EDMONTON, ALBERTA, JULY 6, 2005.
JOAN A. WILLIAMSON
THE ATTORNEY GENERAL OF CANADA representing the
Minister designated under the Cultural Property Export and Import Act
REASONS FOR ORDER AND ORDER
 This is an application for the judicial review of the decision of Victoria Baker, A/Manager, Moveable Cultural Property Program, Heritage Canada finding that the Fort Saskatchewan Historical Society (the "Society") was ineligible to be designated as a Category "B" institution pursuant to ss. 32(2) of the Cultural Property Export and Import Act ("CPEIA").
 On October 10, 2001, the Society submitted an Application for Designation, Category "B" to the Minister of Canadian Heritage to be designated for the purposes of s. 32 of the CPEIA. The Society claims it provided an Application for Certification of Cultural Property for Income Tax Purposes, however this document is not included with the Applicant's documents. This Application related to the Applicant's donation of personal property of historic significance to the Society.
 On November 6, 2001, Victoria Baker spoke with the Society's curator and confirmed that the Society had already received legal transfer of the donation. As the Applicant had already donated the property in issue to the Society and legal title had passed to the Society, Ms. Baker ruled that the Society was ineligible to be designated under ss. 32(2) of the CPEIA as that section is interpreted and administered by Canadian Heritage pursuant to a policy manual entitled "Designations of Institutions and Public Authorities - Information and Procedures" ("Policy Manual"). That policy manual provides that before a donation is made, an institution must be designated. Once a donation has been made and legal title has passed, the institution is no longer eligible to be designated and the donor is no longer eligible for the tax benefits for gifts of "certified cultural property" under the Income Tax Act.
 The Applicant seeks review of the decision on the basis of three grounds:
1. Ms. Baker was not authorized by the CPEIA to make decisions under ss. 32(2), these have to be made by the Minister;
2. A note found on the file dated 6 Nov 01 demonstrates clear bias; and
3. There is no linkage between designation under ss. 32(2) of the CPEIA and determination of qualification as "cultural gifts" under ss. 32(1) of the CPEIA and under the Income Tax Act.
Standard of Review
 A review of the pragmatic and functional approach reveals that the standard of review in this case should be one of correctness as this is an issue of interpretation of law (see Okeymow v. Samson Cree Nation,  F.C.J. No. 940).
Preliminary Procedural Issue - Issues 1 and 2
 The Respondent objects to the Applicant raising issues 1 and 2 arguing they were never set out in the Notice of Application and were only addressed in the Applicant's Memorandum of Fact and Law. The Respondent argues a) that she could not raise them earlier as the relevant document from Canadian Heritage was not filed before January 20, 2005, and therefore, at the time the application was filed she did not know the document displaying the alleged bias by the Respondent existed, and b) in the alternative, she asks the Court to allow her to amend her notice of application now, as this would not cause any prejudice to the Respondent.
 I have difficulty acceding to this request for the following reasons:
i) the original Notice of Application never mentioned either issue. It merely provided:
The Applicant seeks:
a) An Order in the nature of certiorari quashing the July 3, 2002 Decision of Canadian Heritage or the July 3, 2002 Decision of the Minister, on the ground that it is contrary to law and statutory interpretation; and
b) An Order in the nature of certiorari quashing the provisions of a policy document titled Designation of Institutions and Public Authorities - Information and Procedures, revised June 2000 as being contrary to the Cultural Property Export and Import Act.
ii) Rule 301(e) of the Federal Court Rules, 1998 states the following:
An application shall be commenced by a notice of application in Form 301, setting out
(a) the division of the Court to which the application is addressed;
(b) the names of the applicant and respondent;
(c) where the application is an application for judicial review,
(i) the tribunal in respect of which the application is made, and
(ii) the date and details of any order in respect of which judicial review is sought and the date on which it was first communicated to the applicant;
(d) a precise statement of the relief sought;
(e) a complete and concise statement of the grounds intended to be argued, including a reference to any statutory provision or rule to be relied on; and
(f) a list of the documentary evidence to be used at the hearing of the application.
The Notice of Application referred only to the following grounds:
The statutory interpretation fo the Cultural Property Export and Import Act, is a question of law, properly within the jurisdiction of the Federal Court of Canada, with no deference owed to the decision of Canadian Heritage or the Minister.
iii) The Respondent never had an opportunity to file affidavit evidence to explain the delegation of authority within Heritage Canada, nor to provide any context for the note of 6 Nov 01 which allegedly evidences the bias; and
iv) The Applicant never applied to have her application amended. This is a case managed application and the order of Justice MacTavish dated January 7, 2005 in paragraphs 4 and 5 ordered the Respondent to file the Tribunal Record on or before January 25, 2005, and gave the Applicant 20 days thereafter to file supporting affidavits and documentary exhibits. The Applicant thus had the opportunity after receipt of the allegedly biassed document on January 20, 2005, to raise the issue and move for amendment of its Notice of Application. She failed to do so.
