This decision underlines the importance of how
mining equipment is used for purposes of exemptions from taxation
under the British Columbia Social Service Tax Act
Orca Sand & Gravel Limited Partnership (Orca) appealed a
decision of the British Columbia minister of finance (Minister)
affirming an assessment of tax under the Act on a load-out conveyor
and shiploader purchased by Orca, and disallowing Orca's claim
for a refund of the tax it paid to purchase some (but not all) of
the equipment. The equipment was purchased for use in connection
with Orca's sand and gravel mine on Vancouver Island, the
products from which were used by Orca's customers to make
concrete. The conveyor system and shiploader were purchased to
transport extracted sand and gravel products from stockpiles over
1.7 kilometers of land and 450 meters of ocean for loading onto a
ship located offshore for delivery to market.
The key issue on the appeal was the interpretation of section
13.2 of the Social Service Tax Act Regulations
(Regulations) that exempts from tax machinery or equipment that is
purchased for use primarily (more than 50%) and directly in the
manufacture of qualifying tangible personal property, including the
extraction or processing of minerals. For machinery or equipment
that is to be used in relation to the operation of a mineral mine,
the Regulations provided that the exemption was limited to use at
the "mine site" from the point at which the raw material
was extracted from the ground to the point at which the finished
product was placed on a vehicle, or other conveyance for removal
from the mine site.
The Minister denied the exemption on the basis that a "mine
site" was limited to the area in which the actual extraction
and processing of minerals takes place and that the load-out convey
or and shiploader did not qualify. Orca disagreed, arguing that the
load-out conveyor and shiploader were within the "mine
In support of its position, Orca relied on its mine permit and
Environmental Assessment Certificate, both of which were issued by
the provincial government and both of which covered the entirety of
Orca's operations. Orca submitted that from a provincial
government perspective, the entire contiguous site is a "mine
site." Although the British Columbia Supreme Court (BCSC) was
persuaded by Orca's submissions in this regard, it ultimately
dismissed the appeal on the basis that the equipment was not used
"primarily" in the manufacture of aggregate. Rather, on
the evidence before it, the BCSC found that the equipment was used
more than 50% of the time to transport aggregate for loading onto
vessels and barges.
Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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