DATE October 6, 1988
TO Jim Daman Acting Director Audit Applications Division
FROM Resource Industries Section Allan B. Nelson 957-8284
Attention: David Schlesinger Industry Studies Section
SUBJECT: CCA Classification of Logging Roads
We are writing in response to your memo of March 2, 1988, wherein you request our comments on your draft position concerning the CCA classification of logging roads that serve more than one timber limit.
The wording in Schedule II, class 10(n) of the Regulations can be narrowly interpreted so that roads servicing more than one timber limit would be excluded from class 10(n) treatment. It could be argued that once all of the timber has been removed from a particular limit, that portion of the road servicing that particular limit could still be of further use to the taxpayer in servicing the other limit(s).
Alternatively, the wording in class 10(n) can be interpreted in the plural sense (see subsection 26(7) of the Interpretations Act i.e. "Words in the singular include the plural...") so that a road acquired for the purpose of servicing a number of timber limits and that will be of no further use to the taxpayer after the timber has been removed from all of the limits, can be included in class 10(n), if it otherwise qualifies.
In light of this lack of clarity in the wording of class 10(n) and Finance's statement that they never intended each class 10(n) road to be limited to the servicing of only one timber limit, we agree with your draft position that a road, which otherwise qualifies for class 10(n) treatment, should not be precluded from such treatment solely because it services more than one timber limit.
As discussed with you on August 8, 1988, Head Office Appeals closed their file on this matter on March 8, 1988. It was their understanding that your draft position, concerning the CCA classification of logging roads, was your final position. They have responded accordingly to the Quebec District Office (copy of translated memo to Quebec D.O. attached).
We hope the above comments will be of assistance to you.
ORIGINAL SIGNED BY
C. GOUIN -TOUSSAINT
Director Bilingual Services and Resource Industries Division Rulings Directorate