Gonthier
J.—The
issue
in
the
instant
appeal
is
whether
paragraph
56(1
)(b)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act”),
which
requires
a
taxpayer
to
include
in
computing
his
or
her
income
any
amount
received
by
the
taxpayer
in
the
year
as
alimony,
infringes
the
equality
rights
guaranteed
by
subsection
15(1)
of
the
Canadian
Charter
of
Rights
and
Freedoms.
It
should
be
stressed
at
the
outset
that
the
issue
before
this
Court
will
not
be
considered
from
the
standpoint
of
alimony
paid
to
provide
for
the
needs
of
the
recipient
parent.
The
obligation
to
include
is
only
at
issue
in
the
case
at
bar
as
it
applies
to
amounts
intended
to
provide
exclusively
for
the
maintenance
of
the
children
of
the
marriage.
I.
Facts
The
respondent,
Suzanne
Thibaudeau,
married
Jacques
Chainé
on
December
23,
1978.
There
were
two
children
of
this
marriage,
Jean-
François
and
Marie-Christine,
born
in
1979
and
1981
respectively.
On
December
1,
1987
the
respondent
obtained
a
decree
nisi
of
divorce
granted
pursuant
to
the
old
Divorce
Act,
R.S.C.
1970,
c.
D-8.
Under
that
decree,
which
was
made
absolute
on
October
22,
1990,
the
respondent
was
awarded
custody
of
her
two
minor
children
and
her
ex-
husband
was
ordered
to
pay
her
alimony
of
$1,150
a
month
for
the
exclusive
benefit
of
the
children,
with
indexing
pursuant
to
article
638
of
the
old
Civil
Code
of
Quebec,
S.Q.
1980,
c.
39
(now
article
590,
S.Q.
1991,
c.
64).
No
amount
was
awarded
to
the
respondent
for
herself
as
the
Court
was
of
the
view
that
she
had
sufficient
financial
self-sufficiency.
In
determining
the
said
amount,
therefore,
account
was
taken
of
the
cost
of
maintaining
the
children,
some
$900
to
$1,000
a
month,
the
tax
impact
on
the
former
spouses
and
the
respondent’s
duty
also
to
provide
for
the
maintenance
of
her
children.
The
Court
recognized,
however,
that
the
amount
so
determined
required
a
greater
contribution
from
the
respondent
than
would
be
required
by
the
ratio
between
the
respective
incomes
of
the
former
spouses.
In
1989,
the
year
at
issue
here,
the
respondent
received
$14,490
for
the
maintenance
of
the
couple’s
minor
children.
For
that
year
she
filed
three
income
tax
returns:
one
covered
her
personal
situation
and
dealt
essentially
with
her
employment
income;
the
other
two
were
filed
on
behalf
of
the
children
and
reported
for
each
an
income
totalling
half
the
alimony
received
by
the
respondent
during
the
year.
The
Minister
of
National
Revenue
subsequently
reviewed
these
tax
returns
and,
pursuant
to
paragraph
56(1)(b)
of
the
Act,
included
the
amounts
received
as
alimony
in
computing
the
respondent’s
income.
In
a
notice
of
reassessment
for
1989,
the
latter’s
net
federal
tax
was
accordingly
increased
to
$4,042.80.
As
the
Minister
maintained
his
decision
after
considering
the
notice
of
objection
filed
by
the
respondent,
the
respondent
appealed
to
the
Tax
Court
of
Canada,
where
she
argued
that
paragraph
56(1)(b)
of
the
Act,
by
imposing
a
tax
burden
on
her
for
amounts
she
was
to
use
solely
for
the
benefit
of
her
children,
infringed
her
equality
rights
as
guaranteed
by
subsection
15(1)
of
the
Charter.
II.
Judgments
below
Tax
Court
of
Canada,
[1992]
2
C.T.C.
2497,
92
D.T.C.
2111
The
respondent
argued
before
Judge
Garon
that
the
prejudice
which
she
suffered
from
the
taxation
of
amounts
not
intended
for
her
own
benefit
resulted
from
her
civil
status,
her
sex
and
her
social
status.
In
this
connection
Judge
Garon
noted
the
absence
of
statistical
evidence
regarding
the
group
to
which
the
respondent
claims
to
belong,
but
he
nevertheless
took
judicial
notice,
at
page
2118,
of
the
fact
that
the
respondent
was
part
of
a
group
"of
which
the
great
majority
is
separated
or
divorced
women,
who
have
a
certain
degree
of
financial
self-sufficiency
(in
that
they
receive
no
alimony
for
themselves),
who
have
custody
of
their
children
and
who
receive
taxable
alimony
from
their
spouse
for
the
benefit
of
the
children”.
He
said
that
in
his
opinion
this
group
was
entitled
because
of
certain
personal
characteristics
to
the
equality
guarantee
set
out
in
section
15
of
the
Charter.
Before
determining
whether
the
obligation
to
include
alimony
in
the
recipient’s
income,
under
the
specific
terms
of
paragraph
56(1
)(b)
of
the
Act,
entails
prejudicial
consequences
for
the
respondent,
Judge
Garon
analyzed
the
system
set
up
by
paragraphs
56(1
)(b)
and
60(b),
commonly
known
as
the
"inclusion/deduction
system".
He
said
the
following
at
pages
C.T.C.
2507,
D.T.C.
2118-19,
in
a
passage
which
I
set
out
at
length
for
the
sake
of
clarity:
This
inclusion-deduction
system
splits
the
payer’s
income.
This
exceptional
measure
confers
a
benefit
on
the
person
who
receives
the
alimony
if
that
person’s
marginal
tax
rate
after
including
the
alimony
in
his
or
her
income
is
lower
than
the
payer’s
rate
because
the
result
is
a
net
tax
saving
with
respect
to
the
alimony,
which
also
permits
the
alimony
to
be
increased
by
an
amount
equal
to
the
tax
thus
saved.
...it
is
undeniable
that
in
the
case
of
a
difference
between
the
marginal
tax
rates
of
the
payer
and
of
the
person
to
whom
the
alimony
is
paid,
as
I
have
described,
the
children
would
or
should
receive
a
definite
benefit.
If
we
assume
that
the
payer’s
marginal
rate
is
higher
than
that
of
the
person
who
receives
the
alimony,
the
inclusion-deduction
system
ultimately
permits
the
alimony,
which
is
to
be
used
to
support
the
children,
for
example,
to
be
grossed-up.
Moreover,
it
follows
from
the
foregoing
that
if
the
marginal
tax
rate
that
applies
to
the
payer
and
to
the
person
who
receives
the
alimony
is
the
same,
there
is
no
tax
advantage
for
them
and
clearly
the
alimony
would
not
be
grossed-up,
and
the
effect
of
the
inclusion-deduction
system
is
neutral.
Judge
Garon
adopted
the
method
of
analysis
used
by
the
expert
called
on
behalf
of
the
respondent,
according
to
which
it
was
proper
to
take
into
account
tax
credits
she
was
given
in
assessing
the
tax
impact
resulting
from
the
obligation
specified
in
paragraph
56(
1
)(b).
He
noted,
at
page
2120,
that
the
judge
took
the
tax
consequences
into
account
in
establishing
the
alimony,
although
there
was
no
precise
measurement
of
this
impact.
Judge
Garon
was
of
the
opinion,
however,
that
it
was
not
his
function
to
decide
whether
there
should
have
been
a
more
complete
analysis
of
the
tax
consequences:
in
his
view
the
real
question
was
rather
whether
the
court
which
establishes
the
amount
of
the
alimony
must
take
into
account
the
tax
consequences
both
for
the
payer
and
for
the
recipient
of
the
payments.
He
relied
inter
alia
on
Droit
de
la
famille-1488,
C.A.
Québec,
No.
200-09-000553-914,
November
7,
1991,
J.E.
91-1753;
Parker
v.
Parker,
[1988]
O.J.
No.
749
(C.A.)
210/86,
June
16,
1988;
Chelmick
v.
Chelmick
(1991),
118
A.R.
385,
37
R.F.L.
(3d)
155
(Q.B.);
Lehmann
v.
Lehmann
(1989),
95
A.R.
383
(Q.B.);
Treen
v.
Treen
(1991),
88
Sask.
R.
278,
[1991]
2
W.W.R.
483
(Q.B.),
and
Girard
v.
Girard
(1990),
103
N.B.R.
(2d)
377,
259
A.P.R.
377
(Q.B.),
in
arriving
at
the
conclusion,
at
page
2120,
that
"[t]he
case
law
according
to
which
tax
consequences
must
be
taken
into
account
when
determining
the
amount
of
alimony
has
not
varied
at
least
in
recent
times
in
Quebec
and
in
other
provinces”.
In
light
of
the
foregoing
observations,
Judge
Garon
then
concluded
as
follows,
at
pages
C.T.C.
2511,
D.T.C.
2121-22:
...if
the
Court
takes
into
account
the
tax
consequences
on
both
the
payer
and
the
recipient
of
the
alimony
in
determining
the
amount
of
the
alimony
to
be
paid
for
the
support
of
the
children,
the
parent
who
receives
the
alimony
suffers
no
prejudice
even
if
he
or
she
must
include
those
payments
in
his
or
her
income.
If
a
trial
court
fails
to
consider
the
tax
consequences
or
assesses
them
incorrectly,
the
party
concerned
should
exercise
his
or
her
right
of
appeal
to
obtain
the
adjustment
to
which
he
or
she
is
entitled.
The
inclusion-deduction
system
in
its
true
nature
having
regard
to
the
comprehensive
legal
context
does
not
have
the
effect
of
imposing
obligations,
disadvantages
or
burdens
on
the
appellant
or
other
persons
who
would
find
themselves
in
a
situation
similar
to
that
of
the
appellant
with
respect
to
the
receipt
of
alimony
made
by
one
parent
to
the
other
for
the
exclusive
benefit
of
the
children.
The
inclusion-deduction
system...may
raise
in
its
application
to
a
particular
case
certain
difficulties
but
a
statute
or
a
provision
therein
cannot
be
considered
for
this
sole
reason
discriminatory
and
unconstitutional.
Ms.
Thibaudeau’s
appeal
was
accordingly
dismissed.
Federal
Court
of
Appeal,
[1994]
2
C.T.C.
4,
94
D.T.C.
6230
Hugessen
J.A.
for
the
majority
Two
grounds
of
discrimination
were
pleaded
in
connection
with
this
application
for
judicial
review:
the
group
SCOPE
(Support
and
Custody
Orders
for
Priority
Enforcement),
which
was
given
leave
to
intervene
and
to
file
documents
in
support
of
its
position,
submitted
on
the
one
hand
that
paragraph
56(1
)(b)
of
the
Act
results
in
discrimination
on
the
basis
of
sex,
an
enumerated
ground
under
subsection
15(1)
of
the
Charter.
The
respondent
on
the
other
hand
argued
that
she
was
a
victim
of
discrimination
based
on
her
membership
in
a
group
consisting
of
separated
or
divorced
parents
having
custody
of
their
children
and
receiving
maintenance
payments
for
them.
According
to
Hugessen
J.A.,
those
allegations
were
a
claim
of
discrimination
based
on
a
ground
analogous
to
those
enumerated
in
subsection
15(1)
of
the
Charter.
Hugessen
J.A.
first
dealt
with
the
arguments
of
the
intervener
SCOPE
and
noted
that
its
claim
of
discrimination
on
the
ground
of
sex
required
a
consideration
of
the
reasons
in
Symes
v.
Canada,
[1993]
4
S.C.R.
695,
[1994]
1
C.T.C.
40,
94
D.T.C.
6001.
In
light
of
what
was
said
in
that
judgment,
he
concluded
that
paragraph
56(1
)(b)
is
neutrally
worded
and
that
it
neither
expressly
nor
by
necessary
implication
creates
distinctions
based
on
sex.
Moreover,
in
his
view
the
focus
in
such
a
determination
is
not
on
the
number
of
persons
affected
by
legislation
as
much
as
on
the
nature
of
its
effects
on
them.
From
this
standpoint
there
could
not
be
said
to
be
discrimination
on
the
basis
of
sex
in
the
case
at
bar,
since
paragraph
56(1
)(b)
has
the
same
prejudicial
effects
on
custodial
mothers
as
on
custodial
fathers,
although
there
are
fewer
of
the
latter
in
such
a
situation
and
they
are
thus
less
likely
to
suffer
the
effects
of
the
Act.
The
arguments
of
SCOPE
were
accordingly
dismissed.
That
was
not
the
case
with
the
respondent’s
allegations
that
there
was
discrimination
based
on
an
analogous
ground.
Hugessen
J.A.
considered
the
latter
in
light
of
the
three
steps
prescribed
by
analysis
of
subsection
15(1)
of
the
Charter
and
found
inter
alia
in
Andrews
v.
Law
Society
of
British
Columbia,
[1989]
1
S.C.R.
143,
56
D.L.R.
(4th)
1,
R.
v.
Swain,
[1991]
1
S.C.R.
933,
125
N.R.
1,
and
Symes,
supra.
He
said
the
following,
at
pages
C.T.C.
11,
D.T.C.
6236:
First,
paragraph
56(1
)(b)
draws
an
intentional
distinction
between
[the
respondent]
and
others
based
upon
her
being
a
separated
[the
word
includes
divorced
persons]
custodial
parent.
There
can
be
simply
no
doubt
in
my
mind
that
the
qualities
of
being
separated
and
a
parent
are
"personal
characteristics"....
Second,
the
inequality
created
for
separated
custodial
parents
is
discriminatory
and
imposes
a
burden
on
them
not
imposed
on
others.
The
latter
conclusion
by
Hugessen
J.A.
is
based
on
comparisons
of
the
respondent’s
situation
with
that
of
a
non-separated
parent,
that
of
a
separated
non-custodial
parent
and
that
of
separated
non-parents
having
custody
of
a
child,
such
as
an
uncle
or
grandmother.
Hugessen
J.A.
noted
that
none
of
the
aforementioned
persons
is
required
to
include
maintenance
payments
in
computing
his
or
her
income.
He
went
on
(at
pages
C.T.C.
11,
13,
D.T.C.
6236-38):
The
third
and
last
stage
of
the
section
15
analysis
is
to
inquire
whether
the
personal
characteristics
at
issue
constitute
grounds
analogous
to
those
enumerated.
In
my
view,
they
do.
I
have
identified
the
group
to
which
the
applicant
claims
to
belong
as
separated
custodial
parents.
Neither
that
phrase
nor
any
of
its
components
constitute
as
such
a
ground
analogous
to
those
enumerated
in
section
15
but
that
is
hardly
surprising.
As
previously
indicated,
the
definition
of
the
group
must
have
within
it
some
component
which
is
included
within
the
alleged
ground
but
it
is
unlikely
to
be
the
ground
itself....
The
appropriate
description
of
the
ground
of
discrimination
to
which
separated
custodial
parents
are
subject
would,
it
seems
to
me,
be
’’family
status".
[Emphasis
in
original.]
Finally,
at
the
end
of
a
review
of
the
documentary
evidence
submitted
by
the
parties
on
the
effects
of
the
inclusion/deduction
system,
Hugessen
J.A.
concluded
that
paragraph
56(1
)(b)
of
the
Act
cannot
be
saved
by
section
1
of
the
Charter,
since
it
does
not
meet
the
minimum
impairment
and
proportionality
tests
developed
in
R.
v.
Oakes,
[1986]
1
S.C.R.
103,
26
D.L.R.
(4th)
200.
The
application
for
judicial
review
was
allowed
and
the
Tax
Court
of
Canada’s
decision
set
aside.
Létourneau
J.A.,
dissenting
Létourneau
J.A.
was
of
the
view
that
paragraph
56(1
)(b)
did
not
result
in
any
discrimination,
whether
based
on
sex
or
on
an
analogous
ground
such
as
civil
status
or
social
condition.
While
he
accepted
that
the
respondent
and
the
members
of
the
group
to
which
she
belonged
were
treated
differently
as
a
result
of
the
provision,
he
did
not
consider
that
this
difference
in
treatment
could
be
characterized
as
discriminatory.
First,
he
noted
that
it
is
in
the
very
nature
of
the
Income
Tax
Act
to
apply
a
whole
set
of
distinctions
and
differences
in
treatment
which
take
into
account
the
economic
reality
that
ordinarily
accompanies
the
taxpayer’s
civil
status.
Additionally,
Létourneau
J.A.
noted
that
according
to
the
decisions
of
this
Court
in
R.
v.
Turpin,
[1989]
1
S.C.R.
1296,
48
C.C.C.
(3d)
8,
and
Symes,
supra,
the
general
context
must
be
examined
to
determine
whether
there
is
discrimination.
Accordingly,
he
rejected
a
purely
textual
analysis
of
the
Act
as
follows,
at
pages
C.T.C.
22,
D.T.C.
6247-48:
To
undertake
only
a
purely
textual
analysis
of
the
provisions
of
the
Income
Tax
Act,
which
establishes
a
distinction
that
takes
civil
status
into
account,
and
then
conclude
that
there
is
discrimination
amounts
to
ignoring
the
social,
political,
legal
and
economic
reality
which
this
Act
and
its
provisions
inhabit,
and
which
are
experienced
differently
by
taxpayers
whose
family
situations
differ....
To
ignore
this
economic
context,
the
reality
that
underlies
it
and
the
importance
that
the
Government
must
necessarily
place
on
it
would
mean
that
the
numerous
provisions
of
this
Act
which
set
up
a
distinction
and
impose
different
burdens
based
on
different
economic
realities,
because
different
civil
statuses
produce
different
needs,
would
be
prima
facie
discriminatory.
He
went
on
to
say,
at
pages
C.T.C.
23,
D.T.C.
6248,
that
an
examination
of
the
subject
matter
of
the
impugned
legislative
provision
is
a
relevant
part
of
the
analysis
required
by
subsection
15(1)
of
the
Charter:
Paragraph
56(
1
)(b)...is
intended
precisely
as
a
remedy
for
the
disadvantages
that
this
group
of
taxpayers,
to
which
the
applicant
belongs,
had
suffered
at
one
time....
The
remedial
measure
necessarily
creates
a
distinction
by
taking
into
account
these
people’s
civil
status,
since
this
is
the
group
it
is
addressing,
and
this
is
the
group
that
is
living
in
a
different
and
difficult
economic
situation
as
a
result
of
the
breakdown
of
the
family
unit.
This
distinction
does
not
necessarily
constitute
discrimination.
When
read
and
taken
literally
in
isolation,
the
measure
may
appear
discriminatory,
but
it
is
not
when
it
is
placed
in
its
socio-economic
and
socio-political
context
and
the
goal
in
mind
is
taken
into
account.
Finally,
Létourneau
J.A.
noted
on
this
point
that
despite
the
improvements
that
might
be
desired,
it
should
not
be
forgotten
that
paragraph
56(1
)(b)
produces
a
beneficial
effect
in
most
cases.
Under
subsection
15(1)
of
the
Charter
a
remedy
does
not
have
to
be
flawless
and
without
secondary
effects.
He
concluded
at
page
230
that
the
requirement
"[of]
such
an
obligation
in
terms
of
the
result
would
have
a
paralysing
effect
on
any
initiative
contemplated
or
taken
to
correct
the
prejudicial
effects
of
a
policy
in
the
past".
In
concluding
his
reasons,
Létourneau
J.A.
also
dismissed
the
respondent’s
argument
that
the
members
of
the
group
to
which
she
claims
to
belong
are
the
victims
of
discrimination
on
the
basis
of
social
condition.
ITI.
Issues
This
case
requires
the
Court
to
consider
the
following
constitutional
questions,
as
stated
by
the
Chief
Justice
on
July
11,
1994:
1.
Does
paragraph
56(1
)(b)
of
the
Income
Tax
Act
infringe
the
equality
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms?
2.
If
paragraph
56(1
)(b)
of
the
Income
Tax
Act
infringes
the
equality
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms
is
it
justified
in
the
context
of
section
I
of
the
Canadian
Charter
of
Rights
and
Freedoms?
IV.
Relevant
statutory
provisions
At
the
relevant
dates
the
Income
Tax
Act
provided
the
following:
3.
The
income
of
a
taxpayer
for
a
taxation
year
for
the
purposes
of
this
Part
is
his
income
for
the
year
determined
by
the
following
rules:
(a)
determine
the
aggregate
of
amounts
each
of
which
is
the
taxpayer’s
income
for
the
year
(other
than
a
taxable
capital
gain
from
the
disposition
of
a
property)
from
a
source
inside
or
outside
Canada,
including,
without
restricting
the
generality
of
the
foregoing,
his
income
for
the
year
from
each
office,
employment,
business
and
property;
56(1)
Without
restricting
the
generality
of
section
3,
there
shall
be
included
in
computing
the
income
of
a
taxpayer
for
a
taxation
year,
(b)
any
amount
received
by
the
taxpayer
in
the
year,
pursuant
to
a
decree,
order
or
judgment
of
a
competent
tribunal
or
pursuant
to
a
written
agreement,
as
alimony
or
other
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
recipient
thereof,
children
of
the
marriage,
or
both
the
recipient
and
children
of
the
marriage,
if
the
recipient
was
living
apart
from,
and
was
separated
pursuant
to
a
divorce,
judicial
separation
or
written
separation
agreement
from,
the
spouse
or
former
spouse
required
to
make
the
payment
at
the
time
the
payment
was
received
and
throughout
the
remainder
of
the
year;
60.
