Municipal Contracting Ltd. v. Nova Scotia (Attorney General)

Municipal Contracting Ltd. v. Nova Scotia (Attorney General) Court Court of Appeal Date 2003-01-22 Citation 2003 NSCA 10 Docket CA 179154 Judge/Registrar/Adjudicator Bateman, Nancy J. (Honourable Justice) (CA); Chipman, David (Honourable Justice); Glube, Constance R. (Honourable Chief Justice) (CA) Document Type Decision Relations Library Sheet - Municipal Contracting Ltd. v. Nova Scotia (Attorney General) - 2003 NSCA 10 - 2003-01-22 - Library Sheet Decision Content NOVA SCOTIA COURT OF APPEAL Citation: Municipal Contracting Ltd. v. Nova Scotia (Attorney General), 2003 NSCA 10 Date: 20030122 Docket: CA 179154 Registry: Halifax Between: Municipal Contracting Limited, as agent for and on behalf of Municipal Enterprises Limited Appellant v. The Attorney General of Nova Scotia, representing Her Majesty the Queen in Right of the Province of Nova Scotia Respondent Judges: Glube, C.J.N.S.; Chipman and Bateman, JJ.A. Appeal Heard: October 10, 2002, in Halifax, Nova Scotia Held: Appeal dismissed with costs to the respondent per reasons for judgment of Glube, C.J.N.S. and Chipman, J.A.; with Bateman, J.A. concurring by separate reasons. Counsel: Bruce S. Russell, for the Appellant Duncan R. Beveridge, Q.C., for the Respondent Reasons for judgment: (Glube, C.J.N.S.) INTRODUCTION: [1] Municipal Contracting Limited (Municipal) brought an action for and on behalf of Municipal Enterprises Limited (MEL) against the Attorney General of Nova Scotia, representing Her Majesty the Queen in Right of the Province of Nova Scotia pursuant to the Gasoline and Diesel Oil Tax Act, R.S.N.S. 1989, c. 183 (GDOTA or the Act), and the Regulations, O.I.C. 81-973 N.S. Reg. 102/81 (as amended) passed pursuant to the Act. The action claims the refund of certain taxes paid or alternatively claims the Province has been unjustly enriched by refusing to refund the taxes paid to it by Municipal. [2] The sole issue on this appeal is one of statutory interpretation. FACTS: [3] Municipal, a construction company based in Bedford, Nova Scotia, is wholly owned by MEL. MEL owns a quarry known as Rocky Lake Quarry and carries on a rock quarrying and crushing business, producing various grades of crushed stone for sale and for its own use. Municipal operated the quarry. [4] From January 1, 1982 to and including January 31, 1996, Municipal purchased fuel to operate MEL’s heavy machinery in the quarrying and crushing business. Although Municipal considered itself exempt, it paid the taxes on the diesel oil purchases pursuant to the GDOTA and the Regulations. [5] On May 8, 1990, Municipal, on behalf of its group of companies, filed an application with the Nova Scotia Department of Finance pursuant to s. 34 of the Act and paragraph 12(1)(k)(iii) of the Regulations requesting a refund of taxes paid on diesel fuel consumed in the operation of its stone and gravel quarry between February 1, 1989 and January 31, 1990. The basis of its claim was that diesel fuel purchased for machinery and apparatus used in the manufacture or production of goods for sale (stone and gravel) was exempt, and, therefore, Municipal should be refunded the taxes it had paid. In September of 1990, the Department of Finance advised Municipal that its request for a refund would not be processed as the quarrying and crushing operation was taxable pursuant to the Regulations. A notice of objection was filed with the Provincial Tax Commissioner seeking a review. In December 1990, the Commissioner advised he was not prepared to approve the refund claim. [6] In February 1991, Municipal submitted three applications for refunds for periods between January 1, 1982 to December 31, 1990. Each of these claims was refused by the Department of Finance. [7] Further refunds were requested each year from 1991 to 1996. All of these applications were refused. [8] In 1991, Municipal brought an application for a declaration and certiorari before the Supreme Court of Nova Scotia (Trial Division) involving the same issue which is before this court, namely, the interpretation of the Regulations and whether Municipal should receive a refund. Saunders, J. (as he then was) concluded that Municipal was exempt from paying tax. (See: Municipal Contracting Ltd. v. Nova Scotia (Minister of Finance) (1991), 110 N.S.R. (2d) 45 (N.S.S.C.T.D.).) That decision was reversed on appeal on procedural grounds without addressing the interpretation of the Regulations. (See: (1992), 113 N.S.R. (2d) 174 (N.S.S.C.A.D.).) [9] The current action was commenced in1994 and after several amendments to the pleadings, the trial was heard by Justice M. Heather Robertson. It was a 10 ½ day trial which commenced in October 2000, and the last day of the trial was in March 2001. After post trial briefs, Justice Robertson rendered her decision on December 10, 2001. Although the evidence dealing with unjust enrichment took 10 days, she did not rule on that issue nor on the admissibility of certain expert evidence. (Her decision is now reported in [2001] N.S.J. No. 530, (2001) 199 N.S.R. (2d) 362.) DECISION: [10] In her decision, Justice Robertson set out the facts and stated in part: [7] Municipal did not claim an exemption from fuel tax paid to its suppliers. Accordingly, they made refund claims pursuant to the refund provisions of the GDOTA. The claim for refunds relate to the period from February 1, 1989 to March 31, 1996 in a total amount of $1,120,583. It has been agreed by the parties that this sum is reduced by twenty percent to reflect correction for certain activities at the Quarry requiring consumption of diesel fuel that are admitted by both parties as not coming within the statutory exemption provisions. Thus the sum of refund sought by the plaintiff is $896,466. [11] The learned trial judge stated the two issues at trial were as follows: (A) What is the correct interpretation of the GDOTA Regulations as they may apply to Municipal’s crushing and quarrying operation? (B) Alternatively is Municipal entitled to restitution from the Province for fuel tax paid in connection with its operations at Quarry? (¶ 11) [12] In its post trial brief, Municipal raised the doctrine of issue estoppel and judicial comity with respect to the 1991 Municipal Contracting decision of Saunders, J., submitting that the same question was being raised again in the present case and should be answered in favour of Municipal. Further, that by straightforward legal interpretation, Municipal’s interpretation should prevail. [13] In reviewing that decision and after citing Spencer-Bower and Turner, Doctrine of Res Judicata, (2nd ed.), Justice Robertson concluded that as Saunders, J.’s decision was appealed and the judgment was set aside, issue estoppel was not applicable. Also, she found that judicial comity did not apply to Justice Saunders’ decision as that principle only arises where a decision is made by a court of competent jurisdiction and is not reversed on appeal. Finally, she referred to the fact that his decision did not address the history of the Regulations nor s. 9(5) of the Interpretation Act, R.S.N.S. 1989, c. 235. [14] Justice Robertson turned to consider whether the taxing authorities were correct in their interpretation and administration of the Regulations, and whether Municipal’s quarrying and crushing operations were tax exempt. [15] To that end, she examined the following relevant sections of the Regulations, namely, ss. 21(1), 34, 12(1)(k)(iii), 14(d) and 1(1)(mc): GDOTA Regulations: 21(1) Except as provided by subsections (2) and (3) [dealing with diesel oil for use in aircraft or in a ship, boat or vessel operated for commercial purposes] on or before the purchase or delivery of diesel oil, every purchaser shall pay a tax at the rate of fifteen and four-tenths cents per litre on all diesel oil purchased by or delivered to such purchaser. 34 Where the tax has been paid in respect of diesel oil the Minister may make a refund in the amount equal to the tax paid to the persons and in the circumstances in which he may make a refund in respect of the tax paid on gasoline in accordance with Regulations 12 or 13. 