Eric Higgins Car Sales Ltd. v. Nova Scotia (Finance)

Eric Higgins Car Sales Ltd. v. Nova Scotia (Finance) Court Court of Appeal Date 1996-05-13 Citation 1996 NSCA 93 Docket CA 123979 Judge/Registrar/Adjudicator Chipman, David (Honourable Justice); Pugsley, Ronald N. (Honourable Justice); Jones, Malachi C. (Honourable Justice) (CA) Document Type Decision Decision Content C.A. No. 123979 NOVA SCOTIA COURT OF APPEAL Chipman, Jones and Pugsley, JJ.A. Cite as: Eric Higgins Car Sales Ltd. v. Nova Scotia (Finance), 1996 NSCA 93 BETWEEN: ) ) ERIC HIGGINS CAR SALES LIMITED ) Joel E. Fichaud, Q.C. and STACEY AUTO RANCH LIMITED ) for the Appellants ) Appellants ) ) - and - ) ) MINISTER OF FINANCE ) Leanne M. Rodwell-Hayes ) for the Respondent Respondent ) ) ) ) ) Appeal Heard: ) April 11, 1996 ) ) ) ) Judgment Delivered: ) May 13, 1996 THE COURT: The appeal is dismissed with costs in the amount of $1,000.00, plus disbursements as per reasons for judgment of Chipman, J.A.; Jones and Pugsley, JJ.A., concurring. CHIPMAN, J.A.: This is an appeal from a decision of the Nova Scotia Utility and Review Board affirming assessments by the Provincial Tax Commission on the appellants for Health Services Tax on luxury recreational vehicles that each had purchased for a resale, but had subsequently put to a taxable use. The assessments were imposed pursuant to the Health Services Tax Act, R.S., c. 198 (the Act). The appellant Higgins Car Sales is a Honda dealer in Bridgewater, Nova Scotia. The appellant Stacey Auto Ranch is a related company. Both companies are owned by Eric Higgins and both are in the business of purchasing recreational vehicles for resale. Higgins acted for both companies in all matters relevant to this appeal. The companies began selling recreational vehicles in the late 1970's. They progressed from sales of tent trailers and camper vans to more expensive recreational vehicles. By 1987, the appellants were selling so-called Class A recreational vehicles and from that time forward had bought and sold a number of them. Prior to 1991, the appellants had not dealt with what are known as luxury Class A vehicles. In 1991, Higgins decided to enter the luxury market. No other dealer in Atlantic Canada was involved in this market. The appellant Stacey Auto Ranch purchased a 1991 Beaver Contessa Motor Home on June 8, 1991 in Patterson, New York for the sum of $234,972.61. This luxury Class A recreational vehicle was purchased for resale only. It was brought to Bridgewater for this purpose. There were 2,971 miles on the odometer at the time of purchase. Higgins encountered difficulty selling the Contessa in the Atlantic Canada market because of its high price. He advertised it in Auto Trader periodicals and newspapers. No offer was forthcoming. The vehicle comprised approximately one quarter of the inventory value of the two appellant companies, a growing cause for concern with their banker. It was displayed at the dealership in Bridgewater from April to October and stored in a warehouse during the winter months. Higgins concluded that he had misjudged the market as there was none for this type of vehicle in the Province. Finally, in September 1993, he was able to sell the Contessa to a purchaser who had seen an advertisement in an Auto Trader magazine. The price was $235,000, plus G.S.T. At the time of the sale the odometer read 18,903 miles. During the time this vehicle was on hand, 15,932 miles were recorded on the odometer. In his testimony before the Board, Mr. Higgins accounted for the miles driven as follows: June, 1991, New York to Bridgewater on the purchase of the vehicle 1,100 October, 1991, Bridgewater to Nashville, Tennessee - Mr. Higgins attended a Honda Dealers' Convention 4,200 February, 1992, Bridgewater to Lakeland, Florida - Mr. Higgins vacationed in Florida 4,900 October, 1992, Bridgewater to New Orleans - Mr. Higgins attended a Honda Dealers' Convention in Louisiana 5,100 Summer, 1992, Bridgewater to P.E.I. - Mr. Higgins attended a Honda Dealers' meeting in P.E.I. 500 Higgins estimated that he used the Contessa for personal use for approximately seven weeks during the 27 months that the vehicle was in inventory. In December 1993, after the sale of the Contessa, the appellant Higgins Car Sales purchased the other vehicle which is the subject of this appeal, a 1994 Kountry Aire Motor Home. It was purchased in Buctouche, New Brunswick for $115,365.45 plus G.S.T. It was a Class A recreational vehicle but not a luxury vehicle such as the Contessa. It was a type of vehicle which the appellants had bought and sold on other occasions. The Kountry Aire was purchased for resale. At the time of its purchase, the odometer showed 1,150 kilometres. It was sold to a party in Ontario on June 25, 1995 for $154,146.34 including G.S.T. At the time of sale, there were 20,400 kilometres on the odometer. An audit by the Provincial Tax Commission in March 1995 found that there were 8,230 kilometres on the odometer at that time. During the time this vehicle was in inventory, it was on display at the dealership property from April to October and stored in a warehouse in the winter. In his testimony before the Board Mr. Higgins accounted for the 19,250 kilometres the vehicle was driven from the time of purchase to the eventual sale as follows: December, 1993, Buctouche, New Brunswick to Bridgewater on purchase of vehicle. Bridgewater to Buctouche to have the roof repaired. 