Class 5 / 6 inspections Flashcards by Jimmy Litt

class 5 property must include only land or improvements, or both,
a)
b)
c)
d)
e)
f)
g)

a) used as a gathering pipeline
b) used or held for purposes such as extracting, processing, manufacturing, or transporting of products
c) storage of products Ancillary to or in conjunction with (b)
d) included in class 2 or 4
e) used of held for the purpose of, or for purposes ancillary to, the business of transportation by railway
f) used principally as an outlet for the sale of a finished product to a purchaser for purposes of his or her own consumption or use and not for resale in either the form in which it was purchased or any other form
g) used for extracting, processing, manufacturing or storage of food, non-alcoholic beverages or water

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A property used solely for _________ does not qualify for class ____.

For class ____ to apply to storage areas, the storage must be ancillary to, or conjunction with, extracting, processing, manufacturing or transporting products. in this context storage occurs if the product remains at the property for atleast 72 hours

storage , 05

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Class 05 is determined based on the type or use of the property not its _______

Ownership

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The type of business that operates at the property is _________ for determining the type or use of the property

relevant

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if insufficient information is provided, classify the property as class ___

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step 1 is the property used or held for a qualifying purpose?
used for:
held for:
products:
Qualifying purposes:

used for: actually in use for a qualifying purpose and can apply while a property is under construction or renovation

held for: depends on the facts: vacant parcel was subject to a gravel extraction permit (which would ordinarily cause the property to be classified as class 05 because of extraction. the fact that the owner was actively marketing the property to be used for residential development meant the property was not held for a class 05 purpose

products: in the context of class 05, the word “products
connotes a tangible. physical products rather than an intangible product such as a medical test result.

Qualifying purpose: class 05 applies if the property is used or held for only one of the following qualifying purposes. (if activity is storage, it must be ancillary to extracting, processing, manufacturing or transporting of products

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extracting of products:

to extract is to remove or take out, esp by effort or force; obtain a natural resource from the earth; obtain by suction, distillation etc

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processing of products

make goods more marketable and change their appearance of nature

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manufacturing of products

to manufacture is to fabricate, it is the act or process of making articles for use; it is the operations of making goods or wares of any kind; it is the production of articles for use from raw or prepared material by giving to these materials new forms, qualities and properties or combinations whether by hand or machinary

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transporting of products

requiring transporting of products to be part of the larger and continuous chain of transportation activity

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storage of products ancillary to or in conjunction with any of these above activities

storage that is not ancillary to or in conjunction with a class 05 or class 06 property

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property is excluded from class 05 if one of the following apply:

-property is in class 2 or 4

-the property is used or held for the purposes of, or purposes ancillary to, the business of transportation by railway

-the property is used principally as a retail outlet for finished products to end users and not for resale in either the form in which it was purchased or any other form

-the property is used for extracting, processing, manufacturing, or storing of food, non alcoholic beverages or water

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property is in class 2 or 4

if a property is designed to and built as a major industrial property MIP and no definable area is used for a class 05 purpose, the whole plant is class 04

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the property is used or held for the purposes of, or purposes ancillary to, the business of transportation by railway

an intermodal facility where trucks were loaded with products from rail cars was

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property is used as a retail outlet for finished products to end users and not for resale in either the form in which it was purchased or any other form

warehouse adjacent to a showroom where roofing supplies that were mainly sold at wholesale prices to construction contractors was a sales outlet of products to the purchaser for the purchasers own consumption

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the property is used for extracting, processing, manufacturing or storing of food, non- alcoholic beverages or water

the storage area at a transit warehouse where food was stored was excluded from class 05 because although transporting of food, non-alcoholic beverages or water is a class 05 use, storage related to such transportation is excluded from class 05

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are there other activities on the property?

are the areas definable

if there is no definable purpose for each use, do not ______ the class, instead determine the predominant use of the property and classify the entirety of the property in accordance with that predominant use

split

Where there are both sales areas and areas where Class 05 activities occur,
determine whether the storage is associated with the __________ or with the ________
qualifying activity and classify accordingly.

sales use, or class 5

Where the storage area is not at the production site, the storage may be merely a
storage warehouse (Class 06), although transit warehouses and distribution
warehouses are _________ because they are used for the transportation of the
products to their destination.

class 5

Depending on the type of warehouse, classification may be Class 05 or Class 06.

Class 05 will apply if the warehouse is ancillary to the production facility where the
product is _______________________________, then it will be Class 05 as being used
ancillary to or in conjunction with the extraction/manufacturing or processing.

