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Citation: 2003TCC229
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Date: 20030718
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Docket: 2002-4707(IT)I
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BETWEEN:
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N.A. (NOEL) KIRKBRIDE,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Little, J.
A. FACTS
[1] The Appellant is the Facilities
Manager for the Christian Life Assembly (the
"Assembly").
[2] The Assembly is a Pentecostal
church located in Langley, British Columbia.
[3] The Appellant is not an ordained
Minister.
[4] In his capacity as a Facilities
Manager the Appellant is responsible for the day-to-day
administration of the Assembly. The Appellant supervises 21 paid
employees and 17 volunteer workers at the Assembly.
[5] When the Appellant filed his
income tax return for the 2001 taxation year he claimed a
deduction in the amount of $10,800.00 as a clergy residence
deduction (the "Clergy Deduction").
[6] After the Minister of National
Revenue (the "Minister") issued the original Notice of
Assessment for the Appellant's 2001 taxation year, to allow
the Clergy Deduction, the Appellant requested that the Minister
allow an additional deduction in the amount of $1,441.00 for the
utilities costs paid by the Appellant in the year.
[7] On the 2nd day of December 2002
the Minister reassessed the Appellant's 2001 taxation year
and denied the Clergy Deduction claimed by the Appellant. The
Minister also denied the utilities costs that were claimed by the
Appellant.
B. ISSUE
[8] The issue is whether the Appellant
is entitled to claim a Clergy Deduction in the amount of
$10,800.00 plus the utilities costs of $1,441.00 paid by him in
determining his income for the 2001 taxation year.
C. ANALYSIS
[9] Paragraph 8(1)(c) of the Income
Tax Act (the "Act") reads as follows:
8. (1) In computing a taxpayer's income
for a taxation year from an office or employment, there may be
deducted such of the following amounts as are wholly applicable
to that source or such part of the following amounts as may
reasonably be regarded as applicable thereto:
. . .
(c) Clergy
residence - where, in the year, the taxpayer
(i) is a
member of the clergy or of a religious order or a regular
minister of a religious denomination, and
(ii) is
(A) in charge of a diocese,
parish or congregation,
(B) ministering to a diocese,
parish or congregation, or
(C) engaged exclusively in
full-time administrative service by appointment of a religious
order or religious denomination,
the amount, not exceeding the taxpayer's remuneration for
the year from the office or employment, equal to
(iii) the total of all
amounts including amounts in respect of utilities, included in
computing the taxpayer's income for the year under section 6
in respect of the residence or other living accommodation
occupied by the taxpayer in the course of, or because of, the
taxpayer's office or employment as such a member or minister
so in charge of or ministering to a diocese, parish or
congregation, or so engaged in such administrative service,
or
(iv) rent and utilities
paid by the taxpayer for the taxpayer's principal place of
residence (or other principal living accommodation), ordinarily
occupied during the year by the taxpayer, or the fair rental
value of such a residence (or other living accommodation),
including utilities, owned by the taxpayer or the taxpayer's
spouse or common-law partner, not exceeding the lesser of
(A) the greater of
(I) $1,000 multiplied
by the number of months (to a maximum of ten) in the year, during
which the taxpayer is a person described in
subparagraphs (i) and (ii), and
(II) one-third of the
taxpayer's remuneration for the year from the office or
employment, and
(B) the amount, if any, by
which
(I) the rent paid or
the fair rental value of the residence or living accommodation,
including utilities
exceeds
(II) the total of all
amounts each of which is an amount deducted, in connection with
the same accommodation or residence, in computing an
individual's income for the year from an office or employment
or from a business (other than an amount deducted under this
paragraph by the taxpayer), to the extent that the amount can
reasonably be considered to relate to the period, or a portion of
the period, in respect of which an amount is claimed by the
taxpayer under this paragraph;
[10] In considering the Clergy Deduction we
must determine whether the Appellant can be considered:
(1) A member of the clergy, a member
of a religious order, or a regular minister, and
(2) In charge of a diocese, parish or
congregation, ministering to a diocese, parish or congregation,
or engaged exclusively in full-time administrative service by
appointment of a religious order or religious denomination.