There
may
be
deducted
in
computing
a
taxpayer’s
income
for
a
taxation
year
such
of
the
following
amounts
as
are
applicable:
(b)
an
amount
paid
by
the
taxpayer
in
the
year,
pursuant
to
a
decree,
order
or
judgment
of
a
competent
tribunal
or
pursuant
to
a
written
agreement,
as
alimony
or
other
allowance
payable
on
a
periodic
basis
for
the
maintenance
of
the
recipient
thereof,
children
of
the
marriage,
or
both
the
recipient
and
children
of
the
marriage,
if
he
was
living
apart
from,
and
was
separated
pursuant
to
a
divorce,
judicial
separation
or
written
separation
agreement
from,
his
spouse
or
former
spouse
to
whom
he
was
required
to
make
the
payment
at
the
time
the
payment
was
made
and
throughout
the
remainder
of
the
year;
For
ease
of
reference
I
also
set
out
below
subsection
15(1)
of
the
Charter:
15(1)
Every
individual
is
equal
before
and
under
the
law
and
has
the
right
to
the
equal
protection
and
equal
benefit
of
the
law
without
discrimination
and,
in
particular,
without
discrimination
based
on
race,
national
or
ethnic
origin,
colour,
religion,
sex,
age
or
mental
or
physical
disability.
V.
Analysis
Essentially,
the
respondent’s
arguments
require
a
review
of
the
separate
system
created
by
the
combined
effect
of
paragraphs
56(1
)(b)
and
60(b)
of
the
Act,
and
in
particular
the
question
of
how
the
benefit
produced
by
the
mechanisms
so
created
is
to
be
distributed
between
the
custodial
parent
and
the
non-custodial
parent.
In
this
connection,
it
will
thus
be
useful
first
to
examine
the
general
principles
by
which
we
must
be
guided
in
formulating
a
response
to
the
first
point
at
issue.
They
will
be
discussed
in
the
next
three
subsections.
The
following
section
then
applies
these
principles
to
the
case
at
bar.
A.
An
infringement
of
equality
rights
1.
Background
In
R.
v.
Big
M
Drug
Mart
Ltd.,
[1985]
1
S.C.R.
295,
18
D.L.R.
(4th)
321,
this
Court
per
Dickson
J.
(as
he
then
was),
at
page
344
(D.L.R.
359-60),
indicated
the
parameters
within
which
a
right
or
freedom
protected
by
the
Charter
should
be
analyzed:
this
analysis
is
to
be
undertaken,
and
the
purpose
of
the
right
or
freedom
in
question
is
to
be
sought
by
reference
to
the
character
and
the
larger
objects
of
the
Charter
itself,
to
the
language
chosen
to
articulate
the
specific
right
or
freedom,
to
the
historical
origins
of
the
concepts
enshrined,
and
where
applicable,
to
the
meaning
and
purpose
of
the
other
specific
rights
and
freedoms
with
which
it
is
associated
within
the
text
of
the
Charter.
The
interpretation
should
be,
as
the
judgment
in
Southam
emphasizes,
a
generous
rather
than
a
legalistic
one,
aimed
at
fulfilling
the
purpose
of
the
guarantee
and
securing
for
individuals
the
full
benefit
of
the
Charter’s
protection.
At
the
same
time
it
is
important
not
to
overshoot
the
actual
purpose
of
the
right
or
freedom
in
question,
but
to
recall
that
the
Charter
was
not
enacted
in
a
vacuum,
and
must
therefore,
as
this
Court’s
decision
in
Law
Society
of
Upper
Canada
v.
Skapinker,
[1985]
1
S.C.R.
357,
9
D.L.R.
(4th)
161,
illustrates,
be
placed
in
its
proper
linguistic,
philosophic
and
historical
contexts.
There
can
be
no
doubt
that
this
passage
also
applies
to
the
definition
and
interpretation
of
the
equality
rights
contained
in
subsection
15(1)
of
the
Charter.
Additionally,
the
Income
Tax
Act
is
subject
to
the
application
of
the
Charter
just
as
any
other
legislation
is:
the
special
nature
of
the
former
clearly
cannot
be
taken
as
a
basis
for
maintaining
that
it
is
not
subject
to
the
latter.
This
was
recently
pointed
out
by
my
colleague
Iacobucci
J.
in
Symes,
supra,
at
page
753.
I
would
add,
however,
that
though
it
may
not
be
relevant
to
determining
whether
the
Charter
applies
to
the
Act,
the
special
nature
of
the
latter
is
nonetheless
a
significant
factor
that
must
be
taken
into
account
in
defining
the
scope
of
the
right
relied
on,
which
here
as
we
know
is
the
right
to
the
"equal
benefit
of
the
law".
It
is
of
the
very
essence
of
the
Act
to
make
distinctions,
so
as
to
generate
revenue
for
the
government
while
equitably
reconciling
a
range
of
necessarily
divergent
interests.
In
view
of
this,
the
right
to
the
equal
benefit
of
the
law
cannot
mean
that
each
taxpayer
has
an
equal
right
to
receive
the
same
amounts,
deductions
or
benefits,
but
merely
a
right
to
be
equally
governed
by
the
law.
The
basic
purpose
of
section
15
of
the
Charter
was
explained
by
McIntyre
J.
in
Andrews,
supra,
at
page
171
(D.L.R.
15):
It
is
clear
that
the
purpose
of
section
15
is
to
ensure
equality
in
the
formulation
and
application
of
the
law.
The
promotion
of
equality
entails
the
promotion
of
a
society
in
which
all
are
secure
in
the
knowledge
that
they
are
recognized
at
law
as
human
beings
equally
deserving
of
concern,
respect
and
consideration.
That
being
the
case,
one
should
not
confuse
the
concept
of
fiscal
equity,
which
is
concerned
with
the
best
distribution
of
the
tax
burden
in
light
of
the
need
for
revenue,
the
taxpayers’
ability
to
pay
and
the
economic
and
social
policies
of
the
government,
with
the
concept
of
the
right
to
equality,
which
as
I
shall
explain
in
detail
later
means
that
a
member
of
a
group
shall
not
be
disadvantaged
on
account
of
an
irrelevant
personal
characteristic
shared
by
that
group.
2.
The
nature
and
operation
of
the
Act
(a)
The
general
system
for
taxing
individual
income
The
basic
system
of
the
Act
rests
on
the
principle
that
a
taxpayer’s
taxable
income
is
computed
in
accordance
with
all
of
his
so-called
sources
of
income.
Section
3
of
the
Act
contains
the
formula
for
arriving
at
a
taxpayer’s
income
for
a
taxation
year.
It
is
true
that,
using
wording
which
is
intended
to
be
extremely
flexible
and
all-inclusive,
the
legislature
has
chosen
to
refer
to
the
three
most
important
sources
of
income,
namely
income
from
an
office
or
employment,
business
and
property;
but
this
list
is
not
exhaustive.
With
this
in
mind
it
should
not
be
surprising
that
certain
amounts
received
by
a
taxpayer,
though
they
are
not
on
the
list
of
the
principal
sources
of
income
enumerated
in
section
3
of
the
Act,
are
nevertheless
treated
as
taxable
for
the
person
receiving
them.
The
mechanisms
of
the
Act
are
also
intended
to
express
another
principle,
namely
that
the
unit
of
taxation
is
the
individual.
From
this
principle
there
follows
the
rule
that
the
individual
is
taxed
on
the
whole
of
his
income,
that
he
may
not,
for
example,
divide
it
among
the
members
of
his
family
in
order
to
reduce
his
total
tax
payable.
This
is
the
general
prohibition
on
income
splitting.
Accordingly,
within
a
married
couple
each
parent
has
to
pay
tax
on
his
or
her
own
income;
the
same
applies
to
the
income
received
by
a
child
of
the
marriage.
There
are
certainly
provisions
in
the
Act,
such
as
deductions
for
spouses
and
dependants,
which
do
take
into
account
the
unit
represented
by
the
couple,
in
order
to
reflect
the
economic
reality
peculiar
to
it.
That
does
not
mean
they
detract
from
the
importance
of
the
rule
stated
earlier.
(b)
Particular
system
created
by
paragraphs
56(1
)(b)
and
60(b)
The
legislature
has
nevertheless
sought
to
deal
with
the
unfavourable
economic
consequences
resulting
from
the
breakup
of
the
family
unit.
In
1942,
it
thus
created
by
the
combined
effect
of
paragraphs
56(1
)(b)
and
60(b)
of
the
Act
what
is
commonly
referred
to
as
the
inclusion/deduction
system.
This
is
a
system
which
applies
only
to
separated
or
divorced
spouses
and
which
exceptionally
permits
income
splitting
between
the
latter
in
order
to
increase
their
available
resources.
This
was
recognized
by
Beetz
J.
in
Gagnon
J.P.
v.
The
Queen,
[1986]
1
S.C.R.
264,
[1986]
1
C.T.C.
410,
86
D.T.C.
6179,
at
page
268
(C.T.C.
412,
D.T.C.
6181),
where
this
Court
had
to
determine
whether
certain
monthly
payments
made
to
an
ex-wife
to
repay
charges
on
her
property
were
deductible
under
paragraph
60(b)of
the
Act:
The
purpose
of
these
provisions,
by
allowing
income
splitting
between
former
spouses
or
separated
spouses,
is
to
distribute
the
tax
burden
between
them.
As
C.
Dawe
wrote
in
an
article
titled
"Section
60(b)
of
the
Income
Tax
Act:
An
Analysis
and
Some
Proposals
for
Reform",
(1979),
5
Queen’s
L.J.
153:
This
allows
the
spouses
greater
financial
resources
than
when
living
together,
compensating
in
part
for
the
lost
economics
of
maintaining
a
single
household.
For
an
overall
understanding
of
the
inclusion/deduction
system
we
must
look
at
its
specific
mechanism.
Alimony
becomes
taxable
for
the
treasury
by
virtue
of
paragraph
56(1
)(b)
of
the
Act.
It
will
be
noted
that
this
source
of
income
does
not
appear
in
section
3
of
the
Act.
Paragraph
56(1
)(b)
imposes
on
a
parent
who
has
custody
of
his
or
her
child
an
obligation
to
include
in
computing
income
any
amounts
received
as
alimony
for
the
maintenance
of
the
child.
At
the
same
time,
paragraph
60(b)
of
the
Act
allows
alimony
so
paid
to
be
deducted
in
computing
the
non-custodial
parent’s
income.
This
is
where
income
splitting
comes
in:
as
we
know,
it
is
prohibited
under
the
general
system
of
taxation
described
earlier.
A
portion
of
the
payer’s
income,
equivalent
to
the
amount
of
the
alimony
paid,
is
taxed
in
the
hands
of
the
recipient.
The
payer
thus
has
his
income
split,
contrary
to
the
well-settled
rule
that
an
individual
must
be
taxed
on
all
his
income.
It
should
be
noted
that
the
income
splitting
at
issue
is
not
that
of
the
couple
but
that
of
an
individual,
in
this
case
the
payer
of
the
alimony.
It
is
my
view
that
this
is
how
the
passage
by
Beetz
J.
reproduced
earlier
is
to
be
understood.
It
is
by
means
of
this
income
splitting
operation
that
the
legislature
has
sought
to
increase
the
available
resources
that
can
be
used
for
the
benefit
of
the
children.
This
measure
generally
results
in
a
net
tax
saving,
allowing
the
court
which
has
to
set
the
amount
of
maintenance
to
increase
the
alimony
to
be
paid
by
an
amount
equal
to
the
amount
thus
saved.
The
tax
savings
generated
by
this
system
depend,
however,
on
the
difference
in
tax
rates
between
the
payer
and
the
recipient
of
alimony.
Accordingly,
the
more
the
marginal
tax
rate
of
the
payer
of
the
alimony
exceeds
that
of
the
recipient,
the
greater
the
tax
benefit.
If
the
marginal
tax
rate
is
the
same
for
the
payer
and
the
recipient,
then
the
effect
of
the
legislation
is
neutral.
On
the
other
hand,
if
the
custodial
parent
receiving
the
alimony
is
taxed
at
a
marginal
rate
greater
than
that
of
the
payer,
then
the
tax
he
or
she
must
pay
will
be
higher
than
the
saving
which
the
non-custodial
parent
will
enjoy.
In
short,
for
the
deduction
provided
for
in
paragraph
60(b)
of
the
Act
to
produce
a
benefit
for
the
custodial
parent
as
well,
the
additional
tax
which
the
latter
has
to
pay
on
account
of
the
inclusion
requirement
provided
for
in
paragraph
56(1
)(b)
must
correspondingly
be
covered
by
a
greater
increase
in
the
alimony
to
be
paid
by
the
non-custodial
parent.
In
fact,
although
the
tax
savings
generated
by
the
inclusion/deduction
system
depend
on
a
variable,
namely
the
difference
between
the
tax
rates
of
the
members
of
the
couple,
the
system
appears
to
confer
a
benefit
in
most
cases:
the
evidence
in
the
record
indicated
that
recipient
parents
are
generally
subject
to
a
tax
rate
lower
than
that
of
the
parents
paying
the
alimony.
On
this
aspect
of
the
matter,
finally,
I
would
note
that
for
the
inclusion
requirement
in
paragraph
56(1
)(b)
to
arise,
the
alimony
must
have
certain
characteristics.
The
amount
paid
for
the
child’s
maintenance
must
inter
alia
be
determined
"pursuant
to
a
decree,
order
or
judgment
of
a
competent
tribunal
or
pursuant
to
a
written
agreement".
It
should
be
noted
that
the
Act
through
the
provisions
under
consideration
does
not
create
a
support
obligation:
the
latter
is
covered
by
provincial
legislation
such
as
the
Civil
Code
of
Quebec,
S.Q.
1980,
c.
39
(now
S.Q.
1991,
c.
64),
and
by
the
Divorce
Act,
R.S.C.
1970,
c.
D-8
(replaced
by
S.C.
1986,
c.
4
(now
R.S.C.,
1985,
c.
3
(2nd
Supp.))).
In
fact,
the
Act
only
lays
down
the
conditions
under
which
certain
forms
of
alimony
will
be
covered
by
the
inclusion/deduction
system.
In
my
view,
it
could
not
be
seen
as
having
any
other
function.
(c)
Subsection
15(1)
of
the
Charter:
some
principles
of
analysis
In
recent
years
this
Court
has
had
occasion
to
state
some
of
the
fundamental
principles
applicable
to
an
analysis
made
under
subsection
15(1)
of
the
Charter.
Andrews,
supra,
marked
the
beginning
of
the
effort
undertaken
by
this
Court
to
define
the
content
of
the
right
to
equality.
I
note
that
the
essential
points
in
that
judgment
were
recently
highlighted
by
my
colleague
lacobucci
J.
in
Symes,
supra,
I
again
refer
to
them.
In
Andrews
at
pages
168-69
(D.L.R.
13),
McIntyre
J.
first
noted
that
discrimination
will
not
result
from
every
distinction
or
difference
in
treatment.
In
my
view,
this
observation
applies
especially
to
tax
legislation,
the
very
essence
of
which
is
to
create
categories:
It
is,
of
course,
obvious
that
legislatures
may-and
to
govern
effectively
—must
treat
different
individuals
and
groups
in
different
ways.
Indeed,
such
distinctions
are
one
of
the
main
preoccupations
of
legislatures.
The
classifying
of
individuals
and
groups,
the
making
of
different
provisions
respecting
such
groups,
the
application
of
different
rules,
regulations,
requirements
and
qualifications
to
different
persons
is
necessary
for
the
governance
of
modern
society.
Subsection
15(1)
of
the
Charter
is
thus
designed
only
to
eliminate
discriminatory
distinctions.
The
concept
of
discrimination
was
outlined
by
McIntyre
J.
as
follows,
at
pages
174-75
(D.L.R.
18):
discrimination
may
be
described
as
a
distinction,
whether
intentional
or
not
but
based
on
grounds
relating
to
personal
characteristics
of
the
individual
or
group,
which
has
the
effect
of
imposing
burdens,
obligations,
or
disadvantages
on
such
individual
or
group
not
imposed
upon
others,
or
which
withholds
or
limits
access
to
opportunities,
benefits,
and
advantages
available
to
other
members
of
society.
Distinctions
based
on
personal
characteristics
attributed
to
an
individual
solely
on
the
basis
of
association
with
a
group
will
rarely
escape
the
charge
of
discrimination,
while
those
based
on
an
individual’s
merits
and
capacities
will
rarely
be
so
classed.
[Emphasis
added.
]
These
comments
make
it
clear
that
subsection
15(1)
of
the
Charter
provides
protection
both
from
direct
discrimination
and
from
discrimination
by
prejudicial
effect.
In
the
words
of
McIntyre
J.,
at
page
165,
equality
must
be
analyzed
essentially
according
to
"the
impact
of
the
law
on
the
individual
or
the
group
concerned”.
These
are
the
basic
principles
that
run
through
the
concept
of
discrimination.
I
note
the
general
nature
of
the
remarks
made
by
McIntyre
J.
in
this
connection.
Accordingly,
while
bearing
in
mind
the
analytical
framework
he
has
provided
us
with,
the
notion
of
discrimination
requires
some
further
clarification.
The
method
of
analyzing
subsection
15(1)
of
the
Charter,
designed
to
serve
this
objective,
is
set
out
in
my
reasons
in
Miron
v.
Trudel,
S.C.C.,
No.
22744,
May
25,
1985,
rendered
concurrently
herewith.
As
explained
in
that
case,
the
question
is
whether
the
impugned
provision
creates
a
prejudicial
distinction
affecting
the
complainant
as
a
member
of
a
group,
based
on
an
irrelevant
personal
characteristic
shared
by
the
group.
For
the
sake
of
convenience,
this
analytical
method
is
divided
into
three
stages.
The
first
of
these
involves
determining
whether
the
provision
in
question
creates
a
distinction
between
the
individual,
as
a
member
of
a
group,
and
others.
This
distinction
may
result
from
the
wording
of
the
provision
on
its
face.
This
was
noted
by
Iacobucci
J.
in
Symes,
supra,
at
pages
761-62
(C.T.C.
72,
D.T.C.
6024):
With
respect
to
whether
section.
63
[of
the
Act]
creates
a
distinction,
the
language
of
section
63
must
be
separated
from
its
effect.
Clearly,
the
language
of
that
provision
does
not
include
terms
which
expressly
limit
the
child
care
expense
deduction
to
one
sex
or
the
other.
Instead,
for
the
sake
of
simplicity
in
light
of
section
63’s
multifaceted
requirements,
I
can
state
that
section
63
creates
a
facial
distinction
between
those
supporting
persons
who
incur
child
care
expenses
with
respect
to
an
eligible
child,
and
those
persons
who
do
not.
[Emphasis
added.]
The
second
stage
involves
determining
whether
this
distinction
creates
prejudice
in
respect
of
the
group
in
question.
This
element
is
essential:
discrimination
can
only
be
said
to
exist
if
the
result
of
the
impugned
provision
is
to
impose
on
the
group
a
burden,
obligation
or
disadvantage
not
imposed
on
others.
I
refer
in
this
regard
to
what
was
said
by
McIntyre
J
.
in
Andrews,
supra,
at
pages
180-81
(D.L.R.
22-23):
The
words
"without
discrimination"
require
more
than
a
mere
finding
of
distinction
between
the
treatment
of
groups
or
individuals.
Those
words
are
a
form
of
qualifier
built
into
section
15
itself
and
limit
those
distinctions
which
are
forbidden
by
the
section
to
those
which
involve
prejudice
or
disadvantage.
[Emphasis
added.
]
Finally,
in
the
third
stage
it
must
be
determined
whether
the
distinction
created
is
based
on
an
irrelevant
personal
characteristic
which
is
an
enumerated
or
analogous
ground
under
subsection
15(1)
of
the
Charter.
Relevance
is
to
be
determined
in
light
of
the
underlying
objectives
of
the
legislation.
By
its
very
nature
the
review
described
in
the
preceding
paragraphs
rests
on
a
comparative
analysis.
In
Symes,
supra,
at
page
754
(C.T.C.
68,
D.T.C.
6021),
lacobucci
J.
referred
to
the
part
played
by
this
fundamental
principle
in
determining
inequality
in
light
of
particular
facts.
He
relied
in
this
regard
on
the
observations
of
McIntyre
J.,
who
said
in
Andrews,
supra,
at
page
164
(D.L.R.
