Agnico Eagle v. GN, 2014 NUCJ 30

nunavuumi iqkaqtuijikkut NUNAVUT COURT OF JUSTICE La Cour de justice du Nunavut Citation: Agnico Eagle v. GN, 2014 NUCJ 30 Date: 20141030 Docket: 08-13-523-CVA Registry: Iqaluit Applicant: Agnico Eagle Mines Limited -and- Respondent: The Government of Nunavut ________________________________________________________________________ Before: The Honourable Mr. Justice Mahar Counsel (Applicant): Peter Mantas Counsel (Respondent): Adrienne Silk Location Heard: Iqaluit, Nunavut Date Heard: January 14, 2014 Matters: Judicial Review Application REASONS FOR JUDGMENT (NOTE: This document may have been edited for publication)

I. INTRODUCTION [ 1 ] This is an application by Agnico Eagle Mines Limited (AEM). At issue is a decision by the Minister of Finance for Nunavut denying a rebate claimed for taxes paid on fuel purchased in June, July, and October of 2012. This fuel was used for defined purposes at its Meadowbank gold mine located near Baker Lake Nunavut, in 2012 and 2013. [ 2 ] The Minister denied the rebates on the basis of the taxpayer AEM missing a recently amended filing deadline. AEM claims that the Minister has incorrectly interpreted the regulations at issue.

In the alternative, they claim that the Government of Nunavut should be barred from relying on this deadline under the doctrine of promissory estoppel or, alternatively, officially induced error. [ 3 ] At issue is a total of $1,959,839.47 in rebates claimed and denied. II. BACKGROUND [ 4 ] The Government of Nunavut introduced the Fuel Tax Rebate Program in 2006, through the promulgation of the Tax Rebate Regulations, Nu Reg 012-2006 [the Regulations]. There are a number of qualified activities for which eligible individuals and corporations can apply for a rebate of territorial taxes on fuel.

These include harvesting, outfitting, quarrying for carving stone, mineral exploration, and mining development, extraction or reclamation. [ 5 ] AEM is engaged in mineral extraction in Nunavut through the operation of the Meadowbank gold mine. To this end, they have entered into a Development Partnership Agreement with the Government of Nunavut. [ 6 ] Under

Section 5 of the Regulations , this entitles AEM to apply for a rebate on taxes paid with respect to fuel under certain conditions: 5.

A corporation incorporated or registered under the Business Corporations Act that engages in a particular mine development, mine extraction or mine reclamation is eligible to apply for a tax rebate on eligible petroleum products used directly for the purposes of that mine development, mine extraction or mine reclamation if the corporation has entered into and is in compliance with a development partnership agreement with the Government of Nunavut. ( Tax Rebate Regulations, s. 2 ) [ 7 ] In fact, at the time AEM applied for the tax rebates at issue, they were the only company actively engaged in a Development Partnership Agreement, and were thus the only taxpayer to whom

Section 5 applied. [ 8 ] AEM has applied for tax rebates seven times between 2006 and 2012. Two of these applications were denied as a result of missed deadlines. Since 2009, the total rebate claimed and received is $9.3 million. These applications were all made pursuant to section 8(4) of the Regulations , which reads as follows: 8.

(4) An application for a tax rebate must be submitted within one year after the petroleum products were purchased in or brought into Nunavut, and may be submitted every six months. ( Tax Rebate Regulations, s. 8(4) )

[ 9 ] Prior to May of 2012, section 8(4) of the Tax Rebate Regulations was the only statutory deadline applicable to applications for rebates of fuel tax. In May 2012, Regulation R-008-2012 was passed, which added a further subsection to the Tax Rebate Regulations. Section 8(4.1) applies only to applicants referred to in the above

Section 5 , which at the time in question consisted solely of AEM. It reads: 8.

