Saint-Basile, Village Sud (Corporation municipale de) v. Ciment Québec Inc.

Saint-Basile, Village Sud (Corporation municipale de) v. Ciment Québec Inc.
Collection
Supreme Court Judgments
Date
1993-07-15
Report
[1993] 2 SCR 823
Case number
22749
Judges
La Forest, Gérard V.; L'Heureux-Dubé, Claire; Gonthier, Charles Doherty; McLachlin, Beverley; Iacobucci, Frank
On appeal from
Quebec
Subjects
Municipal law
Notes
SCC Case Information: 22749
Decision Content
Saint‑Basile, Village Sud (Corporation municipale de) v. Ciment Québec Inc., [1993] 2 S.C.R. 823
Ciment Québec Inc. Appellant
v.
Corporation municipale de Saint‑Basile, Village Sud Respondent
Indexed as: Saint‑Basile, Village Sud (Corporation municipale de) v. Ciment Québec Inc.
File No.: 22749.
1993: February 23; 1993: July 15.
Present: La Forest, L'Heureux‑Dubé, Gonthier, McLachlin and Iacobucci JJ.
on appeal from the court of appeal for quebec
Municipal law ‑‑ Real estate assessment ‑‑ Immoveables not entered on assessment roll ‑‑ Interpretation of s. 65(1) of the Act respecting Municipal Taxation, R.S.Q., c. F‑2.1.
The appellant is the owner of a large industrial complex where it manufactures cement. It filed a complaint with the Bureau de révision de l'évaluation foncière ("BREF") challenging the value of the unit of assessment of its new plant and the entry of several buildings that were part of that plant on the assessment roll for 1981, 1982 and 1984. The appellant contends that most of these buildings should be excluded from the roll because they are used mainly for purposes of industrial production. The BREF allowed the appellant's complaints in part and, under s. 65(1) of the Act respecting Municipal Taxation, struck from the roll certain buildings that were part of the plant. The BREF was of the view that the exemption provided for in s. 65(1) applied not only to moveable property placed for a permanency, but also to immoveables by nature that are machines, apparatus and their accessories used mainly for purposes of industrial production and not designed to provide a service to land or a building. The Provincial Court reversed that decision and concluded that the exemption applied only to moveable property placed for a permanency, excluding buildings within the meaning of the Civil Code. The court noted that if the legislature had intended to give the word "building" in s. 65(1) a different meaning from that in the Code, it would have done so expressly. The Court of Appeal upheld the Provincial Court's decision.
Held: The appeal should be allowed.
The exemption provided for in s. 65(1) does not exclude from its scope all buildings within the meaning of the Civil Code. The wording of this subsection, interpreted and analyzed in its own particular context, requires first and foremost that the court examine each immoveable or part of an immoveable making up a given plant in the concrete setting of the industrial production, regardless of the nature of their status as immoveables. It is the requirement of industrial production which is the cornerstone of s. 65(1), and not the traditional Civil Code categories of immoveables. Given the definition of the word "immoveable" in s. 1 A.M.T., it is clear that the introductory paragraph of s. 65 ("The following immoveables are not to be entered on the roll") does not distinguish between immoveables by nature and moveable objects placed for a permanency. Further, the concepts of destination and use which have been attached to the terms "land" and "building" are foreign to the criteria for immoveables by nature in the civil law. The meaning of the terms "land" and "building" should therefore be analyzed on the basis of the legislative framework adopted by the legislature, which clarifies and qualifies the concepts in the Code and is dissociated from the traditional civil law categories. Finally, the terms "machines", "apparatus" and "accessories", which are not part of the special vocabulary of the Code, may encompass in the context of s. 65(1) a whole range of immoveables which can be used mainly for purposes of industrial production.
Here, the approach taken by the BREF is in keeping with the letter and spirit of s. 65(1). First, it applied the terms "machines", "apparatus" and "accessories" in the complex setting of the components of an industrial production process, regardless of the dispute as to the nature of their status as immoveables within the meaning of the Civil Code, which is consistent with the wording of the introductory paragraph. Secondly, it took into account the fact that an immoveable or part thereof can be inseparable from a machine or apparatus and at the same time provide a service to land or a building. The words "used mainly for purposes of industrial production" and "taking into account the . . . use of the land or building" require such a construction. The BREF's approach derives from the following observation: s. 65(1) does not suggest that all buildings can never be excluded from the roll on the ground that some buildings may be served by machines, apparatus or their accessories.