10),
that
the
condition
of
equality
"may
only
be
attained
or
discerned
by
comparison
with
the
condition
of
others
in
the
social
and
political
setting
in
which
the
question
arises".
The
importance
of
the
comparative
approach
and
the
close
connection
between
this
and
a
review
of
the
general
context
were
noted
by
Wilson
J.
in
Turpin,
supra,
at
pages
1331-32
(C.C.C.
34):
In
determining
whether
there
is
discrimination
on
grounds
relating
to
the
personal
characteristics
of
the
individual
or
group,
it
is
important
to
look
not
only
at
the
impugned
legislation
which
has
created
a
distinction
that
violates
the
right
to
equality
but
also
to
the
larger
social,
political
and
legal
context....
Accordingly,
it
is
only
by
examining
the
larger
context
that
a
court
can
determine
whether
differential
treatment
results
in
inequality
or
whether,
contrariwise,
it
would
be
identical
treatment
which
would
in
the
particular
context
result
in
inequality
or
foster
disadvantage.
[Emphasis
added.]
The
context
has
a
vital
part
to
play
in
identifying
comparative
groups
and
criteria,
in
determining
prejudice
and
in
assessing
the
nature
and
relevance
of
the
personal
characteristic
to
which
the
distinction
refers.
The
case
at
bar
raises
more
particularly
the
question
of
defining
the
legal
context
in
a
tax
matter.
In
accordance
with
the
comparative
approach
described
earlier,
the
appellant
suggested
that
account
should
be
taken
of
the
underlying
objectives
of
the
inclusion/deduction
system
in
determining
whether
section
15
of
the
Charter
has
been
infringed.
In
the
appellant’s
submission
there
are
four
such
objectives:
the
observance
of
fiscal
equity
between
taxpayers,
increasing
the
financial
resources
of
separated
couples,
coherent
arrangement
of
the
tax
system
and
an
intention
to
encourage
the
payment
of
alimony.
Based
on
this
premise,
the
appellant
then
argued
that
other
measures
contained
in
the
Act,
such
as
tax
credits,
and
family
law
in
general,
are
relevant
in
assessing
whether
paragraph
56(1
)(b)
of
the
Act
has
a
prejudicial
effect.
In
support
of
the
respondent’s
arguments,
on
the
other
hand,
the
intervener
SCOPE
submitted
that
any
argument
about
the
factors
that
led
to
the
adoption
of
this
system
should
be
considered
under
section
1
of
the
Charter,
so
as
not
to
impose
an
unduly
heavy
burden
on
a
person
claiming
an
infringement
of
his
or
her
equality
rights.
SCOPE
relied
on
Andrews
and
Turpin,
supra,
in
this
regard
and
in
particular
on
the
comments
of
Wilson
J.
who
stated,
at
page
1328
of
the
latter
case,
that
”[t]he
equality
rights
must
be
given
their
full
content
divorced
from
justificatory
factors
properly
considered
under
section
1".
In
view
of
the
parties’
respective
positions
on
this
point,
it
is
necessary
to
address
at
once
the
confusion
which
may
arise
between
two
fundamental
approaches:
the
analysis
of
equality
rights
using
a
contextual
approach
and
consideration
of
whether
a
rule
of
law
is
justified
under
section
1
of
the
Charter.
With
respect,
these
are
very
different
steps.
I
shall
return
to
this
later.
The
parameters
that
make
up
the
legal
context
vary
from
one
case
to
another.
They
depend
inter
alia
on
the
nature
of
the
legislation
and
the
wording
of
the
impugned
provision.
Accordingly,
if
the
disputed
section
itself
refers
to
other
legislation
or
to
other
areas
of
law
it
will
be
relevant
to
look
at
these
relationships
under
subsection
15(1)
of
the
Charter.
In
my
view,
for
the
legal
context
to
be
properly
defined
the
review
must
consider
at
least
two
aspects:
(1)
analysis
of
the
legislation
as
a
whole,
taking
into
account
all
of
its
provisions,
and
(2)
analysis
of
the
legislation
in
light
of
measures
prescribed
by
other
statutes,
when
the
impugned
provision
refers
directly
to
them.
Such
a
review
in
fact
derives
from
the
general
rule
that
a
statutory
provision
does
not
operate
in
a
vacuum.
As
Prof.
Pierre-André
Côté
points
out
in
The
Interpretation
of
Legislation
in
Canada
(2nd
ed.
1991),
at
page
258:
the
law
is
considered
to
form
a
system.
Every
component
contributes
to
the
meaning
as
a
whole,
and
the
whole
gives
meaning
to
its
parts:
"each
legal
provision
should
be
considered
in
relation
to
other
provisions,
as
parts
of
a
whole",
wrote
François
Gény.
This
latter
rule
is
especially
important
in
taxation,
where
the
legislation
sets
out
a
complex
arrangement
of
interrelated
and
complementary
provisions.
It
is
true
that
in
Symes,
supra,
and
Tétreault-Gadoury
v.
Canada
(Employment
and
Immigration
Commission),
[1991]
2
S.C.R.
22,
81
D.L.R.
(4th)
358,
this
Court
was
careful
to
state
that
section
1
of
the
Charter
is
the
provision
under
which
a
court
should
conduct
a
review
of
other
government
programs
or
other
legislation
not
being
challenged,
but
the
relevance
of
which
could
be
determined
in
the
overall
context
of
the
debate.
Those
cases
should
be
distinguished,
however,
from
the
one
at
bar.
In
Symes,
supra,
the
main
purpose
of
the
appeal
was
to
determine
whether
child
care
expenses
were
deductible
under
the
of
the
Act
as
business
expenses
in
calculating
profit.
In
his
reasons,
at
page
759,
lacobucci
J.
recognized
that
section
63
of
the
Act
in
itself
created
a
complete
code
which,
unlike
the
special
system
set
up
by
the
combined
effect
of
paragraphs
56(1)(b)
and
60(b)
of
the
Act,
contained
no
reference
to
other
legislation.
A
similar
observation
can
be
made
concerning
Tétreault-Gadoury.
This
Court
per
La
Forest
J.
considered
the
question
of
whether
section
31
of
the
Unemployment
Insurance
Act,
1971,
S.C.
1970-71-72,
c.
48,
infringed
the
equality
rights
guaranteed
by
subsection
15(1)
of
the
Charter.
Section
31
prohibited
the
payment
of
ordinary
unemployment
insurance
benefits
to
claimants
over
the
age
of
65.
I
note
that
under
that
provision
a
person
became
ineligible
for
benefits
merely
because
of
his
or
her
age.
When
the
Court
had
that
case
before
it,
section
31
made
no
reference
to
other
legislative
provisions.
That
is
not
the
case
here.
Paragraphs
56(1
)(b)
and
60(b)
of
the
Act
refer
directly
to
family
law
in
requiring
that
the
amount
paid
for
the
maintenance
of
a
child
be
set
"pursuant
to
a
decree,
order
or
judgment
of
a
competent
tribunal
or
pursuant
to
a
written
agreement".
It
is
by
reason
of
this
fundamental
requirement
that
the
payments
received
may
be
characterized
as
alimony:
without
it,
the
inclusion/deduction
system
simply
does
not
come
into
play,
as
the
Federal
Court
of
Appeal
pointed
out
in
Hodson
B.A.
v.
M.N.R.,
[1988]
1
C.T.C.
2,
88
D.T.C.
6001
(F.C.A.).
On
account
of
this
express
reference
to
other
legislation
which,
like
the
Divorce
Act
and
the
Civil
Code
of
Quebec,
has
a
direct
bearing
on
one
or
more
aspects
of
family
law,
the
situation
in
the
case
at
bar
is
thus
quite
different
from
the
situations
that
could
be
seen
to
exist
in
Symes
and
Tétreault-Gadoury,
supra.
That
being
the
case,
and
as
part
of
the
analysis
of
the
validity
of
the
inclusion/deduction
system
under
subsection
15(1)
of
the
Charter,
I
conclude
that
review
of
the
legal
context
requires
not
only
consideration
of
other
relevant
provisions
of
the
Act
but
also
of
the
principles
of
family
law
applicable
to
determining
the
amount
of
alimony,
to
which
the
actual
wording
of
paragraphs
56(1
)(b)
and
60(b)
refers
directly.
It
is
worth
mentioning
at
this
stage,
however,
that
any
determination
of
the
legal
context
depends
on
variable
factors,
including
the
nature
and
the
wording
of
the
impugned
legislative
provision.
In
this
connection
it
will
suffice
to
refer
to
Symes
and
Tétreault-Gadoury
to
see
that
reviewing
the
legal
context
as
a
relevant
aspect
of
an
analysis
under
subsection
15(1)
of
the
Charter
will
not
require
each
time
that
the
court
consider
all
the
government
programs
or
legislation
that
may
have
some
connection
with
the
disputed
provision.
Let
me
be
quite
clear
about
this:
this
Court
has
obviously
not
ceased
to
hold
that
infringement
of
a
right
guaranteed
by
the
Charter
can
only
be
justified
under
section
1
of
the
Charter.
That
approach
is
still
valid.
This
is
where
the
distinction
drawn
earlier
becomes
relevant.
The
purpose
of
the
analysis
under
subsection
15(1)
of
the
Charter
is
solely
to
determine
whether
a
provision
is
discriminatory
on
account
of
a
prejudicial
distinction,
based
on
an
irrelevant
personal
characteristic,
which
it
makes
in
respect
of
a
group.
In
this
regard
there
must
be
a
contextual
analysis
which
allows
for
some
consideration
of
the
legislation
referred
to
by
this
provision
and
the
rules
of
law,
if
any,
to
which
it
refers.
If
at
the
conclusion
of
such
an
analysis
the
distinction
is
found
to
be
discriminatory,
it
will
then
be
necessary
to
examine
the
justification
for
the
objectives
pursued
by
the
legislation
in
a
free
and
democratic
society,
as
required
by
section
1
of
the
Charter.
That
being
so,
I
shall
now
consider
the
general
principles
set
out
in
the
foregoing
pages
as
they
apply
to
the
particular
facts
of
this
case.
B.
Application
to
the
present
case
1.
First
step:
the
distinction
and
the
group
The
tax
system
set
out
in
paragraphs
56(1
)(b)
and
60(b)
of
the
Act
was
specifically
introduced
to
alleviate
the
economic
consequences
of
a
breakdown
of
the
family
unit.
Consequently,
it
applies
only
to
separated
or
divorced
spouses.
That
being
the
case,
there
is
no
need
to
consider
further
whether
the
Act
creates
a
distinction.
The
group
contemplated
by
the
legislation
consists
of
separated
or
divorced
couples
in
which
one
parent
is
paying
alimony
to
the
other
under
a
judgment
or
agreement.
That
is
not
the
group
to
which
the
respondent
claims
to
belong:
she
claims
she
is
a
member
of
the
smaller
group
of
custodial
parents
having
some
financial
self-sufficiency
and
consequently
receiving
maintenance
solely
for
the
benefit
of
their
children.
With
respect,
two
comments
should
be
made
at
this
point.
First,
the
group
cannot
be
subdivided
by
income
level:
this
is
not
a
characteristic
attaching
to
the
individual.
Accepting
such
a
proposition
would
also
mean
that
the
most
disadvantaged
subgroup
would
be
the
group
of
custodial
parents
with
the
highest
incomes.
Second,
it
is
not
possible
to
consider
custodial
parents
in
isolation
as
a
group
which
would
subsequently
be
compared
with
that
of
non-custodial
parents,
for
purposes
of
determining
prejudice;
I
repeat
that
in
the
final
analysis
the
discussion
in
this
Court
has
to
do
with
distribution
of
the
obligation
to
pay
taxes
within
the
couple.
One
must
not
lose
sight
of
the
fact
that
so
far
as
the
children
of
the
family
unit
are
concerned,
for
whose
benefit
the
mechanisms
of
the
Act
seek
to
free
up
additional
resources,
the
separated
or
divorced
parents
still
form
an
entity,
ordinarily
bound
by
the
support
obligation.
Accordingly,
a
single
facet
of
taxation,
that
of
the
person
receiving
the
alimony,
cannot
be
isolated
and
the
other
aspects
disregarded.
This
Court
is
also
being
asked,
for
the
purpose
of
comparison
with
the
group
of
which
the
respondent
claims
to
be
a
member,
to
consider
the
one
formed
by
persons
who
have
custody
of
children
and
who
as
such
receive
certain
amounts
needed
for
the
maintenance
of
the
latter
though
they
are
not
covered
by
the
provisions
of
paragraph
56(1
)(b)
of
the
Act.
For
example,
the
respondent
mentioned
the
situation
of
a
parent
whose
child
is
receiving
business
income
or
income
from
an
estate
or
trust,
of
a
parent
receiving
support
payments
from
one
of
the
children’s
grandparents
and
of
a
grandparent
receiving
support
payments
from
one
of
the
children’s
parents.
The
respondent
correctly
pointed
out
that
none
of
the
members
of
that
group
are
required
to
include
the
support
payments
received
in
computing
their
income.
I
note,
however,
that
when
she
places
these
persons
in
the
same
group
for
comparison
purposes
the
respondent
is
applying
two
different
taxation
systems.
In
the
first
example
cited
by
the
respondent
it
is
the
child
himself
who
is
treated
like
any
individual
taxpayer
and
must
pay
tax
on
his
income,
if
any.
In
my
opinion,
for
this
very
reason
this
subgroup
cannot
be
validly
used
as
a
basis
for
comparison:
the
different
tax
treatment
of
the
children’s
Own
income
results
from
the
fact
that
they
do
not
fall
either
under
the
system
applicable
to
the
income
of
non-separated
couples
or
under
that
of
separated
couples.
They
are
subject
to
the
general
system
which
applies
to
everyone,
including
children,
regardless
of
their
parents’
situation.
The
situations
in
which
a
child
has
to
pay
tax
reflect
a
completely
different
context
characterized
inter
alia
by
the
payer
being
under
no
obligation
to
support
the
child.
In
that
case
I
certainly
cannot
include
that
category
in
the
group
which
the
respondent
seeks
to
create.
The
other
examples
given
by
the
respondent
involve
parents
to
whom
the
provisions
of
paragraphs
56(1
)(b)
and
60(b)
of
the
Act
do
not
apply
but
who
nonetheless
have
a
support
obligation.
As
they
do
not
fall
within
the
specific
ambit
of
these
provisions
of
the
Act,
they
are
subject
to
the
general
taxation
system:
the
payer
and
the
recipient
are
treated
as
ordinary
taxpayers
and
amounts
which
the
former
pays
the
latter
as
support
are
not
classified
as
income,
unless
they
meet
the
conditions
laid
down
in
paragraphs
56(1
)(b)
and
60(b)
of
the
Act.
The
situation
of
those
individuals
corresponds
to
that
the
respondent’s
group
would
be
in
but
for
this
special
system.
In
order
to
decide
whether
there
is
prejudice,
the
situation
of
the
respondent’s
group
must
be
examined
depending
on
whether
or
not
it
is
subject
to
the
special
system.
2.
Second
step:
prejudice
Now
that
the
distinction
has
been
established,
it
is
necessary
to
determine
whether
paragraphs
56(1
)(b)
and
60(b)
of
the
Act,
in
the
context
contemplated
by
them,
have
a
prejudicial
effect
on
separated
or
divorced
parents
as
members
of
that
group.
The
respondent
and
the
intervener
SCOPE
relied
on
the
evidence
in
the
record
as
showing
that
98
per
cent
of
alimony
recipients
are
women.
In
support
of
their
arguments
they
also
pointed
to
the
recognition
by
this
Court,
in
Symes,
supra,
of
the
disproportionate
share
women
bear
of
the
burden
of
child
care
and
the
social
costs
related
to
it.
They
also
drew
the
Court’s
attention
to
Moge
v.
Moge,
[1992]
3
S.C.R.
813,
92
D.L.R.
(4th)
456,
in
which
this
Court
noted
that
family
breakup
had
a
significant
impact
on
the
standard
of
living
of
custodial
parents.
These
are
undoubtedly
facts
which
may
suggest
a
need
for
reform.
I
would
note,
however,
that
the
Court’s
function
here
is
first
to
see
whether
paragraphs
56(1
)(b)
and
60(b)
of
the
Act
produce
a
prejudicial
effect
on
the
group
of
separated
or
divorced
couples
as
identified
earlier,
and
in
particular
on
a
custodial
parent
to
whom
maintenance
is
paid
for
the
needs
of
his
or
her
children.
The
respondent
and
some
of
the
interveners
maintained
that
women
in
Ms.
Thibaudeau’s
situation
suffer
prejudice
which
they
described
in
three
ways.
First,
parents
who
have
the
custody
of
children
are
subject
to
an
obligation
not
imposed
on
non-custodial
parents,
that
of
including
the
amount
of
the
alimony
in
computing
their
income.
This
obligation
results
from
the
actual
wording
of
paragraph
56(1
)(b)
of
the
Act.
Then,
as
a
result
of
this,
custodial
parents
who
enjoy
a
certain
amount
of
financial
self-
sufficiency
are
subject
to
an
additional
tax
burden,
that
of
paying
an
additional
amount
in
tax.
Finally,
on
account
of
the
very
mechanism
of
the
system,
custodial
parents
are
denied
access
to
the
additional
financial
resources
which
the
legislature
claims
to
intend
for
all
parents,
for
the
benefit
of
their
children,
and
not
just
for
non-custodial
parents.
It
should
be
noted,
as
Hugessen
J.A.
indicated,
that
the
alleged
prejudice
is
of
the
same
kind
for
all
parents
in
such
a
situation
regardless
of
sex,
although
for
the
most
part
it
is
women
who
are
in
this
situation.
A
comparison
was
made
between
the
respondent’s
situation,
separately,
and
that
of
non-separated
couples
in
which
each
parent
is
taxed
individually
on
the
portion
of
his
or
her
income
intended
for
a
child’s
needs.
In
this
connection
I
would
first
note
that
a
valid
examination
of
the
situation
requires
consideration
of
how
the
system
treats
both
parents,
and
not
only
the
recipient
of
the
maintenance.
As
I
mentioned
earlier,
it
is
the
question
of
distribution
which
is
critical
to
the
discussion,
and
for
it
to
be
meaningful
it
must
be
considered
from
the
standpoint
of
the
members
of
the
couple.
One
cannot
thus
object
to
taxation
in
the
hands
of
the
recipient
of
the
maintenance
without
at
the
same
time
taking
the
tax
treatment
given
to
the
payer
into
account.
To
do
otherwise
would
amount
to
claiming
a
tax
exemption
which
other
parents
would
not
receive.
The
rule
is
that
the
income
of
parents
used
for
the
maintenance
of
their
children
shall
be
taxed
in
the
hands
of
the
parents.
This
is
so
for
those
living
together
and
those
who
are
in
single-parent
situations.
The
special
system
applicable
to
separated
or
divorced
parents
maintains
this
rule.
Where
it
departs
from
the
general
rule
is
in
taxing
income
intended
for
the
maintenance
of
children
in
the
hands
of
the
ultimate
recipient
of
the
income
who
disposes
of
it,
rather
than
in
the
hands
of
the
parent
who
earned
or
received
it.
There
is
nothing
inequitable
in
that
as
such.
As
I
noted
earlier,
in
order
to
decide
whether
the
system
is
prejudicial
it
must
be
placed
in
context
by
comparing
the
treatment
of
parents
covered
by
the
special
inclusion/deduction
system
with
that
which
they
would
receive
in
the
absence
of
such
a
system,
namely
that
of
parents
to
whom
paragraphs
56(1
)(b)
and
60(b)
of
the
Act
do
not
apply
but
who
nevertheless
have
a
support
obligation.
It
will
be
seen
from
those
sections,
first,
that
tax
is
imposed
on
the
person
who
can
dispose
of
the
income.
As
I
noted
above,
this
measure
is
not
prejudicial
in
itself.
Second,
a
comparison
with
non-separated
couples
indicates
that
the
parents
to
whom
the
special
inclusion/deduction
system
applies
enjoy
an
overall
lessening
of
their
tax
burden.
The
appellant
pointed
out
that
the
income
splitting
allowed
by
the
system
gave
the
parents
it
covers
a
tax
saving
of
some
$240
million
in
1988
alone.
In
view
of
the
substantial
savings
generated
by
the
inclusion/deduction
system,
it
is
clear
that
the
group
of
separated
or
divorced
parents
cannot
as
a
whole
claim
to
suffer
prejudice
associated
with
the
very
existence
of
the
system
in
question.
On
the
contrary,
it
was
shown
that
on
the
whole
members
of
the
group
derive
a
benefit
from
it:
as
most
of
the
recipient
parents
are
subject
to
a
marginal
tax
rate
lower
than
that
of
the
parents
paying
the
maintenance,
it
can
be
said
that
the
purposes
for
which
the
system
was
created
have
been
to
a
large
extent
achieved.
