Dube,
J:—Both
parties
are
in
agreement
as
to
the
facts.
The
sole
issue
is
a
question
of
law,
namely
whether
the
plaintiff,
a
non-resident
of
Canada
in
the
year
1976
who
had
elected
under
section
216
of
the
Income
Tax
Act
to
pay
taxes
as
if
he
were
resident
in
Canada
in
that
year,
was
entitled
to
avail
himself
of
the
general
averaging
provisions
of
subsection
118(1)
of
the
Act.
The
relevant
subsections
read:
216.(1)
Where
an
amount
has
been
paid
during
a
taxation
year
to
a
non-resident
person,
or
to
a
partnership
of
which
he
was
a
member,
as,
on
account
or
in
lieu
of
payment
of,
or
in
satisfaction
of,
rent
on
real
property
in
Canada
or
a
timber
royalty,
he
may,
within
2
years
from
the
end
of
the
taxation
year,
file
a
return
of
income
under
Part
I
in
the
form
prescribed
for
a
person
resident
in
Canada
for
that
taxation
year
and
he
shall,
without
affecting
his
liability
for
tax
otherwise
payable
under
Part
I,
thereupon
be
liable,
in
lieu
of
paying
tax
under
this
Part
on
that
amount,
to
pay
tax
under
Part
I
for
that
taxation
year
as
though
(a)
he
were
a
person
resident
in
Canada
and
were
not
exempt
from
tax
under
section
149,
(b)
his
income
from
his
interest
in
real
property
in
Canada,
timber
resource
properties
and
timber
limits
in
Canada
and
his
share
of
the
income
of
a
partnership
of
which
he
was
a
member
from
its
interest
in
real
property
in
Canada,
timber
resource
properties
and
timber
limits
in
Canada
were
his
only
income,
and
(c)
he
were
not
entitled
to
any
deduction
from
income
for
the
purpose
of
computing
taxable
income.
118.(1)
Notwithstanding
section
117,
where,
in
the
case
of
an
individual
who
was
resident
in
Canada
throughout
the
taxation
year
immediately
preceding
a
particular
taxation
year
(which
particular
taxation
year
is
hereafter
in
this
section
referred
to
as
the
“year
of
averaging’’),
any
excess
remains
when
(a)
the
greater
of
110%
of
his
income
for
the
immediately
preceding
taxation
year
and
120%
of
the
quotient
obtained
when
(i)
the
aggregate
of
all
amounts
each
of
which
is
the
individual’s
income
for
a
taxation
year
in
the
period
of
such
of
the
consecutive
taxation
years
(not
exceeding
4)
immediately
preceding
the
year
of
averaging
as
were
years
throughout
which
he
was
resident
in
Canada
is
divided
by
(ii)
the
number
of
years
in
the
period
described
in
subparagraph
(i)
is
deducted
from
The
plaintiff
was
the
owner
of
real
property
located
in
the
City
of
Montreal
from
which
he
earned
rental
income
and
for
which
he
claimed
capital
cost
allowance
which
was
recaptured
when
he
sold
the
said
property
in
1976.
During
the
period
in
which
he
owned
the
property
the
plaintiff
elected
to
be
taxed
under
the
provisions
of
section
216
of
the
Income
Tax
Act
and
filed
returns
of
income
under
Part
I
in
the
form
prescribed
for
a
person
resident
in
Canada.
In
computing
his
income
for
the
taxation
year
1976
he
purported
to
avail
himself
of
the
general
averaging
clause
under
the
provisions
of
subsection
118(1),
but
his
claim
for
tax
savings
under
the
clause
was
dissallowed
by
the
Minister.
This
is
an
appeal
from
that
decision.
It
is
common
ground
that
for
his
1976
taxation
year
the
plaintiff
does
not
qualify
for
general
averaging
under
subsection
118(2)
applicable
to
nonresident
individuals.
He
alleges
that
since
subsection
216(1)
allows
a
nonresident
to
file
a
return
under
Part
I,
then
all
the
provisions
of
Part
I
are
available
to
him,
with
the
necessary
changes
in
detail.
He
points
to
subsection
216(3)
in
support
of
his
contention.
It
reads:
216.(3)
Idem.
Part
I
is
applicable
mutatis
mutandis
to
payment
of
tax
under
this
section.
Plaintiff’s
learned
counsel
provided
the
Court
with
some
definitions
of
mutatis
mutandis
which
were
quite
acceptable
to
counsel
for
the
Minister
and
to
the
Court.
Hausman
v
Waterhouse,
182
NYS
249,
251,
191
App
Div
850.
The
words
“mutatis
mutandis”
mean
“with
the
necessary
changes
in
detail
to
conform
to
a
single
vital
change.”
Copeland
v
Eaton,
95
NE
291,
209,
Mass
139,
Ann
Cas
1212B,
521.
Where
profits
are
defined
by
a
certain
article,
all
the
provisions
of
which
are
to
apply
to
the
relations
between
the
parties
springing
into
existence
after
the
expiration
of
the
Contract
“mutatis
mutandis,”
these
latter
words
mean
“necessary
changes
in
details
to
conform
to
a
single
vital
alteration,”
and
suggest
a
reversal
of
the
relative
positions
of
the
parties
under
the
Contract,
which
was
to
continue
the
same
in
all
other
respects.
Re
Kipnes
and
Attorney-General
for
Alberta,
(1966)
4
CCC
387
(CA).
Earl
Jowitt’s
Dictionary
of
English
Law
defines
“mutatis
mutandis'’
as
“with
the
necessary
changes
in
points
of
detail,”
and
Black’s
Law
Dictionary,
4th
Edition,
“with
the
necessary
changes
in
points
of
detail,
meaning
that
matters
or
things
are
generally
the
same,
but
to
be
altered
when
necessary,
as
to
names,
offices,
and
the
like.”