The Court does not express any opinion on the correctness of the findings of fact of the BREF.
Cases Cited
Distinguished: Donohue Bros. v. Parish of St‑Étienne de la Malbaie, [1924] S.C.R. 511; Aluminium du Canada Ltée v. Village de Melocheville, [1973] S.C.R. 792; Richmond Pulp & Paper Co. of Canada v. Town of Bromptonville, [1970] S.C.R. 453; referred to: Ville de Saint‑Romuald d'Etchemin v. Ultramar Canada Inc., [1985] C.P. 212, aff'g [1980-1984] B.R.E.F. 883; Bélair v. Ville de Ste‑Rose (1922), 63 S.C.R. 526; Montreal Light, Heat & Power Consolidated v. City of Outremont (1932), 53 Que. K.B. 133; Montreal Light, Heat & Power Consolidated v. City of Westmount, [1926] S.C.R. 515; Bell Telephone Co. of Canada v. Ville St‑Laurent (1935), 60 Que. K.B. 101; St‑Romuald d'Etchemin (Cité de) v. Golden Eagle Canada Ltd., [1980] C.A. 74; Banque d'Hochelaga v. Waterous Engine Works Co. (1897), 27 S.C.R. 406; Sherbrooke (Cité de) v. Commissaires d'écoles de Sherbrooke, [1957] S.C.R. 476; Cablevision (Montreal) Inc. v. Deputy Minister of Revenue of Quebec, [1978] 2 S.C.R. 64; Lower St. Lawrence Power Co. v. Immeuble Landry Ltée, [1926] S.C.R. 655; Cie de papier Québec et Ontario Ltée v. Baie‑Comeau (Ville de), J.E. 89‑200.
Statutes and Regulations Cited
Act respecting Municipal Taxation, R.S.Q., c. F‑2.1, ss. 1 "immoveable", 2, 31, 65(1) [am. 1980, c. 11, s. 130].
Act respecting Municipal Taxation and providing Amendments to Certain Legislation, S.Q. 1979, c. 72.
Cities and Towns Act, R.S.Q. 1964, c. 193, s. 488.
Civil Code of Lower Canada, art. 376.
Real Estate Assessment Act, S.Q. 1971, c. 50, ss. 1(a) [repl. 1978, c. 59, s. 1], (b), (u), 8 [repl. 1979, c. 22, s. 65], 12 [am. 1972, c. 46, s. 4; am. 1973, c. 31, s. 8; am. 1978, c. 59, s. 4].
Authors Cited
Bélanger, Louise. "L'évaluation des immeubles industriels au Québec: les hauts et les bas de l'article 65 par. 1 de la Loi sur la fiscalité municipale". Dans Développements récents en droit municipal. Formation permanente du Barreau du Québec. Cowansville: Yvon Blais, 1989, 151.
Pâquet, Jean‑M. "Les aspects juridiques". Dans La réforme de la fiscalité municipale. Formation permanente du Barreau du Québec, cours 51, 1980.
Poirier, Michel, et Jean‑Marie Lavoie. "La réforme de la fiscalité municipale: taxation et paiements de transfert" (1981), 12 R.D.U.S. 141.
APPEAL from a judgment of the Quebec Court of Appeal, [1991] R.J.Q. 2757, 41 Q.A.C. 128, affirming a judgment of the Provincial Court, J.E. 88‑149, reversing a decision of the Quebec Bureau de révision de l'évaluation foncière, [1985] B.R.E.F. 471. Appeal allowed.
Benoît Mailloux and Martin R. Gagné, for the appellant.
Paul Bégin and Suzanne Ouellet, for the respondent.
The judgment of the Court was delivered by
//L'Heureux-Dubé J.//
L'Heureux‑Dubé J. ‑‑ This appeal concerns the interpretation of s. 65(1) of the Act respecting Municipal Taxation, R.S.Q., c. F‑2.1 ("A.M.T."), formerly S.Q. 1979, c. 72. More precisely, the issue is whether the tax exemption provided by that section applies only to moveable property as defined in s. 1 A.M.T., excluding buildings within the meaning of the Civil Code.
The respondent municipal corporation argues that the appellant's immoveable property is taxable while the appellant contends that most of the facilities in its new plant should be excluded from the real estate assessment roll because they are used mainly for purposes of industrial production. The appellant's cement manufacturing process thus assumes great importance in this case.
