Words and Phrases - "expenditure"
Consoltex Inc. v. R., 97 DTC 724, [1997] 2 CTC 2846 (TCC)
The cost of yarn that the taxpayer expended in the course of an R&D project qualified under both s. 37(7)(c)(ii)(A) and Regulation 2900(2)(c), notwithstanding that the yarn subsequently was sold. Bowman TCJ. stated (at p. 736) that "the word 'expenditures' is a reasonably comprehensible English word ... . It is something one spends, an outlay. No meaning of which I am aware, either in ordinary parlance or in decided cases, would justify adding after it 'net of sales proceeds'".
He went on to note in light of former s. 4(4) that as the expenditures qualified under s. 37, they could not also be deducted as the cost of sales under s. 9.
Alcatel Canada Inc. v. The Queen, 2005 DTC 387, 2005 TCC 149
S.7 employment benefits under an employee stock option program realized by employees engaged in qualifying scientific research activities constituted qualified expenditures of the taxpayer and expenditures made in respect of expenses incurred for salary or wages for purposes of s. 37(8)(a)(ii)(B)(iv), given that the word "expenditure" did not require that there be a disbursement of cash as opposed to a disbursement of other assets, and that "a very real expenditure is accomplished when shares having an established market value are sold for less than [their] value in the context of a scheme for the compensation of the employees who buy them". Furthermore, given that the primary purpose of the stock option program was to compensate employees for their services and to encourage future effort, and the taxpayer did not engage in the stock option program to increase or otherwise alter its capital structure, these expenditures were of a current nature.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) - Paragraph 37(8)(a) | 155 |
Cultures LaFlamme (1984) Inc. v. MNR, 93 DTC 603, [1993] 1 CTC 2634 (TCC)
The Minister was unsuccessful in a submission that the qualified expenditures of the taxpayer should be reduced by the amount of income derived by it from the sale of experimental production. Lamarre Proulx J. noted that none of the authority cited established that amounts from the sale of products must be deducted in the calculation of "expenditures".