Additionally,
even
accepting
the
respondent’s
suggestion
that
a
comparison
should
be
made
between
those
who
receive
and
those
who
pay
the
maintenance,
the
foregoing
conclusion
remains
unchanged.
In
fact,
if
the
recipients
of
maintenance
are
taken
as
a
group
separate
from
the
payers,
on
the
assumption
that
as
a
group
the
former
are
likely
to
be
the
subject
of
discrimination,
there
is
no
doubt
that
the
Act
creates
a
distinction
by
making
the
maintenance
taxable
in
the
hands
of
the
recipient
alone.
However,
in
the
context
at
issue
here,
which
must
always
be
borne
in
mind,
it
was
not
shown
that
such
a
distinction
entails
a
disadvantage:
the
tax
burden
of
the
couple
is
reduced
and
this
has
the
result
of
increasing
the
available
resources
that
can
be
used
for
the
benefit
of
the
children,
in
satisfaction
of
their
parents’
obligation
to
support
them.
Apart
from
the
efforts
to
frame
for
comparison
purposes
a
definition
which
is
as
close
as
possible
to
what
the
group’s
situation
would
be
if
there
were
no
special
system
in
its
favour,
the
question
of
the
distribution
of
the
resources
available
for
the
benefit
of
the
children
is
another
aspect
which
is
of
crucial
importance
in
assessing
the
prejudice
alleged
by
the
respondent:
indeed,
it
is
at
the
very
heart
of
the
debate.
Accordingly,
before
proceeding
to
develop
the
points
of
comparison
with
non-separated
couples,
I
feel
it
is
proper
to
examine
this
question
in
greater
detail
at
this
stage.
Distribution
of
available
resources
is
governed
by
the
rules
of
family
law,
that
is
according
to
the
child’s
best
interests
within
the
meaning
of
article
30
of
the
Civil
Code
of
Lower
Canada
(now
article
33
of
the
new
Civil
Code
of
Quebec)
and
taking
into
account
the
needs
and
means
of
the
parties
as
provided
by
subsection
15(5)
of
the
Divorce
Act,
R.S.C.,
1985,
c.
3
(2nd
Supp.),
and
article
635
of
the
old
Civil
Code
of
Quebec
(now
article
587,
S.Q.
1991,
c.
64)
respectively.
Additionally,
in
providing
that
a
maintenance
order
made
for
a
child’s
benefit
should
recognize
that
the
spouses
have
a
joint
financial
obligation
to
maintain
the
child,
paragraph
15(8)(a)
of
the
Divorce
Act
also
places
the
child’s
interests
in
the
forefront
of
the
factors
to
be
considered.
As
the
fiscal
impact
resulting
from
the
obligation
of
inclusion
is
one
of
the
factors
to
be
taken
into
account
in
computing
the
alimony,
the
very
way
in
which
it
is
distributed
between
the
parents
for
the
ultimate
benefit
of
the
child
must
still
be
subject
to
the
fundamental
criterion
of
the
latter’s
best
interests
in
all
decisions
concerning
it.
Since
it
is
governed
by
this
criterion
its
distribution
is
therefore
not
open
to
challenge
under
the
Charter,
expressing
as
it
does
a
fundamental
value
of
our
society
which
is
incorporated
into
paragraphs
56(1
)(b)
and
60(b)
of
the
Act
by
reference.
My
colleague
L’Heureux-Dubé
J.
referred
to
this
latter
principle
in
Young
v.
Young,
[1993]
4
S.C.R.
3,
160
N.R.
1,
where
the
child’s
interests
were
specifically
considered
in
relation
to
custody
and
access
rights.
Her
remarks
are
nevertheless
of
general
application
and
particularly
enlightening
in
the
present
context.
She
said
the
following,
at
page
71
(N.R.
109-10):
as
an
objective,
the
legislative
focus
on
the
best
interests
of
the
child
is
completely
consonant
with
the
articulated
values
and
underlying
concerns
of
the
Charter,
as
it
aims
to
protect
a
vulnerable
segment
of
society
by
ensuring
that
the
interests
and
needs
of
the
child
take
precedence
over
any
competing
considerations
in
custody
and
access
decisions.
In
the
case
at
bar,
in
the
decree
nisi
of
divorce
which
he
rendered
in
respect
of
the
respondent
and
her
former
husband,
Boudreault
J.
of
the
Superior
Court
found
the
amount
of
the
alimony
as
determined
to
be
fair
and
equitable
in
all
the
circumstances,
including
the
tax
impact.
I
set
out
below
the
relevant
passage
(Sup.
Ct.
Mtl.,
No.
500-12-151837-865,
December
1,
1987,
at
page
15):
When
we
consider
the
tax
impact
on
the
payer
and
on
the
receiver
of
alimony
payments
like
those
under
consideration
here
(i.e.,
a
real
cost
of
about
50
per
cent
for
the
payer
and
an
additional
real
receipt
by
the
recipient
in
a
similar
proportion
only),
it
appears
to
be
fair
and
equitable
to
continue
the
alimony
payable
for
the
children
alone
at
$1,150
per
month
for
the
moment;
in
view
of
the
tax
consequences,
that
amount
will
compel
the
applicant
to
contribute
to
the
financial
support
of
the
children,
in
addition
to
her
on-going
personal
care
of
them,
in
a
proportion
which
is
probably
higher
than
a
simple
ratio
of
the
parties’
income
would
impose
on
her.
[Translation.]
The
judge
thus
took
the
tax
burden
into
account,
as
he
should
have
done,
in
determining
the
alimony
to
be
paid
by
the
non-custodial
parent
as
an
expense
item.
It
is
one
of
several
items
which,
with
the
needs
of
the
children
and
the
means
and
other
needs
of
each
of
the
parties,
serve
to
determine
the
contribution
by
each
parent
to
the
support
of
the
children.
This
overall
breakdown
includes
that
of
the
tax
burden.
It
is
thus
artificial
to
treat
the
latter
in
isolation
and
it
is
mistaken
to
think
that
the
proper
contribution
by
each
parent
to
the
support
of
the
children
has
been
determined
without
it
being
taken
into
account,
and
that
accordingly
the
burden
has
been
made
the
sole
responsibility
of
the
recipient
of
the
alimony.
Were
that
the
case
it
could
be
overturned
on
appeal.
The
law
requires
that
this
burden
be
assumed
and
shared,
as
an
integral
part
of
the
other
expenses,
in
accordance
with
the
means
and
needs
of
the
parties
and
their
children
through
the
setting
of
alimony.
The
fact
that
the
tax
saving
resulting
from
the
inclusion/deduction
system
does
not
benefit
both
parents
in
equal
proportion
therefore
does
not
infringe
the
equality
rights
protected
by
the
Charter.
Additionally,
I
would
note
that
there
is
no
evidence
in
this
connection
to
show
that
the
recipient
parent
or
the
children
would
benefit
by
taxation
in
the
hands
of
the
payer
of
the
alimony,
as
the
ordinary
rules
of
taxation
under
the
general
system
would
postulate.
In
fact,
in
that
case
it
appears
that
the
latter’s
ability
to
pay
would
be
reduced
in
total
(he
would
be
unable
to
deduct
the
amounts
paid
in
computing
his
income)
and
over
time
(he
would
be
unable
to
benefit
from
the
special
arrangements
allowing
the
payer
of
support
to
reduce
the
amount
of
his
source
deductions).
In
short,
the
fact
that
the
support
may
not
be
increased
by
an
amount
equal
to
the
payer’s
tax
relief
or
the
recipient’s
tax
increase
does
not
as
such
place
the
latter
at
a
disadvantage
since
in
principle
the
distribution
takes
place
in
accordance
with
family
law,
which
is
incorporated
into
the
tax
system
by
reference
and
the
aims
of
which
are
promoted
by
contributing
to
an
alleviation
of
the
tax
burden.
Additionally,
such
results,
if
any,
depend
primarily
on
the
individual
case.
They
do
not
establish
a
disadvantage
for
the
group.
Reference
has
been
made
to
the
fact
that
family
law
does
not
achieve
an
equal
distribution
and
leaves
the
custodial
parent,
usually
the
mother,
relatively
deprived,
or
at
least
leaves
her
saddled
with
a
larger
and
disproportionate
share
of
the
burden.
It
is
said
that
the
deduction/inclusion
system
exacerbates
the
problem.
It
is
thus
incorrect,
even
accepting
the
argument
as
stated,
to
say
that
this
system
is
the
source
of
the
problem
even
though,
on
that
view
of
the
matter,
it
may
make
the
situation
worse.
The
system
thus
cannot
be
blamed
for
the
problem
of
the
limited
resources
of
custodial
parents,
which
the
system
aims
to
relieve
and
does
in
fact
relieve
in
general
by
reducing
the
amount
collected
in
tax
and
leaving
a
larger
part
of
the
parents’
income
at
their
disposal
to
meet
their
requirements
for
maintaining
their
children.
This
is
a
benefit
not
enjoyed
by
other
parents.
Accordingly,
the
complaint
is
not
in
effect
aimed
at
this
benefit
but
rather
bears
upon
the
failure
of
certain
non-custodial
parents
to
fulfil
their
obligations
to
their
children
adequately,
in
view
of
the
tax
relief
which
they
receive.
This
Situation
it
is
said
should
bar
the
government
from
allowing
the
noncustodial
parent
who
supports
the
family
a
larger
amount
of
disposable
income
in
order
to
fulfil
his
obligations
to
his
children,
as
defined
by
the
law
itself
and
the
amount
of
which
is
set
by
a
formal
agreement
or
fixed
by
a
decree.
All
parents
would
thus
be
deprived
of
this
greater
latitude
and
freedom
to
discharge
their
responsibilities.
The
impugned
system
provides
an
overall
benefit
to
couples
supporting
children.
The
defects,
not
in
the
legislation,
which
provides
for
a
sharing
according
to
the
children’s
best
interests,
but
in
its
application
in
certain
cases
for
reasons
quite
unrelated
to
the
system,
may
lead
one
to
conclude
that
the
remedy
chosen
by
Parliament
is
inadequate
to
solve
fully
a
profound
and
complex
social
problem,
but
not
that
it
causes
prejudice
to
those
it
benefits.
There
is
absolutely
nothing
to
show
that
parents,
even
custodial
parents,
would
be
in
a
better
position
as
a
group
if
the
system
did
not
exist.
In
the
first
place,
legislation
must
be
assessed
in
terms
of
the
majority
of
cases
to
which
it
applies.
The
fact
that
it
may
create
a
disadvantage
in
certain
exceptional
cases
while
benefiting
a
legitimate
group
as
a
whole
does
not
justify
the
conclusion
that
it
is
prejudicial.
Secondly,
the
fact
that
the
benefits
sought
are
not
fully
achieved
on
account
of
problems
not
with
the
legislation
but
arising
out
of
the
circumstances
or
the
nature
of
the
subject
matter,
in
particular
in
the
area
of
the
family,
does
not
turn
those
benefits
into
disadvantages.
Any
inequalities
are
peculiar
to
specific
cases,
though
there
may
be
many
of
them;
they
relate
to
economic
interests
and
are
most
likely
to
affect
parents
who
are
better
off,
at
income
levels
where
the
dignity
of
the
person
is
not
at
stake.
This
aspect
of
the
matter
having
been
considered,
the
final
conclusion
resulting
from
comparison
of
the
group
of
separated
or
divorced
parents
requires
a
brief
review
of
the
provisions
of
the
of
the
Act
dealing
with
tax
credits.
I
rely
in
this
regard
on
the
comments
of
Judge
Garon
of
the
Tax
Court
of
Canada,
who
at
the
end
of
his
analysis
found
that
each
of
the
credits
which
the
respondent
could
claim
was
independent
of
the
inclusion/deduction
system
and
was
not
subject
to
receipt
of
alimony.
In
their
very
wording
the
three
main
credits
which
the
respondent
may
claim
(I
refer
to
the
equivalent
to
married
credit
provided
for
in
paragraph
118(l)(b)
of
the
Act,
the
tax
credit
for
dependants
in
paragraph
118(1)(d)
and
the
child
tax
credit
provided
by
section
122.2)
are
not
in
fact
in
any
way
exclusively
associated
with
custody
of
a
child
pursuant
to
an
order,
judgment
or
written
agreement.
In
fact,
in
enacting
these
provisions
it
would
appear
that
the
legislature
instead
intended
to
alleviate
the
tax
burden
of
a
wide
range
of
persons
whose
only
common
denominator
is
having
dependants.
This
arrangement
is
not
de
facto
contrary
to
the
custodial
parent
in
a
separation
situation
generally
being
the
one
able
to
claim
such
credits.
The
respondent’s
particular
case
is
an
example
of
this.
Nevertheless,
I
repeat
that
for
purposes
of
determining
prejudice
the
only
comparison
which
is
valid
in
this
case
is
that
between
the
system
applicable
to
separated
or
divorced
parents
and
the
situation
they
would
be
in
without
such
special
provisions,
namely
the
general
taxation
system.
It
is
not
relevant
to
try
to
assess
the
extent
of
the
prejudice
alleged
by
the
respondent
by
seeing
whether
within
the
Act
the
result
of
other
legislative
provisions
is
to
minimize
the
effects
of
the
provision
in
question,
when
they
are
not
related
to
it.
In
view
of
the
conclusion
I
have
arrived
at
in
the
course
of
the
earlier
steps
in
the
comparison,
that
no
prejudice
exists,
I
do
not
consider
it
necessary
in
this
case
to
decide
categorically
the
question
of
whether
the
tax
credits,
on
account
of
their
regular
application
to
custodial
parents,
should
be
regarded
as
characteristics
of
the
system
applicable
to
separated
or
divorced
parents.
Even
if
that
were
the
case,
however,
I
would
point
out
that
my
conclusion
as
to
the
absence
of
any
prejudicial
effect
would
not
be
altered
thereby.
On
that
assumption,
the
custodial
parent
would
be
able
to
benefit
from
measures
which
the
non-custodial
parent
could
no
longer
claim
for
himself
or
herself,
although
they
were
available
under
the
general
taxation
system.
This
is
the
case
in
particular
with
subsection
118(5)
of
the
Act,
which
prevents
the
payer
of
deductible
maintenance
from
claiming
the
equivalent
to
married
credit,
and
with
the
credit
for
dependants
provided
for
in
paragraph
118(1)(d),
which
is
not
available
to
someone
who
is
entitled
to
a
deduction
provided
for
in
paragraph
60(b)
of
the
Act.
The
child
tax
credit
in
section
122.2
of
the
Act
is
given
to
an
individual
entitled
to
receive
a
family
allowance
for
his
or
her
child
under
the
Family
Allowances
Act,
R.S.C.,
1985,
c.
F-l
(repealed
S.C.
1992,
c.
48,
s.
31).
At
the
relevant
times
subsection
7(1)
of
that
Act
stated
that
the
allowance
was
to
be
paid
to
the
female
parent,
unless
otherwise
provided.
In
view
of
the
evidence
in
the
record
indicating
that
the
vast
majority
of
custodial
parents
are
women,
it
cannot
be
said
that
the
non-custodial
parent,
usually
the
father,
will
be
deprived
here
of
a
benefit
which
he
had
under
the
general
system.
Nevertheless,
it
appears
that
in
a
separation
situation
this
tax
credit
is
no
longer
calculated
on
the
basis
of
the
combined
income
of
the
spouses,
but
merely
in
accordance
with
the
income
of
the
custodial
parent,
including
the
maintenance
paid.
Far
from
suffering
prejudice,
the
custodial
parent
is
thus
favoured
by
this
provision.
In
the
circumstances,
I
would
be
no
more
persuaded
on
this
basis
of
the
existence
of
a
burden
imposed
on
the
respondent.
Accordingly,
there
is
no
need
to
go
on
to
the
third
step
in
the
analysis
and
consider
the
relevance
of
the
personal
characteristic
on
the
basis
of
which
the
distinction
was
created.
VI.
Conclusion
In
the
course
of
this
discussion
it
has
certainly
been
suggested
that
greater
generosity
by
the
Treasury
toward
separated
custodial
parents
would
be
desirable
in
order
to
take
better
account
of
their
economic
and
social
problems,
such
as
an
exemption
for
maintenance
for
children:
I
note,
however,
that
it
was
not
argued
that
this
was
a
government
obligation
under
the
Charter
nor
was
there
any
suggestion
of
a
disadvantage
based
on
the
difference
between
the
present
law
and
such
a
system.
It
is
true
that
the
present
law
involves
an
alleviation
of
the
burden
on
the
payer
of
the
maintenance,
that
the
latter
undoubtedly
derives
a
benefit
therefrom
and
that
the
parliamentary
debates
of
the
time
mentioned
this
as
one
of
the
legislative
aims,
but
this
results
in
relief
for
the
couple
and
a
greater
ability
to
pay
and
hence
an
incentive
to
pay.
The
beneficial
effect
of
the
system
continues,
though
reduced
since
the
legislation
was
adopted.
On
this
point
I
note
that
the
problems
of
collecting
alimony,
deplorable
as
they
are,
cannot
be
invoked
in
support
of
arguments
that
the
tax
system
in
question
is
discriminatory.
They
manifestly
pertain
to
an
area
other
than
that
of
the
Act.
In
any
case,
it
was
not
shown
that
the
difficulties
in
collecting
larger
amounts
of
alimony
are
so
serious
as
to
cancel
out
the
benefit
conferred
by
the
inclusion/deduction
system
in
alleviating
the
tax
burden.
From
another
standpoint,
it
was
also
suggested
that
separated
parents
might
exercise
an
option
as
to
responsibility
for
taxes.
First,
this
involves
seeking
a
benefit
which
is
not
given
to
anyone
else
for
the
benefit
of
those
in
the
group
who
have
the
least
need
of
it,
namely
alimony
recipients
who
have
a
higher
marginal
tax
rate
than
the
payers.
Second,
as
I
pointed
out
earlier,
these
same
persons
cannot
constitute
a
group
within
the
meaning
of
section
15
of
the
Charter,
since
income
level
is
not
a
characteristic
attaching
to
the
individual.
In
closing
I
would
note
that
the
inadequacy
of
maintenance
is
due
to
numerous
factors
governed
by
family
law
and
is
not
the
result
of
these
provisions
of
the
Act.
The
distribution
of
the
additional
amounts
freed
up
by
the
system
does
not,
within
the
meaning
of
section
15
of
the
Charter,
have
to
be
made
equally
between
the
members
of
the
couple,
as
it
is
properly
governed
by
family
law
in
accordance
with
the
child’s
best
interests.
On
the
question
of
costs,
I
note
that
the
appellant
agreed
to
pay
costs
in
this
Court
in
view
of
the
general
interest
of
this
appeal.
It
seems
proper
that
costs
should
be
awarded
to
the
respondent
throughout,
though
there
is
no
justification
for
departing
from
the
general
rule
that
the
costs
are
to
be
determined
according
to
the
established
tariff.
VII.
Disposition
I
would
allow
the
appeal,
but
with
costs
to
the
respondent
throughout,
and
answer
the
constitutional
questions
as
follows:
1.
Does
paragraph
56(1
)(b)
of
the
Income
Tax
Act
infringe
the
equality
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms?
A.
No.
2.
If
paragraph
56(1
)(b)
of
the
Income
Tax
Act,
infringes
the
equality
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms
is
it
justified
in
the
context
of
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms?
A.
The
question
does
not
arise.
Cory
J.
and
lacobucci
J.:-We
agree
with
the
conclusion
reached
by
Gonthier
J.,
but
prefer
to
express
our
own
views
in
this
matter,
in
light
of
the
decisions
of
this
Court
bearing
on
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms
that
are
being
released
contemporaneously,
namely:
Egan
v.
Canada
(No.
23636,
May
25,
1995)
and
Miron
v.
Trudel
(No.
22744,
May
25,
1995).
It
is
clear
from
our
joint
reasons
in
Egan
and
our
agreement
with
McLachlin
J.’s
approach
to
section
15
of
the
Charter
as
expressed
in
Miron,
that
we
cannot
support
Gonthier
J.’s
approach
to
section
15.
The
analysis
of
functional
values
and
relevance
employed
by
Gonthier
J.
imports
into
a
section
15
analysis
the
justificatory
analysis
which
properly
belongs
under
section
I
of
the
Charter.
As
a
result,
it
deprives
the
section
1
analysis
of
much
of
its
substantive
role.
As
well,
it
places
an
additional
and
erroneous
onus
upon
the
claimant.
From
the
outset,
decisions
dealing
with
the
equality
section
have
made
it
clear
that,
under
section
15,
the
claimant
bears
only
the
burden
of
proving
that
the
impugned
legislation
is
discriminatory.
On
the
other
hand,
under
section
1,
it
is
the
government
which
bears
the
onus
of
justifying
that
discrimination.
