B.C. pipeline company argues its 'haulers' are not trucks, for tax purposes

Piping is seen on the top of a receiving platform which will be connected to the Coastal GasLink natural gas pipeline terminus at the LNG Canada export terminal under construction, in Kitimat, B.C., Wednesday, Sept. 28, 2022. (Darryl Dyck / The Canadian Press)

A contractor working on the Coastal GasLink pipeline has been denied more than $333,000 worth of tax rebates because pieces of machinery it purchased – and claimed were not trucks – were deemed sufficiently truck-like in B.C. Supreme Court.

Ledcor Pipeline Limited is the main contractor for the westernmost section of the Coastal GasLink pipeline, which is slated to carry natural gas across northern B.C. to an export terminal in Kitimat.

The company argued it should have been entitled to more than $333,000 worth of PST rebates for the 11 pieces of equipment, which it described as "haulers" in submissions to the court.

The B.C. government approved rebates worth more than $2.2 million for other equipment the company purchased for the project, but denied LPL's request for rebates on the 11 items in question.

The province argued that the machines are either trucks or vehicles "similar to a truck," two categories that are not eligible for PST rebates under regulations designed to encourage infrastructure investment in the wake of the COVID-19 pandemic.

In a decision issued earlier this week, B.C. Supreme Court Justice Warren B. Milman sided with the province, writing that the disputed items are "almost certainly" trucks and therefore ineligible for the rebates. 

'Haulers' are vehicles

LPL brought the case to court after provincial decision-makers with the Ministry of Finance rejected their rebate request for the haulers. The company told the court the ministry was wrong to consider the pieces of equipment "vehicles," since they were never used on public highways and, indeed, were prohibited from being used on such surfaces.

To support its point, the company referenced the provincial Motor Vehicle Act's definition of "vehicles," which reads, in part: "a device in, on or by which a person or thing is or may be transported or drawn on a highway."

If the qualifying criteria for a vehicle is simply that it "may be" used to transport a person or thing on a highway, LPL argued, things as absurd as "radio-controlled toy cars, toy wagons or refrigerators" could be considered vehicles.

While Milman agreed that "may" was ambiguous in the Motor Vehicle Act definition, the judge nevertheless drew a distinction between LPL's haulers and those more unusual items.

The judge determined that the "salient questions to ask" when deciding if something is a vehicle are whether it is "designed or intended to be used primarily to transport things or people" and "whether it is capable of operating in that manner on a highway."

"In the case of the disputed items, the answer to both questions is clearly 'yes,'" Milman's decision reads.

"They have wheels, axles, tires, a chassis, a cab, a box to transport materials, a tailgate, brakes and steering cylinders. Their essential function is to transport things. The same cannot be said of toys or refrigerators."

'Almost certainly' trucks

Certain types of vehicles are eligible for the PST rebates that LPL was seeking, but trucks are not, so the company argued that even if its haulers could be considered vehicles, they were not trucks.

The company argued that the vehicles were more akin to "bulldozers, excavators, forklifts or paving machines," all of which are eligible for rebates under B.C.'s program.

Milman again was unconvinced.

Noting that the regulations for the rebate program state that trucks and vehicles "similar to" trucks, and that trucks are defined in the Motor Vehicle Act as vehicles "designed or used primarily for the transportation of property," the judge dismissed LPL's case.

"This is not an issue that calls for recourse to any interpretive tools beyond looking to the plain meaning of the words used," the decision reads. "If the disputed items are not 'trucks' (which in my view they almost certainly are), then they are, at the very least, vehicles 'similar to a truck,' if that latter phrase is to be given any sensible meaning at all."