12(1) Where the tax has been paid, the Minister may upon application from a purchaser, and upon the receipt of evidence satisfactory to the Minister, refund the tax on gasoline where ... (k) subject to Regulation 14, the gasoline has been used to operate ... (iii) machinery and apparatus which were used in the manufacture or production of goods for sale; 14 The exemption provision contained in paragraph (h) of subsection (2) of Regulation 11 and the refund provision contained in paragraph (k) of subsection (1) of Regulation 12 do not apply to gasoline purchased, stored and used ... (d) in the production or processing of non-renewable resources; Part 1 - Gasoline Interpretation 1(1) In this Part ... (mc) “production or processing” means exploration for, extraction of, or transformation or conversion of any non-renewable resource to the extent and in the manner determined by these regulations; [Emphasis added.] [16] After relating the agreement reached by the parties that taxes had been paid and applications made for refunds of those taxes, the trial judge then stated the ultimate issue as follows: [15] Paragraph 12(k) of the Regulations is expressed as, “subject to Regulation 14... ”. Thus, paragraph 14(d) of the Regulations would prohibit from application of subparagraph 12(1)(k)(iii) of the Regulations any refund of taxes paid in respect of diesel oil purchased, stored or used in the “production or processing” of non-renewable resources. As noted supra, paragraph 1(1)(mc) of the Regulations specifies that “production or processing” means “any non-renewable resource, to the extent and in the manner determined by these regulations.” However, notwithstanding the concluding phrase, in fact no provision in the Regulations does determine or otherwise speak to either the “extent” or the “manner” of any activity in connection with any non-renewable resource. Accordingly, the ultimate issue is whether paragraph 14(d) of the Regulations, containing the defined phrase “production or processing,” does operate so as to provide an exception of the exemption from tax and consequential entitlement to refund provided by subparagraph 12(1)(k)(iii) of the Regulations. [Emphasis in original.] [17] The learned trial judge quoted from Driedger on the Construction of Statutes (3rd ed. 1994) by Ruth Sullivan, where she refers to Stubart Investments Ltd. v. The Queen, [1984] 1 S.C.R. 536 and its conclusion that: [17] ... The words of a taxing enactment are not to receive a strictly literal interpretation but are to be read in their entire context, having regard to the legislative purpose and scheme. These points were reiterated and affirmed by the court if [sic] R. v. Golden: In Stubart ... the court recognized that in the construction of taxation statutes the law is not confined to a literal and virtually meaningless interpretation of the Act where the words will support on a broader construction a conclusion which is workable and in harmony with the evident purposes of the Act in question.... [18] After quoting s-s. 9(5) of the Interpretation Act, which states in part that “every enactment shall be deemed remedial and interpreted to insure the attainment of its objects ...”, in paragraphs 19 to 33, she traced the evolution of the GDOTA and its Regulations from 1926 to 1981 to identify their original purpose and any trends reflecting new policies or whether they have remained constant. (As per Driedger, supra, p. 58.) She then did a comparative review of the GDOTA and its Regulations with the Health Services Tax Act, S.N.S. 1982, c. 27 and its Regulations, noting that the definitions of “manufacture or production”, “non-renewable resource” and “production or processing” are identical in the two Acts. She related the statements in Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, [1994] 3 S.C.R. 3 and Driedger, supra, describing the manner in which tax legislation is to be interpreted today, namely, that: “The words of a taxing enactment are not to receive a strictly literal interpretation but are to be read in their entire context, having regard to the legislative purpose and scheme.” [19] She noted that the 1981 amendment to the Regulations under the GDOTA contained a more detailed list for exemptions or refunding tax paid on gasoline and diesel oil, including then Regulation 12(1)(k)(iv) covering “machinery and apparatus which was directly used in the process of manufacture or production of goods for sale”. However, quarrying and crushing of rock were not exempt nor was a refund available. [20] In 1982, the Minister of Finance, in introducing the budget, referred to non-renewable resources and that effective immediately the government was removing “the exemption under the Health Services Tax Act, on machinery, equipment and supplies used in the production and process of these resources” (Debates of the Nova Scotia House of Assembly, vol. 3, 1982, p. 2106 at 2117), and they were “removing the exemption under the Gasoline and Oil Diesel Tax Act for motor fuels consumed in the production and processing of non-renewable resources.” (p. 2118). [21] In reviewing the amendments to the Health Services Tax Act, the trial judge identified that statutory definitions were introduced and Regulations were passed by OIC 83-163, N.S. Reg. 19/83, effective June 15, 1982, which clarified that extraction and primary crushing of raw ores was considered to be engaging in the production or processing of non-renewable resources. The Governor-in-Council passed the Non-Renewable Resource Production or Processing Regulations by OIC 83-163, N.S. Reg. 19/83, which dealt with the phrase in the definition of “production or processing”, namely, “to the extent and in the manner determined by the regulations”. [22] In contrast, the GDOTA had already granted the power to the Governor-in-Council to grant or limit tax relief. The trial judge stated: [37] ... The Governor-in-Council, by OIC 82-790 (June 29, 1982) removed the ability of anyone to use marked gasoline or diesel oil in the production or processing of non-renewable resources and removed the power of the Minister to give a refund for tax paid on any such fuel. [23] In GDOTA Regulation 14, the words “in the quarrying and crushing of rock” were replaced with “in the production or processing of non-renewable resources.” At the same time, the definition for “production or processing” was added (s. 1(1)(mc)). However, no regulation was ever passed under the GDOTA dealing with the words in s. 1(1)(mc): “to the extent and in the manner determined by these regulations”. [24] Justice Robertson related that the government had consolidated the GDOTA, the Health Services Tax Act and the Tobacco Act into the Revenue Act, S.N.S. 1995-96, c. 17, and used almost identical language to the GDOTA Regulations in defining “manufacture or production”, “non-renewable resource” and “production or processing”, except that the words “to the extent and in the manner determined by these regulations” are no longer included in the definition of “production or processing”. [25] The Revenue Act also includes the following: 25 The exemption provision contained in clause 22(2)(j) and the refund provision contained in clause 23(1)(j) do not apply to gasoline and diesel oil purchased, stored and used ... (d) in the production or processing of non-renewable resources, including but not limited to, the quarrying and crushing of rock, the mining of sandstone, coal, gypsum and limestone and oil exploration and processing; [Emphasis added.] [26] She reviewed what is meant by the relation between purposive analysis and absurdity and stated: [46] Section 9(5)(f) of the Interpretation Act directs that the consequences of a particular interpretation be considered. This is sometimes referred to as avoiding absurd consequences. ... Interpretations that tend to defeat the purpose of legislation are often labelled absurd and rejected on that account. (Emphasis in original.) [27] On the “appropriate legal interpretation of the GDOTA and its Regulations”, she stated: [54] ... I find that the proper interpretation of paragraph 14(d) of the Regulations prohibits from application of subparagraph 12(1)(k)(iii) any refund of taxes paid in respect of diesel oil purchased, stored, or used in the “production or processing” of a non-renewable resource. The failure of the Regulation to further articulate “the extent” and “the manner” of production and processing should not defeat the very obvious intent of the legislation. Regulation 14(d) should be given its plain meaning and the restriction should be unlimited unless or until further Regulations are made. Paragraph 14(d) cannot reasonably be interpreted to mean that the legislature intended to grant quarrying and crushing operations an exemption from paying tax on fuel in their