In
enunciating
the
principles
which
govern
the
relationship
between
the
state
and
the
individual,
the
Charter
recognizes
that
the
state
may
impinge
upon
fundamental
rights
but
only
in
situations
in
which
it
can
justify
that
infringement
as
being
necessary
in
a
free
and
democratic
society.
This
division
of
the
burden
is
integral
to
the
entire
structure
of
the
Charter.
An
approach
to
Charter
rights
which
changes
the
assignment
of
this
onus
should
be
avoided.
Further,
the
functional
values/relevance
approach
of
Gonthier
J.
focuses
narrowly
on
the
ground
of
distinction
and,
as
a
result,
omits
an
analysis
of
the
discriminatory
impact
of
the
impugned
distinction.
As
we
indicated
in
Egan,
the
purpose
of
section
15
is
to
protect
human
dignity
by
ensuring
that
all
individuals
are
recognized
at
law
as
being
equally
deserving
of
concern,
respect
and
consideration.
Consequently,
it
is
the
effect
that
an
impugned
distinction
has
upon
a
claimant
which
is
the
prime
concern
under
section
15.
Ultimately,
the
approach
of
Gonthier
J.
permits
proof
of
relevance,
standing
alone,
to
negate
a
finding
of
discrimination.
We
agree
with
McLachlin
J.’s
critique
of
this
approach
as
set
out
in
Miron.
As
well,
the
reasons
of
La
Forest
J.
in
Egan
provide
an
example
of
the
somewhat
circular
results
such
reasoning
might
yield.
This
is
demonstrated
by
his
reliance
upon
the
capacity
to
procreate
as
rendering
the
distinction
in
the
Old
Age
Security
Act
"relevant".
However,
it
is
clear
that
the
spousal
allowance
is
provided
to
couples
regardless
of
whether
they
actually
have
any
children.
Quite
simply,
procreation
has
nothing
to
do
with
the
qualifications
to
receive
the
benefit.
In
the
case
at
bar,
we
do
not
believe
that
the
group
of
single
custodial
parents
receiving
child
support
payments
is
placed
under
a
burden
by
the
inclusion/deduction
system
created
by
paragraphs
56(1)(b)
and
60(b)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
Although
there
may
very
well
be
some
cases
in
which
the
gross-up
calculations
may
shift
a
portion
of
the
payer’s
tax
liability
upon
the
recipient
spouse,
we
agree
with
Gonthier
J.
that
one
cannot
necessarily
extrapolate
from
this
that
a
"burden"
has
been
created,
at
least
not
for
the
purposes
of
section
15.
In
this
regard,
this
appeal
is
markedly
different
from
the
situation
presented
in
both
Egan
and
Miron.
In
this
appeal,
we
are,
as
noted
by
McLachlin
J.,
dealing
with
two
provisions
geared
to
operate
at
the
level
of
the
couple.
They
are
designed
to
minimize
the
tax
consequences
of
support
payments,
thereby
promoting
the
best
interests
of
the
children
by
ensuring
that
more
money
is
available
to
provide
for
their
care.
If
anything,
the
legislation
in
question
confers
a
benefit
on
the
post-divorce
"family
unit”.
It
is
clear
that
the
divorced
parents
still
function
as
a
unit
when
it
comes
to
providing
financial
and
emotional
support
to
their
children
and
that
both
parents
remain
under
a
legal
obligation
to
provide
this
support.
The
fact
that
one
member
of
the
unit
might
derive
a
greater
benefit
from
the
legislation
than
the
other
does
not,
in
and
of
itself,
trigger
a
section
15
violation,
nor
does
it
lead
to
a
finding
that
the
distinction
in
any
way
amounts
to
a
denial
of
equal
benefit
or
protection
of
the
law.
We
would
stress
that
courts
should
be
sensitive
to
the
fact
that
intrinsic
to
taxation
policy
is
the
creation
of
distinctions
which
operate,
as
noted
by
Gonthier
J.,
to
generate
fiscal
revenue
while
equitably
reconciling
what
are
often
divergent,
if
not
competing,
interests.
As
must
any
other
legislation,
the
Income
Tax
Act
is
subject
to
Charter
scrutiny.
The
scope
of
the
section
15
right
is
not
dependent
upon
the
nature
of
the
legislation
which
is
being
challenged.
See
Symes
v.
Canada,
[1993]
4
S.C.R.
695,
[1994]
1
C.T.C.
40,
94
D.T.C.
6001.
In
the
present
case,
however,
in
determining
whether
the
distinction
has
the
effect
of
creating
a
burden,
it
is
necessary
to
examine
the
interaction
between
paragraphs
56(1
)(b)
and
60(b)
of
the
Income
Tax
Act
and
the
family
law
regime.
Unlike
the
situations
presented
in
Symes
and
in
Egan,
the
impugned
provisions
in
this
appeal
explicitly
incorporate
and
are
dependent
upon
both
federal
and
provincial
legislative
enactments
and
do
not,
by
themselves,
constitute
a
complete
self-contained
code.
Therefore
the
Income
Tax
Act
provisions
must
be
looked
at
in
conjunction
with
the
federal
and
provincial
statutes
under
which
child
support
orders
are
issued
in
order
to
assess
the
effect
upon
the
claimant.
In
the
present
appeal,
paragraphs
56(1
)(b)
and
60(b)
of
the
Income
Tax
Act
are
triggered
by
the
issuance
of
a
support
order
pursuant
to
the
Divorce
Act,
R.S.C.
1970,
c.
D-8.
Accordingly,
the
taxation
provisions
operate
in
close
conjunction
with
family
law.
The
amount
of
income
taxable
under
paragraphs
56(1
)(b)
and
60(b)
is
determined
by
the
divorce
or
separation
decree
and,
unless
the
family
law
system
operates
in
a
defective
manner,
the
amount
of
child
support
will
include
grossing-up
calculations
to
account
for
the
tax
liability
that
the
recipient
ex-spouse
shall
incur
on
the
income.
If
there
is
any
disproportionate
displacement
of
the
tax
liability
between
the
former
spouses
(as
appears
to
be
the
situation
befalling
Ms.
Thibaudeau),
the
responsibility
for
this
lies
not
in
the
Income
Tax
Act,
but
in
the
family
law
system
and
the
procedures
from
which
the
support
orders
originally
flow.
This
system
provides
avenues
to
revisit
support
orders
that
may
erroneously
have
failed
to
take
into
account
the
tax
consequences
of
the
payments.
Therefore,
in
light
of
the
interaction
between
the
Income
Tax
Act
and
the
family
law
statutes,
it
cannot
be
said
that
paragraph
56(1
)(b)
of
the
Income
Tax
Act
imposes
a
burden
upon
the
respondent
within
the
meaning
of
section
15
jurisprudence.
Again,
it
must
be
emphasized
that
the
situation
in
the
instant
appeal
is
markedly
different
from
that
presented
in
Egan.
Paragraphs
56(1)(b)
and
60(b)
of
the
Income
Tax
Act
explicitly
incorporate
family
law.
By
contrast,
in
Egan
the
spousal
allowance
is
allotted
independently
of
any
reference
to
provincial
social
assistance
legislation.
To
this
end,
when
Egan
and
Nesbit
(as
well
as
any
other
gay
couple
that,
but
for
their
sexual
orientation,
would
qualify
for
the
spousal
allowance)
are
denied
the
allowance,
it
is
clear
that
a
burden
is
created.
In
fact,
the
heterosexist
nature
of
the
definition
of
"spouse"
in
the
Old
Age
Security
Act,
R.S.C.,
1985,
c.
0-9,
is
solely
responsible
for
denying
the
same-sex
couple
a
benefit
ordinarily
available
to
an
opposite-sex
couple,
and
there
is
no
incorporation
of
any
provincial
(or
other)
law
to
offset
the
effect
of
this
denial.
Similarly,
in
Miron
there
was
a
denial
of
equal
benefit
of
the
law.
The
legislation
at
issue
in
the
Miron
appeal
infringes
section
15
since
it
directly
denies
common
law
couples
the
insurance
coverage
statutorily
accorded
to
married
couples.
A
burdensome
distinction
is
thus
created
on
the
basis
of
marital
status.
We
would
observe
that
we
are
not
required
in
this
appeal
to
address
the
question
of
whether
spousal
support
subject
to
the
same
taxation
regime
would
threaten
the
equality
principles
embedded
in
the
Charter.
It
is
only
child
support
that
is
at
issue.
In
sum,
this
is
not
a
case
in
which
this
Court
is
called
upon
to
determine
whether
the
distinction
that
has
been
created
is
actually
discriminatory.
Simply
put,
there
is
no
burden.
Accordingly,
this
appeal
can
thus
be
disposed
of
at
this
stage
of
the
section
15
analysis.
It
follows
that
there
is
no
need
to
enter
the
next
stage,
that
of
finding
discrimination,
the
level
at
which
the
opinions
of
our
colleagues
appear
to
diverge
conceptually.
In
so
far
as
we
disagree
with
McLachlin
J.’s
conclusion
that
paragraphs
56(1
)(b)
and
60(b)
of
the
Income
Tax
Act
occasion
a
burden,
our
disagreement
is
limited
to
an
application
of
her
approach
to
the
facts
of
this
case,
not
with
her
methodology
per
se,
which
we
endorse.
By
corollary,
our
concurrence
with
Gonthier
J.
in
the
disposition
of
this
appeal
is
one
of
result,
not
of
method.
This
conclusion
emerges
because,
in
the
instant
case,
we
find
that
there
is
no
denial
of
any
benefit
of
the
law
within
the
context
of
section
15.
We
would
dispose
of
the
appeal
and
answer
the
constitutional
questions
in
the
manner
proposed
by
Gonthier
J.
Sopinka
J.:—I
agree
with
Gonthier
J.
and
with
Cory
and
lacobucci
JJ.
that
the
impugned
provisions
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act"),
do
not
impose
a
burden
or
withhold
a
benefit
so
as
to
attract
the
application
of
subsection
15(1)
of
the
Canadian
Charter
of
Rights
and
Freedoms.
Accordingly,
I
would
dispose
of
the
appeal
as
suggested
by
Gonthier
J.
McLachlin
J.:-This
appeal
requires
the
Court
to
determine
whether
the
deduction/inclusion
scheme
for
separated
or
divorced
couples
set
out
in
paragraphs
56(1
)(b)
and
60(b)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act”),
infringes
the
equality
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms.
The
scheme
taxes
Ms.
Thibaudeau
on
the
amounts
paid
to
her
by
her
ex-husband
for
the
exclusive
benefit
of
the
children
in
her
custody
through
the
inclusion
requirement
contained
in
paragraph
56(1
)(b)
of
the
Act.
Her
ex-husband,
on
the
other
hand,
enjoys
a
deduction
for
the
amounts
paid
as
child
support
due
to
the
deduction
benefit
contained
in
paragraph
60(b)
of
the
Act.
The
inclusion
of
the
children’s
support
payments
in
Ms.
Thibaudeau’s
taxable
income
increased
her
federal
tax
burden
by
$3,705
for
1989.
The
divorce
decree
provided
only
$1,200
for
this
additional
tax
burden.
As
a
result
of
the
application
of
the
Income
Tax
Act
deduction/inclusion
scheme
Ms.
Thibaudeau
was
obliged
to
pay
the
difference
of
$2,505
in
federal
tax
for
1989
out
of
her
own
income
and
resources
after
consideration
of
all
tax
credits.
The
Tax
Court
of
Canada
dismissed
Ms.
Thibaudeau’s
argument
that
the
Act
treats
her
in
a
discriminatory
manner:
[1992]
2
C.T.C.
2497,
92
D.T.C.
2098.
It
reasoned
that
since
the
system
allows
the
quantum
of
the
children’s
support
payments
to
be
adjusted
in
order
to
offset
the
increased
tax
burden
resulting
from
the
inclusion
of
amounts
paid
for
the
children
in
the
custodial
parent’s
taxable
income,
the
system
treats
both
parents
equally.
The
Federal
Court
of
Appeal
set
aside
this
decision,
relying
on
the
fact
that
in
many
cases,
the
deduction/inclusion
scheme
penalizes
the
custodial
parent
by
imposing
on
him
or
her
a
proportionately
higher
tax
burden
than
that
of
the
non-custodial
parent,
who
benefits
from
a
100
per
cent
deduction
in
respect
of
the
amounts
he
pays
for
his
children:
[1994]
2
C.T.C.
4,
94
D.T.C.
6230.
Justices
Sopinka
and
Gonthier,
as
well
as
Justices
Cory
and
Iacobucci,
would
hold
that
the
Federal
Court
of
Appeal
erred.
With
respect,
I
share
the
viewpoint
of
the
majority
on
the
Federal
Court
of
Appeal.
I.
Facts
As
Gonthier
J.
has
already
related
the
principal
facts,
I
need
only
refer
to
certain
aspects
of
the
evidence.
The
evidence
established
the
following
facts.
1.
The
children’s
support
payments
in
the
case
at
bar
are
paid:
and
received
pursuant
to
a
decree
nisi
of
divorce
granted
on
December
1,
1987.
By
that
decree,
the
judge
awarded
custody
of
the
two
children
of
the
marriage
to
Ms.
Thibaudeau.
Finding
her
to
be
financially
self-sufficient,
he
declined
to
order
her
ex-husband
to
make
support
payments
for
her
own
needs.
With
respect
to
support
payments
for
the
children,
the
judge
ordered
the
ex-husband
to
pay
Ms.
Thibaudeau
the
sum
of
$1,150
a
month,
which
included
a
sum
of
between
$150
and
$250
a
month
to
cover
the
additional
tax
which
Ms.
Thibaudeau
would
be
paying
as
a
result
of
including
the
children’s
support
payments
in
the
computation
of
her
taxable
income.
2.
The
additional
amount
awarded
to
Ms.
Thibaudeau
for
taxes
on
the
children’s
support
payments
was
insufficient
to
cover
the
increased
tax
burden
resulting
from
inclusion
of
their
support
payments
in
her
income.
As
a
result
of
the
inadequate
adjustment
of
the
amount
of
child
support,
Ms.
Thibaudeau
was
obliged
to
pay
part
of
her
additional
tax
burden
for
1989-$2,505
in
federal
tax-from
her
own
income
and
resources.
IT.
Issues
These
facts
raise
the
question
of
whether
the
inclusion
of
support
payments
for
the
children
in
the
income
of
the
spouse
who
has
custody
of
the
children,
as
required
by
paragraph
56(1
)(b)
of
the
Act,
infringes
the
Charter,
which
reads:
1.
The
Canadian
Charter
of
Rights
and
Freedoms
guarantees
the
rights
and
the
freedoms
set
out
in
it
subject
only
to
such
reasonable
limits
prescribed
by
law
as
can
be
demonstrably
justified
in
a
free
and
democratic
society.
The
right
at
issue
here
is
the
right
of
equality:
15(1)
Every
individual
is
equal
before
and
under
the
law
and
has
the
right
to
the
equal
protection
and
equal
benefit
of
the
law
without
discrimination
and,
in
particular,
without
discrimination
based
on
race,
national
or
ethnic
origin,
colour,
religion,
sex,
age
or
mental
or
physical
disability.
It
follows
that
the
Court
must
consider
two
specific
questions:
1.
Does
the
inclusion
requirement
provided
for
in
paragraph
56(1
)(b)
of
the
Act
infringe
the
equality
rights
guaranteed
by
section
15
of
the
Charter?
2.
If
so,
is
paragraph
56(1
)(b)
of
the
Act
justified
under
section
1
of
the
Charter?
III.
Analysis
A.
Inequality
contrary
to
section
15
of
the
Charter
1.
Legislative
history
An
analysis
of
the
argument
that
the
Act
treats
Ms.
Thibaudeau
unequally
as
compared
with
her
ex-husband
must
be
conducted
against
the
background
of
the
history
of
the
impugned
legislation.
This
history
suggests
that
Parliament
was
never
concerned
with
equality
of
treatment
between
separated
parents,
and
that
the
potential
for
inequality
contained
in
the
legislation
has
been
exacerbated
during
the
years
following
its
enactment.
The
deduction/inclusion
scheme
was
introduced
in
1942.
Both
the
structure
of
the
scheme
and
the
wording
of
the
provisions
have
essentially
remained
unchanged
since
then.
The
income
splitting
produced
by
this
system
is
an
exception
to
the
general
rule
of
individual
taxation
underlying
the
Act.
The
deduction/inclusion
scheme
does
not
treat
each
taxpayer
as
a
separate
taxation
unit,
but
treats
the
non-custodial
parent
as
forming
part
of
a
single
taxation
unit,
the
family.
By
a
legislative
fiction,
the
deduction/inclusion
scheme
removes
the
amount
of
the
support
payments
paid
between
former
spouses
from
the
non-custodial
parent’s
taxable
income,
and
transfers
it
to
the
custodial
parent’s
taxable
income.
Parliament
created
this
exception
to
the
general
rule
of
individual
taxation
in
order
to
ameliorate
the
situation
of
separated
or
divorced
couples
as
well
as
that
of
any
new
family
that
might
result
from
a
new
marriage
by
the
non-custodial
parent.
In
1942,
the
husband
was
almost
invariably
the
sole
source
of
financial
support
for
the
wife
and
children.
It
is
thus
not
surprising
that
Parliament
considered
that
any
improvement
in
the
situation
of
all
concerned-the
first
wife,
the
second
wife
or
the
children-could
best
be
accomplished
by
improving
the
situation
of
the
husband
or
father.
It
is
also
not
surprising
that
Parliament
was
not
concerned
with
ensuring
equal
tax
treatment
for
the
former
spouses.
At
the
time
of
enactment,
women
who
had
the
custody
of
children
did
not
work
outside
the
home,
rare
cases
excepted.
Thus
they
very
seldom
were
required
to
pay
tax.
The
following
extract
from
the
House
of
Commons
Debates
indicates
the
reasoning
underlying
the
establishment
of
a
deduction
benefit
for
the
non-custodial
parent
and
reveals
the
logic
which
led
Parliament
in
the
Mackenzie
King
era
to
adopt
the
system
to
which
Ms.
Thibaudeau
now
objects
(House
of
Commons
Debates,
vol.
V,
3rd
Sess.,
19th
Pari.,
July
17,
1942,
at
pages
4360-61):
Mr.
Hanson
(York-Sunbury):
Such
a
man
who
has
married
again
is
in
a
very
tight
spot.
I
think
he
ought
to
have
a
little
consideration;
that
should
be
allowed
as
a
deduction.
Mr.
Bence:
I
was
going
to
say
a
word
on
that
point.
It
seems
to
me
most
unfair
that
when
a
man
is
divorced
and
is
supporting
his
ex-wife
by
order
of
the
court,
he
should
not
be
allowed
to
deduct,
for
income
tax
purposes,
the
amount
paid
in
alimony.
If
that
were
done,
the
ex-wife
could
be
required
to
file
an
income
tax
return
as
a
single
woman,
as
she
should,
and
she
would
have
to
acknowledge
receipt
of
that
income
in
making
up
that
return.
/n
many
cases
the
man
has
married
again,
but
still
he
must
pay
a
very
high
tax
on
the
$60,
$70
or
$80
a
month
he
must
pay
his
former
wife.
I
am
not
thinking
of
it
so
much
from
the
point
of
view
of
the
husband,
though
I
believe
he
is
in
a
very
bad
spot.
In
the
cases
with
which
I
have
become
acquainted,
the
husband
has
defaulted
in
his
payments
because
he
has
not
been
able
to
make
them,
and
in
those
cases
it
is
the
former
wife
who
suffers,
and
accordingly
I
believe
she
should
be
given
as
much
consideration
as
the
husband.
Mr.
Ilsley:
I
agree
that
there
is
a
great
deal
of
injustice
to
the
husband,
and
perhaps
indirectly
to
the
wife,
under
the
law
as
it
stands
now,
and
much
consideration
has
been
given
some
method
by
which
the
law
might
be
changed.
However,
I
am
not
in
a
position
at
the
moment
to
say
whether
or
not
an
amendment
to
meet
the
situation
will
be
proposed.
The
matter
is
still
under
consideration.
Mr.
Green:
I
really
think
it
is
an
impossible
situation,
with
the
tax
so
greatly
increased
as
it
has
been
this
year.
After
all,
our
law
recognizes
divorce,
and
once
the
parties
are
divorced
they
are
entitled
to
marry
again.
In
some
cases
that
have
been
brought
to
my
attention
the
husband
has
remarried
and
had
children
by
the
second
wife,
but
is
forced
to
pay
income
tax
on
the
alimony
that
he
pays
the
first
wife,
and
I
suggest
that
the
position
is
absolutely
unfair.
Mr.
Ilsley
:
I
agree
that
it
is,
in
a
great
many
cases.
[Emphasis
added.
