FONDS D’EMPRUNT COMMUNAUTAIRE DE LA GASPÉSIE ET DES
MINISTER OF NATIONAL REVENUE
Appeal No. AP-2011-062
Decision and reasons issued
Thursday, November 8, 2012
TABLE OF CONTENTS
IN THE MATTER OF an appeal heard on August 30, 2012, pursuant to
section 81.19 of the Excise Tax Act, R.S.C. 1985, c.
AND IN THE MATTER OF a decision of the Minister of National
Revenue, dated August 9, 2011, with respect to a notice of
objection pursuant to section 81.17 of the Excise Tax
FONDS D’EMPRUNT COMMUNAUTAIRE DE LA GASPÉSIE ET DES ÎLES Appellant
THE MINISTER OF NATIONAL REVENUE Respondent
The appeal is dismissed.
Jason W. Downey
Jason W. Downey
Place of Hearing: Ottawa, Ontario
Date of Hearing: August 30, 2012
Tribunal Members: Jason W. Downey, Presiding Member
Serge Fréchette, Member
Counsel for the Tribunal: Eric Wildhaber
Manager, Registrar Programs and Services: Michel Parent
Registrar Officer: Haley Raynor
|Fonds d’emprunt communautaire de la Gaspésie et des Îles
|Minister of National Revenue
||George Boyd Aitken
Please address all communications to:
Canadian International Trade Tribunal
333 Laurier Avenue West
1. This is an appeal by Fonds d’emprunt communautaire de la
Gaspésie et des Îles (Fonds d’emprunt) pursuant to section 81.19 of
the Excise Tax Act1 from a decision of the Minister of
National Revenue (the Minister) dated August 9, 2011, with
respect to a notice of objection served pursuant to section
2. The issue in this appeal is to determine whether Fonds
d’emprunt is entitled, under paragraph 68.16(1)(g.1)
of the Act, to a refund of the excise tax paid on the fuel
used for the exclusive use of a registered charity for the period
from December 15, 2007, to December 15, 2009.
3. On October 1, 2012, the tenure of Ms. Diane Vincent ended
after she had participated, as a member in this appeal, in the
hearing by way of written submissions and the subsequent
deliberations. Effective from that date, in accordance with
subsection 9(3) of the Canadian International Trade Tribunal
Act,2 the other two members disposed of the matter
with the authorization of the Chairperson of the Tribunal.
4. On December 15, 2009, Fonds d’emprunt filed with the Canada
Revenue Agency (CRA) its application for a refund of the federal
excise tax on fuel paid for the period from December 15, 2007, to
December 15, 2009.
5. On April 28, 2010, the CRA indicated that several of the
invoices submitted by Fonds d’emprunt were either ineligible or
insufficient to support an application for a refund of the excise
tax. The CRA therefore asked Fonds d’emprunt to provide supporting
documents. Subsequently, Fonds d’emprunt submitted additional
information to the CRA on May 26, 2010.
6. On June 14, 2010, the Minister issued a notice of decision
rejecting the refund application on the grounds that Fonds
d’emprunt had not submitted adequate supporting documents.
7. On July 26, 2010, Fonds d’emprunt filed a notice of
8. On September 21, 2010, a CRA appeals officer requested that
Fonds d’emprunt send certain documents to support this objection.
Not having received any response, on January 20, 2011, the appeals
officer suspended the matter until February 21, 2011, to allow
Fonds d’emprunt time to submit the requested information and
documents. Subsequently, Fonds d’emprunt submitted additional
information to the CRA on February 11, 2011.
9. On August 9, 2011, the Minister upheld his decision to reject
the application. The reasons specified that the refund application
was not supported by the books and records as required under
section 98 of the Act.
10. On January 24, 2012, Fonds d’emprunt requested and the
Tribunal granted an order extending the time to appeal the
11. On March 29, 2012, Fonds d’emprunt requested the addition of
a related organization (Fondation pour le développement des
régions) to the appeal. On April 2, 2012, the Tribunal denied this
request on the grounds that the Tribunal was unable to consider the
appeal in the name of another organization and noted that the
request for an extension was made following the Minister’s notice
of decision of August 9, 2011, in the name of Fonds d’emprunt
12. Fonds d’emprunt requested a hearing by way of written
submissions. As this was not contested by the Minister, the
Tribunal decided hold a hearing by way of written submissions on
August 30, 2012.