1,400 October, 1994, Bridgewater to Toronto - Mr. Higgins attended a Honda Dealers' Convention. 4,500 April, 1995, Bridgewater to Ontario for possible sale to Graham - tryout trip by Graham - Ontario to Bridgewater and final sale. 13,000 Unaccounted for are a little over 1,000 kilometres put on the vehicle from the time of purchase until the audit in March of 1985. With respect to the April trip when 13,000 miles were put on the vehicle, Higgins testified that the purchaser in Ontario wanted to try out the home and Higgins permitted him to take a trip with it after being satisfied that he was a reliable party. Higgins estimated that he personally used the 1994 Kountry Aire for three weeks during the 18 months it was on hand. The Board, in its decision, found that Higgins could be considered to be in the business of buying and selling recreational vehicles, including motor homes. Because he controlled both appellant companies and each had a dealer's license, he could purchase and sell in whatever company he wished. The Provincial Tax Commission, in making its assessment, considered that both appellant companies allowed Higgins to be the user or consumer of the motor homes. When these homes were brought into the Province they were, being for resale, exempt from the tax imposed pursuant to the Act. However, pursuant to s. 5(3) of the Act, the Commission concluded that they were subsequently put to a taxable use that was different from the original use for which they were purchased. The Commission issued an assessment on the Contessa in the total amount of $25,142.07, plus interest and penalties, and on the Kountry Aire in the amount of $13,578.87, plus interest and penalties. Appeals from these two assessments to the Board were dismissed by written decisions dated January 3, 1996. An appeal lies from these decisions to this Court on any question of law or jurisdiction. No point of jurisdiction being raised, there are two issues of law: (1) Whether the provisions of the Act operated to reach the change of use of the vehicles and if so, were they a proper exercise of the Province's constitutional powers? (2) If the changed use was a taxable use, did the Board err in calculating the amount of the tax? APPLICATION OF THE ACT TO THE SUBJECT USE AND ITS CONSTITUTIONAL VALIDITY: The Act imposes a tax on tangible personal property purchased in the Province or brought into the Province for the purchaser's own consumption or use or for the consumption or use by others at his expense or by the purchaser on behalf of a principal for the same purposes. The charging provisions of the Act show four different ways in which the acquisition or use of tangible personal property attracts tax. First, the Act taxes purchases by way of s. 5(1) in conjunction with s. 2(o): 5 (1) Every purchaser shall pay to Her Majesty in right of the Province a tax . . . (c) at the rate of eleven per cent of the purchase price of all other tangible personal property purchased other than that referred to in clauses (a) and (b) 2 (o) "purchaser" means any person who acquires tangible personal property at a sale in the Province for his own consumption or use or for the consumption or use by other persons at his expense, or on behalf of or as agent for a principal who desires to acquire such property for consumption, or use by such principal or other persons at his expense, and includes a user and a promotional distributor to the extent that the fair value of any tangible personal property provided by way of promotional distribution exceeds any payments specifically made therefor by the person to whom such property is so provided; Second, the Act taxes users and consumers by the combined operation of s. 5(1) (set out above) and s. 5(2) and s. 2(x): 5 (2) For the purposes of this Act, every user and consumer shall be deemed to have purchased the tangible personal property from a vendor at a sale in the Province, and such property shall be deemed to have passed at the sale. 2 (x) "user" or "consumer" means any person who within the Province utilizes any tangible personal property for his own consumption or use, or for the consumption or use of other persons at his expense, or on behalf of, or as the agent for, a principal who desires to acquire such property for the consumption or use by such principal or other persons at his expense and includes any person who within the Province consumes tangible personal property acquired by him for resale, or who within the Province consumes tangible personal property manufactured, processed or purchased by him within or without the Province; It will be observed that s. 5(2) is a deeming provision. The user or consumer in the Province is deemed to have purchased the tangible personal property from a vendor at a sale in the Province. Third, a change of use from a non-taxable