I ‑ Facts
The appellant Ciment Québec Inc. is the owner of land within the territorial limits of the respondent municipal corporation on which there is a large industrial complex, consisting of a stone quarry and two plants. The appellant's operations involve extracting raw material from the quarry, crushing the stone extracted and mixing two types of extracted stone, one with a high and the other with a low calcareous content. Its operations also include adding additional material needed in the production of cement and a burning process, which is the final stage of manufacture. When this process is finished, the cement produced is taken to warehouses. The first plant is now out of use and is of no concern in the instant appeal. Construction of the second plant began in 1978 and was completed in late 1982. It is this latter plant which is at the core of the dispute.
In this regard the evidence, which is not disputed at this stage of the proceedings, is as follows. Unlike the old plant, the facilities in this new one are no longer contained in one building covered by a single roof; instead different production stages have been set up. Accordingly, a primary crusher, weighing 400 tons, surrounded by foundations and concrete walls, breaks the material down to a five‑and‑a‑half inch diameter. This crushed stone, consisting of high stone and low stone, is taken to secondary crushers by conveyors about 450 feet long. These conveyors are supported by steel bases and structures. The secondary crushers again break the stone down, to a two‑and‑a‑half inch diameter. The structure of the crushers supports the arrival of the conveyor as well as the transformers, the control centres of the engines and the system for lubricating the crushers.
This crushed stone is then taken to the prehomogenizer, which is where the mixing of the high and low stone begins. The prehomogenizer consists of two tanks and a gauging system below the tanks. The sheathing of the prehomogenizer keeps the humidity level below 6 percent, in accordance with the requirements of the cement production procedure. Another stage in the industrial production chain is carried out by the stone distributor, which, by means of an aerial conveyor, distributes the stone to four different locations. This conveyor is supported by a structure. Like the prehomogenizer, the sheathing of the stone distributor keeps the humidity of the stone from increasing beyond 6 percent. The sheathing also allows for recovery of dust in the air.
Before the raw material can be burned, it first has to be reduced to a fine dust. This operation is performed by the "Loesche" mill. Cyclone separators located above the mill are then used to separate the lime from the dust. Dust collected in this way is moved to a pump which then takes it to the homogenizer. Close by there are electrostatic precipitators, which filter the hot gases and recover a large quantity of dust which is reintroduced into the process. The homogenizer makes a final mixing and standardizes the concentration of the raw mix. This raw mix is then burned using the pre‑heating tower. The first stage of burning involves the raw mix in suspension dropping through four cyclones; 60 percent of the burning is done in the pre‑heating tower, the remainder by the rotary kiln, which raises the temperature from 1,000 degrees Celsius in the pre‑heating tower to 1,500 degrees Celsius.
After these two burning stages, the raw mix is transformed into clinker, which takes the form of small pellets from zero to four inches in diameter, which have to be cooled before other processing stages can take place. After emerging from the cooler, the clinker is crushed to a maximum one inch size by the clinker crusher and then carried on conveyors to the clinker stockpile. This stockpile is the last stage of the industrial process before storage. It constitutes a cushion before the clinker, to which gypsum is added, goes into the ball mills and then into storage silos. The sheathing of this stockpile is also used to recover the dust.
For the periods from January 1 to December 31, 1981, January 1 to December 31, 1982 and the 1984 fiscal year, the respondent had on its real estate assessment roll, in whole or in part, several buildings which were part of the cement production line. On April 27, 1982, the appellant, through a complaint filed with the Quebec Bureau de révision de l'évaluation foncière ("BREF"), challenged the value of the unit of assessment and the entry of certain buildings on the roll for 1981 and 1982. On April 4, 1984, the appellant filed another complaint with the BREF in which it challenged the value of the unit of assessment and the entry of certain buildings on the 1984 roll.
By a decision dated August 29, 1985, the BREF allowed the appellant's complaints in part and, under s. 65(1) A.M.T., struck from the respondent's assessment roll certain buildings which were part of its new plant. The BREF accordingly reduced the value of the unit of assessment of the appellant's plant for 1981, 1982 and 1984.
On September 25, 1985, the respondent appealed this decision to the Quebec Provincial Court and the appellant filed a cross‑appeal. By a judgment dated November 30, 1987, the Provincial Court allowed the respondent's appeal and dismissed the appellant's cross‑appeal. It restored the values of the unit of assessment of the appellant's plant for the 1981 and 1982 rolls to the level fixed by the roll amendment notices issued by the respondent and set the value of the plant's unit of assessment for 1984 at $10,231,902.
