CCLC Technologies Inc. v. Canada
T-3457-90
Rouleau J.
10/11/95
12 pp.
Appeal from notice of assessment disallowing refundable investment tax credit-Plaintiff in business of scientific research and experimental development-In early 1980s, Contar, plaintiff's predecessor corporation, conceived plan to develop dual process of converting coal and heavy oil minerals into light crude oil-1n 1986, plaintiff entered into Agreement with Alberta to: (a) build commercial facility, effectively finalizing process technology and showing commercial output could be produced economically-Not built as yet-Agreement providing if commercial facility built, Alberta entitled to be repaid, out of gross revenue produced from commercialization of technology, entire investment plus return on investment calculated by formula-If commercialization not achieved, Alberta would hold on to its 50% undivided interest in project technology-In 1987, company received $725,569 from Alberta pursuant to Agreement and reported scientific research and experimental development expenditures in amount of $2,298,359-Entitled to further $1,564,748 from province at end of taxation year-Plaintiff's refundable investment tax credit claim disallowed-Issue whether amounts received from Alberta constitute "assistance from government" whether as grant, subsidy, forgivable loan, deduction from tax, allowance or other form of assistance-MNR considered money invested by Alberta falling within phrase "other form of assistance" on basis no partnership or joint venture as not carrying on business-Clear from case law tax provisions using phrase "grant, subsidy . . . or other assistance" have no application to ordinary business arrangements between public authority and taxpayer-Agreement herein essentially technology arrangement in which Province active business participant-Despite clause in Agreement attempting to limit Province's commercial exposure and liability, Agreement clearly commercial arrangement negotiated and entered into by both parties for business purposes-Appeal allowed.