The items listed in number (1) above formulate what is known
as the "status" test. The items listed in number (2)
above formulate what is known as the "function" test.
If the Appellant is successful in demonstrating that at least one
of the options listed in number (1) above, and at least one of
the options listed in number (2) above applies to him, both tests
will be satisfied and the appeal will be successful. The
Respondent argues that the Appellant does not meet either of
these tests.
Status Test
[11] The requirements to meet the status
test are commented upon in Interpretation Bulletin IT-141R,[1] to which the
Appellant referred in presenting his evidence. I will refer to
the IT Bulletin to determine whether the Appellant qualifies as a
"member of the clergy" or as a "regular
minister", as these terms are discussed simultaneously in
the Bulletin. On the requirements for these designations,
IT-141R reads:
Member of the Clergy or Regular Minister
3. Whether a
person is a "member of the clergy" or a "regular
minister" depends upon the structure and practices of the
particular church or denomination.
4. A
"member of the clergy" is a person set apart from the
other members of the church or denomination as a spiritual
leader. It is not necessary that the process of appointment be
referred to as ordination or that the appointment be by someone
higher up in the ecclesiastical hierarchy; it may be done by the
congregation itself. It is sufficient that there be a formal or
legitimate act of recognition, and it requires a serious and
long-term commitment to the ministry. Priests, pastors,
ministers, rabbis, imams, commended workers and other persons who
have been commended, licensed, commissioned or otherwise formally
or legitimately recognized for religious leadership within their
religious organization may be members of the clergy.
5. A
"regular minister" is a person who
·
is authorized or empowered to perform spiritual duties, conduct
religious services, administer sacraments and carry out similar
religious functions. Religious functions may include
participation in the conduct of religious services, the
administration of some of the rituals, ordinances or sacraments,
and pastoral responsibilities to specific segments of the
religious organization;
·
is appointed or recognized by a body or person with the
legitimate authority to appoint or ordain ministers on behalf of
or within the denomination; and
·
is in a position or appointment of some permanence.
6. In the
absence of a legitimate appointment or recognition, the mere
performance of the duties of a minister will not suffice to
constitute a "regular minister" ...
[12] In order to determine whether the
Appellant can be considered a "member of the clergy" or
a "regular minister", it will be necessary to review
the evidence put before the Court, which will require an
examination of the Appellant's role in the church. In other
words, although the legislation appears to be divided (as
discussed) along the lines of "status" and
"function", the two cannot be so easily separated.
Essentially, the determination of Mr. Kirkbride's
"status" will necessarily entail an examination of his
"function".
[13] It is not contested that the position
occupied by the Appellant is facilities manager. The requirements
set out in the job description[2] include overseeing the coordination of
facilities, energy management (i.e. light and heat), security,
housekeeping, transportation, facilities maintenance, rental
buildings, rental of outside facilities, and purchasing.
[14] In addition to these duties, the
Appellant also serves as a volunteer coordinator and supervises a
staff of 19 people. Although the purpose statement as stated in
the Job Description (exhibit R-3) is "To serve the Body of
Christ", there is no mention in the document that relates to
tasks specific to religious ceremonies.
[15] The Appellant testified that, since he
was part of the management team of the church, he was able to
perform "special" functions, such as performing
baptisms, serving communion or "pray[ing] and counsel[ing]
when called upon". Although the Appellant was allowed to
perform some duties normally performed by a minister, he
testified that he never received any "official"
religious training. He further testified that four or five other
lay members of the church also had the privilege of performing
"special" functions within the Assembly.
[16] In Kraft et al. v. The Queen, 99
DTC 693 Mr. Justice Bowman (as he then was) was concerned
with determining whether Mr. Kraft was a member of the clergy.