(4.1) Despite subsection (4), an application made by a person referred to in

section 5 must be submitted on or before March 31 in respect of eligible petroleum products purchased in or brought into Nunavut in the preceding year. ( Tax Rebate Regulations, s. 8(4.1) ) [ 10 ] On May 25, 2012, Regulation R-008-2012 was published in the Nunavut Gazette, as required by the Statutory Instruments Act, R.S.N.W.T. (Nu) 1988, c. S-13 , as duplicated for Nunavut by s.29 of the Nunavut Act, S.C. 1993, c. 28 .

An up to date version of the consolidated Regulations was posted on the Government of Nunavut website on October 19, 2012. [ 11 ] AEM, despite being the only taxpayer to whom the new section 8(4.1) applied and despite being in occasional telephone and email contact with the Government of Nunavut’s Department of Finance, was never informed of the new deadline. [ 12 ] In completing the rebate applications at issue, AEM relied on the Government of Nunavut’s Fuel Tax Rebate for Mining Development, Extraction and Reclamation Guidelines (Revised July, 2009) [Guidelines].

These Guidelines do not, of course, reference the deadline in section 8(4.1) as it was not in existence in 2009. [ 13 ] The Guidelines were updated in May 2012, the same month as section 8(4.1) came into force. The new Guidelines, surprisingly, also contain no reference to section 8(4.1) . I asked counsel during the hearing of this application in January 2014 if the Guidelines and forms had since been updated to include the new deadline and was told that they had not been. [ 14 ] By virtue of

section 5 of the Regulations cited above, section 8(4.1) applies to all eligible taxpayers seeking a rebate for fuel consumed for the purpose of mining development, extraction and reclamation. So the Guidelines, the official means by which the government has chosen to communicate with taxpayers, were and are completely out of date and misleading. [ 15 ] The Government of Nunavut has also prepared official rebate claim forms, which AEM used to prepare these applications.

The forms state that: “No rebate can be claimed on fuel which was purchased or brought into Nunavut longer than one year prior to the application being submitted”, which is the deadline contained in section 8(4) . There is no mention made of any different deadline for

Section 5 companies or of March 31. [ 16 ] On May 23, 2013, AEM submitted two applications for rebates for fuel purchased in 2012. In total, 63,411,381 litres of diesel oil had been purchased from Woodward’s Oil Limited, with tax paid at the lowest rate of 3.1 cents per litre. The total rebate sought was $1,959,839.47. [ 17 ] There were two separate applications.

Application 1 dealt with fuel procured in June and July 2012, which was delivered to Nunavut in July and August, while Application 2 dealt with fuel procured and delivered in October 2012. [ 18 ] Application 1 was for a total of 47,266,562 litres and a rebate of $1,465,263.42. [ 19 ] Application 2 was for the remainder and a rebate of $494,576.05. [ 20 ] Fuel delivery to the Meadowbank Mine is constrained by the seasonal realities of Nunavut. Delivery can only be made by boat between June and October. The fuel is then stored until it is needed.

In order to manage the fuel inventory, AEM accounts for the use of fuel on a “first in – first out” basis. Given that fuel is liquid and that it would be impossible to actually determine what exact lot of fuel is being used at any particular time due to the unavoidable mixing of fuel in the storage tanks, this is the only logical way to keep track of

inventory. [ 21 ] Of the fuel encompassed by Application 1, which was purchased in June and July 2012, 19,707,555 litres was consumed by AEM for eligible purposes within the 2012 calendar year.

The remaining 27,559,007 litres was consumed between December 31, 2012, and May 15, 2013. [ 22 ] The fuel encompassed by Application 2, which was purchased in October 2012, was fully consumed between May 15, 2013 and August 12, 2013. [ 23 ] On July 12, 2013, the Minister denied both Application 1 and Application 2 on the grounds that they had not been submitted prior to the deadline set out in section 8(4.1) of March 31, 2013.