use to a taxable use is taxed by s. 5(3) of the Act: 5 (3) Where tangible personal property has been purchased, whether before, on or after the twenty-ninth day of May, 1987, and at the time of the purchase is exempt from the tax imposed pursuant to this Act or is taxed at a lower rate of tax than that imposed pursuant to clause (c) of subsection (1) and, within three years of the purchase, the property is put to a taxable use that is different from the use for which it was originally purchased or the property becomes situate at a place where the exemption would not have applied, the purchaser shall pay (a) the tax at the rate then in force in accordance with the use to which the property is put on the fair value of the property at the time of the change of use, less (b) the tax, if any, paid by that purchaser pursuant to this Act in respect of that property. Fourth, the act of bringing purchased tangible property into the Province or receiving it here attracts tax by s. 7(1): 7 (1) Every person who brings into the Province or who receives delivery in the Province of tangible personal property acquired by him for value for his own consumption or use in the Province, or for the consumption or use in the Province of other persons at his expense, or on behalf of, or as agent for, a principal, who desires to acquire such property for the consumption or use in the Province by such principal or other persons at his expense, shall immediately report the matter in writing to the Commissioner and supply to him the invoice and all other pertinent information as required by him in respect of the consumption or use of such property, and at the same time shall pay to Her Majesty in right of the Province the same tax in respect of the consumption or use of such property as would have been payable if the property had been purchased at a retail sale in the Province. The scheme of this Act, as in the case of similar provincial sales tax acts, is dictated by s. 92 of the Constitution Act (1867) which gives the provinces power to make laws respecting: 2. Direct Taxation within the Province in order to the raising of a Revenue for Provincial Purposes. The courts have held that a province has no power to impose an indirect tax. The courts have accepted the definition by John Stuart Mill of an indirect tax as a tax demanded by one person in the expectation and intention that the person taxed shall indemnify himself at the expense of another. A direct tax is described by Viscount Simon in Atlantic Smoke Shops, Limited v. Conlon, et al., [1943] A.C. 550 at pp. 563-4: . . . It is a tax which is to be paid by the last purchaser of the article, and, since there is no question of further re-sale, the tax cannot be passed on to any other person by subsequent dealing. The money for the tax is found by the individual who finally bears the burden of it. It is unnecessary to consider the refinement which might arise if the taxpayer who has purchased the tobacco for his own consumption subsequently changes his mind and in fact re-sells it. If so, he would, for one thing, require a retail vendor's licence. But the instance is exceptional and far-fetched, while for the purpose of classifying the tax, it is the general tendency of the impost which has to be considered . . . Since the provincial taxing power is also limited to taxation "within the Province", a number of cases have dealt with what is taxation within the Province. It is on the basis of these that the appellants argue that the attempted reach by the Tax Commission here amounted to a taxation not within the Province. The appellants submit that since the greater part of the mileage on the vehicles was driven when they were outside Nova Scotia, the assessment cannot stand. It is simply an attempt to impose taxes outside the province. The position of the Tax Commission was that liability for tax was triggered as soon as these vehicles, originally bought for resale rather than consumption, were put to use by or on behalf of each appellant. The relevant section is 5(3) of the Act set out above. The appellants concede that Mr. Higgins (as company owner) did put these vehicles to use other than for the purposes of resale. Their position is, however, that a "taxable use" as that term is found in s. 5(3) means, and must mean, a taxable use within Nova Scotia. In support of their argument, they rely on the definition of "user or consumer" in s. 2(x) of the Act set out above. They say that any taxable use referred to in s. 5(3) must have occurred within Nova Scotia. The initial purchase of the vehicles was tax exempt because they were purchased for resale. The only use for purposes other than resale, they say, is related to trips outside of Nova Scotia. They say that such usage is not taxable because of the definition in s. 2(x) of the Act and because of the restraint imposed by s. 92(2) of the Constitution Act that provincial taxation must be "within the Province". The Board's response to this was: The Board does not concur with the Appellants' argument that taxable use of the motor homes stops at the Nova Scotia/New Brunswick Border. Mr. Higgins