Mr. Justice Bowman said at page 695:
[13] It comes to this. Whether
one is member of the clergy in a particular church depends upon
the procedures and rituals of that church. It requires a formal
act of recognition whereby that person is set apart from the
other members of the church as a spiritual leader. It does not
require necessarily that it be done by someone higher up the
ecclesiastical hierarchy. Some churches recognize no such
hierarchy. It may be done by the congregation. It requires a
formal, serious and long-term commitment to the ministry. If
these elements exist, whether or not the particular denomination
calls the formal ritual 'ordination', the person accorded
that status by the church is in my view a member of the
clergy.
[17] While the Appellant is clearly more
involved in the inner workings of the church than is the average
lay member, and the position of facilities manager entails a
considerable amount of added church-related responsibility, there
is no evidence which shows that any formal recognition (akin to
ordination) had to take place before the Appellant was able to
assume that position. Nowhere does it state in the Job
Description that the position of facilities manager requires the
successful party to engage in performing duties of any spiritual
significance.
[18] On the facts before me, I do not
believe that the Appellant could be considered a "member of
the clergy".
[19] In addition to the "special"
functions mentioned previously, the Appellant adduced further
evidence that he was appointed to his position by "the Board
of Deacons and the Senior Pastor" and that the position was
one of some permanence, as he is able to continue in that
function until he chooses to retire.
[20] The Appellant argues that these aspects
show that he has met the requirements of paragraph 5 of
IT-141R.
[21] I agree that the Appellant has met the
third criterion of that paragraph, namely that the position is of
some permanence.
[22] Turning to the first criterion, the
Appellant argues that he is "authorized or empowered to
perform spiritual duties, conduct religious services, administer
sacraments and carry out similar religious functions". From
the evidence presented I am not convinced that the Appellant
satisfies this criterion.
[23] As regards the second criterion of
paragraph 5 of the Bulletin, the Appellant argues that he was
"appointed or recognized by a body or person with the
legitimate authority to appoint or ordain ministers on behalf of
or within the denomination". There was, however, no evidence
presented as to how the Appellant was selected for his current
position within the church.
[24] Consequently, there was no evidence
presented to negate an assumption that this position was open to
multiple applicants, and that Mr. Kirkbride was selected by the
church authority due to his occupational background and
competence rather than any spiritual criteria other than
supporting the general principles and beliefs of the
Assembly.
[25] Once again, the position of facilities
manager, while understandably an important function with multiple
responsibilities, does not require the Appellant to engage in
"spiritual duties", nor is the church bound to
authorize every holder of the position to do so.
[26] The evidence tends to show that the
Appellant was allowed to take on the additional responsibilities
of conducting baptisms or assisting with communion as a result of
his position as an administrative manager within the Assembly,
rather than assuming the position of an administrative manager
because of his experience as a spiritual leader. Once again, the
designation of "lay pastor" supports the inference that
the Appellant never attained a status equal to the status of a
regular minister.
[27] As a result, it appears that the
"legitimate appointment or recognition" stated in
paragraph 6 of IT-141R is lacking. This precludes the Appellant
from being considered a "regular minister".
[28] The Appellant claims in an alternative
argument that he has a higher level of responsibility, which sets
him apart from the other lay members of the church. In addition
to performing the aforementioned "special" functions at
the church and acting as a lay pastor, he is a voting member of
the church. He argues that he is therefore a "member of a
religious order". The Respondent disagrees.
The following explanation is provided in IT-141R:
8. The term "religious order" means a group of people bound by
the same religious, moral and social regulations and discipline.
A religious order may comprise all the members of an organization
or only an identifiable group within that organization. ...
Not every religious organization is a religious order. Whether or
not an organization or a group of individuals within an
organization is a religious order is a question of fact to be
determined on a case-by-case basis. No factor predominates and
each must be assigned its proper weight in the context of all the
facts.