This decision was based on a recommendation by Daniel Young, a manager of taxation with the Department of Finance. [ 24 ] All of the fuel at issue in Application 1 and 2 was consumed in Nunavut in the equipment and machinery that AEM used for its mining activities at the Meadowbank Mine, bringing it within the requirements of

section 5 of the Regulations . Daniel Young was cross- examined at the examination for discovery in this application and admitted that the Government of Nunavut had no other reason to deny the rebates. III. JURISDICTION [ 25 ] The Nunavut Court of Justice has the authority to review a taxation decision based on the

interpretation of a regulation by the Minister of Finance of the Government of Nunavut . IV. STANDARD OF REVIEW [ 26 ] The standard of review is correctness. The parties are in agreement on this issue, as is the Court. V. POSITIONS OF THE PARTIES A. Applicant [ 27 ] Section 8(4.1) applies: “in respect of eligible petroleum products purchased in or brought into Nunavut in the preceding year.” Eligible petroleum products are defined in

Section 5 as fuel that has been used for a particular purpose. Section 8(4.1) therefore applies to used fuel purchased during the preceding year. AEM submits that they “did not purchase used fuel,” and therefore section 8(4.1) does not apply to them. The Court should take a literal approach to the

interpretation of tax statutes, with any ambiguity resolved in favour of the taxpayer. [ 28 ] Since Section 8(4.1) doesn’t apply, Section 8(4) does. AEM made the applications at issue under Section 8(4) . No deadline was missed as the applications were made within one year after the purchase of the fuel. [ 29 ] If Section 8(4.1) does apply, it only applies to fuel which has been consumed.

AEM should therefore have had until March 31, 2014 to apply for a rebate with respect to that portion of the fuel which was consumed in 2013. [ 30 ] Section 8(4.1), as interpreted by the Minister, imposes a deadline which is impossible to follow in practice. AEM did not know the use of the fuel purchased in 2012 until it had actually been consumed, which was not until August 2013. In order for fuel to be an “eligible petroleum product”, it has to have been used for a defined purpose.

[ 31 ] The denial of the rebate applications in question, based on a delay of less than two months, is unfair, inequitable and unjust. AEM relied on information issued by the Government of Nunavut, in the form of the Guidelines and official rebate claim forms, and attempted to follow the Government of Nunavut’s requirements. It had a continuing relationship with the Government of Nunavut in the form of a Development Partnership Agreement and expected, if not to be consulted about the new Regulations , at the very least to be informed.

They rely on the doctrine of promissory estoppel, or, in the alternative, that of officially induced error. [ 32 ] The decision of the Minister to deny the applications at issue should be found to be in error and AEM and the applications for rebate allowed. B. Respondent [ 33 ] The Minister’s decision to rely on the deadline in Section 8(4.1) and deny AEM’s rebate applications is correct in law. It must be upheld. [ 34 ] Section 8(4.1) applies to AEM. Section 8(4.1) is specifically drafted to apply to

Section 5 companies and AEM is a

Section 5 company. [ 35 ] The language used in Section 8(4.1) is clear. It imposes a deadline of March 31st for any eligible petroleum products purchased in the previous calendar year. AEM missed this deadline. [ 36 ] AEM is arguing for an absurd

interpretation of Section 8(4.1), based on the appearance of “eligible petroleum products” before “purchased”. The modern approach to statutory

interpretation is that the words used are to be read in context both grammatically and in harmony with both the scheme and object of the statute and the intention of the lawmaker. An absurd

interpretation should be rejected. [ 37 ] If the practical consequences of Section 8(4.1) make it impossible for AEM to claim a rebate which to which it would have previously been entitled, so be it. [ 38 ] Section 8(4.1) was properly enacted and published according to law. Taxpayers cannot rely on erroneous forms and guidelines or an absence of communication from the government in the face of the clear wording of the law. There is no basis for promissory estoppel. [ 39 ] Officially induced error applies primarily in the context of punitive statutes, most often in the area of criminal and regulatory law.

