Union Natural Gas Company of Canada v. Corporation of the Township of Dover

IDINGTON J.-I think the result which each of the courts below arrived at, is in accord with the correct interpretation and construction of the Assessment

Act in question herein.

To depart therefrom and attempt to apply the views maintained by appellant would lead to much confusion in many conceivable cases, as, for example, the case of a company doing business in two different municipalities.

If, as is quite conceivable, the section does an injustice and happens to produce results out of harmony with the general principles possibly supposed to be underlying the definition of "income" in the Assessment Act, or in the legislation set forth in the Mining

Act, it is not for us to interfere.

The language used is definite and express and is not, as I read it, in conflict with the literal definition as given of the word "income" though it may be a limitation thereof as to a specified case and a departure from the supposed principles had in mind by the draftsman of the definition.

There is nothing remarkable in that, when the subject matter of any legislation in any place happens to be taxation.

The appeal should be dismissed with costs.

J.-I concur in the dismissal of this appeal.

J.-Subsection 3 of section 36 of the Ontario

Assessment Act, of 1904, c. 23, reads as follows:- By sec. 4 of c. 41 of the statutes of 1907 the following words were added to s.s. 3:tax that at

J.

As consolidated in the Revision of 1914 (c. 195, s. 40 (6) ) these provisions now read:that at

An exemption for buildings, plant and machinery is provided by s.s. 4, and by s.s. 5 it is provided that mineral land is in no case to be assessed at less than the value of other land in the neighbourhood used for agricultural purposes.

Having regard to the history of this legislation I am, with great respect, unable to accept the view of the learned Chief Justice of Ontario that in the case of oil and gas properties each. well operated is to be deemed a distinct "mine or mineral work" and that the income therefrom must be assessed separately.

I cannot regard the amendment made in 1907 as intended to do more, in addition to providing for the localization of the assessment, than to provide that the minimum tax on any gas and oil producing property shall be $20 for each well in operation at any time during the year on such property.

The expression "mine or- mineral work" is not defined in the statute and what it may include must, I think, in every case depend on the circumstances. In the case at bar there is no evidence to enable us to determine whether each of the two wells assessed is in itself, or forms part of, a distinct mine or mineral working, or whether the two wells assessed are parts of the same "mine or mineral working."

But, however that may be, I agree with the view of the learned Chief Justice that expenditure on the sinking of new wells or the deepening of existing wells, J. whether productive or dry, is expenditure on capital account and is not deductible from earnings for the purpose of arriving at the "income" of the mine or mineral working assessable under s.s. 6 of s. 40 of the Revised Statutes of 1914.

I am quite unable to appreciate the grounds on which the appellant contends that an adverse difference between receipts and expenditure in one year,

(the latter in this case including capital outlay) should be taken into account and deducted from earnings of a succeeding year in order to arrive at the "income"' for the latter year. The definition of "income" in s. 2 (2) as from any business in my opinion excludes any such deduction.

I would therefore dismiss the appeal.

J.-On the ground that the expenditure incurred by the appellant in drilling wells where no mineral oil or natural gas was obtained, and which expenditure the appellant states was money totally lost, was properly capital expenditure for the development of the oil field, and not expenses which should be charged against the revenue derived from productive wells, I am of opinion that the appeal fails.

With great deference, I cannot concur in the view of the Appellate Division that the proviso added in 1907 to subsection 6 of section 40 of the Assessment Act (R.S.O. 1914, ch. 195) governs the construction of the first part of the subsection which was enacted in 1904. This proviso merely determined a minimum amount for the assessment on the income from each . oil or gas well operated at any time during the year, but, in my opinion, did not make it obligatory to consider each productive gas or oil well as a separate entity the income of which should be separately assessed. Whether it should be so considered is a question to be determined according to the circumstances of each case.

.The appeal should be dismissed with costs.

Appeal dismissed with costs.