use

A stock of spare parts which the taxpayer kept on hand for potential use in the event of machine or equipment failure did not qualify as property "to be used" for the purpose of manufacturing or processing goods for sale for the purposes of the definition of qualified property" in s. 127(10)(c)(i) of the Act (now s. 127(9)) and paragraph (a)(i) of the description of Class 29 property. McNair, J. stated (p. 6294):

Hogan J found that dried insects donated by the taxpayer to Laval University were individually appraised and did not "form an unbreakable set," and thus were not a set (as per s. 46(3)), so that under s. 46(1), each insect had an adjusted cost base of $1,000. Before so concluding, he disagreed with the expansive interpretation of personal-use property in Klotz, stating (at para. 15):

Prior to the expropriation of their 33-acre vacant property, which they intended to use on retirement to build a house and operate a farm, the taxpayers rented out the property for small sums to adjoining farmers. The expropriation proceeds were used, in part, to purchase two smaller vacant lots one-half a mile apart, which were intended to be used on retirement in the same manner (although this ceased to be feasible as a result of a proposed landfill site) and, in the meantime, similar farming arrangements with neighbouring farmers were utilized.

The taxpayer, which leased flight simulators which it had manufactured, subsequently sold those simulators. The Minister denied capital cost allowance claims of the taxpayer made prior to the sales on the grounds that the simulators were inventory.

The taxpayer unsuccessfully submitted that a property acquired by the taxpayer for farming was a replacement property for a property that was used to earn rental income. Paris J. also stated (at p. 1100) that:

"'Use' in paragraph 44(5)(8.1) does not ... include the notion of holding for a future use."

The predecessor of the taxpayer bought an 18-acre parcel of land in 1965 with the intention of using it for an anticipated future expansion of its pharmaceutical business, and sold the parcel in 1988 (and bought a 62-acre site further to the west to meet his future expansion requirements) after realizing that the 18-acre site (which in the meantime had remained vacant) was inadequate for its expansion requirements.

In finding that the parcel did not qualify as a "former business property", Bowman TCJ. stated (at p. 1164) that:

An Ontario corporation which was engaged in the business of importing films or videotapes from its U.S. parent and making them available to Canadian television broadcasters was "using" them, notwithstanding that it was not broadcasting them. [s.22(1)(l)(iii) of the Corporations Tax Act, S.O. 1972]

Although the portions of a one-time payment attributable to the acquisition of a trade name and logo clearly came within s. 212(1)(d)(i), and a concept or plan of merchandising replacement muffler systems came, within s. 212(1)(d)(i) as being for the right to use a "plan" or, perhaps, a "process," and also for the right to use "property," the portion of the payment attributable to obtaining the exclusive right to buy and resell a type of pipe bending machine within specified provinces could not be said to relate to the use of or the right to use the machine, and did not come within s.

Thurlow CJ found that buildings (held in inventory) whose surrounding grounds were improved by landscaping were "used ... in the course of a business of constructing and selling them" when they were sold. This, however, did not mean that the landscaping costs could be deducted in the year prior to the buildings' sale during which they were not yet "used" in that business. S. 20(1)(aa) only provided for the deduction of landscaping costs that otherwise would be non-deductible by virtue of ss. 18(1)(a), (b) or (h).

Expenses incurred by the taxpayer in entertaining clients at a remote B.C. fishing lodge, including room, food, transportation, fishing licences, alcohol and tobacco, were non-deductible. Linden J.A. noted that "there is no need for the property to be 'owned' or 'rented' or 'exclusively controlled' in order for it to be 'used', as that word is employed here" (p. 6462).