[2014] 1 F.C.R. D-4
Income Tax
Income Calculation
Deductions
Appeal from Tax Court of Canada decision (2011 TCC 433) rejecting, pursuant to Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 18(1)(a), claim for deductible expense—Appellant required to post security to cover potential liability for countervailing, anti-dumping duties with respect to goods exported to United States—Funds deposited in term deposits with bank—T.C.C. finding that appellant under no obligation to pay countervailing, anti-dumping duties, deposits remaining in appellant’s name, merely hypothecated to bank, payment not deductible pursuant to Act, s. 20(1)(vv) as amount paid in respect of “existing or proposed” duties—Issue herein deductibility of amount of term deposits—Appellant arguing obligation to purchase term deposits, hypothecate them to bank giving rise to deductible expense—Present case comparable to Canada v. Nomad Sand and Gravel Ltd, [1991] 2 F.C. 172 (C.A.) wherein Urie J.A. noting deductible expense one made “once and for all without recourse”—This notion suggesting deductible expense one where payor retaining no interest in amount paid—Here, amounts deposited in term deposits not deductible pursuant to Act, s. 18(1)(a) as appellant retaining interest in funds—To come within Act, s. 20(1)(vv), appellant having to have paid amount as or on account of existing or proposed duties—Even if placement of funds with bank treated as having been paid to bank, not paid on account of duties, existing or proposed —Appeal dismissed.
Industries Perron Inc. v. Canada (A-428-11, 2013 FCA 176, Pelletier J.A., reasons for judgment dated July 5, 2013, 15 pp.)