operations. To do so would defeat the intended purpose of the legislation and create an absurd result. [Emphasis added.] [55] The significant legislative history of the GDOTA cannot be ignored. In keeping with the modern authorities of statutory interpretation cited herein the interpretation of tax legislation is to follow the ordinary rules of statutory interpretation. The strict or literal approach of the past is not appropriate in this case. The policy of the government in expanding the tax scheme to include all non-renewable resources is made clear by this legislation. Section 14(d) uses very clear language. Any ambiguity resulting from the definition of “production and processing” in s. 1(1)(mc) must be resolved in favour of the taxing authority in the context of the intent of the entire Act and its Regulations. [56] I disagree with the plaintiff’s position that s. 14(d) and the definition of “production and processing” in paragraph 1(1)(mc) of the Regulations creates a “reasonable doubt” as to its meaning, that cannot be resolved through the ordinary principles of statutory interpretation, thus allowing a residual presumption in favour of the taxpayer. This is not a matter of reasonable doubt, creating an issue of burden of proof. Rather the interpretation of s. 14(d) is a straight forward issue of statutory interpretation and a question of law for this court to decide. [28] The trial judge quoted from pp. 14-15 of Bon-Secours, supra, tracing the history of how tax legislation should be interpreted. Traditionally it was to be strictly construed, i.e., since tax legislation created a burden on individuals, no one should be subject to it “unless the wording of the Act so provides in a clear and precise manner.” Thus if the tax imposed an obligation, the interpretation favoured the taxpayer; if the taxpayer claimed a benefit, the benefit of any doubt went to the tax department. [29] After the Bon-Secours quote, Justice Robertson stated: [58] The residual presumption in favour of the taxpayer where the language of the Regulations leaves doubt as to its meaning must nevertheless be “reasonable” and recourse to this presumption is clearly residual. [30] Dealing with counsel’s submissions, Robertson, J. stated: [59] Here two interpretations have been advanced, the plaintiff’s interpretation that s. 14(d) intended to grant an exemption from paying tax on fuel in its quarrying and crushing operation and the defendant’s position that the drafts persons sloppily borrowed language from the Health Services Tax Act regime. I cannot accept that the plaintiff’s interpretation is a valid interpretation or one that can be reasonably sustained and agree with the defendant’s views on the drafting error. [Emphasis added.] [31] Again, citing Driedger, supra, she found that the court has jurisdiction to correct an error because, [61] To interpret s. 14(d) in favour of the plaintiff would indeed lead to a result that cannot have been intended by the legislation. [32] She further found that before 1982, Municipal was not exempt from tax on fuel used for quarrying and crushing, and that the amendment in 1982 “merely broadened application of the gasoline and fuel tax to the whole of the non-renewable resource sector.” [33] Thus, she found the eleven words at the end of 1(1)(mc) of the Regulations were a drafting error and should be disregarded in interpreting 14(d) and 1(1)(mc). She concluded that the taxing authorities were correct in their interpretation and administration of the Regulations and held that Municipal’s quarrying and crushing operations were not tax exempt and therefore, it was not entitled to any refund. She dismissed the plaintiff’s action. APPEAL ISSUES: [34] Although Municipal listed 6 grounds of appeal in its notice of appeal, in its factum it states the issue as follows: 12. The sole issue in this appeal is one of statutory interpretation - whether the learned Trial Judge erred in interpreting paragraph 14(d) of the Regulations by wholly disregarding paragraph 1(1)(mc) and in particular its concluding words, “to the extent and in the manner determined by these regulations”. ANALYSIS: [35] On appeal, the parties filed an agreed statement of facts and the evidence of one witness. However, it is unnecessary to recite all those facts or summarize all the evidence of the witness as both generally relate to the issue of unjust enrichment. The trial judge gave no decision on this issue as she had concluded that Municipal’s quarrying and crushing operations were not exempt. The agreed facts state in part: [3] The learned trial judge, in her written decision of December 10th, 2001, concluded that the taxing authorities were correct in their interpretation and administration of the Regulations made pursuant to the Gasoline and Diesel Oil Tax Act; that the Appellant’s quarrying and crushing operations were not exempt. She concluded that it was not necessary to determine whether or not the Plaintiff has established the necessary requirements to be successful in its claim of unjust enrichment, in particular that it bore the burden of the tax and did not pass it on to its customers. [4] Virtually all the evidence led at trial was relevant only to the second issue of unjust enrichment, which the learned trial judge chose not to address. [36] I have already set out the pertinent sections of the Regulations under the GDOTA in ¶ 15, but for ease of reference, I shall set out again ss. 12(1)(k)(iii), 14 and 1(1)(mc) and the Interpretation Act which must be considered in reaching a decision in this case: GDOTA Regulations: 12(1) Where the tax has been paid, the Minister may upon application from a purchaser, and upon the receipt of evidence satisfactory to the Minister, refund the tax on gasoline where .... (k) subject to Regulation 14, the gasoline has been used to operate ... (iii) machinery and apparatus which were used in the manufacture or production of goods for sale; 14 The exemption provision contained in paragraph (h) of subsection (2) of Regulation 11 and the refund provision contained in paragraph (k) of subsection (1) of Regulation 12 do not apply to gasoline purchased, stored and used ... (d) in the production or processing of non-renewable resources; Part 1 - Gasoline Interpretation 1(1) In this Part ... (mc) “production or processing” means exploration for, extraction of, or transformation or conversion of any non-renewable resource to the extent and in the manner determined by these regulations; [Emphasis added.] It should be noted again that there has never been a Regulation which dealt with the “extent” or “manner” of any specified activity pertaining to any non-renewable resource as set out in Regulation 1(1)(mc). Interpretation Act, s-s. 9(5): (5) Every enactment shall be deemed remedial and interpreted to insure the attainment of its objects by considering among other matters: (1) the occasion and necessity for the enactment; (2) the circumstances existing at the time it was passed; (3) the mischief to be remedied; (4) the object to be attained; (5) the former law, including other enactments upon the same or similar subjects; (6) the consequences of a particular interpretation; and (7) the history of legislation on the subject. [37] In its factum, the appellant submitted argument under the following headings and subheadings: 1. ERROR RE APPLICABLE PRINCIPLES OF INTERPRETATION (A) Interpretation Should Recognize Clear and Unambiguous Meaning. (B) Alternatively, Interpretation Should Recognize Residual Presumption for Taxpayer. 11. ERROR RE UNDUE WEIGHT GIVEN TO LEGISLATIVE HISTORY (A) Prior Tax Regime Not Indicative of Intent of 1982 Regulations. (B) House of Assembly Debates Not Applicable. (C) Parallel Health Services Tax Act Legislation Wrongly Utilized. (D) Undue Weight re Legislative History Causes Erroneous Drafting Conclusion in Interpretation. (E) Undue Weight re Legislative History Erroneously Leads to Absurd Results Conclusion. [38] Before considering the appellant’s arguments under each of these headings and sub-headings, it should be stated that, in my opinion, the inclusion of the words “to the extent and in the manner determined by these regulations” in s-s. 1(1)(mc) makes the meaning of “production or processing” ambiguous, for the reasons so ably expressed by Justice Bateman in her concurring decision. Further, I am of the view that adopting the appellant’s position as to the meaning and effect of the phrase would lead to an absurdity, as found by Justice Robertson. In light of the above, I conclude that Municipal is not entitled to a refund of the tax paid. Upon a full and careful analysis of the entire context of the provisions at issue, it is in my view apparent that the legislature intended, both before and after 1982, that taxes paid on diesel fuel used in the quarrying and crushing of rock would not be refunded. 