On December 17, 1987, the appellant appealed this judgment to the Quebec Court of Appeal. By a unanimous judgment dated September 10, 1981, the Court of Appeal dismissed the appellant's appeal and upheld the Provincial Court's decision.
II ‑ Legislation
Sections 1 and 31 A.M.T. read as follows at the relevant time:
1. In this act, unless the context indicates otherwise,
. . .
"immoveable" means an immoveable by nature within the meaning of the Civil Code or a moveable object placed by anyone for a permanency in or on an immoveable by nature;
31. Subject to the provisions of this act, the immoveables situated in the territory of a municipal corporation must be entered on the roll of the municipal corporation.
Additionally, s. 65(1) provided:
65. The following immoveables are not to be entered on the roll:
(1) machines, apparatus and their accessories used mainly for purposes of industrial production or farming operations, or intended for that use and not designed to provide a service to land or a building, taking into account the actual or intended use of the land or building;
III ‑ Judgments
Bureau de révision de l'évaluation foncière, [1985] B.R.E.F. 471
After referring to several earlier decisions, the BREF examined the definition of the word "immoveable" in s. 1 A.M.T. and noted that the only reference to the Civil Code concerned immoveables by nature. It was of the view that the word "immoveable" within the meaning of the Act includes, at the very least, land and buildings within the meaning of the Civil Code, but that s. 1 A.M.T. [translation] "is an `original' definition for the purposes of a particular statute and must be seen, interpreted and applied as such" (p. 485). The BREF further noted that the only time the notion of "building" comes into play is with respect to the exception contained in s. 65(1) A.M.T., where the question is whether the purpose of "machines, apparatus and their accessories" is to provide a service to a "building". It referred to Ville de Saint‑Romuald d'Etchemin v. Ultramar Canada Inc., [1985] C.P. 212, affirming [1980‑1984] B.R.E.F. 883, where the word "building" as used in s. 65(1) A.M.T. was given its ordinary meaning. Summarizing the mechanism for giving effect to s. 65(1) A.M.T., the BREF wrote (at p. 489):
[translation] In the Act respecting Municipal Taxation, and in particular s. 65, there are the following concepts including that of "building". They merge, complement and clarify each other by the limitations they impose on each other, on their own understanding. Thus:
(1) the unit of assessment brings together all parts of the immoveable property,
(2) the immoveables are in general immoveables by nature (land and buildings) and moveable property covered by the definition in s. 1 A.M.T. . . .
(3) the moveable objects referred to in s. 1 A.M.T. are the "machines, apparatus and their accessories" described in s. 65 and the others which make up the concept of an immoveable by destination but which the Act respecting Municipal Taxation has broadened.
That is why, in applying s. 65 A.M.T., we must be aware that references to general statutes and judgments based on them may mislead us by causing us to forget the special characteristics of the Act respecting Municipal Taxation, which is the statute we must apply here. [Emphasis in original.]
The BREF added that s. 65(1) A.M.T. makes essential distinctions between the words "immoveables", "machines", "apparatus", "accessories", "land" and "building", distinctions which do not exist as such in the Civil Code (at p. 489):
[translation] The particular context we are dealing with in the Act respecting Municipal Taxation is further characterized by the fact that s. 65 requires us to look at the situation in terms of industrial production, which already takes the discussion onto a special and specific level which the cases applying the Civil Code quite properly do not always take into account. [Emphasis in original.]
The BREF further noted that while buildings within the meaning of the Civil Code must generally be entered on the roll as they are immoveables by nature, such buildings may nevertheless constitute "machines", "apparatus" and "accessories" within the meaning of s. 65 A.M.T., [translation] "thereby losing their identification as a building and assuming that of machines, and so on, which will circumscribe, define or limit the meaning of the word "building" in the Act respecting Municipal Taxation" (p. 490). (Emphasis in original.) Being of the view that, under the Act, immoveable property providing a service to a machine or an apparatus can be its accessory, and at the same time provide a service to land or a building, the BREF referred to the criteria set out in Ultramar Canada Inc., supra.
Applying these criteria to the 41 items entered on the respondent's assessment roll for 1981, 1982 and 1984, the BREF kept on the roll 20 structures which were part of the old plant as these were not used for purposes of industrial production on the dates covered by the complaints, there being no specific evidence as to their intended use. The BREF concluded that the 21 structures making up the new plant and the industrial complex were, for the most part, used, wholly or partly, to carry out the processing of the raw material. It completely excluded from the roll 8 structures in the new plant, kept 7 in their entirety and partly excluded 6. It thus reduced the value of the unit of assessment for the appellant's new plant for 1981, 1982 and 1984.