13. The Tribunal hears appeals of the Minister’s decisions,
filed pursuant to section 81.19 of the Act, which provides
81.19 Any person who has served a notice
of objection under section 81.15 or 81.17, other than a notice in
respect of Part I, may, within ninety days after the day on which
the notice of decision on the objection is sent to him, appeal the
assessment or determination to the Tribunal.
14. Paragraph 68.16(1)(g.1) of the Act allows
a registered charity to apply, within the prescribed period, for a
refund of the excise tax on fuel ($0.015 per litre) purchased for
the exclusive use of the organization. This paragraph provides as
(1) Where tax under Part III has been paid
in respect of any gasoline and the gasoline has been purchased
. . .
(g.1) a registered charity, within the meaning of
the Income Tax Act,
. . .
for the sole use of the purchaser and not for resale, an amount
equal to that portion of the tax equal to one and one-half cents
per litre shall, subject to this Part, be paid
(h) to the purchaser, or
(i) in accordance with such terms and conditions
as the Governor in Council may by regulation prescribe, to the
manufacturer, producer, wholesaler, jobber or other dealer,
if the purchaser applies therefor within two years after he
purchased the gasoline.
15. The Income Tax Act4 defines a registered charity
248(1) In this Act,
. . .
“registered charity” at any time means
(a) a charitable organization, private foundation
or public foundation, within the meanings assigned by subsection
149.1(1), that is resident in Canada and was either created or
established in Canada, or
(b) a branch, section, parish, congregation or
other division of an organization or foundation described in
paragraph (a), that is resident in Canada and was either created or
established in Canada and that receives donations on its own
that has applied to the Minister in prescribed form for
registration and that is at that time registered as a charitable
organization, private foundation or public foundation.
16. Section 98 of the Act requires the taxpayer to keep
the supporting documents containing such information that enables
the determination of the amount of taxes that should have been paid
or collected for six years or until the final disposition of any
pertinent objection or appeal. The relevant provisions of the
Act provide as follows:
98(1) Every person who
(a) is required, by or pursuant to this Act, to
pay or collect taxes or other sums or to affix or cancel stamps,
(b) makes an application under any of sections 68
shall keep records and books of account in English or French at
that person’s place of business in Canada in such form and
containing such information as will enable the amount of taxes or
other sums that should have been paid or collected, the amount of
stamps that should have been affixed or cancelled or the amount, if
any, of any drawback, payment or deduction that has been made or
that may be made to or by that person, to be determined.
(2) Every person required by subsection (1) to keep records
and books of account shall retain those records and books of
account and every account and voucher necessary to verify the
information contained therein until the expiration of six years
from the end of the calendar year in respect of which those records
and books of account are kept or until written permission for their
prior disposal is given by the Minister.
. . .
(2.1) Notwithstanding subsection (2), where a person
required by subsection (1) to keep records and books of account
serves a notice of objection under section 81.15 or 81.17 or is a
party to an appeal under this Part, he shall retain those records
and books of account and every account and voucher necessary to
verify the information therein until the objection or appeal has
been finally disposed of by appeal or otherwise.
17. Fonds d’emprunt submitted that, due to its status as a
registered charity, it is entitled to a refund in the amount of
$822 for the excise tax paid on fuel purchased (96,000 litres) from
the years 2007 to 2009. Fonds d’emprunt alleged that it had
previously received such refunds, specifically in 2003, 2004 and
18. According to Fonds d’emprunt, it could not provide any
additional proof that the invoices submitted are related to the
organization’s work for the following reasons: its volunteers must
continually drive long distances in order to work with the
different communities scattered throughout the territory of the
Gaspé Peninsula; the volunteers regularly buy fuel for work-related
purposes and have no control over the information contained in the
various types of receipts that they receive from the service
stations; and since 2011, Fonds d’emprunt is no longer able to
have the purchaser’s name entered manually on fuel receipts that
are now issued electronically by the service stations.
19. In light of the above, Fonds d’emprunt submitted additional
information to the CRA in support of its refund application on
December 15, 2009, and, later, in support of its notice of
objection on July 26, 2010. The documentation that it
submitted included some explanation of the distance travelled by
its volunteers for work-related purposes and an estimate that $10
bought 10.2 litres of fuel.