1. ERROR RE APPLICABLE PRINCIPLES OF INTERPRETATION [39] The appellant submits that only the wording of the Act and the Regulations govern where the words are clear and unambiguous. Thus arguing, “... in the absence of any regulatory provision speaking to ‘extent’ or ‘manner’, the term ‘production or processing’ in regulation 14(d) was without meaning or application”, and since no regulation was passed, 14(d) did not limit the tax exemption found in subparagraph 12(1)(k)(iii). In saying this, counsel relied upon the 1991 Municipal decision, Municipal Contracting Ltd. v. Nova Scotia (Minister of Finance) (1991), 110 N.S.R. (2d) 45. [40] The earlier decision appears to have been argued on fairly narrow grounds which did not include the history of the legislation or any reference to s-s. 9(5) of the Interpretation Act. The 1991 trial decision was overturned by the Court of Appeal on the basis that the application for a refund did not follow the provisions set out in the Act or Regulations, therefore, the matter was not subject to review by certiorari. No comment was made on the merits. (See: (1992), 113 N.S.R. (2d) 174 at p. 179.) As a result, there was no ‘decision’ for Robertson, J. to follow. In my opinion, she made no error in failing to follow the 1991 decision of Saunders, J. as it was a nullity and res judicata does not apply. (See: Doctrine of Res Judicata (2d ed.) by Spencer-Bower and Turner at ¶ 63.) (A) Interpretation Should Recognize Clear and Unambiguous Meaning [41] The appellant submits that when the words in a taxing provision are clear and unambiguous on their face, then the court does not need to inquire further into the legislative intent. In particular, it says that since s-s. 1(1)(mc) and 14(d) of the Regulations are clear and unambiguous in expressing that the exemption and refund are conditional on future regulations respecting “extent” and “manner”, Municipal should have been refunded the tax it paid. [42] As I have already indicated above, for the reasons elaborated by Justice Bateman, I do not accept the appellant’s contention that the words used were clear and unambiguous. However, even if I had done so, I could not find Justice Robertson erred in inquiring into legislative intent as she did. [43] In support of its position, the appellant relied upon five Supreme Court of Canada decisions and, in particular, statements from them which suggest that one should, in effect, take a more restrictive approach to interpreting taxing statutes. However, extracting partial quotes does not always clearly set out the Supreme Court of Canada’s position and some of these five cases give contradictory guidance. [44] McLachlin, J. (as she then was) said in Shell Canada Ltd. v. Canada, [1999] 3 S.C.R. 622 at 625: “Where the provision at issue is clear and unambiguous, its terms must simply be applied” without recourse to its intention and the objects. However, in 65302 British Columbia Ltd. v. Canada, [1999] 3 S.C.R. 804, Iacobucci, J. refers to Driedger’s modern principle of statutory construction, which involves looking at the words in their entire context, in their ordinary sense, along with the scheme and object of the Income Tax Act and the intention of Parliament. (¶ 50) He acknowledges that when the wording is clear then one should not stray too far when dealing with complex taxing statutes where the legal and practical effect of the transaction is undisputed. Although he relies on Canada v. Antosko, [1994] 2 S.C.R. 312 at pp. 326-7, upon examining the decision in Antosko as a whole (which Iacobucci, J. also wrote), the purpose and intent of the statute did form part of his consideration. Also in the British Columbia case, Iacobucci, J. says that he is not endorsing a literalist approach to statutory interpretation. (¶ 51) [45] Finally, the appellant relied upon Singleton v. Canada, [2001] 2 S.C.R. 1046, [2001] SCC 61, and Canada (Deputy Minister of National Revenue - M.N.R.) v. Mattel Canada Inc., [2001] 2 S.C.R. 100, 2001 SCC 36. Both of those cases quote the previously noted words of McLachlin, J. in Shell. However, Singleton deals with how a taxpayer can structure complex tax transactions and the need to be sensitive about economic realities, and Mattel uses the quote to say that when the statutory provision is clear and unambiguous, it is not necessary to analyse the economic realities of the transaction. In my opinion, these two cases are not ones dealing with statutory interpretation and do not support the appellant’s position. [46] The Supreme Court of Canada cases have given us varying approaches, but I am unable to find that these cases are authority for returning to a strict or literal approach to interpreting taxing legislation as is submitted by the appellant. I would note and refer to the cases of Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Bell Express Vu Limited Partnership v. Rex. [2002] S.C.J. No. 43, and Harvard College v. Canada (Commissioner of Patents), [2002] S.C.J. No. 77. All of these cases cite the modern rule of statutory interpretation as set out by Driedger. Bell Express Vu also refers to the Interpretation Act, R.S.C. 1985, c. I-21, s. 12. [47] The modern rule of statutory interpretation is set out in Driedger, supra, at p. 131: The modern rule. There is only one rule in modern interpretation, namely, courts are obliged to determine the meaning of legislation in its total context, having regard to the purpose of the legislation, the consequences of proposed interpretations, the presumptions and special rules of interpretation, as well as admissible external aids. In other words, the courts must consider and take into account all relevant and admissible indicators of legislative meaning. After taking these into account, the court must then adopt an interpretation that is appropriate. An appropriate interpretation is one that can be justified in terms of (a) its plausibility, that is, its compliance with the legislative text; (b) its efficacy, that is, its promotion of the legislative purpose; and (c) its acceptability, that is, the outcome is reasonable and just. [48] In Statutory Interpretation (1997), Irwin Law Publications for Professionals by Ruth Sullivan, she states at p. 50: An interpretation that takes into account the full context of legislation, its purpose and its possible consequences, along with any relevant interpretive aids, is superior to one that looks to a limited context and ignores, or purports to ignore, all other considerations. [49] In Bell Express Vu, supra, Iacobucci, J., dealt with statutory interpretation referring to Driedger on the Construction of Statutes (2d ed. 1983): [26] Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. He then refers to a number of cases including Stubart, supra, Bon-Secours, supra, Rizzo Shoes, supra, and the federal Interpretation Act, supra, and states: [27] The preferred approach recognizes the important role that context must inevitably play when a court construes the written words of a statute ... [29] ... one must consider the “entire context” of a provision before one can determine if it is reasonably capable of multiple interpretations. In this regard, Major J.’s statement in Canadian Oxy Chemicals Ltd. v. Canada (Attorney General), [1999] 1 S.C.R. 743, at para. 14, is apposite: “It is only when genuine ambiguity arises between two or more plausible readings, each equally in accordance with the intentions of the statute, that the courts need to resort to external interpretive aids” (emphasis added), to which I would add, “including other principles of interpretation”. [50] The appellant submits that if a taxing provision is clear and unambiguous on its face, the court does not have to consider other things like legislative intent. Because I would find that the words are not clear, it is necessary to examine the intention of the legislature and the scheme and object of the Act to properly interpret this legislation. [51] I would find that the trial judge read the words of the enactment in their entire context, considering the purpose of the legislation and the