is making use of tangible personal property that is presently established within the Province. The fact that he uses the property beyond the Nova Scotia/New Brunswick Border does not render the taxing of this use unconstitutional. In this respect, the appellants submit that the Board committed an error in law. It is necessary to refer to some of the cases dealing with what constitutes taxation "within the Province". Hogg in Constitutional Law of Canada (3d) (1992, Carswell) said at p. 30-18: Taxes are, of course, always paid by persons, and a narrow view of the territorial limitation on provincial taxing power would confine the power to taxes levied on persons in the province. But the courts have taken a more expansive view, holding that taxes may be levied not only upon persons, but also upon property or transactions or benefits. In determining the constitutionality of a provincial tax, the first step is to ask whether the tax is imposed upon persons or property or transactions or benefits. Having thereby ascertained the subject of the tax, the second step is to ask whether the subject of the tax is within the province. In The Allocation of Taxing Power Under the Canadian Constitution, Second Edition, (1981) G. V. LaForest, as he then was, said at pp. 111-112 respecting the territoriality of provincial taxation: Though a province may impose taxes on persons, property, transactions, and benefits in the province, they must of course be properly framed to reach out to the permissible limits. Thus, a tax on a person, income, property, or transaction outside the province is invalid; but a tax on a person in the province in respect of his income or other benefit received outside the province, and a tax on income or property in the province owned by a nonresident are valid . . . In Bank of Toronto v. Lambe (1887), 12 App. Cas. 575 the Privy Council held that Quebec Act 45 Vict. c. 22 imposing direct taxes on commercial corporations carrying on business in the Province was intra vires of the Provincial Legislature. The tax was imposed upon banks and insurance companies, which carried on business in the province, varying in amount with the paid up capital and with the number of their offices whether or not their principal place of business was within the province. This was held to be direct taxation within the province within the meaning of the Constitution Act. The taxes met the test because there was property of the taxpayer situated within the province. To the argument that the taxpayer was a corporation domiciled outside of Quebec, the Privy Council said at p. 584: . . . The answer to this argument is that class 2 of sect. 92 does not require that the persons to be taxed by Quebec are to be domiciled or even resident in Quebec. Any person found within the province may legally be taxed there if taxed directly. This bank is found to be carrying on business there, and on that ground alone it is taxed. There is no attempt to tax the capital of the bank, any more than its profits. The bank itself is directly ordered to pay a sum of money; but the legislature has not chosen to tax every bank, small or large, alike, nor to leave the amount of tax to be ascertained by variable accounts or any uncertain standard. It has adopted its own measure, either of that which it is just the banks should pay, or of that which they have means to pay, and these things it ascertains by reference to facts which can be verified without doubt or delay. The banks are to pay so much, not according to their capital, but according to their paid-up capital, and so much on their places of business . . . In A.G.B.C. v. Canada Trust Company and Ellett, [1980] 2 S.C.R. 466, the Supreme Court of Canada dealt with the validity of British Columbia legislation which taxed residuary beneficiaries of the estate of a testator who died domiciled and ordinarily resident in Alberta. The estate consisted of personal property entirely located in Alberta and the question was whether British Columbia had the power to tax persons resident in British Columbia with respect to property situate elsewhere. The Supreme Court answered this question in the affirmative. Dickson, J., on behalf of the court, after referring to the passage quoted above from Bank of Toronto v. Lambe, supra, said at p. 473: While this statement may require some qualification in respect of artificial persons in the light of later cases, it stands unchallenged in respect of natural persons. And at p. 474: In the face of clear authority, it would seem unarguable that a province could levy a succession duty on a beneficiary found within the province, and calculate the tax with reference to the value of property situate elsewhere and passing on the death of a person domiciled elsewhere. Thus, the presence of the beneficiary within the taxing province was a sufficient connection for the imposition of tax under the power to impose direct taxation "within the Province". Dickson, J. asserted that if the Canadian Constitution is to be regarded as a "living tree" and legislative competence as "essentially dynamic" then the determination of