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Table of Contents
I.
II.
III.
Introduction......................................................................................................................... 3
Background ......................................................................................................................... 9
Partial Agreed Statement of Facts..................................................................................... 10
. Historical Background of the Construction of the Transcontinental Railway................... 10
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a) 1871 BC Terms of Union............................................................................................ 10
b) Initial Attempts to Construct Transcontinental Railway ............................................ 11
c) 1880 Contract ............................................................................................................. 12
d) 1881 CPR Act ............................................................................................................. 15
e) Issuance of the CPRC Charter and Incorporation in 1881 ......................................... 17
f)
CPRC Constructs and Operates the Railway.............................................................. 18
g) Subsequent Corporate History.................................................................................... 19
h) Federal Taxation in Canada at the time of the 1880 Contract.................................... 19
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Extension of Manitoba boundaries in 1881................................................................ 20
Saskatchewan and Alberta Join Confederation in 1905 ............................................. 20
k) CPRC Pays Certain Taxes or Makes Payments in Lieu of Taxes .............................. 21
l) Federal taxes............................................................................................................... 21
m) Provincial Taxes ......................................................................................................... 27
n) Events of the 1960s..................................................................................................... 28
o) CPRC Invokes Clause 16 against Federal Taxation in 2004...................................... 30
The Witnesses and Evidence............................................................................................. 33
Issues................................................................................................................................. 36
IV.
V.
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. Clause 16 does not have constitutional force but does have statutory and contractual force
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(a) Clause 16 does not have constitutional force ............................................................. 38
(b) Clause 16 has statutory force...................................................................................... 65
(c) Conclusion on the legal status of Clause 16............................................................... 86
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. The Kingstreet remedy does not apply in these circumstances ......................................... 87
(a) Parties’ positions......................................................................................................... 88
(b) Analysis ...................................................................................................................... 92
(c) Conclusion on the Kingstreet remedy ...................................................................... 122
. Clause 16 must be interpreted using both contractual and statutory interpretation
principles......................................................................................................................... 122
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a) Identifying the interpretive framework to determine the scope of Clause 16 .......... 123
b) Conclusion on interpretive principles applicable to Clause 16 ................................ 134
. Clause 16 applies to LCT, but not to Income or Fuel Tax............................................... 135
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a) The Parties’ arguments ............................................................................................. 135
b) Surrounding circumstances: The historical context of the 1880 Contract................ 141
c) Income Tax............................................................................................................... 145
d) Fuel Tax.................................................................................................................... 167
e) LCT........................................................................................................................... 199
f)
Conclusion on the scope of the Clause 16 Exemption ............................................. 205
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. Clause 16 was neither repealed nor rescinded in the 1960s nor after CPRC’s 1984
continuance, with respect to federal taxation.................................................................. 205