 Gibson J. in Arona v. Canada (Minister of Citizenship and Immigration)  FCJ No. 24 in a similar situation stated at paragraph 9 :
9 While the issue on this application for judicial review is clearly not the scope of documentation relevant to the application, the principle that the Court will deal only with the grounds of review invoked by the applicant in the originating notice of motion and in the supporting affidavit must, I am satisfied, govern. If, as here, the applicant were able to invoke new grounds of review in his memorandum of argument, the respondent would conceivably be prejudiced through failure to have an opportunity to address the new ground in her affidavit or, once again as here, to at least consider filing an affidavit to address the new issue. In the result, I determine that the second issue raised on behalf of the applicant is not properly before the Court.
 For the reasons stated above and following Arona, supra, I am not prepared to allow an amendment at this time. Accordingly, the first two issues raised by the Applicant are not considered to be before this Court and will not be addressed.
Statutory Provisions in Issue
 Subsections 32(1) to (3) of the CPEIA provide as follows:
32. (1) For the purposes of subparagraph 39(1)(a)(i.1), paragraph 110.1(1)(c), the definition "total cultural gifts" in subsection 118.1(1) and subsection 118.1(10) of the Income Tax Act, where a person disposes of or proposes to dispose of an object to an institution or a public authority designated under subsection (2), the person, institution or public authority may request, by notice in writing given to the Review Board, a determination by the Review Board as to whether the object meets the criteria set out in paragraphs 29(3)(b) and (c) and a determination by the Review Board of the fair market value of the object.
(2) For the purposes of subparagraph 39(1)(a)(i.1), paragraph 110.1(1)(c), the definition "total cultural gifts" in subsection 118.1(1), subsection 118.1(10) and section 207.3 of the Income Tax Act, the Minister may designate any institution or public authority indefinitely or for a period of time, and generally or for a specified purpose.
(3) The Minister may at any time revoke a designation made under subsection (2).
 The Applicant asserts that Ms. Baker failed to properly apply the legislation and the Policy Manual and that her decision was contrary to law. She refers to ss. 32(2) which contains no limitation as to when such a designation may be made.
 The Applicant further advances that there is no sense in providing for a one time designation without contemplating a preliminary passage of ownership and possession of the objects. She notes that Ms. Baker herself, in her decision, states that the determination of the Canadian Cultural Property Export Review Board (the "Review Board") can occur after the institution has acquired the gift. In her view designation and determination are two separate steps which should not be linked. The Society should receive a Category "B" designation and the question of whether or not it should be certified for income tax purposes should be determined by the Review Board, independent of whether the Society received the donation before or after obtaining designation.
 Finally, the Applicant submits that to not designate the Society would thwart its goal of recording the history of the community. They should not be discriminated against for being a small museum who did not "pre-apply". The legislation was passed to advance cultural and historic resources and this goal should be preserved.
 In contrast, the Respondent takes the position set out at page 5 of the Policy Manual, namely:
Subsection 32(1) of the Cultural Property Export and Imports Act states that an institution or public authority must be designated at the time that cultural property is certified by the Canadian Cultural Property Export Review Board and at the time that the legal disposition of the cultural property to the institution takes place. For this reason, an application for designation may not be made in relation to objects or collections for which the institution has obtained legal title.
 The concept of the CPEIA was succinctly described by Rothstein J (as he then was) in Art Gallery of Ontario v. Canada (Cultural Property Export Review Board  3 F.C. 691:
8 The CPEIA came into force on September 6, 1977, as did certain complementary amendments to the Income Tax Act. The purpose of this legislation is to provide a mechanism to preserve the national heritage of Canada through a combination of export controls, preferential rights of purchase for designated cultural institutions and income tax incentives for those who donate Canadian cultural property to such designated institutions.
9 The basic scheme of the CPEIA and its companion provisions in the Income Tax Act is to combine an incentive -- preferential tax treatment on the gift or sale of Canadian cultural property to designated institutions, with certain restrictions on the export of Canadian cultural property, and a limited right of expropriation after Canadian cultural property has been offered for sale.
 The process works as follows: A donation is made to an institution designated by the Minister of Canadian Heritage pursuant to ss. 32(2) of the CPEIA. The donor can apply to the Review Board for a determination as to whether the donation is cultural property under the CPEIA and to determine the fair market value of the donation. If the Review Board finds the donation meets the criteria of the CPEIA, pursuant to ss. 29(3)(b) and (c), a Cultural Property Income Tax Certificate is issued. The donor of the property then receives favourable tax consequences with respect to capital gains and a tax credit or deduction.
