Supreme Court of Canada
Ottawa Valley Power Company v. Minister of National Revenue  S.C.R. 941
Ottawa Valley Power Company Appellant;
The Minister of National Revenue Respondent.
1970: May 26, 27.
Present: Abbott, Hall, Spence, Pigeon and Laskin JJ.
ON APPEAL FROM THE EXCHEQUER COURT OF CANADA
Taxation—Income tax—Capital cost allowance—Alterations paid for by customer, a public body—Income Tax Act, R.S.C. 1952, c. 148, s. 11(1)(a).
The appellant company had a long-term contract to supply 25 cycle electrical power to The Hydro-Electric Power Commission of Ontario. When the Commission changed its system from 25 cycle current to 60 cycle, it undertook to make at its own expense the necessary alterations to the appellant’s plant. The Minister refused to allow capital cost allowance on these additions and improvements to the appellant’s plant. The Exchequer Court upheld the Minister’s contention. The company appealed to this Court.
Held: The appeal should be dismissed.
APPEAL from a judgment of Jackett P. of the Exchequer Court of Canada, in an income tax matter. Appeal dismissed.
J.H. Laycraft, Q.C., and C.D. O’Brien, for the appellant.
D.G.H. Bowman and E.M. McFadyen, for the respondent.
At the conclusion of the argument of counsel for the appellant, the following judgment was delivered:
ABBOTT J. (orally for the Court)—We are all of opinion that the expenditure of $1,932,150 made by the Hydro-Electric Power Commission of Ontario was not an expenditure which can be taken into account in determining the capital
cost to appellant of its depreciable property within the terms of s. 11(1)(a) of the Income Tax Act.
The appeal must therefore be dismissed with costs.
Appeal dismissed with costs.
Solicitors for the appellant: Saucier, Jones, Peacock, Black, Gain, Stratton & Laycraft, Calgary.
Solicitor for the respondent: D.S. Maxwell, Ottawa.
  C.T.C. 242, 69 D.T.C. 5166.