consequences of the proposed interpretations. In doing so she was not in error. In accordance with s-s. 9(5) of the Interpretation Act, the Act and Regulations are to be deemed remedial and interpreted to insure the attainment of their objects by considering the history of the legislation; the consequences of a particular interpretation; the mischief to be remedied; the circumstances existing at the time it was passed; the object to be attained; and the former law, including other enactments upon the same or similar subjects. [52] In my opinion, the conclusion she reached was not in error. The purpose of the legislation was to ensure that non-renewable resources were taxed. (B) Alternatively, Interpretation Should Recognize Residual Presumption for Taxpayer [53] The appellant submits that interpretation of the words in issue should recognize the residual presumption in favour of the taxpayer in interpreting tax legislation. (See: Bon-Secours, supra, p. 20.) The rules formulated in the preceding pages, some of which were relied on recently in Symes v. Canada, [1993] 4 S.C.R. 695, may be summarized as follows: The interpretation of tax legislation should follow the ordinary rules of interpretation; A legislative provision should be given a strict or liberal interpretation depending on the purpose underlying it, and that purpose must be identified in light of the context of the statute, its objective and the legislative intent: this is the teleological approach; The teleological approach will favour the taxpayer or the tax department depending solely on the legislative provision in question, and not on the existence of predetermined presumptions; Substance should be given precedence over form to the extent that this is consistent with the wording and objective of the statute; Only a reasonable doubt, not resolved by the ordinary rules of interpretation, will be settled by recourse to the residual presumption in favour of the taxpayer. [54] The appellant submits there is a reasonable doubt as to the legislative intent and therefore the “residual presumption” means that 14(d) must not be interpreted against the taxpayer. It is argued that the legislation is not ambiguous; it will be expressed in a future regulation and the court cannot interpret what the Governor-in-Council will do in the future. [55] The trial judge did refer to Bon-Secours and the principle of residual presumption. She also referred to the Interpretation Act. I would find she properly applied the rules of statutory interpretation and the considerations set out in the Interpretation Act. [56] Section 12 of the federal legislation states: 12 Every enactment is deemed remedial and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects. (Interpretation Act, R.S., C. I-23.) Thus, both the federal and provincial Interpretation Acts give similar guidance but they are often not mentioned by the courts when they interpret statutes. This occurred in both Antosko, supra, and British Columbia, supra, where the Court chose not to refer to the federal legislation, but referred instead to Driedger and the “modern rule” which generally incorporates the terms of the federal Interpretation Act. (But see Bell Express Vu, ¶ 26, and the reference to s. 12 of the federal Interpretation Act.) [57] In my opinion, the residual presumption only applies when all other means of statutory interpretation have been exhausted. This is not an appropriate case to rely upon that presumption. [58] The trial judge made no error in not applying this presumption. 11 ERROR RE UNDUE WEIGHT GIVEN TO LEGISLATIVE HISTORY (A) Prior Tax Regime Not Indicative of Intent of 1982 Regulations ... It is well established that the evolution of a provision may be looked at by courts to help determine its meaning or purpose, to resolve conflict among competing provisions, or to detect drafting errors. [Ruth Sullivan, Statutory Interpretation, p. 208.] [59] The use of legislative history is entirely appropriate as a tool for determining the intention of the legislature. (See: Rizzo Shoes, supra, at ¶31.) [60] Legislative history can be used to characterize a statute for purposes of judicial review. (See: P. W. Hogg, Constitutional Law of Canada, Vol. 1 (3rd ed.) (supplemental) 1992 loose-leaf, pp. 14-15; Statutory Interpretation, supra, Ch. 13, Extrinsic Aids, p. 199, et seq.). [61] The historical analysis of the GDOTA and the Regulations clearly shows that the use of exempt gasoline or diesel oil was not permitted in the quarrying and crushing of rock, nor was the Minister permitted to rebate tax paid for gasoline or diesel oil used in the quarrying and crushing of rock. [62] The new Regulations extended the non-refundable provisions to the production or processing of non-renewable resources. Although some terms may not have a legislative history, this cannot mean that viewing the history in its totality should be discounted. [63] In my opinion, the learned trial judge was correct when she said, “The significant legislative history of the GDOTA cannot be ignored.” It does lay out a pattern which led to the 1982 version of the Regulations pursuant to which non-renewable resources were not exempt and the tax, if paid, was not refundable. [64] I would find no error in the trial judge relying on the legislative history as one indication of the intent of the 1982 Regulations. (B) House of Assembly Debates Not Applicable (C) Parallel Health Services Tax Act Legislation Wrongly Utilized These two headings will be dealt with together. [65] Legislative debates can be an aid to statutory interpretation of the legislation, “Provided that the court remains mindful of the limited reliability and weight of Hansard evidence, it should be admitted as relevant to both the background and the purpose of the legislation”. ( R. v. Morgentaler, [1993] 3 S.C.R. 463 at 484; see also Rizzo Shoes at ¶ 35.) [66] Sopinka, J. in R. v. Heywood, [1994] 3 S.C.R. 761 at pp. 787-8, did not accept that the debates were proof of intent but could be used for the general purpose of showing the mischief Parliament was trying to remedy with the legislation. [67] In the present case, in describing the evolution of the legislation, the trial judge made reference to the House of Assembly debates and what the Minister said in presenting the budget on April 30, 1982, namely, that they were removing the exemption under the GDOTA for non-renewable resources and also doing the same under the Health Services Tax Act. [68] In the case of the Health Services Tax Act, it used the same definition for “production or processing” including the phrase “to the extent and in the manner determined by these regulations”. However, a regulation was passed on February 8, 1983 which was retroactive in its application to June 5, 1982. It gave users a limited or reduced tax burden. The appellant argues that there was a change in the intent of removing the exemption from the time of the budget speech, and this change shows why little weight should be attached to the debates. [69] The appellant suggests the Minister’s statement concerning the GDOTA is not accurate. Even if it is not strictly accurate, I am unable to find that the trial judge placed undue reliance or weight on the Minister’s remarks in the House. It was mentioned as part of the history which she referred to in her review of the evolution of the Act and the Regulations. [70] I would find no error in her reference to these remarks by the Minister, nor in her comparing the GDOTA and its Regulations with the Health Services Tax Act and its Regulations. (D) Undue Weight re Legislative History Causes Erroneous Drafting Conclusion in Interpretation (E) Undue Weight re Legislative History Erroneously Leads to Absurd Results Conclusion It is appropriate to deal with these two issues together. [71] The learned trial judge interpreted subparagraphs 1(1)(mc) and 14(d) on the basis that the draftsperson wrongly copied the Health Services Tax Act when drafting 1(1)(mc) of the Regulations. She further found that if the interpretation advanced by the appellant was adopted, it would result in an absurdity. [72] The appellant submits there was no evidence to support this conclusion. It is argued that if there was a mistake, it could be the oversight in not passing any regulation under the GDOTA Regulations. Also, if it was an error, a further Order-in-Council could have deleted the phrase. [73] The respondent argues that whether or not a drafting error occurred is a