20. Moreover, Fonds d’emprunt submitted that it had never been
notified of any requirement to provide receipts with the name of
the organization or the buyer, as well as the quantity of fuel
purchased by the organization or the buyer in question.
21. The Minister does not object to the registered charity
status claimed by Fonds d’emprunt. Rather, his position is to the
effect that the invoices submitted by Fonds d’emprunt did not
enable the CRA to determine whether the fuel had been used by the
organization for eligible activities as opposed to other purposes
not recognized by the Act.
22. The Minister based his position on section 98 of the
Act and argued that Fonds d’emprunt did not keep its books
and records in such a way that would enable it to prove that the
fuel purchases were related to the organization’s operations.
Specifically, the CRA was unable to verify the alleged connection
between the purchase of the fuel at issue and the organization’s
23. This situation was exacerbated by the fact that certain
invoices included several ineligible expenses (snacks, chips,
chewing gum, etc.) or were otherwise insufficient to support an
application for an excise tax refund. In some cases, it was
difficult, and even impossible, to separate the expenses claimed by
Fonds d’emprunt from those also claimed by Fondation pour le
développement des régions.
24. In addition, several invoices only indicated the total price
paid for the fuel, without showing the quantity of fuel purchased,
and none of the invoices identified the name of the purchaser or
the organization to which the purchase was charged.
25. The Minister submitted that, in order to support such
applications, an organization like Fonds d’emprunt must manage its
volunteers’ work-related expenses and travel and be able to justify
how its purchases are related to its charitable activities.
26. According to subsections 68.16(1) and 98(1) of the
Act, Fonds d’emprunt has the burden of establishing that
it was entitled to a tax refund in this case.
27. The Tribunal accepts that Fonds d’emprunt is a registered
charity, despite the fact that it did not provide any direct
evidence in this regard; moreover, it was not contested by the
28. It is well established in Tribunal jurisprudence that
section 98 of the Act requires that applications submitted
under the Act be supported by sufficient documentary
evidence to enable the amount of tax allegedly paid in error to be
29. In the Tribunal’s view, the evidence submitted by Fonds
d’emprunt in support of its claim lacks probative value.
30. Specifically, there are no invoices specifying the amount of
fuel consumption, the persons responsible for this consumption and
the relationship between the consumption and the duties of the
persons responsible for these expenses at the
31. Certain exhibits submitted by Fonds d’emprunt included
copies of its correspondence with the CRA, in which Fonds d’emprunt
provided additional information in support of its initial refund
application and its objection to the Minister’s decision of June
14, 2010.8 Although these exhibits may help to
explain the grounds of Fonds d’emprunt’s application, they are of
little use to the Tribunal because none of the documents provides
evidence in support of Fonds d’emprunt’s claim.
32. The Tribunal notes that the CRA’s letter dated June 3, 2010,
specifies the following inadequacies in the documentation submitted
by Fonds d’emprunt: “. . . you or your employees or
volunteers must complete expense accounts or reports demonstrating
that the fuel purchase was used for activities related to the
operation of the foundation and not for personal use. These expense
accounts or reports must indicate, in particular, the trips made,
the organization for which they were made, the dates, the departure
and arrival points and the kilometres travelled, and match these
trips to the corresponding invoices. You must be able to prove that
you manage these expenses, which would allow you to substantiate a
refund application”9 [translation].
33. The evidence on record shows that Fonds d’emprunt
subsequently provided the CRA with explanations regarding the
erroneous inclusion of certain expenses unrelated to fuel
purchases, but Fonds d’emprunt indicated that the calculations of
the kilometres travelled and the corresponding quantities of fuel
used by the volunteers for work-related purposes were only
34. Subsequently, the Minister rejected the refund application,
on the grounds that the documents submitted
“. . . do not enable us to determine whether the
fuel was used by your organization for eligible activities and not
for personal purposes. We cannot make the connection between the
purchase of this fuel and your organization’s
activities. . . . The examination of these
invoices leaves serious doubt regarding the legitimacy of these
35. The Tribunal notes that the “Report on an
objection”11 [translation] indicates that, in the
Minister’s opinion, “[n]ot only are the invoices of a personal
nature but they are almost all made to the name of
[H.] Nelligan when they are identified. For example, there are
162 photocopies of invoices, of which 118 are in the name of [H.]