categories existing in 1867 becomes of little, other than historic, concern. Dickson, J. stated that the correct approach to the identification of the subject matter of a taxing statute was to examine the Act as a whole and not merely the charging sections. Returning to this case, initially the vehicles being bought for resale would not be subject to the operation of s. 7(1). They would, however, be taxed on the basis of their fair market value if at any time within three years of their purchase, they were "put to a taxable use that is different from the use for which it was originally purchased" (s. 5(3)). The Constitution Act refers to direct taxation within a province. We have already seen that the presence of the taxpayer in a province supports constitutional approval of taxation of that taxpayer, even with respect to property outside the province. We must now address cases dealing with the significance of the location of the property in determining whether taxation respecting it is constitutionally permissible and whether the taxing statute, on its terms, even reaches the property. It is, of course, the contention of the appellants that s. 2(x) of the Act operates to prevent the Act's application to any use outside the Province. I will address that later. In Manitoba v. Air Canada (1980), 32 N.R. 244, the Supreme Court of Canada dealt with a challenge to the imposition of sales tax by the Province of Manitoba under the Retail Sales Tax Act against Air Canada on the value of aircraft and related property respecting overflights of Manitoba and temporary stopovers in Manitoba. The Supreme Court of Canada held that the Retail Sales Tax Act was ultra vires insofar as it purported to tax Air Canada on overflights and on flights temporarily landing in Manitoba from points outside. Laskin, C.J.C. speaking for the court said at p. 255: In my view of Manitoba's taxing statute, although the tax that it imposes is in personam, it is exacted upon the bringing of tangible personal property into the province. If this is not shown, then the statute itself precludes the exaction of the tax even if Air Canada has a presence in Manitoba . . . Laskin, C.J.C. then stated that the question was whether the overflights and temporary stopovers were sufficient to attract tax under the legislation. At p. 256, he said: Merely going through the airspace over Manitoba does not give the aircraft a situs there to support a tax which constitutionally must be "within the province". In the case of aircraft operations, there must be a substantial, at least more than a nominal, presence in the province to provide a basis for imposing a tax in respect of the entry of aircraft into the province. (emphasis added) Laskin, C.J.C. emphasized the fact that the flights that landed involved but a temporary presence in the province and that momentary transitory presence of agencies of transportation in the province cannot bring them under the Act any more than if they did not enter the province or were merely overflying the province. This was so even though the operators of such service had places of business in the province. Apart from the constitutional considerations, they could not be said to be a "purchaser" as defined in the Retail Sales Tax Act. He concluded at p. 259: For the reasons given above, I hold that the Manitoba Retail Sales Tax Act is ultra vires insofar as it purports to tax Air Canada on overflights of its aircraft through the airspace over Manitoba and on flights which land temporarily in Manitoba from outside points before proceeding onward. The Act does not impose a tax that can be said to be "within the Province" under s. 92(2) of the British North America Act. In addition, I do not think that in its own terms it is applicable to Air Canada in respect of such flights. In Canadian Pacific Airlines Ltd. and Pacific Western Airlines Ltd. v. British Columbia (1989), 96 N.R. 1, the Supreme Court of Canada dealt with an attempt by the Province of British Columbia to impose tax on airlines with respect to aircraft and parts purchased outside the Province and used in flights landing there, and to the in‑flight sale of alcoholic beverages to passengers in the airspace over the Province. The Province had contended that s. 2(4) of the Social Services Tax Act, corresponding to s. 7 of the Act quoted above, operated to tax airlines as persons bringing or sending tangible property into the province or receiving delivery in the province of tangible property for their own consumption or use. The court, following Manitoba v. Air Canada, supra, held that the aircraft and parts and alcoholic beverages purchased were not taxable under the Social Services Tax Act. With respect to s. 2(4), respecting bringing goods into the province, LaForest, J. said at pp. 19-20: This context, it seems to me, strongly supports the view that the general purpose of s. 2(4) is to serve as a supplementary provision "to guard against the methods of avoidance of" the purchase tax; see Viscount Simon in Conlon, at p. 568. If that view is correct, what the provision was intended to do was to prevent the evasion of the tax