Opco used a truck, equipped with a new loader and a grapple, to transport pulpwood logs from woodlots for producers to a pulpwood processing plant, and also transported sawlogs that it purchased from lumber producers and resold to sawmill operators (and further, and to a lesser extent, transported sawlogs from woodlots belonging to it). CRA stated:
[L]og hauling services performed by a subcontractor from the point of harvest to the point of delivery of the logs to a processing plant (sawmill, pulp mill, plywood mill or other similar log processing location), can constitute an activity of logging for purposes of the definition of qualified property in subsection 127(9) and paragraph 4600(2)(f) … based, inter alia, on Lor-Wes … .
It appears to us that the purchase and resale of logs by Opco constituted an activity of logging for the purposes of paragraph 4600(2)(f) of the Regulations and the definition of "qualified property" in subsection 127(9).
Finally, a logging truck as described in paragraph 4600(2)(f) … could be considered to have been acquired for use in logging … if it were acquired by a subcontractor with the intention of using it for log hauling services to sawmills, pulp mills or other processing sites on behalf of a number of wood producers who are either farmers who own woodlots or simply other persons who own woodlots for whom income from the sale of wood is not the primary source of income.