question of law or at the most, a question of mixed fact and law for the trial judge to determine. The respondent submits calling evidence was not a viable possibility as it would mean calling the Minister to testify. This was not permitted in the case of Ontario Teachers’ Federation v. Ontario (Attorney General) (1998), 39 O.R. (3d) 140; [1998] O.J. No. 545. [74] The evidence of a member of the Provincial Tax Commission from 1974 until 2000 was that prior to 1982, no permits were issued by the Commission permitting the use of exempt gasoline or diesel fuel in quarrying and crushing of rock. No refund claims were made by Municipal or any of its competitors until after 1990 when eight or nine companies made claims and all were refused. The respondent submits there was no uncertainty in the application of the law. [75] Ruth Sullivan in Statutory Interpretation, supra, discusses the issue of “absurdity” at pp. 149-151. In resolving problems in statutory interpretation, courts appropriately take into account the consequences of applying legislation to particular facts. Consequences that are judged to be good are generally presumed to be intended and are regarded as part of the legislative purpose. Consequences that are judged to be absurd or otherwise unacceptable are presumed not to have been intended. As much as possible, interpretations that lead to unacceptable consequences are avoided. . . . In testing whether the consequences of an interpretation are acceptable, the courts work with norms of reasonableness, fairness, and plausibility derived from the culture to which they belong. ... To be considered absurd or unacceptable, consequences must violate a norm that is judged to be important to the legislature or to society in general, and this violation must be evident and serious. It is ... considered absurd for the legislature to contradict itself ... enacting rules that ... would tend to defeat the very purpose for which they were enacted. [Emphasis added.] ... where a provision lends itself to more than one plausible interpretation, it is clearly appropriate for a court to reject the interpretation that would lead to absurdity in favour of one that avoids it. [76] Even if the words appear to be clear, if they lead to an absurdity or inconsistency, then the words can be modified to avoid that situation. See: Driedger, supra, p. 64, et seq.; Rizzo, supra, at ¶ 27; Grey v. Pearson (1857) 29 LTOS 67 at 71 (H.L.); and Re Estabrooks Pontiac Buick Ltd. (1982), 44 N.B.R. (2d) 201 at 210 (C.A.), where LaForest, J.A. wrote: The fact that the words as interpreted would give an unreasonable result . . . is certainly ground for the courts to scrutinize a statute carefully to make abundantly certain that those words are not susceptible of another interpretation. For it should not be readily assumed that the Legislature intends an unreasonable result or to perpetrate an injustice or absurdity. [77] In my opinion, it is not necessary to decide whether there was a drafting error or it was an oversight by the draftsperson. If the words were given the meaning suggested by the appellant, in my opinion they would defeat the legislative purpose which is to tax non-renewable resources. Therefore, there was both an absurdity and an ambiguity. In light of this, it was appropriate for the trial judge to consider factors such as the debates from the Nova Scotia House of Assembly; the evolution of the Act and the Regulations; the administrative practises carried out by the Provincial Tax Commission since 1982 which were supported and affirmed by the various Ministers of Finance, that the Regulations gave no exemption to fuel used in the quarrying and crushing of stone specifically and in the non-renewable resource sector in general; and the consequences of the interpretations of paragraph 1(1)(mc) as advanced by the appellant and the respondent. [78] I can find no error in the conclusion of Robertson, J. that, “To interpret s. 14(d) in favour of the plaintiff [appellant] would indeed lead to a result that cannot have been intended by the legislation.” (Even before 1982, the appellant was not exempt from paying taxes on fuel used in its quarrying and crushing operations.) The amendment broadened the application of no exemption and no refund for gasoline and diesel fuel to the whole of the non-renewable resource sector. [79] In my opinion, interpreting the legislation as suggested by the appellant would lead to an absurdity and would result in an unreasonable decision to refund taxes when the use of fuel for non-renewable resources was to be taxable. CONCLUSION: [80] I would dismiss the appeal with costs to the respondent (plus disbursements) in the amount of 40% of the trial costs as agreed to or as determined by the trial judge. Glube, C.J.N.S. Concurred in: Chipman, J.A. Concurring Reasons for judgment: [81] I have had the benefit of reading the reasons for judgment of the Chief Justice. I would reach the same result through a different analysis. [82] I will not review the facts or the details of the decision on appeal which are set out in the opinion of the Chief Justice. This case involves the tax on diesel fuel used by heavy machinery employed in the stone and gravel manufacturing process within Municipal’s quarry. Municipal paid tax on the fuel at the time of purchase as is required by the former Gasoline and Diesel Oil Tax Act, R.S.N.S. 1989, c. 183, as amended, (the "GDOTA"). By regulation the GDOTA provided for certain exemptions and refunds from the payment of fuel tax. We are here concerned with a claim for refund of taxes paid. [83] The former GDOTA Regulations (O.I.C. 81-793, N.S. Reg. 102/81 as amended) at issue are: 21(1) Except as provided by subsections (2) and (3) [dealing with diesel oil for use in aircraft or in a ship, boat or vessel operated for commercial purposes] on or before the purchase or delivery of diesel oil, every purchaser shall pay a tax at the rate of fifteen and four‑tenths cents per litre on all diesel oil purchased by or delivered to such purchaser. 34 Where the tax has been paid in respect of diesel oil the Minister may make a refund in the amount equal to the tax paid to the persons and in the circumstances in which he may make a refund in respect of the tax paid on gasoline in accordance with Regulations 12 or 13. 12(1) Where the tax has been paid, the Minister may upon application from a purchaser, and upon the receipt of evidence satisfactory to the Minister, refund the tax on gasoline where . . . (k) subject to Regulation 14, the gasoline has been used to operate . . . (iii) machinery and apparatus which were used in the manufacture or production of goods for sale; ... 14 The exemption provision contained in paragraph (h) of subsection (2) of Regulation 11 and the refund provision contained in paragraph (k) of subsection (1) of Regulation 12 do not apply to gasoline purchased, stored and used . . . (d) in the production or processing of non‑renewable resources; 1(1)(mc) "production or processing" means exploration for, extraction of, or transformation or conversion of any non‑renewable resource to the extent and in the manner determined by these regulations; (Emphasis added) [84] The problem giving rise to this litigation is that s. 1(1)(mc) of the Regulations appeared to contemplate the promulgation of additional regulations describing, limiting or otherwise explaining the “extent and manner” of “production and processing” of renewable resources. In the fourteen years during which this legislation was in effect no clarifying regulations were enacted. It was for the judge to determine the effect of the unexplained phrase “to the extent and in the manner . . .” at the end of Regulation 1(1)(mc). [85] It is Municipal’s position, as it was at trial, that because no such regulations were brought into force, s. 14(d) was of no effect and Municipal was, therefore, not dis-entitled to the refund of fuel tax provided by r. 12(1)(k)(iii). The trial judge found that Municipal was not entitled to the refund. [86] Municipal says in its factum: The Appellant submits that in the absence of any regulatory provision speaking to “extent” or “manner”, the term “production or processing” in paragraph 14(d) was without meaning or application. Thus, unless and until a regulatory provision was passed (none was) that spoke to “extent” or “manner”, paragraph 14(d) provided no limitation upon the application of the subparagraph 12(1)(k)(iii) tax exemption. . . . The