A-472-79
Essex International of Canada Ltd. (Applicant)
v.
Administrator under the Anti-Inflation Act
(Respondent)
Court of Appeal, Pratte and Marceau JJ. and
Hyde D.J.—Montreal, May 14 and 15; Ottawa,
June 8, 1981.
Judicial review — Application to review and set aside a
decision of the Anti-Inflation Appeal Tribunal dismissing an
appeal from an order of the Administrator that the applicant
had contravened the Anti-Inflation Guidelines in 1975 and
1976 — Applicant, a Canadian company, assembles and sells
electrical harnesses to Ford Motor Company of Canada, Lim
ited and to Chrysler Canada Ltd. — The harnesses were
incorporated without alteration into automobiles that were
manufactured in Canada and exported to the United States —
Whether such sales are "export sales" within the meaning of
the Anti-Inflation Guidelines — Application dismissed —
Anti-Inflation Guidelines, SOR/76-1 — Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, s. 28.
APPLICATION for judicial review.
COUNSEL:
R. Lewin and J. Potvin for applicant.
M. Cuerrier for respondent.
SOLICITORS:
Heenan, Blaikie, Jolin, Potvin, Trépanier,
Cobbett, Montreal, for applicant.
Deputy Attorney General of Canada for
respondent.
The following are the reasons for judgment
rendered in English by
PRArrE J.: This is a section 28 application to
review and set aside a decision of the Anti-Infla
tion Appeal Tribunal dated July 13, 1979, dismiss
ing an appeal from an order made by the Adminis
trator under the Anti-Inflation Act, S.C.
1974-75-76, c. 75. By that order, the Administra
tor had determined that the applicant had contra
vened the Anti-Inflation Guidelines, SOR/76-1 in
1975 and 1976 and was obliged, as a consequence,
to return the amount of its excess revenues to the
Canadian manufacturers from whom it had
derived them.
The applicant is a Canadian company which is
in the business of assembling and selling electrical
harnesses. An electrical harness, as I understand
it, is a bundle of all the electrical wires, of various
sizes and lengths, that are used in building a car of
a given make. Part of the electrical harnesses
assembled by the applicant were sold to Ford
Motor Company of Canada, Limited and Chrysler
Canada Ltd. Those companies incorporated those
harnesses, without altering them, into automobiles
that they manufactured in Canada and exported to
the United States.
The applicant contends that these sales to Ford
Motor Company of Canada, Limited and Chrysler
Canada Ltd. were "export sales" within the mean
ing of the Anti-Inflation Guidelines' and that the
Appeal Tribunal wrongly held that they were not.
The applicant's sole argument is that those sales
were export sales within the meaning of the Guide
lines because they were sales of a commodity by a
resident of Canada (the applicant) to another resi
dent of Canada (Ford Motor Company of Canada,
Limited or Chrysler Canada Ltd.) who resold "the
commodity without substantially changing the
form thereof, for use or consumption outside
Canada".
In my view, this argument is ill-founded and was
correctly rejected by the Appeal Tribunal. Once
an electrical harness has been incorporated into an
automobile, it loses its identity; it ceases to be an
electrical harness and becomes part of the automo-
' Paragraph 4(2)(e) of the Anti-Inflation Guidelines [P.C.
1975-2926, as amended] provides that:
4....
(2) This Part does not apply to
(e) the portion of a supplier's business that is export sales;
The definition of the phrase "export sale" is found in section 3
of the Guidelines. It reads in part as follows:
3. In this Part,
"export sale" means
(a) the supply of a commodity by a supplier from a
permanent establishment in Canada to any other person
where the commodity is supplied
(ii) to another person who is resident in Canada and
who resells the commodity without substantially
changing the form thereof,
for use or consumption outside Canada,
bile. When Ford Motor Company of Canada, Lim
ited and Chrysler Canada Ltd. exported to the
United States the cars that they had manufac
tured, they did not export or sell electrical har
nesses; they exported cars in the construction of
which electrical harnesses had been used.
For ' those reasons, I would dismiss the
application.
* * *
MARCEAU J.: I agree.
* * *
HYDE D.J.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.