I
Despite
its
laudable
aim
of
ameliorating
the
position
of
all
members
of
the
broken
family,
the
method
Parliament
chose
to
accomplish
this
goal
contained
the
seeds
of
future
inequality.
It
focused
solely
on
improving
the
financial
situation
of
the
non-custodial
parent
and
ignored
the
tax
position
of
the
custodial
parent.
It
contained
no
provisions
to
ensure
that
the
custodial
parent
receiving
payments
for
children
would
not
see
her
personal
tax
burden
increased,
much
less
share
the
advantageous
tax
treatment
enjoyed
by
the
non-custodial
parent.
At
the
time
Parliament
did
not
consider
the
tax
impact
of
the
deduction/inclusion
scheme
on
custodial
parents
(who
in
the
great
majority
of
cases
were
the
mothers).
There
was
no
concern
with
the
need
to
ensure
that
the
latter
receive
an
adequate
adjustment
of
the
amount
of
support
payments
to
offset
the
additional
tax
burden
they
might
be
required
to
assume
as
a
result
of
the
inclusion
of
this
amount
in
computing
their
taxable
income.
The
fact
that
most
separated
women
remained
in
the
home,
had
no
income,
and
paid
no
tax,
suffices
to
explain
why
their
tax
situation
received
no
attention
at
the
time.
These
assumptions,
however,
no
longer
hold
true.
The
half-century
that
has
passed
since
the
adoption
of
the
tax
scheme
which
Ms.
Thibaudeau
challenges
has
seen
great
changes
in
society
and
in
the
family.
In
the
social
context
of
1942
the
inequality
inherent
in
the
system
was
not
widely
felt;
in
the
modern
social
context,
the
same
inequality
is
widely
felt.
In
1992,
56
per
cent
of
married
women
held
employment
(P.
La
Novara,
A
Portrait
of
Families
in
Canada
(1993),
at
page
21)
and
there
are
many
more
taxpayers
today
among
women
than
there
were
in
1942.
The
negative
effect
of
the
inclusion
requirement
on
the
custodial
parent
(women
in
most
cases)
has
thus
become
greater
over
the
years.
2.
Present
inequality
under
subsection
15(1)
of
the
Charter
In
Miron
v.
Trudel,
S.C.C.,
No.
22744,
May
25,
1995,
I
take
the
view
that
an
analysis
under
subsection
15(1)
of
the
Charter
involves
two
stages.
First,
the
claimant
must
show
that
the
impugned
legislation
treats
him
or
her
differently
by
imposing
a
burden
not
imposed
on
others
or
denying
a
benefit
granted
to
others.
Second,
the
claimant
must
show
that
this
unequal
treatment
is
discriminatory.
This
requires
one
to
consider
whether
the
impugned
legislative
distinction
is
based
on
one
of
the
grounds
of
discrimination
enumerated
in
subsection
15(1)
or
on
an
analogous
ground.
In
the
great
majority
of
cases
the
existence
of
prejudicial
treatment
based
on
an
enumerated
or
analogous
ground
leads
to
a
conclusion
that
subsection
15(1)
has
been
infringed.
Distinctions
made
on
these
grounds
are
typically
based
on
stereotypical
attitudes
about
the
presumed
characteristics
or
situations
of
individuals
rather
than
their
true
situation
or
actual
ability.
Once
a
breach
has
been
established,
it
is
for
the
government
to
justify
the
inequality
under
section
1
of
the
Charter
by
showing
that
the
distinction
is
reasonable
and
justifiable
in
a
free
and
democratic
society:
R.
v.
Oakes,
D.E.,
[1986]
1
S.C.R.
103,
26
D.L.R.
(4th)
200,
at
pages
136-37
(D.L.R.
225-26);
R.
v.
Edwards
Books
and
Art
Ltd.,
[1986]
2
S.C.R.
713,
35
D.L.R.
(4th)
1,
at
page
768
(D.L.R.
41);
Black
v.
Law
Society
of
Alberta,
[1989]
1
S.C.R.
591,
58
D.L.R.
(4th)
317,
at
page
627
(D.L.R.
347);
Irwin
Toy
Ltd.
v.
A.G.
(Quebec),
[1989]
1
S.C.R.
927,
58
D.L.R.
(4th)
577,
at
page
986
(D.L.R.
620);
and
Andrews
v.
Law
Society
of
British
Columbia,
[1989]
1
S.C.R.
143,
56
D.L.R.
(4th)
1,
at
page
153
(D.L.R.
33).
(a)
Inequality
of
protection
or
benefit
of
the
law
and
its
basis
The
impugned
taxation
scheme
imposes
a
burden
on
separated
or
divorced
custodial
parents,
which
it
does
not
impose
on
separated
or
divorced
non-custodial
parents.
The
custodial
parent
must
include
child
support
payments
from
which
she
gains
no
personal
benefit.
The
noncustodial
parent
may
deduct
support
payments
from
his
taxable
revenue.
He
is
taxed
only
on
his
actual
personal
income
less
this
deduction.
On
its
face,
this
demonstrates
adverse
unequal
treatment
of
custodial
parents.
The
evidence
in
this
case
suggests
that
taking
into
account
the
amounts
from
which
she
benefitted
in
the
form
of
tax
credits,
Ms.
Thibaudeau
was
obliged
to
pay
from
her
own
resources
an
additional
$2,505
in
federal
tax
for
1989
as
a
result
of
the
inclusion
of
child
support
payments
in
her
taxable
income:
testimony
of
Jean-Francois
Drouin,
a
tax
lawyer.
The
increased
tax
burden
resulting
from
this
artificial
inflation
of
the
custodial
parent’s
taxable
income
may
increase
the
amount
of
tax
payable
in
two
ways.
First,
the
inclusion
increases
the
amount
of
taxable
income
and
consequently
the
amount
of
tax
payable.
Second,
the
inclusion
may
result
in
an
increase
in
the
marginal
tax
rate
and
hence
in
the
tax
payable.
The
inequality
between
the
custodial
and
non-custodial
spouse
is
exacerbated
by
the
fact
that
the
latter
enjoys
an
automatic
and
absolute
right
of
deduction
of
support
payments
from
personal
income,
while
the
former’s
ability
to
offset
the
increase
in
her
taxes
by
obtaining
an
adjustment
of
support
is
unpredictable.
Whether
the
custodial
parent
receives
such
an
adjustment
or
not,
the
non-custodial
parent
may
reduce
his
tax
burden
by
deducting
the
full
amount
of
the
child
support
paid
by
him
in
computing
his
taxable
income.
On
the
other
hand,
not
only
must
the
custodial
parent
request
any
adjustment
from
the
court,
it
is
not
always
certain
that
the
court
will
correctly
assess
the
tax
impact
or
will
award
a
sufficient
amount
to
enable
the
recipient
to
discharge
her
additional
tax
burden.
Similarly,
when
the
tax
cost
of
child
support
alters
as
the
result
of
a
change
in
the
circumstances
of
the
parties,
it
is
up
to
the
custodial
parent
to
claim
an
adjustment
of
child
support.
For
example,
if
the
custodial
parent
increases
her
annual
income
and
her
marginal
tax
rate,
she
will
be
obliged
to
initiate
proceedings
and
show
that
the
increase
in
the
tax
cost
of
the
child
support
justifies
an
adjustment.
The
economic
as
well
as
psychologi
cal
and
practical
hardships
involved
in
such
proceedings
explain
why
support
orders
are
rarely
amended
in
such
cases
and
why
the
custodial
parent
more
often
than
not
ends
up
paying
the
additional
tax
burden
out
of
her
own
resources
or
those
of
the
children
in
her
custody
(Report
of
the
Federal/Provincial/Territorial
Family
Law
Committee,
The
Financial
Implications
of
Child
Support:
Guidelines
Research
Report,
May
1992,
at
page
91).
The
non-custodial
parent,
for
his
part,
always
automatically
benefits
from
the
deduction,
even
if
the
tax
adjustment
for
the
custodial
parent
is
no
longer
adequate.
The
logic
of
the
deduction/inclusion
scheme
is
further
called
into
question
by
the
fact
that
our
society
strongly
encourages
women
to
attain
financial
self-sufficiency,
and,
in
pursuit
of
that
essential
objective,
to
increase
their
income.
The
higher
the
income
of
the
custodial
parent,
the
greater
will
be
her
tax
rate
and
the
more
she
will
be
penalized
by
the
requirement
of
including
the
amount
of
child
support
in
computing
her
own
taxable
income.
Such
a
mechanism
not
only
does
not
encourage
women
to
attain
financial
self-sufficiency,
it
seems
designed
in
some
cases
to
discourage
them
from
increasing
their
income.
One
of
the
premises
on
which
the
logic
of
the
deduction/inclusion
scheme
rests
(that
custodial
parents
are
generally
subject
to
a
lower
tax
rate
than
those
who
pay
the
child
support)
is
less
and
less
in
accord
with
present
reality
and
undermines
the
importance
our
society
places
on
women
attaining
financial
self-
sufficiency.
The
deduction/inclusion
scheme
therefore
not
only
presents
a
problem
in
the
limited
context
of
reviewing
the
applicable
legislation,
but
also
in
more
general
terms.
A
further
inequality
in
the
deduction/inclusion
scheme
may
be
noted.
While
the
non-custodial
parent
may
deduct
child
support
from
his
taxable
income,
the
custodial
parent
not
only
cannot
deduct
amounts
she
spends
on
maintaining
the
children,
but
must
also
pay
the
tax
that
the
non-custodial
parent
would
ordinarily
have
had
to
pay
on
the
income
devoted
to
child
support.
The
deduction/inclusion
scheme
overlooks
the
custodial
parent’s
financial
contribution
to
the
support
of
the
children.
The
Income
Tax
Act
limits
the
amounts
that
may
be
deducted
to
child
support
under
a
court
order
or
written
agreement.
Court
orders
or
written
agreements
never
allude
to
the
amounts
which
the
custodial
parent
personally
devotes
to
supporting
the
children
in
his
or
her
custody.
Still
less
do
they
note
the
contribution
of
the
custodial
parent
in
terms
of
services,
presence
and
availability.
Standard
child
deductions
and
credits
claimed
by
the
custodial
parent
are
legislatively
capped,
and
may
fall
short
of
her
actual
expenditure
for
the
child.
It
need
hardly
be
added
that
the
non-custodial
separated
or
divorced
parent
has
no
obligation
to
include
in
his
or
her
taxable
income
amounts
which
the
custodial
parent
spends
on
maintaining
the
children.
Although
a
comparison
between
the
tax
obligations
of
the
custodial
and
non-custodial
parents
seems
to
me
the
best
means
of
establishing
the
existence
of
prejudicial
treatment
of
the
former
as
compared
with
the
latter,
this
conclusion
can
be
buttressed
by
other
comparisons.
Apart
from
paragraph
56(1
)(b),
child
support
is
not
included
in
the
taxable
income
of
other
persons
in
situations
similar
to
that
of
the
custodial
parent.
The
general
principle
of
individual
taxation
applies,
and
the
person
having
custody
is
not
taxed
on
amounts
which
do
not
personally
belong
to
him
or
her.
For
example,
if
child
custody
is
awarded
to
a
third
party
to
whom
the
parents
pay
child
support,
the
principle
of
individual
taxation
applies
and
the
third
party
is
not
required
to
include
child
support
in
his
or
her
taxable
income.
The
law
thus
treats
a
separated
custodial
parent
and
a
custodial
third
party
receiving
child
support
differently,
imposing
on
the
former
an
obligation
to
which
the
latter
is
not
subject.
Parliament
may
have
had
valid
reasons
for
not
requiring
custodial
third
parties
to
include
the
amount
of
the
children’s
support
payments
in
their
taxable
income,
for
example,
a
desire
not
to
discourage
third
parties
from
accepting
child
custody.
But
this
does
not
permit
us
to
infer
that
it
is
fair
and
acceptable
to
penalize
custodial
parents
by
placing
an
unequal
tax
burden
on
them.
The
case
of
a
custodial
parent
who
is
widowed
provides
a
similar
comparison.
If
one
parent
dies
and
leaves
money
for
the
child,
the
surviving
parent
who
retains
custody
of
the
child
and
administers
the
money
for
the
child
is
not
required
to
include
it
in
his
or
her
taxable
income.
The
amount
bequeathed
is
intended
exclusively
for
the
child,
a
fact
which
the
tax
law
recognizes.
Again,
we
see
that
the
law
treats
widowed
custodial
parents
differently
from
separated
or
divorced
custodial
parents.
It
may
be
argued
that
the
different
tax
treatment
results
from
the
fact
that
the
money
inherited
by
the
child
is
the
child’s
property
(although
the
surviving
parent
administers
it),
while
the
child’s
support
paid
to
a
custodial
parent
for
the
exclusive
benefit
of
the
children
is
not
only
administered
by
the
custodial
parent
but
is
also
part
of
the
latter’s
property-in
short
that
the
distinction
is
based
not
on
the
status
of
the
person
receiving
the
child
support
payment
but
on
the
nature
of
the
amount
paid.
But
this
technical
legal
distinction
must
yield
to
reality.
Child
support
paid
to
separated
or
divorced
custodial
parents
is
provided
exclusively
for
the
child.
While
the
custodial
parent
is
not
subject
to
the
obligation
of
rendering
accounts,
in
reality
the
money
is
paid
for
the
exclusive
benefit
of
the
child.
The
fact
that
in
one
case
the
custodial
parent
holds
the
property
subject
to
a
legal
trust
and
in
the
other
subject
to
the
practical
reality
of
the
child’s
needs,
cannot
justify
imposing
a
tax
burden
in
one
case
and
none
in
the
other.
I
conclude
that
the
deduction/inclusion
scheme
imposes
a
burden
on
the
custodial
parent
which
it
does
not
impose
on
the
non-custodial
parent
or
on
others
who
are
in
similar
situations.
I
turn
now
to
the
arguments
which
are
raised
against
this
conclusion.
The
first
argument,
adopted
by
Gonthier
J.,
is
that
it
is
wrong
to
focus
the
analysis
on
the
individual’s
tax
treatment
and
that
one
should
consider
the
fractured
family
as
a
unit
for
taxation
purposes.
The
second
argument,
adopted
by
Gonthier
J.
and
by
Cory
and
Iacobucci
JJ.,
is
that
there
is
no
inequality
if
one
takes
into
account
the
impact
of
the
family
law
regime
on
the
tax
scheme.
With
respect
to
the
first
argument,
Gonthier
J.
suggests
that
it
is
wrong
to
focus
on
a
comparison
of
the
position
of
the
custodial
or
non-custodial
spouse.
This,
he
contends,
distorts
the
analysis
by
isolating
the
component
parts
of
a
single
system.
He
argues
that
the
equality
analysis
must
focus
on
the
couple,
rather
than
the
individuals
who
were
once
members
of
the
couple.
With
respect,
I
cannot
accept
this
position.
First,
to
compare
the
position
of
the
custodial
and
non-custodial
parent
does
not,
as
Gonthier
J.
suggests,
take
the
matter
out
of
context.
Rather,
it
focuses
on
the
interaction
between
the
various
components
of
the
deduction/inclusion
scheme.
This
is
to
place
the
analysis
in
its
context
and
to
make
a
comparison
which
takes
into
account
the
actual
situation
of
the
parties
affected
by
the
deduction/inclusion
scheme.
Second,
subsection
15(1)
is
designed
to
protect
individuals
from
unequal
treatment.
Its
opening
words
state:
"Every
individual
is
equal
before
and
under
the
law
and
has
the
right
to
the
equal
protection
and
benefit
of
the
law".
Where
unequal
treatment
of
one
individual
as
compared
with
another
is
established,
it
is
no
answer
to
the
inequality
to
say
that
a
social
unit
of
which
the
individual
is
a
member
has,
viewed
globally,
been
fairly
treated.
It
is
true,
as
Cory
and
Iacobucci
JJ.
suggest,
that
former
spouses
who
are
parents
of
the
same
children
have
a
joint
obligation
toward
the
latter
and
so
may
theoretically
be
regarded
as
members
of
a
single
entity,
despite
the
breakup
of
the
family
unit.
It
can
be
seen,
however,
that
in
practical
terms
the
former
spouses
conduct
their
everyday
lives
much
more
as
individuals
than
as
a
couple.
As
proof
of
this,
Ms.
Thibaudeau
had
to
pay
part
of
the
additional
tax
resulting
from
the
inclusion
requirement
($2,505)
out
of
her
own
income
and
resources.
Her
ex-husband
made
no
contribution
to
these
costs
and
the
law
did
not
require
him
to
make
any.
The
fact
that
the
deduction/inclusion
scheme
does
not
impose
prejudicial
treatment
on
the
majority
of
divorced
or
separated
couples
as
compared
with
other
couples-and
even
confers
a
benefit
on
them
in
67
per
cent
of
cases
(affidavit
of
Nathalie
Martel,
an
economist
in
the
Personal
Income
Tax
Division
of
the
federal
Department
of
Finance,
February
1,
1994,
paragraph
21)—is
no
bar
to
concluding
that
that
same
system
imposes
prejudicial
treatment
within
the
couple
by
imposing
on
one
of
its
members
a
burden
not
imposed
on
the
other.
Here,
paragraph
56(1
)(b)
imposes
on
one
member
of
the
separated
or
divorced
couple
a
burden
which
does
not
affect
the
other
member
of
that
couple.
The
fact
that
no
disadvantage
results
for
the
couple
as
a
whole
in
most
cases
is
no
bar
to
concluding
that
the
provision
imposes
prejudicial
treatment
on
one
of
its
members,
the
custodial
parent.
Even
if
the
legislation
is
viewed
from
the
perspective
of
the
couple,
it
works
significant
inequality.
Under
the
deduction/inclusion
scheme,
the
higher
the
non-
custodial
parent’s
marginal
tax
rate
is
above
that
of
the
custodial
parent,
the
greater
is
the
overall
tax
benefit.
Accordingly,
when
the
custodial
parent
and
the
non-custodial
parent
are
taxed
at
the
same
marginal
tax
rate,
the
tax
benefit
is
nil.
On
the
other
hand,
when
the
custodial
parent’s
marginal
tax
rate
is
greater
than
that
of
the
non-custodial
parent,
there
is
an
adverse
tax
impact
since
the
deduction/inclusion
scheme
has
the
effect
of
increasing
the
total
tax
paid
by
both
parents.
The
result
of
this
is
that
the
deduction/inclusion
scheme
leads
to
tax
savings
for
both
parents
together
in
about
67
per
cent
of
cases,
adversely
affects
separated
or
divorced
couples
in
about
29
per
cent
of
cases
and
has
neutral
effects
in
about
4
per
cent
of
cases
(affidavit
of
Nathalie
Martel,
an
economist
in
the
Personal
Income
Tax
Division
of
the
federal
Department
of
Finance,
February
1,
1994,
paragraph
21).
From
the
outset,
the
deduction/inclusion
scheme
imposes
prejudicial
treatment
on
separated
or
divorced
couples
in
about
30
per
cent
of
cases.
The
total
federal
income
tax
saved
by
separated
parents
in
1991
as
a
result
of
income
splitting
under
the
deduction/inclusion
scheme
is
estimated
at
$203
million
(affidavit
of
Nathalie
Martel,
an
economist
in
the
Personal
Income
Tax
Division
of
the
federal
Department
of
Finance,
June
30,
1994).
But
this
global
saving
provides
no
defence
to
the
charge
of
inequality.
The
problem
is
that
the
overall
context
in
which
this
scheme
is
applied
does
not
require,
and
in
some
cases
prevents,
an
equitable
division
of
this
tax
benefit
between
the
separated
or
divorced
parents.
In
many
cases
in
which
a
tax
benefit
results
from
the
application
of
the
deduction/inclusion
scheme,
the
benefit
is
not
passed
on
to
the
custodial
parent
or
the
children
and
remains
in
the
possession
of
the
non-custodial
parent
(Report
of
the
Federal/Provincial/Territorial
Family
Law
Committee,
supra,
at
page
91).
The
legislation
contains
nothing
to
encourage
an
equitable
division
between
family
members
of
any
benefits
that
may
result
from
tax
savings
granted
to
the
non-custodial
parent
by
means
of
the
deduction.
For
example,
neither
the
Income
Tax
Act
nor
the
Divorce
Act,
R.S.C.,
1985,
c.
3
(2nd
Supp.)
(formerly
R.S.C.
1970,
c.
D-8),
requires
the
non-custodial
parent
to
share
with
his
former
spouse
and/or
the
children
the
tax
savings
resulting
from
the
deduction
he
is
allowed.
The
prejudicial
treatment
of
the
custodial
parent
as
compared
with
the
noncustodial
parent
could
scarcely
be
clearer.
I
conclude
that
the
argument
that
the
question
of
equality
must
be
viewed
from
the
perspective
of
the
couple
rather
than
the
individual
overlooks
individual
unequalities
which
section
15
of
the
Charter
is
designed
to
redress;
and
that
even
if
the
matter
is
viewed
from
the
standpoint
of
the
couple,
unequal
treatment
is
demonstrated.
