Canada v. Tom Baird & Associates Ltd.
A-866-96
Létourneau J.A.
18/11/97
13 pp.
Appeal from Trial Division decision dismissing appeal from Canadian International Trade Tribunal determination holding certain imaged articles used only for manufacture of taxable printed matter as advertising, and subsequently sold to clients by respondent exempt from federal sales tax under Act, s. 29(1) and Schedule III, Part XIII, s. 4-Respondent advertising agency creating marketing strategies and manufacturing printed matter as advertising for its clients-To achieve objective, respondent engaged various suppliers to manufacture photographs, typesetting, film, camera-ready art work and colourseparated film negatives each of which carried image for reproduction by printing (imaged articles)-Suppliers engaged by respondent manufactured imaged articles using designs, art work or film, and instructions, provided to them by respondent-Imaged articles sold by various suppliers to respondent on federal sales tax exempt basis-Respondent turned over imaged articles without charge to printers who used them to manufacture both printed matter subject to federal sales tax (taxable printed matter) and printed matter exempt of federal sales tax-Imaged articles at issue having been supplied free of charge by respondent to printers, sale price of printed matter did not include amount on account of cost component of imaged article at issue-Imaged article at issue also sold by respondent to its clients, upon which respondent remitted amount identified as federal sales tax, calculated on amount it charged its clients for imaged articles at issue-Portion of amount remitted by respondent as federal sales tax attributable to difference between amount respondent invoiced its clients and for imaged articles at issue and cost to respondent of those imaged articles (mark-up) subsequently refunded to respondent-Respondent now seeking refund of remaining portion of federal sales tax remitted in respect of imaged articles at issue, calculated on cost of imaged articles to respondent-Appeal confined to imaged articles used to manufacture only taxable printed matter-Issue interpretation of "made or imported by or sold to a manufacturer or producer for use exclusively in the manufacture or production of printed matter" in Act, Schedule III, Part XIII, s. 4-Appellant arguing basically as imaged articles sold to clients, said articles not used exclusively in manufacture or production of printed matter and s. 4 needing to be interpreted as restricting exemption to manufacturer who uses article in manufacture of printed matter, i.e. a printer-Appeal dismissed-Trial Judge concluded s. 4 clear and required no further interpretation: imaged articles used exclusively in manufacture of taxable printed matter tax exempt without further qualification-Appellant's proposed interpretation of provision (requiring replacement of "manufacturer or producer" by "printer") leading to overly restrictive application thereof not supported by text itself-Not for Court to rewrite statute so as to replace two categories of persons, manufacturer and producer, by more restricted third category, printer-Words "made or imported by or sold to" in s. 4 not redundant or superfluous, qualifying conditions under which either manufacturer or producer may benefit from tax exemption-Provision clearly not intended to deal with printers only-FCA warning in McRae (W.R.) Co. v. Minister of National Revenue (Customs and Excise) (1997), 215 N.R. 233 Court should be reluctant to compare microscopically words of provisions of Excise Tax Act devised at different times and in different context and meant to address distinct concerns not applicable herein as Trial Judge comparison did not address distinct concerns in different context-Case law replete with judicial pronouncements on need for judicial restraint in redrafting statutes-In Friesen v. Canada, [1995] 3 S.C.R. 103, Major J. stated "Reading extra words into a statutory definition is even less acceptable when the phrases which must be read in appear in several other definitions in the same statute"-Where, as here, imaged articles specific to client and of no use to anyone else, ultimate disposal of articles by manufacturer or producer, either by way of destruction or return or sale to its client who has proprietary interests in them, not physical use of articles within meaning of s. 4 depriving manufacturer or producer of benefit of tax exemption accorded by it-Excise Tax Act, R.S.C. 1970, c. E-13, s. 29(1) (as am. by S.C. 198081-82-83, c. 104, s. 9), Schedule III, Part XIII, s. 4.