[29] The Bulletin suggests the following
factors be considered:
9. Generally, the following characteristics will be indicative
of a religious order:
(a) The purpose of
the organization should be primarily religious. It may have other
objects within the overall context of that religious purpose such
as education, the relief of poverty, or the alleviation of social
ills and suffering. A religious order may have objects that go
beyond preaching the gospel and prayer and meditation, and extend
to works beneficial to humanity such as running hospitals or
helping the poor and homeless...
(b) The members must
agree to, and in fact adhere to, a strict moral and spiritual
regime of self-sacrifice and dedication to the goals of the
organization to the detriment of their own material
well-being.
(c) The commitment
of the members should be full-time and of a long-term nature. It
is not essential that the commitment be for life but it is
important that it not be short term, temporary or part-time.
(d) The spiritual
and moral discipline and regime under which the members live must
be markedly stricter than that to which the lay members of the
church are expected to adhere.
(e) The admission of
members must be in accordance with strict standards of spiritual
and personal suitability.
(f) There
should generally be a sense of communality.
10. Religious orders can include interfaith orders, orders
that are family oriented and orders that do not require vows of
celibacy, poverty and obedience. Nonetheless, such orders do
require significant self-sacrifice, a dedication that transcends
that of an ordinary churchgoer and an ardent commitment to the
cause of the particular order.
[30] The factors stated in paragraph 9 of
the Bulletin were derived from the Reasons of Bowman, J. in
McGorman v. Canada,[3] and applied inter alia in his decisions in
Koop v. Canada[4]and Alemu et al. v. The Queen.[5]
[31] Any analysis of the term
"religious order" must first make note of the fact that
the term is different from the term "religious
denomination" or "religion". It would be
counterintuitive to suggest that the Minister allow a tax
deduction to individuals who are simply a member of a religion or
religious denomination. The Christian Life Assembly is, as
discussed, such a denomination. However, as Mr. Justice
Bowman stated in Koop, "[t]his does not ... mean
that every religious institution or organization is a religious
order."[6]
[32] Looking at the factors listed in
paragraph 9 of IT-141R, as well as the case law on which it is
based, it appears that the Appellant meets only the criteria
indicated by the letters (a), (b) and (c). That is, the
organization in question is primarily religious, the members must
adhere to a strict moral and religious regime and the
Appellant's commitment is long-term.
[33] The Appellant does not meet the
criteria set out in letters (d) or (f). Specifically, there is no
evidence which suggests that:
· the
Appellant may have agreed to and adhered to a strict moral and
spiritual regime but there is no evidence of of self-sacrifice
and dedication to the goals of the organization to the detriment
of his own material well-being,
· the
Appellant's spiritual and moral discipline and regime must be
markedly stricter than that to which the lay members of the
church are expected to adhere. There was no clear evidence to
establish this point,
· there is
generally a sense of communality.
[34] Aside from the admission that the
Appellant in the case at bar was a lay pastor, there is no
evidence to suggest that the Appellant had to exhibit some form
of self-sacrifice or denial of material comfort or financial
advancement beyond that which was expected of other lay members
of his church. For example, there was no evidence that the
Appellant earned less or was required to work under more
rigourous conditions than what could possibly be expected of a
facilities manager for a secular organization - in contrast to
the meager earnings of the Appellants in McGorman, who
received "only enough to satisfy their basic needs",[7] In the year 2000,
Mr. Kirkbride had income of $53,000.[8]
[35] Moreover, there was no evidence
presented to indicate that his position as facilities manager
required him to live in a "general sense of
communality" with other members of the church or share in
any kind of common property.
[36] For the reasons above, I do not believe
that the Appellant would qualify as a "member of a religious
order".
[37] From an analysis of the facts before me
I have concluded that the Appellant was not a "member of the
clergy", nor a "regular minister", nor a
"member of a religious order". He is therefore unable
to meet the "status" test. It therefore follows that
the provisions of paragraph 8(1)(c) are not satisfied and the
appeal must fail.
[38] The appeal is dismissed, without
costs.
Signed at Vancouver, British Columbia, this 18th day of July
2003.
Little, J.
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