Provincial Court (Québec, No. 200‑02‑007252‑853, November 30, 1987), J.E. 88‑149
Judge Gagnon stated the issue as follows (at p. 3):
[translation] The fundamental point at issue here is as follows: does the exemption contained in s. 65(1) of the Act respecting Municipal Taxation, which provides for the exclusion from the roll of machines, apparatus and their accessories when they are used or intended for use in industrial production and not designed to provide a service to land or a building, apply to all or part of the structures or facilities making up the industrial complex referred to by the respondent as the new plant. [Emphasis in original.]
After summarizing the BREF's decision and the arguments of the parties, Judge Gagnon gave an historical account of the legislation on real estate taxation of machinery. He noted that s. 65 A.M.T. is much more restrictive than its predecessor, s. 12 of the Real Estate Assessment Act, R.S.Q. 1977, c. E‑16 (formerly S.Q. 1971, c. 50). In his view, for immoveable property to be covered by the exception contained in s. 65(1) A.M.T. and excluded from the roll, three requirements must be met (at p. 27):
[translation] 1. It must be a machine, apparatus or accessory of a machine or apparatus.
2. The machine, apparatus or accessory must be used mainly for purposes of industrial production or farming operations, or intended for that use.
3. The machine, apparatus or accessory must not be designed to provide a service to land or a building.
Judge Gagnon then referred to Bélair v. Ville de Ste‑Rose (1922), 63 S.C.R. 526, Montreal Light, Heat & Power Consolidated v. City of Outremont (1932), 53 Que. K.B. 133 (P.C.), and Bell Telephone Co. of Canada v. Ville St‑Laurent (1935), 60 Que. K.B. 101 (P.C.), and noted that the terms "machine", "apparatus" and "accessory" are not defined in the Act. He then asked the following question (at p. 30):
[translation] Should we conclude that the machines and apparatus, the value of which cannot be entered on the roll, can equally well be immoveables by nature and moveable property placed by anyone for a permanency on an immoveable by nature?
After quoting the dictionary definitions of the terms "machine", "apparatus" and "accessory", Judge Gagnon rejected the approach taken by the BREF and examined ss. 63(2) and 65(6) A.M.T. In his view, these provisions show that if the legislature had intended to give the word "building" in s. 65(1) a different meaning from that in the Civil Code, it would have done so expressly. He, therefore, concluded that this term has the meaning given to it by art. 376 C.C., and that [translation] "the machines and apparatus falling within the exception in s. 65(1) and not to be entered on the roll are moveable objects attached by anyone for a permanency to an immoveable by nature" (p. 34). Judge Gagnon was of the opinion that the term "accessory" means a non‑essential part which [translation] "can be added to a machine or apparatus to make it more efficient, safer or to enable it to carry out different types of work or processing in the industrial process" (p. 34). He noted that certain concrete supports, stands or bases on which machines or apparatus rest can be immoveables by nature or parts thereof, but that they could not at the same time be "accessories" exempted from the roll for the purposes of s. 65(1) A.M.T., as an immoveable by nature cannot be the accessory of an immoveable by destination.
Applying these principles to the items in the unit of assessment of the appellant's new plant, Judge Gagnon restored the values of the unit of assessment of the appellant's plant for the 1981 and 1982 rolls to the level set by the notices amending the roll issued by the respondent, and set the plant's unit of assessment value for 1984 at $10,231,902.
Court of Appeal, [1991] R.J.Q. 2757 (Nichols, Tourigny and Chevalier JJ.A.)
After citing s. 65(1) A.M.T., Nichols J.A. for the court summarized the BREF's decision as follows (at p. 2759):
[translation] The B.R.E.F. found that most of the components of the unit of assessment were covered by this exception. In its view, the provision applies not only to moveable property which becomes immoveable by destination but also to immoveables by nature when it is shown that they are used mainly for industrial production and are not designed to provide a service to land or a building.