fact that paragraph 1(1)(mc) obviously anticipated further regulatory provisions, as to “extent” and “manner”, does not render it meaningless so as to require an interpretation counter to the obvious intent that tax would be applicable selectively. It simply signals that the enacting body intends to finalize the matter in due course at which time the intended meaning would be made evident. [87] It is Municipal’s argument that Justice Robertson erred in conducting a fulsome review of the history and context of the legislative scheme to assist in the interpretation of the regulations when the words of the legislation were clear. [88] The Attorney General says that the meaning ascribed to the legislation by Justice Robertson was correct. The Attorney General notes that the judge was required to conduct a detailed analysis by virtue of s. 9(5) of the Interpretation Act, R.S.N.S. 1989 c. 235 and consistent with the direction of the Supreme Court of Canada, which requires courts to adhere to the modern rule of statutory interpretation. [89] In submitting to this Court that the legislative wording is clear and unambiguous, Municipal departs from its position at trial. There Municipal asserted that the definition of “production and processing” was “ambiguous in the extreme”, incapable of being applied in any way and therefore not sufficient to dis-entitle Municipal to the fuel refund. Faced with admittedly ambiguous wording, it is not surprising that the trial judge embarked upon the contextual and purposive analysis reflected in her judgment. I have serious doubts whether Municipal should be permitted to resile from its position at trial that the regulations are ambiguous. As I am of the view, however, that the trial judge reached a correct result, it is unnecessary to decide whether the change in Municipal’s position is fatal to their success on appeal. [90] Municipal says that the judge was not entitled to look at the object or purpose of the legislation in the interpretive exercise. This assertion is inconsistent with s. 9(5) of the Interpretation Act and with all recent direction from the Supreme Court of Canada. Although purporting to support the “modern principle of statutory interpretation” Municipal is, in fact, urging a return to a strict and literal application of the traditional “plain meaning rule”. Such an approach is no longer considered to conform with the contextual interpretation required by the modern rule (see Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at paras. 20 and 21). [91] The Interpretation Act provides: 9(5) Every enactment shall be deemed remedial and interpreted to insure the attainment of its objects by considering among other matters (a) the occasion and necessity for the enactment; (b) the circumstances existing at the time it was passed; (c) the mischief to be remedied; (d) the object to be attained; (e) the former law, including other enactments upon the same or similar subjects; (f) the consequences of a particular interpretation; and (g) the history of legislation on the subject. [92] Most recently in Bell ExpressVu Limited Partnership v. Rex, [2002] S.C.J. No. 43 (Q.L.); 2002 SCC 42 the Court confirmed its endorsement of the modern rule of statutory interpretation and noted that it is an interpretive approach which is in harmony with the federal Interpretation Act, R.S.C. 1985, c. I‑21 (per Iacobucci J.): ¶ 26 In Elmer Driedger's definitive formulation, found at p. 87 of his Construction of Statutes (2nd ed. 1983): Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. Driedger's modern approach has been repeatedly cited by this Court as the preferred approach to statutory interpretation across a wide range of interpretive settings: see, for example, Stubart Investments Ltd. v. The Queen, [1984] 1 S.C.R. 536, at p. 578, per Estey J.; Québec (Communauté urbaine) v. Corp. Notre‑Dame de Bon‑Secours, [1994] 3 S.C.R. 3, at p. 17; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21; R. v. Gladue, [1999] 1 S.C.R. 688, at para. 25; R. v. Araujo, [2000] 2 S.C.R. 992, 2000 SCC 65, at para. 26; R. v. Sharpe, [2001] 1 S.C.R. 45, 2001 SCC 2, at para. 33, per McLachlin C.J.; Chieu v. Canada (Minister of Citizenship and Immigration), 2002 SCC 3, at para. 27. I note as well that, in the federal legislative context, this Court's preferred approach is buttressed by s. 12 of the Interpretation Act, R.S.C. 1985, c. I‑21, which provides that every enactment "is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects". ¶ 27 The preferred approach recognizes the important role that context must inevitably play when a court construes the written words of a statute: as Professor John Willis incisively noted in his seminal article "Statute Interpretation in a Nutshell" (1938), 16 Can. Bar Rev. 1, at p. 6, "words, like people, take their colour from their surroundings". This being the case, where the provision under consideration is found in an Act that is itself a component of a larger statutory scheme, the surroundings that colour the words and the scheme of the Act are more expansive. In such an instance, the application of Driedger's principle gives rise to what was described in R. v. Ulybel Enterprises Ltd., [2001] 2 S.C.R. 867, 2001 SCC 56, at para. 52, as "the principle of interpretation that presumes a harmony, coherence, and consistency between statutes dealing with the same subject matter". (See also Stoddard v. Watson, [1993] 2 S.C.R. 1069, at p. 1079; Pointe‑Claire (City) v. Quebec (Labour Court), [1997] 1 S.C.R. 1015, at para. 61, per Lamer C.J.) ¶ 28 Other principles of interpretation ‑ such as the strict construction of penal statutes and the "Charter values" presumption ‑ only receive application where there is ambiguity as to the meaning of a provision. (On strict construction, see: Marcotte v. Deputy Attorney General for Canada, [1976] 1 S.C.R. 108, at p. 115, per Dickson J. (as he then was); R. v. Goulis (1981), 33 O.R. (2d) 55 (C.A.), at pp. 59‑60; R. v. Hasselwander, [1993] 2 S.C.R. 398, at p. 413; R. v. Russell, [2001] 2 S.C.R. 804, 2001 SCC 53, at para. 46. I shall discuss the "Charter values" principle later in these reasons.) (Emphasis added) (see also Rizzo Shoes, supra, at para. 22 as to the recognition of the “. . . fair, large and liberal construction . . .” directed by the various Interpretation Acts.) [93] The modern rule of statutory interpretation, as noted by the Chief Justice in her opinion, is set out by Ruth Sullivan, in Driedger on the Construction of Statutes (3rd ed. 1994) at p. 131: The modern rule. There is only one rule in modern interpretation, namely, courts are obliged to determine the meaning of legislation in its total context, having regard to the purpose of the legislation, the consequences of proposed interpretations, the presumptions and special rules of interpretation, as well as admissible external aids. In other words, the courts must consider and take into account all relevant and admissible indicators of legislative meaning. After taking these into account, the court must then adopt an interpretation that is appropriate. An appropriate interpretation is one that can be justified in terms of (a) its plausibility, that is, its compliance with the legislative text; (b) its efficacy, that is, its promotion of the legislative purpose; and (c) its acceptability, that is, the outcome is reasonable and just. [94] Both s. 9(5) of the Interpretation Act and the Supreme Court’s endorsement of the “modern” approach invite the interpreter of legislation to look beyond the words alone to the object and spirit of the legislation. Municipal’s argument fails to recognize that consideration of the scheme and object of the legislation is a fundamental part of the interpretive process under the “modern” approach. [95] This is not to suggest that a judge may avoid the application of clear and unambiguous statutory language by attributing unexpressed legislative intent revealed through a purposive analysis. As Cory J., for the majority of the Court, said in Alberta (Treasury Branches) v. M.N.R., [1996] 1 S.C.R. 963; [1996] S.C.J. No. 45 (Q.L.): 15 Thus, when there is neither any doubt as to the meaning of the legislation nor any ambiguity in its application to the facts then the statutory provision must be applied regardless of its object or purpose. I recognize that agile legal minds could probably find an ambiguity in as simple a request as "close the door please" and most certainly in even the shortest