The Minister of Finance appealed a decision of the Court of Appeal for Ontario which held that the definition of 'hedging' in the Mining Tax Act was restricted to contracts settled by physical delivery of gold from an Ontario mine.
The respondent, a mining company, had realized significant gains from financial hedging transactions that did not result in physical delivery, and excluded these gains from its profit computation based on the Minister's former administrative practice.
The Supreme Court of Canada allowed the appeal, holding that the statutory definition of 'hedging' extends to transactions that do not result in physical delivery.
The Court applied the modern approach to statutory interpretation, finding that the narrower interpretation would render parts of the statutory definition redundant.