and consequent loss of revenue by the simple expedient of a consumer purchasing goods outside the province . . . The out-of-province purchaser pays the tax when he "brings or sends the goods" in the province or "receives delivery" for his use or consumption . . . What I think is contemplated is the bringing of a purchased item into the province on a permanent basis, at which time it is taxable once and for all at a stated percentage of the purchase price as the provision clearly provides. If such a tax was imposed on interprovincial airlines by every province, it would place a much heavier burden on these entities than on local airlines and other businesses . . . LaForest, J. therefore concluded that on the proper construction of the Act, the tax did not apply to the airlines' aircraft and parts. Thus, the constitutional issue did not need to be addressed. As to the alcoholic beverages, the reasoning in Manitoba v. Air Canada, supra, governed. There was simply no presence in the province sufficient to provide a basis for the imposition of the tax. In Nova Scotia (Minister of Finance) v. Risley (1991), 108 N.S.R. (2d) 335, this Court affirmed a decision of the Nova Scotia Tax Review Board ruling that a vessel owned by Risley did not have sufficient presence in Nova Scotia to attract tax under s. 7(1) of the Health Services Tax Act. In that case, the vessel was purchased by Risley in Finland in 1988. It was used outside the Province until July 1989 when it was in Halifax at the end of the Marblehead race. Once again it came to the Province in August of 1989 to participate in Chester races. On these two occasions, the vessel was allowed into Canada under a Customs Permit. No Customs or Excise was paid. The vessel then returned to Maine after the races and was used outside of the Province thereafter. On July 23, 1990, an assessment was made against Risley because the vessel was registered in Nova Scotia and had been used in the Province. The Tax Review Board concluded that the vessel did not have sufficient presence in the Province to attract tax under s. 7(1) of the Act. The Minister appealed and the issue before this Court was whether the Board erred in law by holding that there was not a sufficient presence of the vessel to attract the tax. In an oral judgment, this Court referred to s. 7(1) of the Act and to Manitoba v. Air Canada, supra, and C.P. Air and P.W.A. v. British Columbia, supra, and the authorities referred to therein. Jones, J.A. then said at p. 340: We see no substantial difference between the provisions of the B. C. statute and the Nova Scotia Health Services Tax Act. In our view the reasoning in Canadian Pacific Airlines Ltd. applies to the present case . . . The appeal is dismissed without costs. In view of the foregoing, we are left here to consider whether s. 5(3) of the Act read in the context of the entire Act including s. 2(x) thereof operated to tax the use made of these recreational vehicles and if so, whether this was a proper exercise of the Province's constitutional powers. In my opinion, the putting of property to a taxable use different from the use for which it was originally purchased triggers, by virtue of s. 5(3), liability for tax. It is a situation like a purchase at a sale in the Province which is governed by the combined effect of s. 5(1) and s. 2(o) or the bringing into the Province of property that is governed by s. 7(1). It is an action which takes place at once and has an immediate effect, under the Act, of triggering tax. Is there sufficient presence in the Province to afford constitutional support of the taxation of these recreational vehicles? In my opinion, there is. The circumstances here are distinguishable from the cases of Manitoba v. Air Canada, supra; C. P. Air and P.W.A. v. British Columbia, supra; and Nova Scotia (Minister of Finance) v. Risley, supra. The property was in the Province at the time that it was first put to a taxable use. Prior to that time, it had been brought into the Province and kept here for a significant period of time while being offered for sale. In the case of the Contessa, it had been here for over three months before it was first driven out of the Province in October. While a significant number of miles may have been driven after it left the Nova Scotia border, it returned to the Province at the end of the trip and remained until February, when once again it was driven out of the Province. Again, however, it returned to the Province and remained until the following October, when once again it was driven outside. Once again, it returned to the Province until its next trip following which it returned to the Province and remained until it was sold in September of 1993. In these circumstances there was a substantial presence of the vehicle in the Province. It was in the Province when it was put to the use described in s. 5(3). Notwithstanding that the use carried on outside the Province on trips, each of these trips terminated in the Province and the vehicle remained here as its permanent location. Likewise, the Kountry Aire was in the Province about 10 months when the change of use