O ’Connor, J.:—This is an appeal from the decision of the Provincial Treasurer affirming the assessment for Income Tax of the Company at 7% on the net taxable income during the last quarter of 1936, viz., $5010.94. The company’s fiseal year ends on Semptember 30th.
Prior to 1938 the rate of taxation was 5% but by chapter 20 of the Statutes of Alberta, 1938, the rate was increased to 7%. Section 16 provides in part that:
“16 . . . . the amendments made by . . . . shall be retroactive so as to apply to all income for the year 1937.”
Year is defined unless the context requires a contrary meaning, by See. 2, subsection (f).
"‘(f) ‘Year’ means the calendar year.
There is nothing in the immediate context to require a contrary meaning but counsel for the Provincial Treasurer relies on sec. 34, subsec. 2, added in 1935, viz:
“34 (2) Notwithstanding the provisions of section 32 of this Act,
any corporation or joint stock company whose fiscal year ends upon some day other than the thirty-first day of December, shall make a return within three months from the day upon which its fiscal year ends, and the tax shall be computed in the manner prescribed by this Act, mutatis mutandis, as if the fiscal year of the corporation or joint stock company had ended on the thirty- first day of December after the day upon which that fiscal year ends.”
He quotes particularly the words ‘‘and the tax shall be computed in the manner prescribed by this Act mutatis mutandis, as if the iscal year had ended on the 31st day of December. ’ ’
Counsel for the company interprets "‘in the manner’’ as referring to procedure, that is I suppose without allowance for depletion as provided in sec. 5, subsec. 5, or the deductions excluded by sec. 6, a payment of one-quarter of the tax to accompany the return as provided by section 47 &c.
He further points out that when the rate was changed in 1936 the increased rate was expressly made to apply to income for any period terminating in 1935 and in any subsequent year, and that in all changes of rate in the Dominion Act the increased rate is expressly made to apply to income for any period terminating after March 3lst.
It seems unlikely that the Legislature would apply the higher rate for the entire year to a company the fiscal year of which ended on January 5th, 1937, while exempting other companies the fiscal year of which ended on December 31st, 1936. It may be the company could in October, 1936, have changed its fiscal year to end December 31st making a partial return for the last quarter of 1936 and if so it would have paid the lower rate. All these considerations are merely speculative, however. In the result it is difficult to say whether the Legislature intended the higher rate to apply not only to 1937 income as expressly stated but also as to income for any period terminating in 1937.
Mr. Gray refers to Craie’s Statute Law, 4th Ed. at p. 109, as authority for the statement that there is no rule requiring taxing statutes to be strictly construed but it is clear that retroactive Legislation is in a different position.
In Schmidt v. Ritz, 31 S.C.R. 602, the Chief Justice (Sir Henry Strong) said (page 605) :
“The well known rule that retrospective statutes especially such as divest vested rights are to receive a restrictive construction is too well established to permit any larger interpretation than that which I attribute to the words according to their strict grammatical construction.
“That the legislature had demonstrated an intention to enact retrospectively to a certain extent is not sufficient to warrant a retroactive operation carried beyond the meaning of the terms used strictly construed.”
The subject is not to be taxed upon refinements or otherwise than by clear words. Commissioner of Stamps v. Munro, [1933] 3 W.W.R. at 910.
I find the rate applicable to the income for the last quarter of 1936 is 5%. I allow the appeal with costs.