It does not apply in this context. [ 40 ] The doctrine of ambiguity operating in favour of the taxpayer is no longer applied in a simplistic fashion. Section 8(4.1) confers a benefit, rather than a duty, and should therefore be more liberally interpreted. VI. ISSUES [ 41 ] What is the proper

interpretation of the rebate regulations as they pertain to Agnico Eagle? [ 42 ] Did the Minister interpret the regulations correctly in denying the claims for rebate? What consequences flow from the court’s

interpretation of the regulations? For this claim? In the future? [ 43 ] Should the Government of Nunavut be allowed to rely on the new deadline for filing in section 8(4.1) for this particular set of rebate applications?

VII. ANALYSIS A. What is the proper

interpretation of the rebate regulations as they pertain to Agnico Eagle? [ 44 ] The words of

an act or regulation must be taken in context, with the ordinary sense of the words used considered against the presumed intentions of the law-maker. Context and presumptions about the intentions of legislators cannot, however, overcome clear and unambiguous language. Where the ordinary meaning of the statute can be clearly articulated it will always be given significant weight. [ 45 ] When the clear meaning of the words used leads to a literal

interpretation which renders the statute in question unwieldy or obviously unfair, courts should attempt a broader

interpretation that, while supported by the actual words used, leads to a conclusion that is workable and in keeping with the presumed intentions of the law-maker. [ 46 ] Where there is more than one possible

interpretation of a statute, courts will always choose an

interpretation that avoids absurdity. Law makers are presumed to be rational and to have discernable intentions. Statutes must be interpreted in such a way that the law is reasonable and sensible, not nonsensical. [ 47 ] While it has long been held that where tax legislation is ambiguous, ambiguity favours the taxpayer, this truism must be cast in the light of the modern approach to statutory

interpretation. Contextual considerations must be applied. In the case of tax statutes, the underlying policy considerations at play must also be taken into account. [ 48 ] The applicant has based a significant number of arguments on the premise that the new section 8(4.1) is nonsensical: 8.

(4.1) Despite subsection (4), an application made by a person referred to in

section 5 must be submitted on or before March 31 in respect of eligible petroleum products purchased in or brought into Nunavut in the preceding year. ( Tax Rebate Regulations, s. 8(4.1) ) [ 49 ] As the words “eligible petroleum products” come before the words “purchased or imported”, they say that section 8(4.1) only applies to the purchase of fuel which has already been used. I respectfully disagree with this premise and reject all the arguments that flow from it.

This formalistic approach leads to an absurdity and must be rejected. [ 50 ] In the alternative, it is suggested that because of the uncertain meaning of the regulation, the words “purchased or imported” should be ignored and the

section be read to apply to any fuel that was used for an eligible purpose in the previous year, regardless of when it was purchased. This would require me to ignore the clearest wording in the

section and I decline to do so. [ 51 ] The respondent urges the Court to accept the clear meaning of section 8(4.1) , yet the ordinary meaning of the words results in an

interpretation that is almost as absurd as that suggested by the applicant. Section 8(4.1), read literally and sensibly, but without context, would require that fuel purchased in a calendar year would have to be used within the same calendar year in order to be eligible for a rebate. As applied to the applications at issue, only 19,707,555 of the 63,411,81 litres purchased in 2012 would have been eligible for rebate had the applications been filed before March 31, 2013.

Even if the period for use was extended to the March 31 deadline, which would be almost impossible to apply in practice, only about half of the fuel would have been eligible. [ 52 ] If the Government of Nunavut had wanted to do away with the rebate provisions as applied to

Section 5 companies, they could easily have done so. It makes no sense to the Court that they would have intentionally set out to make the process impractical or impossible. [ 53 ] In order to make sense of these provisions, the Court has to consider the policy reasons behind the Regulations generally and

Section 8(4.1) specifically. The presumed intentions of the Government of Nunavut will have to inform this

interpretation. [ 54 ] By making certain activities eligible for rebate, the Government of Nunavut clearly intends to promote those activities. Nunavut is a territory of limited financial resources, with chronically high unemployment and little revenue from sources other than transfers from the Government of Canada. The extraction of mineral resources has the potential to transform this rather bleak economic landscape. It is not at all surprising that the Government of Nunavut wishes to promote such activities. [ 55 ] Section 8(4) places a reasonable limitation on those wishing to claim a rebate for taxes paid on fuel: 8.