He gave an historical account of the legislation and referred to the Court of Appeal's decision in Cité de St‑Romuald d'Etchemin v. Golden Eagle Canada Ltd., [1980] C.A. 74, to illustrate the problem presented by the definition of the word "building" in the Real Estate Assessment Act. He noted that this definition was not the definition of the general law and that, by virtue of it, even if they were immoveable by nature, the only taxable buildings were those falling within this specific definition. In this regard Nichols J.A. was of the view that the fact that the Act respecting Municipal Taxation does not adopt this definition and that it also consolidates the definitions which the old law gave to the words "immoveable" and "immoveable by destination" provides an indication of the thrust of the new Act. After analyzing ss. 31 and 32 A.M.T., Nichols J.A. concluded that the word "building" could not be given a precise meaning which the Act did not give it (at p. 2763):
[translation] Since the definition of the word "immoveable" refers to the Civil Code of Lower Canada meaning in the case of an immoveable by nature and art. 376 of the Civil Code of Lower Canada includes in immoveables by nature "(l)ands and buildings", it clearly follows that the word "building", used in s. 32 of the Act respecting Municipal Taxation, cannot, in the absence of a different definition, refer to anything but a "building" provided for in art. 376, that is the building known to the general law.
The same word cannot have a different meaning when it is found in s. 65 A.M.T.
Further, Nichols J.A. could not subscribe to the Provincial Court's decision in Ultramar Canada Inc., supra, relied on by the BREF. In his view, it is not relevant to establish whether an immoveable by nature can become a machine or a machine can become something other than an immoveable by destination. He, accordingly, considered that the wording of s. 65(1) A.M.T. leaves no room for interpretation and that the word "building" can have no meaning other than that deriving from the definition of the word "immoveable", that is the meaning it has in the general law. In this connection, he wrote (at p. 2765):
[translation] If the legislature had intended that buildings, which are immoveables by nature within the meaning of the Civil Code of Lower Canada, could become machines and apparatus or accessories thereof for purposes of the exception, it should have giving the word a definition different from the general law one.
I accordingly conclude that the Provincial Court judgment is correct and the B.R.E.F.'s interpretation wrong.
The Court of Appeal accordingly upheld the findings of the Provincial Court and dismissed the appeal.
IV ‑ Issue
The only issue in this Court, as in the lower courts, is whether the exemption provided for by s. 65(1) A.M.T. applies only to moveable property as defined in s. 1 A.M.T., excluding buildings within the meaning of the Civil Code.
V ‑ Analysis
In my opinion, when legislation is to be interpreted it is worth beginning by looking, however briefly, at its background. By clarifying the specific nature of s. 65(1) A.M.T., this approach will place the judgments of the Court of Appeal and the Provincial Court in their particular context and clarify the issues involved here.
(a) Background
Prior to the adoption of the Real Estate Assessment Act, S.Q. 1971, c. 50, the Cities and Towns Act, R.S.Q. 1964, c. 193, provided that machinery and accessories were taxable. Section 488 read in part as follows:
488. The taxable immoveables in the municipality shall comprise lands, constructions and work‑shops erected thereon and all improvements made thereto, as well as machinery and accessories which are immoveable by destination or which would be so if they belonged to the owner of the real property.
Under the second paragraph, the municipal council could order, by by‑law, that "the machinery and accessories which are immoveable by destination, or which would be so if they belonged to the owner of the real property, are not immoveables taxable in the municipality". However, the municipalities governed by the Municipal Code enjoyed no latitude, as machinery was not an immoveable taxable thereunder. In Richmond Pulp & Paper Co. of Canada v. Town of Bromptonville, [1970] S.C.R. 453, Pigeon J. noted the disparity between these two systems (at p. 455):
Since 1959 however, by virtue of the amendment enacted by s. 7 of the Act 7‑8 Eliz. II, c. 19, municipalities governed by the Cities and Towns Act are authorized to order by by‑law that machinery and accessories "are not immoveables taxable in the municipality". In this regard, it must be noted that in Quebec machinery is taxable property under the Cities and Towns Act only. It is not such under the Municipal Code nor, for the greater part, in Montreal including the whole metropolitan area (The Protestant School Board of Greater Montreal v. Jenkins Bros Ltd., [1967] S.C.R. 739).
In 1972, the Real Estate Assessment Act deprived the municipal councils of cities and towns of their discretion to tax machinery by standardizing real estate assessment rules. In 1979, s. 8 read as follows:
8. Except where otherwise provided by this act, all immoveables must be entered on the roll and be entered at their actual value on 1 January preceding the deposit of the roll. Subject to the exemptions provided in this act, the immoveables entered on the roll are taxable.