Class 05 will also apply if the storage at the warehouse is part of the process of
transportation (e.g., transit warehouses or distribution warehouses), unless the product in question is food, non-alcoholic beverage or water (in which case the
storage area is Class 06 per Pepsico, supra).

Class 06 will apply if the warehouse is ancillary to a Class 06 activity such as _______

extracted/manufactured/processed

Sales

Determine if storage occurs at all. If the product is left at the property for a very
short time (i.e., less than 72 hours), then that does not constitute _______ If
storage does occur, determine if it is in conjunction with the Class 05 activity or is
related to other activities (e.g., sales).

If there are both Class 05 activities and other activities, determine if the classification of the storage area should be ______

storage, split

Transportation does not exist for every business that sends and receives goods;
rather transportation requires that such activity must be part of a larger and
__________ of transportation activity. Typically, though not always, the place
where the products are sold is________________.

continuous chain, point of destination

Transportation connotes the continuum of _____________ from their point of
origin to their point of destination, and can include the putting down and taking up
of the products en route.

movement of goods

_____________of storage may be relevant to whether the product is in the process of being transported. The shorter the duration of storage, the more likely the product is still being transported; the longer the duration, the more likely that the product is not still being transported (although the matter may not be completely free from doubt). What constitutes long or short duration will depend in part on the type of product. Products with a ___________will typically be stored for a shorter term en route to final destination than products with a longer self-life.

duration, shorter shelf life

The point of destination for a product being transported will turn on the facts; storage along the transportation continuum is ______ (e.g., a distribution warehouse) but once the product has reached its destination point, storage will be ________ (e.g., a warehouse ancillary to or part of a sales outlet). Consider, however, whether the sales outlet sells to a purchaser who resells the products. If it is, then the product has not yet reached its _____________ until it is at the storage place for the reseller. Use caution with terminology of retail/wholesale because it is possible for purchasers paying a wholesale price to the be consumers of the product.

class 5, class 6 Final destination

It is sometimes difficult to know when the act of storing is ancillary to transportation or ancillary to sales. One indicator may be the business of the occupier of the premises. Although classification cannot be based on who owns a property, it is appropriate to c____________________ of the occupier (owner or tenant) as one factor in determining the use of the property. If the business is transportation (e.g., a shipper such as a motor carrier like a trucking company, a courier company, an air freight carrier or a freight forwarder)then temporary storage of products is likely to be ______________________________________________________________ If the business of the occupier were a customs broker that deals mainly with transportation companies while goods are en route from another country then the temporary storage of the products at the premises of the customs broker would also be ancillary to or in conjunction with the transportation of the products.

consider the nature of the business, ancillary to or in conjunction with use for transportation purposes.

It is also possible for a manufacturer, processer, or extractor to have a distribution aspect to its business (e.g., a fleet of trucks to deliver the manufactured product). In such cases, the manufacturer, processor or extractor is also in the business of _____________________ A warehouse or other property used for the transportation of the product en route to the product’s destination would be in Class 05 because of that transportation use.

transportation of products

Approach Determine the nature of the ______________ of the occupier of the premises and the activities that occur. If the business of the occupier is_____________, or a business that works primarily with ____________, and the use of the property for storage purpose is for the transportation of the product en route to its _______________, then the property will be in Class 05. If the business of the occupier is a manufacturer, processor, or extractor and the property is used for the purpose of distributing the product then the property is Class 05.

business Shipping, shippers destination

Processing and Manufacturing Some activities _______________alter material and so may not constitute manufacturing or processing. In order to be “processing”, the activity must (1) make goods more ____________and (2) change their __________ or nature. For instance, merely cutting carpet or repackaging tiles and hardwood flooring is not “processing” of those products. Stabilizing hazardous waste before it is disposed of in a landfill is not “processing of products”. Conducting laboratory tests of biomedical specimens is not “processing of products”. Something that is marketable should result from the processing activity. Otherwise, the activity is not processing “of products”. The products should be tangible, physical property (e.g., medical test results are not a “product” for the purposes of Class 05). Manufacturing requires fabrication by hand or machine of a thing from raw or prepared materials, by giving them new forms, qualities and properties. If materials are only minimally altered by the activity (e.g., engraving, imprinting logos on a t-shirt, photocopying, repairing or altering clothing, etc.), that does not constitute “_______________”.