(Hausman
v
Waterhouse
cited
with
approval).
Petit
Larouse,
1976.
“mutatis
mutandis:
en
changeant
ce
qui
doit
être
changé;
en
faisant
les
changements
nécessaires.”
Plaintiff
proposed
a
draft
of
subsection
118(1)
which
would
include
the
added
words
necessary
to
obtain
the
desired
results.
The
proposed
“changes
in
detail”
apear
in
italics.
For
brevity’s
sake,
the
paragraphs
and
subparagraphs
of
118(1)
are
not
reproduced.
118.(1)
Notwithstanding
section
117,
where,
in
the
case
of
an
individual
who
was
not
resident
in
Canada
throughout
the
taxation
year
immediately
preceding
a
particular
taxation
year
(which
particular
taxation
year
is
hereafter
in
this
section
referred
to
as
the
“year
of
averaging”),
but
had,
during
the
year
immediately
preceding
the
year
of
averaging,
elected
to
file
a
return
of
income
under
this
Part
in
the
form
prescribed
for
a
person
resident
in
Canada
for
that
taxation
year,
any
excess
remains
In
his
argument
counsel
for
the
Minister
avers
that
the
general
scheme
of
the
Income
Tax
Act
allows
non-resident
persons
to
pay
an
income
tax
of
25%,
or
such
other
rate
as
may
be
prescribed
by
treaty,
on
their
Canadian
rental
income.
The
Act
provides
that
a
non-resident
person
can
elect
to
pay
tax
under
Part
I
of
the
Income
Tax
Act,
if
that
person
receives
rental
income
from
real
property
in
Canada
and
files
a
return
of
income
under
Part
I
in
the
form
prescribed
for
persons
resident
in
Canada
for
that
taxation
year,
as
if
that
person
was
resident
in
Canada
and
as
if
that
property
income
was
his
only
income.
The
Income
Tax
Act
provides
that
Part
I
is
applicable
mutatis
mutandis
to
a
person
paying
tax
under
section
216(1),
that
is
with
the
necessary
changes
in
detail,
not
with
changes
of
substance.
But,
whereas
subsection
216(1)
applies
to
a
non-resident
person,
subsection
118(1)
applies
to
an
individual
who
was
a
resident
in
Canada
throughout
the
preceding
year:
it
is
common
ground
that
the
plaintiff
was
not
a
resident
of
Canada
during
his
1975
taxation
year.
Therefore,
the
defendant
submits,
subsection
216(3)
is
of
no
assistance
to
the
plaintiff
since
residence
for
the
previous
year
is
an
essential
condition
for
the
application
of
subsection
118(1),
not
merely
a
point
of
detail.
The
defendant
further
submits
that
plaintiff’s
construction
of
subsections
118(1)
and
216(1)
would
lead
to
a
perverse
conclusion:
a
non-resident
would
benefit
from
a
more
favourable
tax
treatment
than
a
resident.
In
my
view,
in
order
to
so
transform
subsection
118(1)
as
to
have
it
apply
to
a
non-resident,
changes
have
to
be
brought
about
which
would
indeed
go
to
the
very
substance
of
the
provision.
In
the
construction
of
statutes,
words
must
be
interpreted
in
their
ordinary
grammatical
sense,
in
harmony
with
the
scheme
of
the
Act
and
the
intention
of
Parliament,
unless
there
be
something
in
the
context
to
show
otherwise.
Subsection
118(1)
clearly
applies
to
an
individual
who
was
a
resident
in
Canada
throughout
the
taxation
year
immediately
preceding
a
particular
taxation
year.
Plaintiff
was
not
a
resident
of
Canada
in
1975,
he
merely
had
elected
to
file
a
return
of
income
for
that
year
under
Part
I
as
if
he
were
a
resident.
If
it
had
been
the
intention
of
Parliament
to
open
the
general
averaging
provisions
of
subsection
118(1)
to
non-residents,
that
intention
would
have
been
clearly
spelled
out
in
the
Statute.
Plaintiff’s
counsel
advances
a
second
argument.
He
points
out
that
subsection
216(7)
provides
that
section
61
is
not
applicable
where
a
nonresident
person
is
liable
to
pay
under
Part
I.
Section
61
is
the
section
dealing
with
income
averaging
annuity.
Subsection
216(7)
reads
as
follows:
Election.
Where,
by
virtue
of
subsection
(5),
a
non-resident
is
liable
to
pay
tax
under
Part
I
for
a
taxation
year,
for
greater
certainty
section
61
is
not
applicable
in
computing
his
income
for
that
year.
Counsel
argues
that
since
annuity
income
averaging
is
specifically
excluded,
and
the
Act
is
silent
on
the
exclusion
of
income
averaging,
therefore
by
virtue
of
the
rule
exclusio
unius
inclusio
alterius,
income
averaging
would
be
permissible
for
a
non-resident
filing
income
tax
under
Part
I
as
a
Canadian
resident.
The
doctrine
may
not
be
invoked
in
this
instance.
Section
61
is
specifically
made
not
applicable
to
a
non-resident
person
who
has
elected
to
pay
tax
as
a
resident
under
Part
I
because
it
would
otherwise
have
been
available
to
him.
The
situation
with
reference
to
subsection
118(1)
is
manifestly
different:
it
is
apparent
on
the
face
of
it
that
it
applies
only
to
an
individual
who
was
a
resident
in
Canada
throughout
the
preceding
year.
The
appeal
therefore
is
dismissed
with
costs.