https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/497156/index.do
Logix Data Products Inc. v. The Queen (May 14, 2021 – 2021 TCC 36, Monaghan J.).
Précis: The taxpayer claimed SRED expenditures and related tax credits in respect of the development of a dual purpose solar shingle, i.e., one that could be used to product solar power and also act as a roof shingle. The Tax Court found that the evidence adduced was not sufficient to meet the evidentiary burden of demonstrating that the solar shingle project met the various requirements necessary to qualify as SRED.
Decision: The taxpayer filed one expert report within the 90 day limited under the Rules and then moved to file an amended Report less than 90 days prior to the trial. The Court rejected both reports as not meeting the requirements for expert evidence and accordingly dismissed the taxpayer’s motion with costs.
This case really turned on the Court finding that the taxpayer had not met the evidentiary burden of establishing an SRED claim.
1. The taxpayer did not meet the technological uncertainty test:
[105] The Respondent assumed there was no technological uncertainty and that the Appellant’s activities were ones for which the required knowledge was in the public domain. The Appellant bore the burden of providing the Court with evidence that this assumption was incorrect. The evidence does not persuade me that the matters the Appellant describes as technological uncertainties would have been characterized as such by persons knowledgeable in the field of solar energy, mechanical and electrical engineering and solar panel or solar shingle production and installation. Thus, I am not satisfied there was any technological uncertainty.
2. Nor did it meet the scientific method test:
[123] All of this is far less than I would expect had the Appellant formulated hypotheses specifically aimed at reducing or eliminating a technological uncertainty and adopted a procedure that accorded with the discipline of scientific method: trained and systematic observation, measurement and experiment, and formulation, testing and modification of the hypotheses as the project proceeded.
3. Finally, the documentary record was unsatisfactory:
[140] In conclusion, I find the documentary evidence submitted by the Appellant, as records of the activities, to be wholly inadequate and unreliable. They do not constitute detailed records of the Appellant’s work.
The Tax Court was at the end of the day simply not satisfied with the record adduced by the taxpayer and dismissed the appeal with costs.