minimally marketable appearance Manufacturing

Sales Outlets to Purchaser for Purchaser’s Own Consumption and Not for Resale in Same or Any Other Form If a property is used principally as a sales outlet of finished products to consumers for their ___________ and not for the consumer to resell, then the property is excluded from Class 05. In such cases, Class 06 is appropriate. A grey area may be a business that could be considered a Class 05 activity in some circumstances but not others. For example, a printer who prints books, pamphlets and other printed materials at an industrial printing facility would generally be regarded as Class 05, but a storefront photocopy business that copies and binds reports, documents and other printed materials would be Class 06. The distinction occurs because in the former case, the property is not primarily a ___________, whereas in the latter case it is. By legal policy, a sales outlet is a definable area whose primary purpose is sales. For example, a showroom at a business that sold roofing supplies at wholesale prices to construction contractors was “primarily a sales outlet”. The storage ancillary to that sales outlet was excluded from Class 05 because the sales were to the purchasers for their own consumption (i.e., consumption in their businesses). Although the contractors charged their clients for the roofing materials, it was not considered to be “reselling” the products in the same or any other form. A property where raw materials are sold to a manufacturer or processor who incorporates those raw materials into a finished product would constitute sales to a consumer for resale in another form. _________ would apply.

own use sales outlet Class 05

Extracting, Processing, Manufacturing or Storage of Food, Nonalcoholic Beverages or Water Premises used for the manufacturing, processing or extracting of food, nonalcoholic beverages and water are excluded from ___________ If the Class 05 activity is transportation of food, non-alcoholic beverages or water, the _____________ portion of the property will be in Class 05 but any storage of such products will be excluded from Class 05. Where the food product is retained on the premises for a very short period of time_______________, the product may not be stored so as to be excluded from Class 05. If it is impossible to discern which part of the property is used for the storage of food/non-alcoholic beverage/water as opposed to other types of products (e.g., because other products are stored on-site without any specific area delineated for various products) then consider the ___________________ of the property and classify accordingly.

Class 5 transportation (less than 72 hours)

Gathering Pipeline:

“a pipeline used for the transportation of natural gas from a wellhead to the intake valve at a scrubbing, processing or refining plant which precedes the transfer of gas to a transmission line or a distribution line, or petroleum or a petroleum product from a well-head to the intake valve at a refining, processing or storage facility which precedes transfer of the petroleum or petroleum product to a transportation line.” – B.C. Reg. 438/81

Ancillary to

Providing essential support to a central service or industry, Aiding; assisting, auxiliary, Subservient, subordinate [to] … a secondary matter or event follows a primary matter or event. The secondary matter or event cannot come into existence until the primary matter or event exists … the ancillary matter is something grafted on to the primary matter.

Business of transportation by railway

95 percent of the freight moving through a trans-loading facility is transported by rail either onto or off of the site. The business is dependent upon and relies on the railway for its success and would likely not exist in that location but for the proximity to the railway. The property’s use helps, serves, or supplements the business of transportation by railway and is used for purposes ancillary to the business of transportation by railway. In addition, the land is owned by a railway corporation and leased for use as a trans-loading facility to get customers for the railway, directly aiding, serving or supplementing the business of transportation by railway. The property is leased for use as a trans-loading facility to get customers onto the railway. The owner holds the property for purposes of, or for purposes ancillary to, the business of transportation by railway.

Distribution

The dispersal of goods … among consumers brought about by commerce. "transporting of products" and the "distribution of products" are the same thing.

End user

The person, customer, etc. who is the ultimate user of a product.

Extract

Remove or take out, esp. by effort or force; obtain (a natural resource) from the earth; obtain (juice, etc) by suction, distillation, etc

Gathering Pipeline

… a pipeline used for the transportation of (a) natural gas from a well-head to the intake valve at a scrubbing, processing or refining plant which precedes the transfer of gas to a transmission line or a distribution line, or (b) petroleum or a petroleum product from a well-head to the intake valve at a refining, processing or storage facility which precedes transfer of the petroleum or petroleum product to a transportation line.

Held for

Land may be held for a Class 05 purpose if it is reserved for an industrial purpose in the future. It may also be “held for” a Class 05 purpose if it the area is intended to be for future expansion of the light industrial activity.

In conjunction

action of joining

a transportation use will be found when the property in question is used as a part of a__________________________. … it would [not] be accurate to characterize retail customers attendance at the property to pick up product they had purchased to be a form of “transportation” in any commercial sense. When a retail customer, or even a contractor, collects flooring product from the property, they are not participating in an ongoing chain of transportation. Once received by the end user, the transport of the product has come to an end. It is important … that there is no evidence that there are ________________ incurred by the appellant when the product leaves the property in these circumstances as would have been the case for the commercial transport trucks collecting freight from the distribution warehouses in 2725321 Canada Inc. and the Kebet Holdings decisions. In those cases, it is clear that the chain of transportation is continuing.

larger chain of transportation, freight fees