took place and returned to the Province after each trip and was in the Province until its final sale. There was a substantial, not merely transitory presence in the Province of these vehicles. If the fact that they were taken outside the Province for long trips were sufficient to relieve the appellants for taxation with respect to the vehicles, every taxpayer who purchased or otherwise attracted tax on tangible personal property in the Province and then took it outside would be contending that the taxation was not taxation within the Province. By its very nature tangible personal property is movable, and movement of such property in and out of the Province does not affect the liability for taxation with respect to it as long as the substantial presence envisaged in the cases is present. The Supreme Court of Canada rendered its decision in Air Canada and Pacific Western Airlines Ltd. v. British Columbia (1989), 95 N.R. 1 contemporaneously with C. P. Air and P.W.A. v. B.C., supra. In the second case, the question was whether the British Columbia Gasoline Tax Act was ultra vires s. 92(2) of the Constitution. The court ruled that the consumption of some or even a considerable portion of gasoline outside the province, where the tax is a tax on the purchase of gasoline within the province, was irrelevant. LaForest, J. said at p. 23: I have no doubt either that the tax is imposed in the province. It is imposed on a purchaser of gasoline and a purchaser is defined as "any person who, within the Province, purchases or receives delivery of gasoline for his own use or consumption . . ." Whether the tax is viewed as one on a transaction (the purchase) or on a person (the purchaser) does not matter for this purpose either. The purchase must obviously take place in the province and the purchaser has a sufficient presence in the province to be taxed there. The airlines argued that the tax was a tax on the consumption of gasoline. Since most of that consumption, so far as the airlines were concerned, was in the airspace, which falls outside the province (see Manitoba, Province of v. Air Canada and Attorney General of Canada et al, [1980] 2 S.C.R. 303; 32 N.R. 244), the tax was imposed outside the province. I cannot agree with this contention. The Act clearly does not impose a consumption tax. The references in the definition to consumption or use merely define the taxpayer i.e. a purchaser who buys gasoline for his own use. Since the tax is imposed in the province in respect of the purchase of gasoline, it does not matter where the gasoline is consumed, whether it is in the airspace or in another province . . . There may, I suppose, be cases where a tax, though in form a purchase tax within the province, might, in essence, be a tax on consumers outside the province. But the present statute is a general one directed at all purchasers of gasoline within the province. The fact that some of these purchasers may consume some or a considerable portion of the gasoline outside the province does not change the basic character of the Act, which is one that imposes a tax on the purchase of gasoline within the province. That it may have an effect on persons outside the province is of no consequence . . . Does the Act in its own terms reach this property so as to render the appellants liable with respect to their use of it? The same substantial presence of this property in the Province which gave the Province constitutional power to tax the appellants respecting it, is sufficient to answer this question in the affirmative. Here the tax was on the change of use. Like the purchase in Air Canada and P.W.A. v. B.C., supra, it took place within the Province. It does not matter where the tangible property may later be used. The appellants, however, point to s. 2(x) of the Act as indicating an intention on the part of the Legislature not to tax property which is used outside the Province. I cannot accept this contention. Section 2(x) of the Act does not specifically apply to taxation imposed pursuant to s. 5(3) as is the case here. It is, as I have shown, part of the regime set up by the Act which taxes persons respecting tangible personal property in four different ways. A user or consumer is a person who utilizes within the Province tangible personal property in the way set out in the definition section, (2(x)). Such a person is deemed to have purchased the tangible personal property from a vendor at a sale within the Province. It is not necessary to consider this part of the Act further. This use within the Province specifically spelled out there does not mean that property having a presence in the Province is any the less so because it is at some point removed from the Province, either temporarily or permanently. I am satisfied on a review of the Act as a whole and of the authorities that s. 5(3) operates to tax the appellants with respect to the use they made of these recreational vehicles and that this was a proper exercise of the Province's constitutional powers under the Constitution Act. WHETHER THE BOARD ERRED IN CALCULATING THE AMOUNT OF TAX: In the alternative, the appellants argue