However, s. 12 imposed a requirement that certain immoveable property should not be entered on the roll, and then set out exceptions. This provision stated:
12. Immoveables intended or used principally for research, business, industry, prevention or reduction of noise, fighting water, air or soil pollution or for the operation of a farm or woodlot shall not be entered on the roll, except the following:
(a) lots and buildings excluding the buildings used mainly to fight pollution and the underlying land;
(b) roads other than railroads, whether paved or not, bridges, tunnels, fences and other works forming part of them;
(c) fences, sidewalks, drains and other structures for surface arrangement unless the immoveables are situated on a farm or woodlot contemplated by section 21;
(d) apparatus, devices, equipment and systems to ensure service to a building and forming part of it, excluding machinery and equipment for handling purposes other than elevators, lifts, escalators and moving sidewalks;
(e) radio and television station towers and antennae;
(f) other immoveables forming part of a waterworks or sewer system, a system for the transport or distribution of liquid or solid matter, or a gas transport system of an undertaking which does not distribute gas to consumers in Québec.
Additionally, s. 1 defined the following terms as follows:
(a) "immoveable": an immoveable by nature within the meaning of the Civil Code, or an immoveable by destination;
(b) "immoveable by destination": any moveable thing placed for a permanency by any person on or in an immoveable by nature;
. . .
(u) "building": a structure intended to lodge persons, animals or things;
On December 21, 1979, the Quebec legislature enacted Bill 57 on municipal taxation, the Act respecting Municipal Taxation, R.S.Q., c. F‑2.1, introduced by the Act respecting Municipal Taxation and providing Amendments to Certain Legislation, S.Q. 1979, c. 72, to take effect for the purposes of all municipal fiscal periods, beginning with the fiscal period 1980. While maintaining the principle that all immoveables should be entered on the roll (s. 31), the new Act set out limited exceptions to the general rule. I reproduce s. 65 for convenience:
65. The following immoveables are not to be entered on the roll:
(1) machines, apparatus and their accessories used mainly for purposes of industrial production or farming operations, or intended for that use and not designed to provide a service to land or a building, taking into account the actual or intended use of the land or building;
(2) mobile equipment mainly used for industrial or transport purposes, or intended for that use;
(3) ore within the meaning of the Mining Act;
(4) galleries, shafts, excavations, tunnels, or the equipment of underground or open mines;
(5) reserves of raw materials in peat‑bogs, quarries and sandpits;
(6) a railway, bridge, tunnel, fence or other works forming part thereof, intended for the operation of a railway undertaking, except the land forming the bed of such an immoveable and a structure intended to lodge persons, shelter animals or store things;
(7) a dam, embankment, a flume or other works intended for driving timber or for conveying timber to a mill or a wood processing plant;
(8) an access road to forest or mining operations.
Further, the definition of the word "building" was not incorporated into the body of s. 1. That provision incorporated in the definition of the word "immoveable" the old definition of the term "immoveable by destination" as set out in para. (b) of s. 1 of the Real Estate Assessment Act:
1. In this act, unless the context indicates otherwise,
. . .
"immoveable" means an immoveable by nature within the meaning of the Civil Code or a moveable object placed by anyone for a permanency in or on an immoveable by nature;
This brief historical review invites three comments, in my view. First, it seems quite clear that the introductory paragraph of s. 12 of the Real Estate Assessment Act was broader in scope than s. 65 A.M.T. While it excluded from the roll immoveable property intended or used mainly for industrial purposes, it also included immoveable property used or intended for research, business, prevention or reduction of noise and fighting pollution. The new provision is thus more restrictive so far as exemptions are concerned (M. Poirier and J.‑M. Lavoie, "La réforme de la fiscalité municipale: taxation et paiements de transfert" (1981), 12 R.D.U.S. 141, at p. 156):
[translation] It is important to note at the outset that the first paragraph of s. 12 of the Real Estate Assessment Act dealt with immoveable property intended or used for research, business, industry, fighting water, air, soil or noise pollution or for the operation of a farm or woodlot. The relevant provisions of s. 65 of the Act respecting Municipal Taxation are limited to certain property used for purposes of industrial production, operation of a farm or transport only. Second, the new provisions completely reverse the rules that applied previously. Under s. 12 of the Real Estate Assessment Act, there was in principle no entry for immoveable property intended or used principally for business, industry, fighting pollution or the operation of a farm or woodlot, apart from certain exceptions stated in the Act. Under ss. 31 and 65 of the Act respecting Municipal Taxation, such immoveable property is in principle entered on the roll apart from the exceptions expressly mentioned in s. 65 of the Act. It goes without saying that these changes result in the taxing of much property which was not formerly taxed. The assessor enters such immoveable property on the assessment roll and the new entries will be effective as of January 1, 1980. [Emphasis added.]