(4) An application for a tax rebate must be submitted within one year after the petroleum products were purchased in or brought into Nunavut, and may be submitted every six months. ( Tax Rebate Regulations, s. 8(4) ) [ 56 ] The requirement that fuel be used within one year has a number of possible benefits.

It encourages companies to avoid stockpiling environmentally dangerous amounts of fuel, makes it more difficult to divert the fuel to other uses over time, makes the tracking of inventory simpler, and keeps the promoted activity and the effect on government tax revenue connected in time. [ 57 ] Government has to be presumed to act both rationally and fairly when it enacts statutes and regulations.

The only rational reason I can think of for Section 8(4.1) is that the law makers felt it necessary to connect the use of fuel, the amount of tax revenue subject to rebate, and the calendar year, with reporting required by the end of the fiscal year for accounting purposes.

Section 5 companies are potentially huge players in the relatively small economy of Nunavut, and the Government of Nunavut would have an understandable incentive to have as clear a picture as possible of both the impact and benefits of these companies’ activities on the Governments yearly financial balance. [ 58 ] The only other possible reason for the enactment of Section 8(4.1) would be that the Government of Nunavut wished to particularly target AEM.

This would be inappropriate and is therefore unlikely. [ 59 ] It also does not make sense that the Government of Nunavut’s intention in enacting section 8(4.1) was to force companies to engage in perverse purchasing and use arrangements in order to be able to claim a rebate for using fuel in an activity that the same Government wishes to encourage. It also does not make sense that the law was designed to make otherwise claimable rebates impossible to claim because of the short shipping season in Nunavut. [ 60 ] The use of the word “despite” in section 8(4.1) offers another, more practical

interpretation. If the intention of the drafters had been to limit

Section 5 companies to section 8(4.1) alone, the

section could simply have commenced by stating that 8(4) does not apply to such companies. This the Government did not do. This Court’s

interpretation is that section 8(4) and 8(4.1) are meant to operate together. Section 8(4.1) imposes an additional requirement on

Section 5 companies, but does not do away with the need for such companies to also comply with section 8(4). [ 61 ] Section 8(4) requires that fuel be used within one year of purchase or importation in order to be considered eligible for a rebate. Section 8(4.1) requires, additionally, that any claimable fuel (fuel which has been used for a designated purpose and is therefore an eligible petroleum product) purchased in calendar year and consumed in the same calendar year, must be claimed by March 31st of the following year. The combined effect is that all fuel used in any calendar year must be claimed for that calendar year by the fiscal year end at the latest. [ 62 ] This

interpretation leads to perfect harmony between the time of use and the eligibility for a rebate. It also allows

Section 5 companies to claim everything they would have been able to claim before section 8(4.1) was enacted, with only the additional requirement that they have to file earlier with respect to any fuel used in a calendar year which was also purchased or imported in that same year. B. Did the Minister interpret the regulations correctly in denying the claim for rebate? What consequences flow from the Court’s

interpretation of the regulations? For this claim? In the future? [63] AEM’s rebate claims were rejected because the Minister decided that section 8(4) no longer applied to

Section 5 companies at all.This decision leads to the difficulties discussed above and is therefore incorrect. Both sections 8(4) and 8(4.1) apply to AEM. [64] Subject to sections 8(4) and 8(4.1), AEM should have been allowed to claim a rebate for all the fuel claimed in Application 1 and 2which was used for eligible purposes between January 1, 2013 and August, 2013, because all of that fuel was used and claimed within ayear of purchase.

