CAMERON, J.:—This is an appeal by the Minister of National Revenue from a decision of the Income Tax Appeal Board dated June 11, 1951 (4 Tax A.B.C. 287, footnote), which allowed an appeal by the respondent company from an assessment to income tax made upon it on April 15, 1950, in respect of its taxation year ending December 31, 1947. In computing its taxable income for that year, the respondent claimed as a deduction the sum of $846,154.96, paid the Minister of Hydraulic Resources for the Province of Quebec under the provisions of ‘‘An Act to Insure the Progress of Education”, enacted by the Legislature of the Province of Quebec, 10 George VI, c. 21. That deduction was disallowed by the Minister on the ground that was a corporation tax as defined by the regulations contained in P.C. 5948, passed under the authority of Section 6(l)(o) of the Income War Tax Act, and therefore, under the provisions of that subsection, was not deductible. I am advised that in this case, as in all the others, the full amount now claimed by the Minister as payable, has in fact been paid, no doubt under protest.
Paragraph (0) as made applicable to the year 1947 was as follows:
“6. In computing the amount of the profits or gains to be assessed, a deduction shall not be allowed in respect of
(o) any corporation tax, as defined by regulation made by the Governor in Council, paid to the Government of a province or to a municipality.”
An appeal to the Income Tax Appeal Board was allowed, the Board being of the opinion that the ‘‘ Act to Insure the Progress of Education” did not impose a corporation tax, and that the Governor in Council in enacting P.C. 5948 exceeded the powers conferred on him by paragraph (0) of Section 6(1) of the Income War Tax Act, and that it was therefore ultra vires. The Board also held that in any event a portion of the deduction claimed was within the express provisions of certain exceptions contained in P.C. 5948, as being rents or royalties in respect of natural resources; and that the sums so disbursed were wholly, exclusively and necessarily laid out for the purpose of earning the income, and therefore deductible under Section 6(1) (a) of the Act.
This appeal was heard at the same time as eight other appeals in which the Minister was the appellant and eight other power corporations of the Province of Quebec were respondents. It was agreed at the hearing of the appeals that the evidence given before the Income Tax Appeal Board, and a certain admission of facts supplementary thereto which was filed with the consent of all parties, would be the evidence on these appeals, subject only to the question of the admissibility of certain evidence tendered to the Board.
This respondent, like all other respondents, was engaged in the business of generation of electrical power from water powers. Part of the water powers of this respondent were in the Province of Quebec, a part thereof being owned by the respondent in fee simple,the remainder being held under emphyteutic leases from the Province of Quebec.
The issues raised in this appeal were the same as in the others, except that Counsel for MacLaren-Quebec Power Company and for the Ottawa Valley Power Company did not join with counsel for this and the other respondents in their submission that paragraph (o) of Section 6(1) of the Zncome War Tax Act was ultra vires the Parliament of Canada.
Judgment has been delivered today in the appeal of the Minister regarding the assessment of one of the respondents— The Shawinigan Water and Power Company. That appeal was allowed, the decision of the Income Tax Appeal Board was set side and the assessment made upon that company was restored.
For the reasons given in that judgment, and which are to be considered as forming part of this judgment, the appeal herein will be allowed, the decision of the Income Tax Appeal Board set aside, and the assessment made upon the respondent by the Minister will be affirmed. The appellant is entitled to be paid its costs after taxation.
Judgment accordingly.