(See also J.‑M. Pâquet, "Les aspects juridiques", in Formation permanente du Barreau du Québec, cours 51, La réforme de la fiscalité municipale (1980), at p. 29; L. Bélanger, "L'évaluation des immeubles industriels au Québec: les hauts et les bas de l'article 65 par. 1 de la Loi sur la fiscalité municipale" in Développements récents en droit municipal (1989), 151, at pp. 157‑58.)
There is, however, a certain continuity between these successive statutes. Thus, s. 12 of the Real Estate Assessment Act and s. 65(1) A.M.T. both refer to the concept of the principal use or intended use of the immoveable property enjoying the exemption, which does not cover property providing a service to buildings. Unlike the old wording of the Cities and Towns Act, these two sections also exclude machinery from the assessment roll without referring to the term "immoveable by destination", with s. 65(1) A.M.T. adding the term "apparatus" to the words "machines" and "accessories". Moreover, like the Cities and Towns Act and the Real Estate Assessment Act, the Act respecting Municipal Taxation defines a moveable object placed for a permanency without the civil law requirement that it be placed for a permanency and belong to the owner of the immoveable by nature (Banque d'Hochelaga v. Waterous Engine Works Co. (1897), 27 S.C.R. 406; Bell Telephone Co. of Canada v. Ville St‑Laurent, supra; Cité de Sherbrooke v. Commissaires d'écoles de Sherbrooke, [1957] S.C.R. 476, and Cablevision (Montreal) Inc. v. Deputy Minister of Revenue of Quebec, [1978] 2 S.C.R. 64). Seen from this standpoint, therefore, the successive statutes dispense with a criterion peculiar to the civil law.
Finally, and this is connected to the foregoing, an observation that the Act respecting Municipal Taxation reflects a legislative intent to subject to real estate tax several types of property not subject to tax under the Real Estate Assessment Act does not thereby remove the necessity of interpreting the legislative wording in its own particular context. Before analyzing the wording of s. 65(1), the Court of Appeal noted two changes which it considered important (at p. 2762):
[translation] The first observation resulting from the wording of this new Act concerns the fact that the legislature did not reproduce the specific definition of the word "building".
It is this definition which presented a problem and which led the courts to restrict considerably the municipal tax base by excluding from the roll all buildings not used to accommodate persons, animals or things.
Another special feature of this new Act (A.M.T.) results from the fact that the legislature saw fit to consolidate the definitions which the Real Estate Assessment Act gave of the words "immoveable" and "immoveable by destination".
. . .
In my view, these two premises must be borne in mind in analyzing s. 65(1) A.M.T., which gives rise to the divergent interpretations found in the decisions of the B.R.E.F. and the Provincial Court.
With respect, I consider that these two changes cannot in themselves be conclusive as to the point at issue here. First, in my opinion no conclusion can be drawn from the fact that the legislature incorporated in the definition of the word "immoveable" the definition of "immoveable by destination" as set out in s. 1(b) of the Real Estate Assessment Act. That definition had already been consolidated by s. 1(a) of the same Act, in which the word "immoveable" was defined as including the concept of an "immoveable by destination". Further, the core of the matter is not to articulate a definition of the concept of a "building" in absolute terms, but rather to determine the meaning and scope of s. 65(1) A.M.T. with respect to the class of property covered by this exemption. Certainly, when a term used by the legislature is not otherwise defined, reference may be had to the reservoir of concepts contained in the Civil Code (Bélair v. Ville de Ste‑Rose, supra; Montreal Light, Heat & Power Consolidated v. City of Westmount, [1926] S.C.R. 515; Montreal Light, Heat & Power Consolidated v. City of Outremont, supra, and Bell Telephone Co. of Canada v. Ville St‑Laurent, supra). However, this approach must not ignore the textual environment adopted by the legislature itself. In the case at bar, therefore, the most important question concerns the limits laid down by s. 65 A.M.T.
(b) Section 65 A.M.T.
1. The terms "immoveables", "land" and "building"
Before considering the central issue in this appeal, two preliminary observations should be made.
To begin with, the introductory paragraph of s. 65 refers to the term "immoveables" without distinguishing immoveables by nature from the moveable objects covered by s. 1 A.M.T.