Since this fuel was not consumed in the same calendar year as it was purchased, section 8(4.1) does not apply andAEM is only limited by section 8(4). [65] The only fuel they could not claim a rebate for under the new deadline of March 31, 2013, is that portion of eligible petroleumproducts referenced in Application 1 which were consumed before December 31, 2012, as these clearly fall into the previous calendaryear, which is also the year in which they were purchased. The amount of fuel subject to the March 31 missed deadline is 19,707,555litres. [66] For all

Section 5 companies, all fuel must be used for a defined purpose and claimed within one year of being purchased orimported into Nunavut in order to qualify for a rebate pursuant to section 8(4). Further, any “eligible petroleum product” fuel used forsuch a defined purpose, must be claimed by March 31st following the calendar year of its purchase or import and use, pursuant to section8(4.1). [67] A simpler way to state the above is this: for

Section 5 companies, a tax rebate for all fuel used for an eligible defined purpose mustbe claimed no later than the earliest of one year from the date of its purchase or import or March 31st of the year following the calendaryear in which it was used. C.

Should the Government of Nunavut be allowed to rely on the new deadline for filing in section 8(4.1) for this particular set of rebate applications? [68] As a matter of general and well established principle and law, taxpayers cannot rely on ignorance of the law to avoid a penalty ordeadline to which they would otherwise be subject. [69] At issue here is the 19,707,555 litres that was purchased in 2012 and consumed before December 31, 2012, which makes it subjectto the filing deadline of March 31, 2013 contained in section 8(4.1).

This is slightly less than one third of the total fuel for which rebateswere claimed in Applications 1 and 2. The rest is deemed eligible for rebate according to the analysis above and is no longer beingconsidered here. [70] The Supreme Court of Canada articulated the longstanding doctrine of promissory estoppel in Maracle v Travellers Indemnity Co(1991), (SCC), 2 SCR 50, [1991] SCJ No 43 (QL). As follows: The principles of promissory estoppel are well settled.

The party relying on the doctrine must establish that the other party has, by wordsor conduct, made a promise or assurance which was intended to affect their legal relationship and to be acted on. Furthermore, therepresentee must establish that, in reliance on the representation, he acted on it or in some way changed his position. (ff. Issue 1: Promissory Estoppel) [71] The doctrine of estoppel is not limited to private parties. It is also binding on the Government.

A party, including the Governmentand its agents, will be held to act consistently with statements made to another party where that party has relied upon these statements toguide their actions (See Canada v Langille, (FC), [1977] FCJ No 46, [1977] 2 FC 380). [72] The respondent has provided the Court with several cases concerning the application of the doctrine to tax law, specifically with

regard to the limitations therein. [73] The leading case appears to be the decision of the Supreme Court in Minister of National Revenue v Inland Industries Ltd, (SCC), [1974] SCR 514, [1971] SCJ No 145 [Inland Industries]. At issue was a complicated scheme in which retroactivepension fund payments were funnelled through affiliated companies at high interest rates to essentially evade tax which would otherwisehave been owed. Agents of the Minister gave prior approval to the retroactive payments after having been provided with the details of theintended transactions; although this approval was obviously misguided.

The Minister subsequently sought to collect the taxes owed.

TheSupreme Court held that the Minister could not be bound by such an approval where the law was clearly not followed: The difference between the wording of this memorandum and the wording of the actuarial certificate is quite substantial and it issomewhat surprising that, notwithstanding such advice, departmental approval was given to the payments on behalf of the Minister.However, it seems clear to me that the Minister cannot be bound by an approval given where the conditions prescribed by the law werenot met (at 523). [74] The respondent urges the Court to adopt the reasoning of the Federal Court in Irving Oil Ltd v R, (FC), [1984] 1FC 281, 2 Admin LR 53 [Irving Oil], specifically for the proposition that the doctrine of estoppel and fairness does not apply when thecore issue is the correct

interpretation of the statute in question: The doctrine of estoppel and fairness did not apply where the issue was one of the correct

interpretation of a statute as opposed to adecision on rights or entitlement by a statutory authority, particularly as it was in the public interest to recover the overpayment.Moreover, it was too speculative to contemplate whether IO Ltd. would have ordered its affairs differently and avoided the overpaymentof compensation had the old formula not been used... (at para 3). [75] At this stage of the analysis, however, the issue is not one of statutory

interpretation, but whether or not the Government of Nunavutacted fairly in applying the provisions of the statute. The decision by the Minister to rely on the new deadline of March 31 contained insection 8(4.1) when Applications 1 and 2 were submitted less than two months after the deadline, while the Government’s ownGuidelines and forms did not reveal the new deadline, is what is at issue. The rebate provisions confer an entitlement. AEM clearlyordered its affairs, in terms of the timing of the applications at issue, in reliance upon the Government’s Guidelines and forms.