 The rule for interpreting statutory provisions was laid down by Iaccobucci J. in Rizzo v. Rizzo Shoes  1 R.C.S. 27 at paragraph 21:
Although much has been written about the interpretation of legislation (see, e.g., Ruth Sullivan, Statutory Interpretation (1997); Ruth Sullivan, Driedger on the Construction of Statutes (3rd ed. 1994) (hereinafter "Construction of Statutes"); Pierre-André Côté, The Interpretation of Legislation in Canada (2nd ed. 1991)), Elmer Driedger in Construction of Statutes (2nd ed. 1983) best encapsulates the approach upon which I prefer to rely. He recognizes that statutory interpretation cannot be founded on the wording of the legislation alone. At p. 87 he states:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
 Here the context demands that section 32 of the CPEIA be read as a whole. Subsections 2 and 3 are not independent subsections but are meant to be employed in the context of the tax benefits available under ss. 32(1). The principal purpose of a designation is to create the tax benefits. Parenthetically Canadian Heritage also operates a program entitled "Moveable Properties Grants and Loans" for which only designated institutions are eligible, however while the authority for the program is set out in sections 35 and 36 of the CPEIA, the link to designated institutions is not set out in the CPEIA, but only stems from the policy manual.
 The grammatical and ordinary meaning of words is also reflected by choice of tense for verbs used. Subsection 32(1) states "a person disposes or proposes to dispose", but then refers to "an institution, or a public authority designated". It does not refer to "an institution, or a public authority designated or to be designated". This careful choice of tense makes it clear that the institution or public authority is meant to be designated at the time the donation is made or proposed.
 The wording of three of the Income Tax Act provisions cross- referenced in subsection 32(1) of the CPEIA (attached for ease of reference as Annex A) make it clear that the institution must have been designated at the time the donation takes place.
 Finally, an absurd result would occur if a donor could make a donation to an undesignated institution and the institution could subsequently seek designation under ss. 32(2) of the CPEIA. First, the determination could only apply in terms of ss. 29 (3)(a) and (b) of the CPEIA, but would have no effect with respect to the Income Tax Act. Yet the introductory words of ss. 32(1) of the CPEIA provides that such a determination is made "for the purposes of paragraph 39(1)(a)(1.1) (...) of the Income Tax Act.." In effect a donation prior to designation would preclude an income tax benefit for the donor and thus also any any corollary benefit to the institution. While it would qualify the institution for eligibility under the Moveable Properties Grants and Loans program, such eligibility does not arise under the CPEIA and therefore cannot be taken into consideration in terms of statutory interpretation.
 While the plight of small cultural institutions such as the Society may have been in the Minister's mind when he explained his policy at the time of introduction of the bill, it is not reflected in the wording of the CPEIA. Any purposive interpretation of the legislation employing the dicta laid down in Rizzo, supra, leads to the interpretation of ss. 32(2) as employed by the Respondent.
 Accordingly, the decision of Ms. Baker applying section 32 (2) of the CPEIA is correct and should not be disturbed.
THIS COURT ORDERS that this application be dismissed with costs to the Respondent.
Income Tax Act, R.S.C. 1985, Ch. 1
39.(1) For the purposes of this Act,
39.(1)(a) a taxpayer's capital gain for a taxation year from the disposition of any property is the taxpayer's gain for the year determined under this subdivision... from the disposition of any property of the taxpayer other than
(i) eligible capital property,
(I.1) an object that the Canadian Cultural Property Export Review Board has determined meets the criteria set out in paragraphs 29(3)(b) and (c) of the Cultural Property Export and Import Act and that has been disposed of, ...
to an institution or a public authority in Canada that was, at the time of the disposition, designated under subsection 32(2) of that Act either generally or for a specified purpose related to that object, ...
110.1.(1)(c) the total of all amounts each of which is the fair market value of a gift (other than a gift described in paragraph 110.1(1)(d)) of an object that the Canadian Cultural Property Export Review Board has determined meets the criteria set out in paragraphs 29(3)(b) and (c)
of the Cultural Property Export and Import Act, which gift was made by the corporation in the year or in any of the 5 preceding taxation years to an institution or a public authority in Canada that was, at the time the gift was made, designated under subsection 32(2) of that Act either generally or for a specified purpose related to that object; and
118.1(1) "total cultural gifts" of an individual for a taxation year means the total of all amounts each of which is the fair market value of a gift
(a) of an object that the Canadian Cultural Property Export Review Board has determined meets the criteria set out in paragraphs 29(3)(b) and (c) of the Cultural Property export and Import Act, and
(b) that was made by the individual in the year or in any of the 5 immediately preceding taxation years to an institution or a public authority in Canada that was, at the time the gift was made, designated under subsection 32(2) of the Cultural Property Export and Import Act either generally or for a specified purpose related to that object,
NAME OF COUNSEL AND SOLICITORS OF RECORD
STYLE OF CAUSE: JOAN A. WILLIAMSON
ATTORNEY GENERAL OF CANADA ET AL
SOLICITORS OF RECORD:
Parlee McLaws, LLP FOR APPLICANT
Deputy Attorney General of Canada