Tenneco Canada Inc. v. The Queen, 91 DTC 5207 (FCA) -- summary under Canadian Manufacturing and Processing Profits

By services, 28 November, 2015

In finding that a corporation which assembled and installed exhaust systems in automobiles was not engaged in manufacturing ("producing for sale an identifiable article of commerce by assembling parts produced by others" (p. 5208)) or processing (which "occurs when raw or natural materials are transformed into saleable items" (p. 5209)), Linden J.A. stated (pp. 5209-5210):

"The nature of the modern commercial world is that goods often pass through many hands before they reach consumers. At each stage, minor alterations may be made to the goods, or they may be assembled in conjunction with other ready-made goods, before they progress through the commercial chain. The benefit of the incentives cannot be claimed by each of the handlers merely because they altered the goods in some small way. Only those operations which significantly change the character of the goods can truly be described as 'manufacturing' or 'processing' so as to qualify for the special tax incentives."

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only operations significantly changing goods' character are "manufacturing" or "processing"
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