Irving Oildoes not apply to this application. [76] The respondent also relies on the Tax Court decision in Nelson Consulting Services Ltd v R, [2002] GSTC 122, [2002] TCJ No 598[Nelson Consulting Services], where at issue was approximately $70,000 in H.S.T. which a small business had failed to collect and remit,after obtaining and following advice from agents of the C.R.A.: Mr. and Mrs. Blinn, understandably, feel that they did everything they could to comply with the law.

This case certainly demonstratesthe danger inherent in operating even a modest business in this country without the benefit of ongoing professional advice. I have nodoubt that the Blinn’s had every intention of complying with the Act, and felt that they were being careful to do so. Unfortunately, theirfrequent inquiries of Revenue Canada are to no avail; I am bound by the decision of the Supreme Court of Canada in Inland Industries,which held that having relied on bad advice from agents of the Minister cannot relieve a taxpayer from the application of the law.

Thereis no ambiguity in the legislation; HST was exigible, and the Appellant failed to collect and remit it (at para 5). [77] In both Inland Industries and Nelson Consulting Services, taxpayers sought either approval or advice from agents of the Minister asthey went about either not following the law through ignorance or, in the case of Inland Industries, attempted to obtain prior approval forhighly questionable accounting practices designed to circumvent the law. [78] Neither one of these is present in the case at bar.

Here we are not dealing with complicated and layered transactions undertaken witha view to evading tax otherwise payable, nor are we dealing with taxpayers who failed to properly interpret well known and publicizedlaw. [79] There is little in tax law more basic and fundamental than filing deadlines. The net result of the lack of reasonable steps to inform inthis case is essentially taxation by ambush. I posit the following fact situation: the Government of Canada decides to change the deadlinefor RRSP contributions from February 28th to January 31st. The Regulations are changed and published according to law.

None of theCRA Guidelines accessible to taxpayers are updated and changed. None of the paper forms are changed. Would the Government ofCanada be allowed to rely on the new deadline to the detriment of taxpayers? This is not a penal section. It is clearly a benefit. Yet such a

result would be inconceivable. [80] The circumstances are even more troubling in this case, for the following reason. AEM was the only company affected by theintroduction of the new March 31 deadline in section 8(4.1). The impact on AEM of this change was substantial. AEM and theGovernment of Nunavut were engaged in an active partnership of which the availability of a rebate on tax paid for fuel formed only asmall part. All of this would have to have been well understood by the various government functionaries involved when the Regulationswere changed.

If it was too much trouble to update the official Government of Nunavut Guidelines or the rebate claim forms, it wouldsurely not have placed too great a burden on the Government of Nunavut for someone to send an email. [81] The case most on point filed by the respondent is that of Gemini Biochemical Research Ltd v R, (TCC), [1997]3 CTC 2664, [1996] TCJ No 1780 [Gemini], a 1996 oral decision by Justice Rowe of the Tax Court.

There, the taxpayer had failed tomeet a filing deadline in order to claim research expenses, by reason of the fact that the deadline had been changed, the guidelines hadnot, and the taxpayer had not been otherwise notified. Justice Rowe dismissed the taxpayer’s application summarily as follows: They didn’t have to. First of all, the very use of the word “guideline” is exactly indicative of what it is, it’s a guideline.

