C.R.I. Environnement Inc. v. Canada
The Court held the transactions were not sales because the third‑party recipients did not obligate themselves to pay a price in money; the appellant paid them to accept waste, and the concept of a "negative price" sale is not recognized under the relevant law, so the deduction under s.125.1 was properly disallowed.
Source-derived case information.
- Citation
- 2008 FCA 103
- Parties
- Appellant: C.R.I. Environnement Inc.; Respondent: Her Majesty the Queen
- Court
- Federal Court of Appeal
- Jurisdiction
- Canada
- Judgment Date
- 13 March 2008
- Procedural Posture
- Tax Appeal From Tax Court of Canada / Appeal to the Federal Court of Appeal (final Disposition)
- Outcome
- Appeal dismissed with costs.
- Legal Topics
- Canadian Manufacturing and Processing Profits Deduction, Subsection 125.1(3) Income Tax Act, Definition of Sale, Consideration, Negative Price Concept
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
C.R.I. Environnement Inc.
Appellant
Her Majesty the Queen
Respondent
Procedural Posture
Tax Appeal From Tax Court of Canada / Appeal to the Federal Court of Appeal (final Disposition)
Legal Issues
- 1 Whether industrial waste processed by the appellant was "for sale" under subsection 125.1(3) of the Income Tax Act
- 2 Whether payments made by the appellant to third parties to accept waste can constitute a sale for a "negative price"
- 3 Whether application of Quebec private law or other law could alter the characterization of the transactions
Ratio Decidendi
The Court held the transactions were not sales because the third‑party recipients did not obligate themselves to pay a price in money; the appellant paid them to accept waste, and the concept of a "negative price" sale is not recognized under the relevant law, so the deduction under s.125.1 was properly disallowed.
Court Disposition
Appeal dismissed with costs.
Orders
- Appeal dismissed with costs.
- Reassessments for the 1998, 1999 and 2000 taxation years upheld.
Full Case Text
Judgment text and source record
1 paragraphs
C.R.I. Environnement Inc. v. Canada Court (s) Database Federal Court of Appeal Decisions Date 2008-03-13 Neutral citation 2008 FCA 103 File numbers A-259-07 Decision Content Date: 20080313 Docket: A-259-07 Citation: 2008 FCA 103 CORAM: DESJARDINS J.A. NOËL J.A. TRUDEL J.A. BETWEEN: C.R.I. ENVIRONNEMENT INC. Appellant and HER MAJESTY THE QUEEN Respondent Hearing held at Montréal, Quebec, on March 13, 2008. Judgment delivered at Montréal, Quebec, on March 13, 2008. REASONS FOR JUDGMENT OF THE COURT BY: NOËL J.A. Date: 20080313 Docket: A-259-07 Citation: 2008 FCA 103 CORAM: DESJARDINS J.A. NOËL J.A. TRUDEL J.A. BETWEEN: C.R.I. ENVIRONNEMENT INC. Appellant and HER MAJESTY THE QUEEN Respondent REASONS FOR JUDGMENT OF THE COURT (Delivered from the bench at Montréal, Quebec, on March 13, 2008.) NOËL J.A.: [1] This is an appeal from a decision rendered by Mr. Justice Bédard of the Tax Court of Canada (2007 TCC 206) upholding the reassessments made against the appellant for its 1998, 1999 and 2000 taxation years. Through those assessments, the Minister of National Revenue disallowed the Canadian manufacturing and processing profits deduction provided for in section 125.1 of the Income Tax Act (Act) that was claimed by the appellant for each of the years in question. [2] Is the industrial waste processed by the appellant “for sale” within the meaning of subsection 125.1(3) of the Act? This is the only issue that was to be addressed by the judge of the Tax Court of Canada. In our opinion, he rightly answered this question in the negative because the third-person recipients to whom the waste was sent did not purchase it for a price in money that they obligated themselves to pay, as required in article 1708 of the Civil Code of Québec. Instead, the Appellant paid an amount to these third-person recipients to accept the waste. The argument that this was a sale for a “negative price” lacks any legal basis, since without the monetary consideration, there is no sale. [3] Even if a law other than Quebec private law applied to some of the transactions carried out by the appellant, the appellant does not explain how this other law could lead to a finding other than that arrived at by the judge of the Tax Court of Canada. To our knowledge, the concept of “negative price” sale has no more basis in common law than in civil law. [4] The appeal will be dismissed with costs. “Marc Noël” Judge Certified true translation Susan Deichert, LLB FEDERAL COURT OF APPEAL SOLICITORS OF RECORD DOCKET: A-259-07 (APPEAL FROM A JUDGMENT OF THE HONOURABLE MR. JUSTICE BÉDARD DATED MAY 1, 2007, DOCKET NO. 2004-4248(IT)G) STYLE OF CAUSE: C.R.I. Environnement Inc. v. Her Majesty the Queen PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: March 13, 2008 REASONS FOR JUDGMENT BY: Desjardins J.A. Noël J.A. Trudel J.A. DELIVERED FROM THE BENCH BY: Noël J.A. APPEARANCES: Bertrand Leduc FOR THE APPELLANT Johanne Boudreau FOR THE RESPONDENT SOLICITORS OF RECORD: Miller Thomson Pouliot Montréal, Quebec FOR THE APPELLANT John H. Sims, Q.C. Deputy Attorney General of Canada Montréal, Quebec FOR THE RESPONDENT