Gonthier
J.,
as
well
as
Cory
and
Iacobucci
JJ.
argue
that
the
family
law
regime
rectifies
the
inequality
that
the
legislation
creates
between
custodial
and
non-
custodial
parents
by
allowing
the
amount
of
the
child
support
to
be
adjusted
to
offset
the
additional
tax
burden
on
the
custodial
parent.
I
agree
that
the
section
15
equality
analysis
must
take
into
account
the
rules
of
family
law.
I
cannot
accept,
however,
the
conclusion
that
the
family
law
regime
neutralizes
the
effects
of
the
inequality
created
by
the
deduction/inclusion
scheme.
The
evidence
indicates
that
in
practice
the
family
law
regime
does
not
and
cannot
succeed
in
rectifying
the
inequality
created
by
the
deduction/inclusion
scheme.
Tax
impact
is
not
always
considered
by
the
courts
and,
when
it
is,
the
adjustment
is
often
insufficient
to
cover
the
additional
tax
which
the
custodial
parent
must
pay
as
a
result
of
being
subject
to
the
deduction/inclusion
scheme.
A
survey
of
147
judges
conducted
by
Judge
R.
James
Williams
of
the
Nova
Scotia
Family
Court
in
1990
indicates
that
only
a
minority
of
counsel
present
evidence
to
the
court
on
the
tax
impact
of
the
child
support
and
that
a
majority
of
judges
do
not
calculate
the
tax
consequences
if
no
evidence
is
presented
to
them
in
this
connection
(Report
of
the
Federal/Provincial/Territorial
Family
Law
Committee,
supra,
at
page
90,
note
52).
The
fact
that
the
custodial
parent
can
appeal
a
judgment
which
does
not
adequately
take
the
tax
impact
into
account
or
apply
to
the
court
to
increase
child
support
when
new
circumstances
increase
the
additional
tax
burden
she
must
bear
as
a
result
of
including
child
support
in
her
taxable
income,
does
not
answer
these
practical
problems.
I
cannot
accept
that
the
legality
of
the
system
is
preserved
by
the
existence
of
corrective
mechanisms
which,
in
addition
to
being
illusory,
place
on
the
shoulders
of
one
individual-the
custodial
parent-the
psychological
and
economic
burdens
inherent
in
implementing
them.
Even
when
the
court
considers
the
tax
consequences,
complete
compensation
for
the
additional
tax
burden
on
the
recipient
is
far
from
certain.
Leaving
aside
the
question
of
the
complexity
of
the
calculations
required,
one
cannot
ignore
the
fact
that
the
amount
of
child
support
has
to
be
determined
in
light
of
several
factors-including
the
child’s
interests
and
the
duty
of
both
parents
to
contribute
to
their
children’s
support
in
proportion
to
their
means-and
leaves
room
for
the
exercise
of
a
very
wide
discretionary
judicial
power.
This
precludes
complete
neutralization
of
the
negative
effects
that
may
result
from
the
inclusion
requirement
provided
for
in
paragraph
56(1)(b)
of
the
Act
(Report
of
the
Federal/Provincial/Territorial
Family
Law
Committee,
supra,
at
page
91).
The
actual
situation
of
thousands
of
custodial
parents
in
Canada
belies
the
contention
that
the
family
law
regime
corrects
the
inequality
created
by
the
deduction/inclusion
scheme
within
the
couple.
In
Willick
v.
Willick,
[1994]
3
S.C.R.
670,
119
D.L.R.
(4th)
405,
at
pages
719-25
(D.L.R.
430-35),
L’Heureux-Dubé
J.
decried
the
inadequate
compensation
which
the
law
often
provides
for
the
hidden
costs
associated
with
the
custody
of
children.
To
the
already
difficult
task
on
the
custodial
parent
of
proving
the
true
cost
to
her
of
raising
a
child,
paragraph
56(1
)(b)
adds
the
additional
burden
of
proving,
for
the
present
and
the
future,
what
the
increase
in
her
tax
will
be
as
a
result
of
inclusion
of
child
support
in
her
income.
It
is
contradictory
to
concede
on
the
one
hand
that
family
law
is
able
only
with
difficulty
to
divide
the
financial
obligations
pertaining
to
the
children
equally
between
the
former
spouses,
and
at
the
same
time
to
assert
that
the
same
law
is
able
to
fully
and
adequately
compensate
for
the
increase
in
the
tax
burden
which
the
inclusion
requirement
imposes
on
the
custodial
parent.
The
same
problems
arise
where
child
support
is
paid
pursuant
to
an
agreement
between
the
parties,
as
opposed
to
a
court
order.
Once
again,
full
compensation
for
the
additional
tax
burden
imposed
on
the
custodial
parent
is
uncertain
and
contingent,
while
the
deduction
benefit
for
the
non-custodial
parent
is
automatic
and
absolute.
Such
agreements
are
often
reached
in
an
informal
way
and
without
professional
advice.
The
custodial
spouse
is
placed
in
the
position
of
demonstrating
to
the
non-custodial
spouse
the
significance
of
the
additional
tax
burden
she
must
bear
on
account
of
the
law’s
inclusion
of
child
support
in
her
taxable
income.
All
this,
taken
in
the
emotional,
personal
and
economic
context
in
which
such
negotiations
take
place,
has
as
a
consequence
that
the
custodial
parent
often
fails
to
obtain
sufficient
compensation
to
indemnify
her
for
the
additional
tax
which
the
Income
Tax
Act
imposes.
In
the
present
case
the
judge
who
set
the
quantum
of
the
child
support
expressly
considered
its
tax
consequences.
Boudreault
J.
stated
that
a
sum
of
$900
to
$1,000
a
month
was
necessary
to
maintain
the
children
and
thought
it
advisable
to
set
the
amount
of
child
support
at
$1,150
a
month
on
account
of
the
tax
consequences
of
the
latter
for
the
recipient
and
the
payer:
Thibaudeau
v.
Chainé,
Sup.
Ct.
Montreal,
No.
500-12-151837-865,
December
1,
1987.
The
adjustment
made
was
inadequate,
however
forcing
Ms.
Thibaudeau
to
assume
an
additional
federal
tax
burden
of
$2,505
out
of
her
own
income
for
the
1989
taxation
year:
testimony
of
Jean-François
Drouin.
In
short,
the
family
law
regime
failed
to
rectify
the
inequality
which
the
tax
law
imposed
on
Ms.
Thibaudeau.
Even
if
she
were
to
seek
a
variation
in
child
support,
there
is
no
assurance
that
the
result
would
be
full
indemnity.
Ms.
Thibaudeau’s
case,
far
from
isolated,
negates
the
notion
that
the
family
law
regime
neutralizes
the
discriminatory
impact
of
the
tax
law.
I
conclude
that
the
requirement
of
paragraph
56(1)(b)
that
separated
or
divorced
custodial
parents
include
child
support
in
their
taxable
income
imposes
obligations
on
separated
or
divorced
custodial
parents
that
do
not
apply
to
others
in
similar
situations
and
denies
benefits
which
the
law
accords
to
others.
It
denies
the
right
of
custodial
parents
to
equal
protection
and
benefit
of
the
law.
Unequal
treatment
under
section
15
is
established.
This
brings
us
to
the
second
stage
of
the
analysis
under
section
15:
an
examination
of
the
ground(s)
of
discrimination.
56(1)(b)
Does
the
status
of
separated
or
divorced
custodial
parent
constitute
an
analogous
ground
within
the
meaning
of
section
15
of
the
Charter?
If
so,
is
the
distinction
based
on
this
ground
discriminatory?
The
ground
on
the
basis
of
which
the
distinction
is
made
here-the
status
of
separated
or
divorced
custodial
parent-is
not
enumerated
in
section
15
of
the
Charter.
The
question,
therefore,
is
whether
it
constitutes
an
analogous
ground
of
discrimination.
In
Miron
v.
Trudel,
supra,
I
explained
that
in
order
to
decide
whether
a
ground
of
discrimination
is
an
analogous
ground
within
the
meaning
of
s.
15
of
the
Charter,
it
is
essential
to
ask
whether
the
characteristic
on
the
basis
of
which
the
prejudicial
distinction
is
made
may
be
used
to
make
irrelevant
distinctions
that
are
contrary
to
human
dignity.
The
fact
that
the
group
in
question
has
historically
been
disadvantaged,
that
it
constitutes
a
discrete
and
insular
minority,
that
the
distinction
is
based
on
an
immutable
personal
characteristic
rather
than
on
an
individual’s
merit,
capacities
or
circumstances,
that
the
ground
under
consideration
is
similar
to
one
of
the
enumerated
grounds,
or
that
the
legislatures
and
the
courts
have
recognized
that
distinctions
based
on
the
ground
under
consideration
are
discriminatory,
are
all
factors
which
may
help
in
deciding
whether
a
ground
of
discrimination
is
an
analogous
ground
for
the
purposes
of
section
15
of
the
Charter.
Is
the
status
of
separated
or
divorced
custodial
parent
an
analogous
ground
within
the
meaning
of
section
15
of
the
Charter?
In
my
view
it
is.
First,
the
imposition
of
prejudicial
treatment
solely
on
the
basis
of
this
status
may
violate
the
dignity
of
an
individual
and
his
or
her
personal
worth
to
a
degree
affecting
the
individual’s
personal,
social
or
economic
development.
One’s
status
vis-à-vis
one’s
former
spouse
involves
the
individual’s
freedom
to
form
family
relationships
and
touches
on
matters
so
intrinsically
human,
personal
and
relational
that
a
distinction
based
on
this
ground
mst
often
violate
a
person’s
dignity.
Second,
separated
or
divorced
custodial
parents
considered
as
a
group
have
historically
been
subject
to
disadvantageous
treatment.
The
social
opprobrium
to
which
this
group
has
been
subjected
over
the
years
may
have
lessened
with
time.
Nevertheless,
even
today
evidence
of
disadvantage
suffered
by
such
persons
is
overwhelming.
Separated
or
divorced
custodial
parents
as
heads
of
single-parent
families
confront
economic,
social
and
personal
difficulties
not
faced
by
non-custodial
parents
or
those
in
two-parent
families.
Several
studies
in
Canada
and
abroad
indicate
that
the
standard
of
living
of
the
custodial
parent
and
the
children
is
significantly
reduced
following
a
divorce,
whereas
the
standard
of
living
of
the
non-custodial
parent
increases
following
the
divorce.
(Canada,
Department
of
Justice,
Bureau
of
Review,
Evaluation
of
the
Divorce
Act-Phase
II:
Monitoring
and
Evaluation
(1990);
E.
D.
Pask
and
M.
L.
McCall,
eds.,
How
Much
and
Why?
Economic
Implications
of
Marriage
Breakdown:
Spousal
and
Child
Support
(1989),
at
pages
76-78;
R.
J.
Williams,
"Quantification
of
Child
Support"
(1989),
18
R.F.L.
(3d)
234;
J.
B.
MCLindon,
"Separate
But
Unequal:
The
Economic
Disaster
of
Divorce
for
Women
and
Children"
(1987),
21
Fam.
L.Q.
351;
M.
Eichler,
"The
Limits
of
Family
Law
Reform
or,
The
Privatization
of
Female
and
Child
Poverty"
(1991),
7
C.F.L.Q.
59,
at
page
61;
H.
R.
Wishik,
"Economics
of
Divorce:
An
Exploratory
Study"
(1986),
20
Fam.
L.Q.
79;
R.
E.
Weston,
"Changes
in
Household
Income
Circumstances",
in
P.
McDonald,
ed.,
Setting
Up:
Property
and
Income
Distribution
on
Divorce
in
Australia
(1986),
100;
L.
Weitzman,
The
Divorce
Revolution:
The
Unexpected
Social
and
Economic
Consequences
for
Women
and
Children
in
America
(1985);
M.
Maclean
and
J.
M.
Eekelaar,
"The
Economic
Consequences
of
Divorce
for
Families
with
Children",
in
J.
M.
Eekelaar
and
S.
N.
Katz,
eds.,
The
Resolution
of
Family
Conflicts
(1984),
488;
Canadian
Institute
for
Research
and
the
Steering
Committee,
Matrimonial
Support
Failures:
Reasons,
Profiles
and
Perceptions
of
Individuals
Involved
(1981);
and
D.
Chambers,
Making
Fathers
Pay
(1979).)
Third,
the
special
difficulties
with
which
separated
or
divorced
custodial
parents
must
live
and
their
minority
position
as
compared
with
Canadian
families
as
a
whole
justifies
viewing
them
as
a
discrete
and
insular
minority.
In
1991,
13
per
cent
of
families
were
headed
by
a
single
parent
while
in
87
per
cent
of
families
the
father
and
mother
lived
together
with
the
children
(La
Novara,
supra,
at
pages
10
and
15).
Single
parents
with
custody
thus
constitute
a
minority.
It
is,
moreover,
a
disadvantaged
minority,
confronted
with
social,
personal
and
emotional
challenges
unique
to
its
members.
Fourth,
classification
as
a
separated
or
divorced
custodial
parent
may
give
rise
to
adverse
distinctions
on
the
basis
of
immutable
personal
characteristics,
rather
than
on
the
merit
and
actual
circumstances
of
a
particular
individual.
The
status
of
a
divorced
parent
in
respect
of
children
of
the
dissolved
marriage
is,
for
all
practical
purposes,
immutable.
The
remarriage
of
the
custodial
parent
does
not
change
the
relationship
with
the
children,
and
the
parent
still
remains
a
"former
spouse"
in
relation
to
the
first
marriage
under
the
Divorce
Act.
Only
if
there
is
remarriage
to
the
former
spouse
does
the
status
of
divorced
parent
disappear-a
possibility
so
remote
that
it
may
safely
be
ignored.
Moreover,
the
decision
to
separate
or
divorce
is
often
far
from
free.
The
other
party
may
leave
the
relationship
against
the
will
of
the
parent
who
remains
with
the
children.
Or
the
circumstances
of
the
marriage
may
have
left
the
custodial
parent
with
little
choice
but
to
leave
it.
Fifth,
the
status
of
separated
or
divorced
custodial
parents
is
linked
to
the
enumerated
ground
of
sex
given
that
the
great
majority
of
the
members
of
this
group
are
women.
In
fact,
in
1990
the
courts
awarded
custody
to
women
in
73.2
per
cent
of
divorce
cases
while
custody
was
awarded
to
men
in
12.3
per
cent
of
the
cases
and
a
joint
custody
order
was
made
in
14.1
per
cent
of
the
cases
(La
Novara,
supra,
at
pages
11
and
18).
These
considerations
lead
to
a
single
conclusion:
the
status
of
separated
or
divorced
custodial
parent
constitutes
an
analogous
ground
of
discrimination
within
the
meaning
of
subsection
15(1)
of
the
Charter.
Unequal
treatment
by
a
law
on
an
enumerated
or
analogous
ground
ordinarily
suffices
to
establish
that
paragraph
56(1
)(b)
constitutes
discrimination
and
infringes
the
equality
right
guaranteed
by
subsection
15(1)
of
the
Charter.
The
only
exceptions
are
rare
cases
in
which
a
distinction
based
on
an
enumerated
or
analogous
ground
does
not
lead
to
an
infringement
of
subsection
15(1)
of
the
Charter:
see
my
reasons
in
Miron
v.
Trudel.
This
is
not
such
a
case.
The
distinction
made
here
on
the
basis
of
the
status
of
separated
or
divorced
custodial
parent
runs
directly
counter
to
the
values
underlying
subsection
15(1)
of
the
Charter.
It
increases
the
disadvantages
already
suffered
by
separated
or
divorced
custodial
parents
based
not
on
their
merit
or
actual
situation
but
solely
and
arbitrarily
by
reference
to
their
membership
in
a
group.
I
conclude
that
a
violation
of
section
15
of
the
Charter
is
established.
The
remaining
question
is
whether
this
infringement
of
subsection
15(1)
of
the
Charter
is
justified
by
section
1.
B.
Is
the
infringement
of
section
15
of
the
Charter
by
paragraph
56(1
)(b)
Ita
justified
in
a
free
and
democratic
society?
1.
Is
the
objective
pursued
of
sufficient
importance?
The
speeches
which
appear
in
the
Parliamentary
debates
of
the
period
suggest
that
the
deduction/inclusion
scheme
challenged
by
Ms.
Thibaudeau
was
adopted
in
order
to
increase
child
support
and
ease
the
discharge
of
support
obligations
owed
by
the
non-custodial
spouse
to
his
first
and
sometimes
second
family.
Under
the
scheme
introduced,
this
objective
was
to
be
achieved
by
reducing
the
tax
burden
of
the
fractured
family
as
a
unit.
This
in
turn,
was
to
be
achieved
by
transferring
the
tax
burden
for
child
support
from
the
non-custodial
spouse
to
the
custodial
spouse
who
typically
enjoyed
a
lower
tax
rate.
I
pause
to
note
here
that
the
mechanism
of
the
scheme
introduced-a
deduction
for
the
non-custodial
spouse
with
no
assurance
it
would
be
passed
on
to
the
custodial
spouse-easts
doubt
on
the
genuineness
of
this
legislative
objective.
The
practical
operation
of
the
scheme
suggests
that
it
was
designed
more
to
improve
the
non-custodial
parent’s
situation
than
that
of
the
custodial
parent.
This
aspect
will
be
considered
more
fully
under
the
analysis
of
the
reasonableness
of
and
justification
for
the
means
chosen
by
Parliament
to
achieve
its
objective.
This
said,
I
am
of
the
view
that
the
objective
of
increasing
the
resources
of
the
broken
family
as
a
unit
in
order
to
increase
child
support
and
ease
the
discharge
of
the
non-custodial
parent’s
obligations
responds
to
social
concerns
of
considerable
importance.
There
is
no
question
that
the
breaking
up
of
the
family
unit
tends
to
impoverish
its
members.
Parliament
is
to
be
commended
for
attempting
to
offset
or
reduce
that
impoverishment.
The
legislative
objective
may
without
exaggeration
be
described
as
pressing
and
substantial.
2.
Are
the
means
chosen
reasonable
and
justified?
(a)
Rational
connection
I
am
prepared
to
accept
that
there
is
a
rational
connection
between
the
means
adopted
by
Parliament
(taxation
of
child
support
in
the
hands
of
the
parent
who
would
ordinarily
have
a
lower
marginal
tax
rate,
together
with
a
deduction
for
the
other
parent)
and
the
objective
pursued
(increasing
the
amount
of
child
support
and
enabling
the
non-custodial
parent
to
discharge
his
support
obligations
more
readily).
However,
I
view
the
correlation
as
tenuous.
As
indicated,
the
scheme
introduced
by
Parliament
was
designed
to
improve
the
economic
situation
of
each
member
of
the
broken
family
and
any
second
family.
The
means
adopted
by
the
scheme
which
was
introduced
appears
to
ensure
only
that
the
economic
situation
of
the
broken
family
as
a
whole
is
improved.
The
choice
of
this
means
rests
on
the
assumption
that
an
improvement
in
the
situation
of
one
of
the
members
of
the
broken
family
(and
thus
of
the
family
viewed
as
a
whole)
necessarily
implies
an
improvement
in
the
situation
of
each
of
them.
While
an
improvement
in
the
economic
situation
of
each
family
member
implies
an
improvement
in
the
economic
situation
of
the
family
viewed
as
a
whole,
the
reverse
is
not
always
true.
This
is
an
important
distinction.
It
is
evident
that
the
connection
between
the
legislative
objective
and
the
means
chosen
exists
more
in
theory
than
in
practice.
No
specific
measure
was
contemplated
to
ensure
or
even
encourage
any
attainment
of
the
legislative
objective.
Neither
the
Income
Tax
Act
nor
the
Divorce
Act
requires
a
non-custodial
parent
to
share
the
tax
savings
resulting
from
the
deduction
received
or
to
proportionately
increase
the
amount
of
the
child
support.
The
deduction/inclusion
scheme
appears
to
benefit
only
the
person
on
whom
the
deduction
is
conferred,
namely
the
non-custodial
parent,
and
works
to
the
disadvantage
of
the
custodial
parent,
who
must
include
an
additional
amount
in
computing
her
taxable
income
thereby
increasing
her
tax
burden.
The
appearance
is
borne
out
by
the
reality.
In
many
cases,
the
tax
benefit
is
not
passed
on
to
the
custodial
parent
or
the
children
and
remains
in
the
possession
of
the
non-custodial
parent
(Report
of
the
Federal/Provincial/Territorial
Family
Law
Committee,
supra,
at
page
91).
Having
said
that,
I
am
not
prepared
to
conclude
that
the
impugned
legislation
entirely
fails
the
rational
connection
test.
