Ford Motor Company of Canada, Ltd v. M.N.R.
T-3700-82
Gibson J.
26/10/94
45 pp.
Refund claim ($31,757,800) relating to sales tax paid by plaintiff based on duty paid value of passenger cars and light trucks imported from the U.S. (imported goods) and sold to dealers in Canada -- Sales tax on imported goods calculated on basis of acquisition cost (ie. duty paid) giving rise to tax avoidance where imported goods subject to value added by marginal manufacturing (domestic assembling and packaging of imported goods) -- To eliminate tax discrimination against Canadian manufacturers Excise Tax Act amended to include "marginal manufacturers" within definition of "manufacture or producer" thus making sales tax payable on basis of Canadian sale price -- In ordinary course of trade, amendment resulting in increase in base value from which sales tax calculated, however exchange rates and depressed market conditions for new vehicles in Canada during period in question resulting in opposite effect -- Consequently significant tax advantage flowing to plaintiff if qualifying as marginal manufacture -- Minister denying plaintiff qualification on basis assembling and packaging of imported goods done by dealers, rather than by plaintiff -- Plaintiff seeking judgment declaring it manufacture of imported goods; and order directing reassessment of taxes payable pursuant to amendment -- Expression "marginal manufacturing" requiring liberal interpretation in departure from Fiat Auto Canada Limited v. The Queen, [1984] 1 F.C. 203, (T.D) which applied ejusdem generis doctrine to restrict interpretation -- Preparation and conditioning of imported goods by dealers constituting marginal manufacturing on behalf of plaintiff-Plaintiff dealership not "retail store" due to limited new car showroom space allocation -- Plaintiff entitled to make application to be considered manufacture or producer of imported goods it sells to dealers, however no basis for interfering in Minister's rejection of application as no evidence application not given full and fair consideration -- Cost of transportation of imported goods from assembly plants to dealers being cost incurred by plaintiff and therefore may be excluded in determination of consumption or sales tax -- Evidence tendered regarding treatment by Minister of plaintiff's competitors relevant to determination of Minister's interpretation of "marginal manufacturing" in automotive industry during period in question; but not relevant to whether plaintiff entitled to refund claimed -- Judgment in favour of plaintiff-Excise Tax Act, R.S.C. 1970, c. E-13, ss. 2(1)(f) (as am. by S.C. 1980-81-82-83, c. 68, s. 1), 26(6) (as am. idem, s. 8).