that if the usage is taxable under s. 5(3) of the Act, the Board erred by calculating the tax of 100% of the purchase price of the vehicles. The appellants maintain that the usage of the vehicles in Nova Scotia "was almost entirely for the purposes of resale" and that such usage resulted in the eventual retail sale of these vehicles. They refer to "the minimal usage in Nova Scotia for purposes other than resale" and say that this should not permit the Province to deem the appellants entire usage as 100% taxable. I have already stated my view that at the moment the use of the vehicles was changed from a non-taxable use to a taxable one, liability for tax was triggered by reason of s. 5(3) of the Act. The appellants refer to Interpretation Bulletin B75-65 published by the Provincial Tax Commission in 1975. It is entitled: Subject: Automobile Dealers - Tax Application to Inventory Vehicles Used by Other Than Bona Fide Salesmen. The Bulletin states: As the Health Services Tax is applicable to business use of equipment, it follows that all vehicles and equipment purchased for use of an automobile dealership and not for resale are subject to 7% tax on the purchase price. . . . Where vehicles are listed in the company records as inventory "for resale", either new or used, and are driven by bona fide full time car salesmen as demonstrators for sale, they will not attract tax on this use, but will, of course, be subject to tax when sold. Where vehicles are listed in the company records as inventory "for resale", and are used for company business use, or by persons other than bona fide full time car salesmen, they are subject to the 7% Health Services Tax on the use. The formula to be applied will be based on an average value of $3,600 with a three-year use factor. This would then represent a fair use value of $100 per month, thus attracting a tax thereon of 7% of $100 per month, or $7 per month per vehicle so taxed. (emphasis added) We are told that this Bulletin has not been repealed. The appellants submit that with the exception of the tax rate which is changed from 1975 the underlined words should apply. They constitute, it is submitted, a recognition by the Commission that apportionment is permitted to calculate change of use tax. The Interpretation Bulletin is, in my opinion, merely an accommodation by the Tax Commission to relieve what it considers a possible hardship resulting from the application of the Act in certain cases. It does not directly apply to the circumstances here. The recreational vehicles were not demonstrators. In its decision, the Board said: This Bulletin is an accommodation that exists between the Provincial Tax Commission and the Automobile Dealers Association of Nova Scotia for taxing the use of demonstration automobiles that are representative of the dealership's advertised product. For example, a Honda in the case of a Honda dealership. The July 31, 1995 decision from the Provincial Tax Commission refers to this policy which was recommended by the appellant as an alternative solution to taxing the vehicles. The Commissioner's letter states: In reference to your alternative submission that tax be applied on a prorated formula, I must advise that the policy of this Commission is to apply the formula to demonstrator inventory vehicles for resale in the ordinary course of business. In these cases, such vehicles are continually for sale. Also note that the formula would have only applied to vehicles that are representative of the dealership. Moreover, there was no evidence that the appellants relied on the Bulletin before making the use of the recreational vehicles that is in issue here. Finally, the Bulletin does not have the force of law. In C. P. Air and P.W.A. v. B.C., supra, LaForest, J. said at p. 21: I am aware that the taxing authorities sought to alleviate any unfair burden the tax might impose on the airlines by calculating it on a basis proportional to the use of their aircraft in the province. But there is no statutory basis for this practice and, as the Court of Appeal noted, they did not have the power to do this. It may well be that the legislature could, by properly framed legislation, impose a proportional tax of the kind the taxing authorities sought to levy here if it did not impose an undue burden on interprovincial undertakings. But I do not think I should speculate further about the matter. As Laskin, C.J., noted in Manitoba v. Air Canada, supra, at p. 320, it is "preferable to avoid dealing with it, in conformity with the general rule in constitutional cases not to engage issues which do not squarely arise for decision". This approach seems to me to be particularly apt in an area as intricate and so fraught with consequences as the constitutional power of taxation. There is no statutory basis for the practice spelled out in the Bulletin on which the appellants rely. No attempt has been made in the Act to impose a proportional tax. I would reject this ground of appeal. DISPOSITION: I would dismiss the appeal with costs which I would fix at $1,000, plus disbursements. Chipman, J.A. Concurred in: Jones, J.A. Pugsley, J.A.