There’s norequirement that your company be specifically put on a mailing list that Revenue Canada has to advise you when it’s about to change thelaw and if you rely on waiting for changes to tax law to make its way into a guideline, you’re going to do so at your peril, as was the casehere, so there’s no requirement in law that these kind of amendments – people are presumed to know and keep abreast of this. The royalassent was, the Minister says, received on June 15, 1994, and there was appropriate proclamation in the Canada Gazette.

There musthave been some information released by way of circular or reference in the newspapers or Globe & Mail or something, and the fact that itwas not contained in the particular guideline is of absolutely no import or significance as a matter of law (at para 4). [82] Given the dramatic change that has occurred in the distribution of information in the nearly 20 years since the Court’s decision inGemini, I find that the case does not apply to the case at bar. The most significant change since 1996 is the advent of the Internet and itsimpact on communication.

It may have been unreasonable to expect the paper circulars and guidelines prepared by the Government ofCanada to be continually kept up to date in 1996. It is not unreasonable to expect that official information provided by the Governmentof Nunavut on important matters such as filing deadlines for taxation be kept up to date online. If the Government is going to go so far asto create guidelines and forms to assist taxpayers in complying with their obligations, then those guidelines and forms should be kept upto date.

People can be expected to rely on them, and they should not be encouraged to do so to their detriment. [83] The obligation of the Government to keep the taxpayer informed is particularly stark in this case; the change to the deadlineaffected only one taxpayer, the impact was significant, the relationship between the taxpayer and the Government was ongoing, and theeffort required to inform the taxpayer was minimal. [84] Even if I am incorrect about this requirement, in the case at bar the failure of the Government to update the Guidelines in May 2012distinguishes the instant case from Gemini.

The Government was clearly aware of its own amendments in May 2012 as the update to theregulation had already proceeded to publication in the Gazette. The failure to update the Guidelines was unreasonable. [85] The doctrine of promissory estoppel will be a rare and unusual remedy in tax cases, highly unusual when dealing with a taxpayerfailing to follow specific statutory requirements. However, in this particular case, on these unusual facts, it is made out.

The combinedeffect of the misguiding Guidelines, the less than helpful forms, and a reasonable reliance on the ongoing relationship between AEM andthe Government leads to what is, in effect, a “promise” that the regime was continuing as it had before. VIII. CONCLUSION [86] The Minister erred in his

interpretation of section 8(4.1) of the Tax Rebate Regulations. Applying both sections 8(4) and 8(4.1) ofthe Tax Rebate Regulations, AEM should have been allowed to claim a rebate for all the fuel claimed in Application 1 and 2, which wasused for eligible purposes between January 1, 2013 and August, 2013, because all of that fuel was used and claimed within a year ofpurchase.

Since this fuel was not consumed in the same calendar year as it was purchased, section 8(4.1) does not apply and AEM isonly limited by section 8(4). [87] The only fuel they could not claim a rebate for under the new deadline of March 31, 2013, is that portion of eligible petroleumproducts referenced in Application 1 which were consumed before December 31, 2012, as these clearly fall into the previous calendaryear, which is also the year in which they were purchased. The amount of fuel subject to the March 31 missed deadline is 19,707,555

litres. [ 88 ] For all

Section 5 companies, all fuel must be used for a defined purpose and claimed within one year of being purchased or imported into Nunavut in order to qualify for a rebate pursuant to section 8(4) . Further, any “eligible petroleum product”, fuel used for such a defined purpose, must be claimed by March 31st following the calendar year of its purchase or import and use, pursuant to section 8(4.1) . [ 89 ] In the particular and unusual circumstances of this application, as discussed in detail above, the doctrine of promissory estoppel applies.

AEM is also allowed to file for a rebate for the 19,707,555 litres of fuel claimed in Application 1 which was consumed prior to December 31, 2012. A. Costs [ 90 ] The Applicant has requested costs in this matter. Given the novel interpretive issues in this matter, I decline to order costs. Dated at the City of Iqaluit this 30th day of October, 2014 ___________________ Justice A. Mahar Nunavut Court of Justice