Melligan or Nelligan and 30 are not identified. Nearly all the
gasoline was purchased from Dépanneur de la Petite Rivière in New
Richmond. . . . There are also tire repairs,
oil, antifreeze, gloves, windshield washer fluid, lawn mower
repairs, etc. . . . We must consider fraud in
this matter . . .” [translation]. The Tribunal notes
that this last allegation was not raised by the Minister in this
36. In the absence of invoices or other detailed documents in
support of Fonds d’emprunt’s claim, its submission essentially was
that the Tribunal should account for a lump sum that is
“. . . reasonable, since it is difficult to prove
that our invoices are related to our
work . . .”12 [translation]. In this
regard, Fonds d’emprunt estimated an “acceptable average”
[translation] of an annual amount but failed to prove
37. The Tribunal is unable to render a decision based on such an
estimate. Such an approach does not overcome the inadequacies noted
in the keeping of records and books of account by Fonds d’emprunt
with respect to the requirements of the Act, specifically
paragraphs 68.16(1)(g.1), (h) and (i)
and subsection 98(1).
38. The Tribunal cannot ignore Fonds d’emprunt’s admission that
it is unable to substantiate the claims to which it says it is
entitled. This is contrary to subsection 98(1) of the Act,
which requires the taxpayer to “. . . keep records
and books of account . . . at that person’s
place of business in Canada in such form and containing such
information as will enable the amount of taxes or other sums that
should have been paid or collected . . . to be
39. Therefore, the Tribunal is of the view that the documentary
evidence on record is insufficient to support Fonds d’emprunt’s
claim and that, consequently, Fonds d’emprunt has not discharged
its burden of proof.
40. As regards the allegation that Fonds d’emprunt was never
notified by the CRA that it had to provide expense accounts and
written reports to demonstrate its activities, the Tribunal notes
that the Act does not impose such an obligation on the CRA
and that the Tribunal cannot draw inferences from the fact that
Fonds d’emprunt has already obtained similar refunds in the past in
order to rule on its eligibility for refunds in this case.
41. For the foregoing reasons, the appeal is dismissed.
1 . R.S.C. 1985, c. E-15 [Act].
2 . R.S.C. 1985 (4th Supp.), c. 47 [CITT
Act]. Subsection 9(3) of the CITT Act provides as
follows: “Where a person to whom subsection (1) applies or any
member has taken part in any matter and has died or for any reason
is unable or unwilling to take part in the disposition of the
matter, the remaining members, if any, who took part in the matter
may, with the authorization of the Chairperson, make the
disposition notwithstanding that the quorum of members required to
dispose of the matter was lost as a result, and the remaining
members where so authorized shall, for that purpose, be deemed to
constitute a quorum.”
3 . Fonds d’emprunt communautaire de la
Gaspésie et des Îles (24 January 2012), EP-2011-007
4 . R.S.C. 1985 (5th suppl.), c. 1.
5 . Although Fonds d’emprunt did not submit
direct evidence to that effect, the Tribunal notes, in particular,
that the “Application for Refund of Federal Excise Tax on Gasoline”
completed by Fonds d’emprunt on December 15, 2009,
indicates that its charitable registration number assigned by the
CRA is “860684661RR0001”. Tribunal Exhibit AP-2011-062-10, tab
6 . The Russo Group Inc. v. M.N.R.
(1 April 2003), AP-2002-008 (CITT); Les Pignons L.V.M. du
Québec Inc. v. M.N.R. (19 August 2002), AP-93-315 (CITT).
7 . The Tribunal did not have the benefit of
seeing copies of the invoices in question because they were not
filed. Nonetheless, the parties agree, and the Tribunal accepts,
that some of these invoices only indicate the monetary value and
not the quantity, and that no invoice indicates the organization to
which the fuel purchase must be charged.
8 . Tribunal Exhibit AP-2011-062-06C,
appendices A-3, A-4.
9 . Tribunal Exhibit AP-2011-062-10, tab
10 . Tribunal Exhibit AP-2011-062-10, tab
11 . Tribunal Exhibit AP-2011-062-10, tab
B-2 at 3.
12 . Tribunal Exhibit AP-2011-062-06C,
13 . Ibid.