Revenue, [1994] 2 S.C.R. 312; 168 N.R. 16, refd to. [para. 25].

Minister of National Revenue v. Shell Canada Ltd., [1999] 3 S.C.R. 622; 247 N.R. 19, refd to. [para. 25].

Canpar Holdings Ltd. v. Saskatchewan (Minister of Energy and Mines) (1987), 60 Sask.R. 128 (C.A.), refd to. [para. 31].

Harrods (Buenos Aires) Ltd. v. Taylor-Gooby (1964), 41 T.C. 450 (Eng. C.A.), refd to. [para. 31].

Roenisch v. Minister of National Revenue, [1931] Ex. C.R. 1, refd to. [para. 32].

Inland Revenue Commissioners v. Dowdell O'Mahoney & Co., [1952] 1 All E.R. 531 (H.L.), refd to. [para. 32].

Pollon v. American Home Assurance Co. (1991), 44 O.A.C. 153; 79 D.L.R.(4th) 178 (C.A.), refd to. [para. 34].

Quemont Mining Corp. v. Minister of National Revenue, [1967] 2 Ex. C.R. 169, affd. [1970] S.C.R. 511, refd to. [para. 38].

Nickel Rim Mines Ltd. v. Ontario (Attorney General), [1966] 1 O.R. 345 (C.A.), consd. [para. 39].

London County Council v. Attorney-General, [1901] A.C. 26 (H.L.), consd. [para. 49].

Statutes Noticed:

Income Tax Act, R.S.C. 1985 (5th Supp.), c. 1, sect. 18(1)(a) [para. 18]; sect. 18(1)(m) [para. 13].

Income Tax Act, R.S.B.C. 1979, c. 190, sect. 8 [para. 6].

Authors and Works Noticed:

British Columbia, Hansard, Debates of the Legislative Assembly, Vol. 14(22) (May 3, 1994), p. 10471 [para. 21].

Bryce, R.B., Federal Provincial Tax Arrangements, in Canadian Tax Foundation, Report of Proceedings of the Tenth Tax Conference (1957), p. 306 [para. 46].

Coristine, J.P., The May 6, 1974 Budget, in Canadian Tax Foundation, Report of Proceedings of the Twenty-Sixth Conference (1975), pp. 190 to 195 [para. 8].

Hansard - see British Columbia, Hansard, Debates of the Legislative Assembly.

Holland, E.N., and Kemp, R.M., Canadian Taxation of Mining Income (1978), pp. 1 to 8 [para. 8].

Krishna, Vern, The Fundamentals of Canadian Income Tax: An Introduction (7th Ed. 2002), pp. 95, 100, 103 [para. 50].

Parsons, B., Comparative Mining Tax Regimes: A Summary of objectives, types and best practises (1998), p. 5 [para. 47].

Parsons, R.B., Canadian Mining Taxation (1982), pp. 219 to 221 [para. 8].

St-Onge, Victor, Recent Quebec Tax and Royalty Proposals Relating to Mining, in Canadian Tax Foundation, Report of Proceedings of the Twenty-Seventh Tax Conference (1976), p. 398 [para. 47].

Counsel:

W.I. Innes, B.R. Carr and R.B. Bissell, for the appellant;

I.T. Torrie and E. Douglas, for the respondent.

This appeal was heard at Vancouver, British Columbia, on June 25, 2004, by Rowles, Hall and Levine, JJ.A, of the British Columbia Court of Appeal.

The decision of the Court of Appeal was delivered on October 6, 2004, by Levine, J.A.