BC government to repay Domtar
December 27, 2005 By Pulp & Paper Canada
Domtar will soon be pocketing $210,502, plus interest, of its own money. The Vancouver Sun recently reported the pr…
Domtar will soon be pocketing $210,502, plus interest, of its own money. The Vancouver Sun recently reported the provincial government of British Columbia has been ordered to repay Domtar the money it forced the company to pay in provincial tax on biocides used to manufacture high-quality paper. Domtar sued the government for the return of the capital.
Biocides work to prevent microbes, which are present in the manufacturing process, from building up into bacterial slime, which can lead to paper breaks, spray nozzle blockage and discolouration.
According to the Sun, Domtar claimed it should not be required to pay the tax due to a section of the Social Services Tax Act, which provides for an exemption for substances used as a, “catalyst or direct agent in a chemical reaction for the transformation or manufacture of a productthat is in contact with, or is temporarily incorporated into the material being transformed or manufactured.”
The Vancouver Sun further reported Justice Linda Loo as saying that the government took this section to mean that for the exemption to be valid, the biocides must change the raw materials into paper. However, after a careful examination of the case, Loo concluded the government’s interpretation was too parochial, and ordered the money be returned.
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