Mobil Oil Canada Ltd. v. Canada
A-212-93
MacGuigan, J.A.
16/2/94
9 pp.
Appeal from trial judgment, [1993] 2 F.C. D-18, appellant not entitled to exemption from federal sales tax -- Whether appellant entitled to federal sales tax exemption on purchase of Dash-8 aircraft by virtue of Excise Tax Act, s. 6(b)(i) as air service directly related to exploration, development of natural resources -- Appellant using aircraft to fly crews to and from oil and gas fields in remote areas of northern Alberta, British Columbia -- Aircraft flying regularly scheduled route three times a week -- "Development", "natural resources" broadly interpreted in Bridges Brothers Ltd v. The Queen (1985), 85 D.T.C. 5285 (F.C.A.), in context of use of helicopter to control animal, human trespassers on blueberry farm -- Trial Judge opted for narrow interpretation holding appellant not meeting required burden of proof in establishing Dash-8 purchased for use exclusively in provision of air services directly related to development of oil and gas fields -- Essential issue, meaning of "development" already decided in Bridges Brothers -- Test: greatest possible economic benefit from resources -- Must be understood in sense of maximization of potential of natural resources -- Augmentation of available pool of oil or gas at bottom of well bore, through enhanced recovery systems, not production, but quantitatively maximizing commercial potential of resource -- Development must mean installation of such systems and their operation, since maximization of potential requires both -- Exclusivity of development not required; development can co-exist with production -- Only statutory requirement: air services must be "directly related" to development of natural resources -- Appeal allowed -- Purchase of aircraft exempted under Excise Act, s. 29(1) from consumption or sales tax -- Excise Tax Act, R.S.C. 1970, c. E-13, Sch. III, Part XVII (as enacted by S.C. 1974-75-76, c. 24, s. 21), s. 6(b)(i) (as am. by S.C. 1980-81-82-83, c. 68, s. 40), 27 (as am. idem, s. 10), 29(1) (as am. by S.C 1980-81-82-83, c. 104, s. 9).