and clearest of the ten commandments. However, the very history of this case with the clear differences of opinion expressed as between the trial judges and the Court of Appeal of Alberta indicates that for able and experienced legal minds, neither the meaning of the legislation nor its application to the facts is clear. It would therefore seem to be appropriate to consider the object and purpose of the legislation. Even if the ambiguity were not apparent, it is significant that in order to determine the clear and plain meaning of the statute it is always appropriate to consider the "scheme of the Act, the object of the Act, and the intention of Parliament". What then was Parliament's intention in enacting the 1990 legislation? [96] Because both parties at trial were of the view that the regulations were ambiguous, the trial judge did not explore the nature of the ambiguity. Here the lack of clarity is apparent on the face of the regulations. If one substitutes the definition of “production and processing” from r. 1(1)(mc) into r. 14(d) the regulation is nonsensical: The exemption provision contained in paragraph (h) of subsection (2) of Regulation 11 and the refund provision contained in paragraph (k) of subsection (1) of Regulation 12 do not apply to gasoline purchased, stored and used in the exploration for, extraction of, or transformation or conversion of any non-renewable resource to the extent and in the manner determined by these regulations of non-renewable resources; [97] The alternative interpretation, which is urged by Municipal, is that the exemption limitation applies only “to the extent and in the manner determined by the regulations”. [98] Here, the judge’s task was to make a reasonable effort to give meaning to these incomplete or otherwise flawed Regulations consistent with the purpose and intent of the legislation. It was for the judge to determine whether the absence of the further regulatory provisions rendered the exemption from refund provision meaningless. In so doing she was driven to a contextual and purposive analysis. [99] Municipal has referred to several cases which it says support its submission that, “where the statutory words are clear and unambiguous, [the court] must give conclusive weight to those clear unambiguous words, without further or any inquiry into legislative intent”. (Shell Canada Ltd. v. Canada, [1999] 3 S.C.R. 622; 65302 British Columbia Ltd. v. Canada, [1999] 3 S.C.R. 804; Singleton v. Canada, [2001] 2 S.C.R. 1046, 2001 SCC 61; Canada (Deputy Minister of National Revenue - M.N.R.) v. Mattel Canada Inc., [2001] 2 S.C.R. 100, 2001 SCC 36) I do not agree that these cases advance Municipal’s position. They do no more than reiterate the caution of Cory J. in Alberta Treasury at ¶16 above. In Shell, for example, McLachlin J. (as she then was) cautioned against finding an unexpressed legislative intent within the clear unambiguous statutory provision under the guise of a purposive interpretation (at para. 43); in 65302 British Columbia Iacobucci J., for the majority, expressly endorsed the modern principle of statutory interpretation but warned, as did McLachlin J. in Shell, that the tools of statutory interpretation should not be used to stray from “clear and unambiguous statutory language”; to similar effect were the comments of Major J. in Singleton and in Mattel. The cases cited do not reflect the Supreme Court’s endorsement of a strict, literal interpretive approach. Each case involved the application of clear and unambiguous statutory language to transactional facts. The regulations here in dispute are, in my view, neither clear nor unambiguous. [100] I do acknowledge that, notwithstanding the Supreme Court of Canada’s repeated endorsement of the “modern principle”, it is sometimes difficult to reconcile the divergent approaches to statutory interpretation revealed in the many of that Court’s cases. (see, for example, Québec (Communauté urbaine) v. Corp. Notre-Dame de Bon-Secours, [1994] 3 S.C.R. 3; Stubart Investments Ltd. v. Canada, [1984] 1 S.C.R. 536; 65302 British Columbia Ltd. v. Canada, supra; Canada v. Antosko, [1994] 2 S.C.R. 312; Friesen v. The Queen, [1995] 3 S.C.R. 103). For a thoughtful and persuasive discussion of this issue see Brian J. Arnold “Statutory Interpretation: Some Thoughts on Plain Meaning” from Report of Proceedings of the Fiftieth Tax Conference, 1999 Conference Report (Toronto: Canadian Tax Foundation 1999). [101] In my view it is unnecessary here to do other than apply the clear and consistent direction of the Supreme Court of Canada that “. . . the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”. The meaning of the regulations in question here, construed contextually, is not clear. The omission of the clarifying regulations created doubt as to the meaning of the legislation. As was noted by Iacobucci J. in Bell ExpressVu, supra, to determine whether a provision is ambiguous, in other words, reasonably capable of more than one meaning, one must consider its entire context. At para. 29: ¶ 29 What, then, in law is an ambiguity? To answer, an ambiguity must be "real" (Marcotte, supra, at p. 115). The words of the provision must be "reasonably capable of more than one meaning" (Westminister Bank Ltd. v. Zang, [1966] A.C. 182 (H.L.), at p. 222, per Lord Reid). By necessity, however, one must consider the "entire context" of a provision before one can determine if it is reasonably capable of multiple interpretations. In this regard, Major J.'s statement in CanadianOxy Chemicals Ltd. v. Canada (Attorney General), [1999] 1 S.C.R. 743, at para. 14, is apposite: "It is only when genuine ambiguity arises between two or more plausible readings, each equally in accordance with the intentions of the statute, that the courts need to resort to external interpretive aids" (emphasis added), to which I would add, "including other principles of interpretation". 30 . . . It is necessary, in every case, for the court charged with interpreting a provision to undertake the contextual and purposive approach set out by Driedger, and thereafter to determine if "the words are ambiguous enough to induce two people to spend good money in backing two opposing views as to their meaning" (Willis, supra, at pp. 4‑5). (Emphasis added) [102] I am satisfied, as was Justice Robertson, that a contextual and purposive analysis leads to the conclusion that the legislature intended that companies engaged in the production and processing of non-renewable resources not be entitled to the refund of tax. Such is the correct interpretation of these regulations. [103] Municipal argues, in the alternative, that if the judge was entitled to conduct a contextual and purposive analysis, she erred by assigning undue weight to legislative history. I do not agree. The judge’s inquiry was multifaceted including legitimate consideration of the history of the legislation, companion legislation and statements of purpose contained in Hansard. I am not persuaded that a single aspect dominated. [104] Nor is there merit to Municipal’s complaint that the judge erred in relying upon legislative history because “no evidence respecting legislative history was submitted in the proceeding”. Municipal acknowledges that consideration of legislative history in the interpretive process was urged by the Attorney General in its pre-trial brief with material following the evolution of the Act and Regulations and relevant excerpts from the legislative Debates attached. Municipal did not object at trial to the judge’s receipt of this material. [105] Municipal further argues that, if there is a reasonable doubt as to the meaning of the Regulations, a residual presumption operates in favour of the taxpayer, citing Bon-Secours, supra. The Attorney General says in response that a residual presumption operates only where it is impossible to ascertain the meaning of the enactment. In such a case, the interpretation which most favours that taxpayer prevails. (See Bon-Secours, at paras. 24 and 25, per Gonthier J.) Here, through application of the modern rule of statutory interpretation, it was not impossible to ascertain the meaning of the Regulations. [106] I agree with the Chief Justice that Justice Robertson did not err in failing to follow the 1991 decision of Saunders, J.(as he then was). [107] Accordingly, I would dismiss the appeal with costs to the respondent Attorney General in the amount of 40% of those fixed or agreed at trial. Bateman, J.A.