A-141-74
The Queen (Appellant) (Defendant)
v.
G.T.E. Sylvania Canada Limited (Respondent)
(Plaintiff)
Court of Appeal, Jackett C.J., Ryan J. and Hyde
D.J.—Montreal, October 8, 10, 1974.
Income tax—Provision for depreciation—Deduction from
capital cost of `public grant, subsidy or other assistance"—
Phrase excluding reduction in provincial income tax—
Income Tax Act, s. 20(6)(h) and s. 11(1)(a).
The respondent taxpayer, by virtue of a reduction in
Quebec income tax effected by the Quebec legislature for
the year 1971, was liable to pay less tax to the provincial
government than it would otherwise have been liable to pay.
The taxpayer was assessed for Canadian income tax as
having "received ... from a government ... a grant, sub
sidy or other assistance" within the depreciation provisions
of section 20(6)(h) of the Income Tax Act. The assessment
was set aside by the Trial Division [1974] 1 F.C. 726. The
Crown appealed.
Held, dismissing the appeal, the respondent was outside
the relevant phrase, as it literally received nothing from the
reduction in provincial tax. If the words in section 20(6)(h)
were treated as broad enough to include such a reduction,
the rule would include reduction effected by various allow
ances in the Income Tax Act that could not be taken to have
been intended without more explicit language.
INCOME tax appeal.
COUNSEL:
N. A. Chalmers, Q.C., and Wilfrid Lefebvre
for appellant.
Richard W. Pound and Robert Couzin for
respondent.
SOLICITORS:
Deputy Attorney General of Canada for
appellant.
Stikeman, Elliott, Tamaki, Mercier & Robb,
Montreal, for respondent.
The following are the reasons for judgment
delivered orally in English by
JACKETT C.J.: This is an appeal from a judg
ment of the Trial Division allowing with costs
an appeal by the respondent from its assessment
under Part I of the Income Tax Act for the 1971
taxation year.
The appeal turns upon what effect is to be
given to section 20(6)(h) of the Income Tax Act,
as it was in respect of that taxation year, on
certain agreed facts.
20. (6). For the purpose of this section and regulations
made under paragraph (a) of subsection (1) of section 11,
the following rules apply:
(h) where a taxpayer has received or is entitled to receive
from a government, municipality or other public authority,
in respect of or for the acquisition of property, a grant,
subsidy or other assistance ... the capital cost of the
property shall be deemed to be the capital cost thereof to
the taxpayer minus the amount of the grant, subsidy or
other assistance;
Put in a nutshell, the question is whether the
reduction in Quebec income tax for the year in
question that was effected by the provincial
National Assembly by appropriate amendment
to the provincial tax statute, as a result of which
the respondent was liable to pay less tax to the
Government of the Province than it would
otherwise have been liable to pay, resulted in
the respondent having
"received ... from a government ... a grant,
subsidy or other assistance"
within the meaning of those words in section
20(6)(h). In my view, the answer is in the nega
tive. In so far as the reduction in tax is con
cerned, the respondent literally received noth
ing. If a meaning were given to the expression
"received ... other assistance" broad enough to
include such a reduction in tax, the ambit of the
rule in section 20(6)(h) would be such as to
include a reduction effected by various allow
ances in the Income Tax Act itself that could
not, in my view, be taken to have been intended
without more explicit language. I have in mind,
for example, what is commonly referred to as
the "capital cost allowance" that is provided for
by section 11(1)(a) itself.'
For the aforesaid reasons, I am of opinion
that the appeal should be dismissed with costs.
RYAN J. concurred.
* * *
HYDE D.J. concurred.
I wish, expressly, to reserve consideration of the accura
cy of that part of the learned Trial Judge's Reasons for
Judgment that reads as follows [at pages 736-737]:
Again referring to the dictionary meanings of the words
"grant" and "subsidy" there is one common thread
throughout, that is a gift or assignment of money by
government or public authority out of public funds to a
private or individual or commercial enterprise deemed to
be beneficial to the public interest. Subject to minor
refinements the words "grant" and "subsidy" appear from
their dictionary meanings to be almost synonymous.
I am of the view that rules of interpretation or canons
of construction which have been established judicially
must be applied where pertinent and in or saying I do so
fully cognizant that such rules, particularly the principle
of ejusdem generis, are a useful servant but a dangerous
master.
The ejusdem generis doctrine is as old as Bacon's
maxims. That rule, which I repeat, is that where general
words follow an enumeration of particular things they do
not introduce changes of a different character.
In my judgment the familiar rule that where there are
general words following particular and specific words all
of one genus, the general words are presumed to be
restricted to the same genus as the particular words,—
applies to the words "grant, subsidy or other assistance"
as used in section 20(6)(h) of the Income Tax Act. In this
section there are the specific words "grant" and "sub-
sidy" followed by the general words "or other
assistance".
The fact is that the general words "or other assistance"
can hardly avoid being ancillary in nature to the words
"grant" and "subsidy". It seems to me that where there
are ancillary words of this nature it is a sound rule not to
give such a construction to the ancillary words as will
wipe out the significance of the particular words which
antecede them.
As I have said before the constant and dominating
feature in the words "grant" and "subsidy" is that each
contemplates the gift of money from a fund by govern
ment to a person for the public weal. Something concrete
and tangible is to be bestowed. For the reasons I have
expressed the general words "or other assistance" must
be coloured by the meaning of those words.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.