Cumberland Ready Mix Ltd. v. Canada
T-450-88
Cullen J.
20/10/93
20 pp.
Appeal from reassessments for 1983 to 1986 -- Minister denying plaintiff's claim for investment tax credits and refunds on ground property with respect to which claiming credits neither "qualified property" nor "qualified construction equipment" within meaning of Income Tax Act -- Plaintiff carries on business of providing pre-mixed cement products -- Owns several "cement mixer" trucks and one stone slinger -- Mixers used to manufacture, process, and deliver concrete to construction sites -- Concrete ready-mixers property described in Class 22 of Schedule II of Income Tax Regulations as power-operated, movable equipment designed for purpose of placing concrete -- Income Tax Act, s. 127(9) definition of "investment tax credit" requiring taxpayer to acquire "qualified property" or "qualified construction property" to calculate investment tax credit -- S. 127(9) definition of "qualified property" referring to prescribed machinery and equipment to be used primarily in Canada to manufacture or process goods for sale -- Regulation 4600(2)(e) providing property prescribed machinery and equipment if depreciable property of taxpayer included in Class 10(a) or Class 22, other than car or truck "designed for use on highways or streets" -- Plaintiff claiming investment tax credit on basis concrete ready-mixers "prescribed machinery and equipment" and thus "qualified property" as defined by Income Tax Act -- Minister disallowing investment tax credits on basis concrete ready-mixers trucks "designed for use on highways and streets" and therefore not "prescribed machinery and equipment" and not "qualified property" given exclusionary effect of Regulations, s. 4600(2)(e) -- Whether mixers excluded under s. 4600(2)(e) -- Appeals allowed -- Primary purpose test set out in The Queen v. Nowsco Well Service Ltd. (1990), 90 DTC 6312 (F.C.A.) and applied in Terroco Industries Ltd. v. Minister of National Revenue (1992), 93 DTC 1 (T.C.C.) applied to this Regulation -- Evidence of modifications made to prepare trucks for use as mixers establishing mixers and stone slingers not designed to be ordinary truck -- Operation on highway and streets ancillary to main purpose, to process and deliver concrete -- Designed for primary purpose of operating off-highway on construction sites or at plant -- Income Tax Act, S.C. 1970-71-72, c. 63, s. 127(9) (as enacted by S.C. 1974-75-76, c. 71, s. 9; 1985, c. 45, s. 72; 1986, c. 55, s. 48) -- Income Tax Regulations, C.R.C., c. 945, s. 4600(2)(e).