Some
connection
may
be
argued
for
on
the
ground
that
the
deduction/inclusion
scheme
reduces
the
tax
burden
of
broken
families
as
a
whole
in
about
67
per
cent
of
cases
(affidavit
of
Nathalie
Martel,
an
economist
with
the
Personal
Income
Tax
Division
of
the
federal
Department
of
Finance,
February
1,
1994,
paragraph
21)
and
that
the
total
federal
tax
saved
by
separated
or
divorced
couples
in
1991
as
a
result
of
the
income
splitting
generated
by
the
deduction/inclusion
scheme
is
estimated
at
$203
million
(affidavit
of
Nathalie
Martel,
an
economist
with
the
Personal
Income
Tax
Division
of
the
federal
Department
of
Finance,
June
30,
1994).
Although
the
connection
may
seem
somewhat
theoretical
to
an
individual
penalized
by
the
system,
it
cannot
be
said
that
it
is
entirely
irrational
to
assume
that
by
improving
the
financial
situation
of
one
of
the
members
of
the
broken
family,
through
giving
him
a
tax
deduction,
the
situation
of
all
members
of
the
fractured
family
may
also
be
improved.
Since
the
scheme
brings
about
an
immediate
improvement
in
the
financial
situation
of
the
parent
whose
contribution
to
maintaining
the
other
members
of
the
family
is
generally
the
greater,
namely
the
non-custodial
spouse,
it
becomes
difficult
to
argue
that
the
scheme
is
devoid
of
all
logic.
The
fact
that
the
mechanisms
for
dividing
the
tax
saving
are
ineffective
or
even
non-existent
is
deplorable,
but
that
does
not
mean
that
there
is
no
rational
connection
between
the
objective
and
the
means.
(b)
Minimal
impairment
The
onus
is
on
the
party
seeking
to
uphold
the
limitation
to
show
on
a
balance
of
probabilities
that
the
impugned
law
is
a
"reasonable
limit
[which]
can
be
demonstrably
justified
in
a
free
and
democratic
society":
Oakes,
D.E.,
supra,
at
pages
136-37
(D.L.R
225-26);
Edwards
Books,
supra,
at
page
768
(D.L.R.
41);
Black,
supra,
at
page
627
(D.L.R.
347);
Irwin
Toy,
supra,
at
page
986
(D.L.R.
620);
Andrews,
supra,
at
page
153
(D.L.R.
33).
The
question
here
is
whether
the
Crown
has
discharged
this
burden
in
respect
of
the
"minimal
impairment"
component
of
the
section
1
analysis.
In
other
words,
has
the
Crown
demonstrated
on
a
balance
of
probabilities
that
there
were
no
other
reasonable
alternatives
to
the
present
system
that
were
less
intrusive
of
the
right
to
equality
guaranteed
by
the
Charter,
and
by
means
of
which
the
legislative
objective
could
still
have
been
achieved?
A
law
should
not
be
regarded
as
failing
the
minimal
impairment
requirement
simply
because
it
does
not
correspond
exactly
to
the
solution
the
Court
would
have
adopted:
Edwards
Books,
supra,
at
page
795
(D.L.R.
67),
and
Black,
supra,
at
page
627
(D.L.R.
348).
Parliament
does
not
have
to
have
chosen
the
least
intrusive
means
of
all
to
meet
its
objective.
The
fact
that
Parliament
selected
one
of
a
range
of
choices
so
as
to
impair
the
right
or
freedom
protected
by
the
Charter
as
little
as
possible
will
suffice
to
meet
the
minimal
impairment
test:
À.
v.
Chaulk,
[1990]
3
S.C.R.
1303,
[1991]
2
W.W.R.
385,
and
R.
v.
Swain,
[1991]
1
S.C.R.
933,
125
N.R.
1.
In
my
view,
it
is
far
from
clear
that
Parliament
chose
an
alternative
which
reasonably
minimizes
the
impairment
of
the
equality
rights
of
Ms.
Thibaudeau
and
persons
in
her
situation.
A
range
of
alternatives
less
intrusive
of
the
right
to
equality
protected
by
the
Charter
may
be
readily
envisaged:
a
deduction/non-inclusion
scheme;
taxation
of
the
support
in
the
hands
of
the
child;
complete
abolition
of
the
deduction/inclusion
scheme;
replacement
of
the
deduction/inclusion
scheme
by
tax
credits;
an
optional
deduction/inclusion
scheme;
and
a
progressive
deduction/inclusion
scheme.
To
consider
only
two
of
these,
it
appears
that
the
alternatives
of
taxation
in
the
hands
of
the
child
or
an
optional
deduction/inclusion
scheme
would
be
much
less
intrusive
of
the
right
to
equality
guaranteed
by
the
Charter
than
the
method
Parliament
chose,
while
still
achieving
the
legislative
objective.
The
alternative
of
taxation
in
the
hands
of
the
child
offers
a
clear
advantage
in
a
significant
number
of
cases
since
the
income
of
children
is
frequently
below
the
threshold
at
which
a
taxpayer
is
required
to
pay
income
tax
($7,000
federally).
The
objective
of
enabling
separated
families
to
have
more
money
at
their
disposal
to
provide
for
their
needs
could
thus
be
attained
in
a
greater
number
of
cases
without
imposing
on
custodial
parents
a
tax
burden
for
child
support
from
which
they
derive
no
personal
benefit.
An
optional
deduction/inclusion
scheme
also
appears
attractive
in
that
it
would
allow
parents
to
avoid
application
of
the
scheme
if
it
would
have
a
detrimental
effect.
Restricting
the
deduction/inclusion
scheme
to
couples
who
have
concluded
a
specific
agreement
to
that
effect,
would
promote
adjustments
of
child
support
to
offset
the
increased
tax
burden.
Absent
a
specific
agreement
as
to
taxation,
the
rule
of
individual
taxation
would
apply.
The
non-custodial
parent
would
be
taxed
on
his
entire
income,
including
child
support.
The
adverse
tax
impact
and
the
impairment
of
equality
rights
would
thus
be
reduced.
These
alternatives
are
mentioned
only
by
way
of
illustration
and
are
not
intended
as
an
exhaustive
list
of
solutions
that
might
be
considered
by
Parliament
to
attain
its
valid
objectives
while
complying
with
the
requirements
of
the
Charter.
Not
all
are
free
from
problems.
However,
it
must
be
recalled
that
it
is
not
up
to
this
Court
to
"devise
legislation
that
is
constitutionally
valid,
or
to
pass
on
the
validity
of
schemes
which
are
not
directly
before
it,
or
to
consider
what
legislation
might
be
the
most
desirable":
Edwards
Books,
supra,
at
page
783
(D.L.R.
52).
It
is
rather
the
function
of
Parliament
to
consider
the
range
of
available
solutions
in
depth,
to
weigh
the
competing
interests
and
to
arrive
at
the
solution
it
thinks
is
best
within
the
range
of
options
permitted
by
the
Charter.
The
existence
of
a
panoply
of
less-intrusive
alternatives
available
to
Parliament
to
meet
its
objective
of
improving
the
economic
situation
of
the
members
of
broken
families,
leads
me
to
conclude
that
the
deduction/inclusion
scheme
does
not
impair
the
right
to
equality
in
a
restrained
and
minimal
fashion.
It
follows
that
the
inequality
imposed
by
paragraph
56(1
)(b)
cannot
be
justified
under
section
1
of
the
Charter.
Against
this
conclusion,
it
was
argued
that
the
tax
credits
provided
by
the
Act
reduce
the
impairment
to
an
acceptable
minimum
by
attenuating
any
inequality
which
the
inclusion
requirement
may
work
on
the
custodial
parent.
I
accept
that
tax
credits
should
be
considered
under
section
1:
Symes
v.
Canada,
[1993]
4
S.C.R.
695,
[1994]
1
C.T.C.
40,
94
D.T.C.
6001,
and
Tétreault-Gadoury
v.
Canada
(Employment
and
Immigration
Commission),
[1991]
2
S.C.R.
22,
81
D.L.R.
(4th)
358.
However,
like
Garon
J.
in
the
Tax
Court
of
Canada
and
the
majority
in
the
Federal
Court
of
Appeal,
I
cannot
accept
the
argument
that
the
tax
credits
provided
by
the
Act
reduce
the
inequality
to
the
custodial
parent
to
the
required
degree
of
minimal
impairment.
I
note
that
the
tax
credits
for
equivalent
to
married
status
(paragraph
118(1)(b)),
for
dependants
(paragraph
118(1
)(d))
and
for
children
(section
122.2)
essentially
operate
separately
from
the
deduction/inclusion
scheme.
It
is
therefore
difficult
to
argue
that
these
provisions
offset
the
inequality
created
by
the
deduction/inclusion
scheme
since
the
conditions
under
which
the
two
systems
apply
are
not
the
same.
However,
my
principal
objection
to
this
argument
arises
from
the
evidence
presented
at
the
trial.
Quite
apart
from
the
fact
that
the
increase
in
taxable
income
caused
by
the
inclusion
requirement
may
result
in
loss
of
entitlement
to
certain
tax
credits,
Mr.
Drouin’s
testimony
clearly
indicates
that
the
amounts
of
the
tax
credits
involved
are
frequently
insufficient
to
offset
the
additional
tax
burden
resulting
from
the
inclusion
requirement.
After
taking
all
available
tax
credits
into
account,
he
concluded
that
Ms.
Thibaudeau
was
obliged
to
pay
additional
federal
tax
of
$3,705
for
the
1989
taxation
year,
$2,505
of
which
came
out
of
her
own
income
and
resources.
These
considerations
lead
me
to
conclude
that
paragraph
56(1
)(b)
fails
the
minimal
impairment
test.
Other
options
which
are
more
consistent
with
equality
rights
ought
to
have
been
considered
by
Parliament.
While
this
is
sufficient
to
dispose
of
the
case,
I
shall
briefly
comment
on
the
proportionality
of
the
effects
of
the
impugned
legislation.
(c)
Proportionality
of
effects
In
Dagenais
v.
Canadian
Broadcasting
Corp.,
[1994]
3
S.C.R.
835,
120
D.L.R.
(4th)
12,
at
page
889
(D.L.R.
46),
Lamer
C.J.,
writing
for
the
majority,
restated
the
proportionality
of
effects
test
as
follows:
"there
must
be
a
proportionality
between
the
deleterious
effects
of
the
measures
which
are
responsible
for
limiting
the
right
or
freedom
in
question
and
the
objective,
and
there
must
be
a
proportionality
between
the
deleterious
and
the
salutary
effects
of
the
measures”.
[Emphasis
in
original.]
I
am
of
the
view
that
the
proportionality
of
effects
test
is
not
met
in
the
case
at
bar.
As
discussed
earlier,
the
deduction/inclusion
scheme
produces
tax
savings
for
the
broken
family
as
a
whole
in
approximately
70
per
cent
of
cases,
leaving
an
adverse
tax
impact
in
approximately
30
per
cent
of
cases.
Thus,
the
scheme
disadvantages
approximately
30
per
cent
of
the
families
it
affects.
Many
custodial
parents
may
suffer
as
a
consequence
of
this
disadvantage.
In
addition,
they
may
suffer
from
the
added
disadvantage
of
being
required
to
include
child
support
in
their
personal
income
for
tax
purposes.
An
adverse
tax
impact
for
the
custodial
parent
and
the
children
may
thus
occur
in
more
than
30
per
cent
of
cases.
Accepting
that
there
is
no
perfect
system,
it
seems
apparent
that
the
harmful
effects
of
the
deduction/inclusion
scheme
are
disproportionate
to
the
benefits
it
may
produce.
What
is
at
stake
is
nothing
less
than
the
adequacy
of
a
custodial
parent’s
livelihood
and
that
of
the
children
living
with
her.
The
interest
at
stake
is
too
essential
to
permit
us
to
accept
as
proportionate
an
adverse
tax
impact
in
more
than
30
per
cent
of
cases.
The
deduction/inclusion
scheme
exacerbates
the
significant
financial
difficulties
encountered
by
custodial
parents
and
children
upon
the
breakup
of
the
family.
The
evidence
indicates
that
it
is
usually
the
custodial
parent
and
the
children
who
bear
the
brunt
of
the
impoverishment
caused
by
the
breakup
of
the
family
unit
(Canada,
Department
of
Justice,
Bureau
of
Review,
Evaluation
of
the
Divorce
Act-Phase
II:
Monitoring
and
Evaluation,
supra;
Pask
and
McCall,
supra,
at
pages
76-78;
Williams,
supra;
McLindon,
supra;
Eichler,
supra,
at
page
61;
Wishik,
supra;
Weston,
supra;
Weitzman,
supra;
Maclean
and
Eekelaar,
supra;
Canadian
Institute
for
Research
and
the
Steering
Committee,
supra;
and
Chambers,
supra).
One
study
shows
that
in
the
first
year
after
the
divorce,
the
standard
of
living
of
women
and
children
falls
by
73
per
cent
while
that
of
men
increases
by
42
per
cent
(Eichter,
supra,
at
page
61).
Any
attempt
to
break
out
of
this
cycle
of
poverty
is
discouraged
by
the
fact
that
the
higher
the
custodial
parent’s
income,
the
greater
the
disadvantage
suffered
as
a
result
of
the
inclusion
in
her
income
of
child
support.
I
conclude
that
the
requirement
of
proportionality
between
the
deleterious
effects
of
the
scheme
and
the
salutary
consequences
which
it
may
potentially
have
is
not
satisfied.
C.
Conclusion
Although
the
deduction/inclusion
scheme
is
designed
to
improve
the
situation
of
the
family
upon
divorce
or
separation
and
in
many
cases
succeeds
in
achieving
this
objective,
it
does
so
at
the
cost
of
placing
an
unequal
and
unjustifiable
tax
burden
on
the
shoulders
of
custodial
parents
like
Ms.
Thibaudeau.
I
conclude
that
the
requirement
of
paragraph
56(1
)(b)
that
child
support
be
included
in
the
custodial
parent’s
income
infringes
the
right
to
equality
guaranteed
by
the
Charter
and
that
this
infringement
is
not
justified
by
section
1.
1.
Remedy
A
reading
down
of
paragraph
56(1
)(b)
to
exclude
child
support
payments
appears
appropriate.
Since
the
issue
in
this
Court
turned
essentially
on
paragraph
56(1
)(b),
the
remedy
must
be
limited
to
this
provision,
without
ruling
on
the
unconstitutionality
of
the
deduction
provision
in
paragraph
60(b).
This
solution,
while
not
perfect,
is
the
best
available
to
the
Court.
All
available
options
present
difficulties
in
one
respect
or
another.
Limiting
the
remedy
to
paragraph
56(1
)(b)
without
dealing
with
its
immediate
counterpart,
the
deduction
benefit
under
paragraph
60(b)
may
be
seen
as
enshrining
a
misguided
system
which
enhances
inequalities
within
the
couple
itself.
In
a
non-inclusion/deduction
scheme
the
non-custodial
parent
could
continue
to
claim
a
deduction
for
amounts
he
spends
on
child
support.
The
custodial
parent
would
clearly
no
longer
have
to
pay
tax
on
amounts
paid
by
the
non-custodial
parent
for
the
exclusive
benefit
of
the
children,
but
could
not,
unlike
the
non-custodial
parent,
deduct
from
taxable
income
amounts
she
herself
spent
on
support
of
the
children.
A
non-
inclusion/deduction
scheme
also
presents
problems
of
tax
equity
for
united
families
and
may
be
criticized
as
subsidizing
divorce.
Also,
the
probable
effect
of
an
isolated
finding
that
paragraph
56(1
)(b)
is
unconstitutional
is
to
deprive
the
government
of
larger
sums
of
money
than
the
present
deduction/inclusion
scheme:
Schachter
v.
Canada,
[1992]
2
S.C.R.
679,
93
D.L.R.
(4th)
1,
at
page
713
(D.L.R.
24).
Notwithstanding
these
considerations,
I
am
of
the
view
that
the
remedy
in
this
case
must
be
limited
to
paragraph
56(1
)(b).
First,
by
extending
the
finding
of
unconstitutionality
to
paragraph
60(b),
the
Court
would
be
ruling
ultra
petita
since
the
parties
did
not
seek
a
ruling
on
this
provision
and
limited
their
claims
to
paragraph
56(1
)(b).
Second,
paragraph
60(b)
plays
no
part
in
the
computation
of
the
custodial
parent’s
taxable
income
or
assessment.
The
inclusion
requirement
and
deduction
benefit
operate
independently
of
one
another.
Indeed,
I
have
criticized
the
fact
that
there
is
no
connection
between
these
two
mechanisms,
with
the
result
that
one
leads
to
enrichment
of
the
noncustodial
parent,
while
the
other
leads
to
impoverishment
of
the
custodial
parent,
without
the
former
having
any
obligation
to
pass
the
benefits
derived
from
the
system
on
to
the
latter.
The
two
aspects
of
the
deduction/inclusion
scheme
are
therefore
not
intrinsically
related-this
is
one
of
the
scheme’s
problems-and
it
is
not
entirely
incoherent
to
regard
these
two
components
as
independent
when
deciding
on
the
remedy
to
be
granted.
Third,
to
declare
paragraph
60(b)
unconstitutional
would
be
premature.
Like
the
majority
in
the
Federal
Court
of
Appeal,
I
would
emphasize
the
fact
that
the
issue
in
this
Court
related
only
to
the
inclusion
requirement.
Evidence
as
to
paragraph
60(b)
was
not
before
the
Court.
In
these
circumstances,
the
Court
should
not
rule
on
its
constitutionality.
Fourth,
to
declare
paragraph
60(b)
unconstitutional
at
this
point
might
cause
practical
problems.
Persons
paying
child
support,
deprived
of
their
deduction,
might
be
expected
to
apply
to
the
courts
for
a
reduction
of
support
obligations.
It
seems
preferable
in
these
circumstances
to
leave
paragraph
60(b)
in
place
pending
Parliament’s
review
of
the
entire
system.
In
order
to
permit
Parliament
the
necessary
time
to
review
and
amend
the
system,
I
would
suspend
the
effect
of
the
declaration
of
unconstitutionality
for
a
period
of
12
months
from
the
date
of
this
judgment.
"A
delayed
declaration
is
a
serious
matter
from
the
point
of
view
of
the
enforcement
of
the
Charter.
A
delayed
declaration
allows
a
state
of
affairs
which
has
been
found
to
violate
standards
embodied
in
the
Charter
to
persist
for
a
time
despite
the
violation":
Lamer
C.J.,
speaking
for
the
majority
in
Schachter,
supra,
at
page
716
(D.L.R.
26).
A
period
of
delay
nevertheless
seems
to
me
to
be
necessary
here
to
allow
Parliament
to
develop
new
measures
that
will
make
it
possible
to
alleviate
the
economic
problems
created
by
family
breakup,
while
complying
with
the
Charter
and
ensuring
that
the
assistance
directly
benefits
those
whose
situation
is
to
be
improved.
Given
the
circumstances
of
the
present
case
and
the
considerable
legal
battle
waged
by
Ms.
Thibaudeau,
I
would
not
suspend
the
declaration
of
unconstitutionality
as
it
applies
to
her.
2.
Disposition
For
these
reasons
I
would
dismiss
the
appeal
and
answer
the
constitutional
questions
raised
as
follows:
1.
Does
paragraph
56(1
)(b)
of
the
Income
Tax
Act
infringe
the
equality
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms?
Yes,
in
so
far
as
it
applies
to
amounts
paid
between
spouses
or
former
spouses
for
child
support.
2.
If
paragraph
56(1)(b)
of
the
Income
Tax
Act
infringes
the
equality
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms,
is
it
justified
in
the
context
of
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms?
No.
I
would
also
suspend
the
effects
of
this
declaration
of
unconstitutionality
for
a
period
of
12
months,
except
as
regards
the
respondent;
order
the
appellant
to
pay
costs
throughout,
except
costs
relating
to
the
class
action
brought;
and
refer
the
matter
back
to
the
Tax
Court
of
Canada
to
be
decided
in
accordance
with
this
judgment.
Appeal
dismissed.
L’Heureux-Dube
J.:—Although
I
agree
with
the
result
reached
in
the
instant
case
by
McLachlin
J.
as
well
as
with
a
great
part
of
her
analysis,
I
arrive
at
this
conclusion
somewhat
differently,
given
the
section
15
framework
that
I
have
set
out
in
Egan
v.
Canada
(No.
23636).
Accordingly,
I
prefer
to
focus
on
the
group
adversely
affected
by
the
distinction
as
well
as
on
the
nature
of
the
interest
affected,
rather
than
on
the
grounds
of
the
impugned
distinction.
As
in
Miron
v.
Trudel
(No.
22744),
the
following
remarks
apply
the
framework
I
set
out
in
Egan
to
the
facts
of
this
case.
Paragraph
56(1
)(b)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-
71-72,
c.
63)
(the
"Act"),
requires
that
a
person
who
receives
spousal
or
child
support
payments
pursuant
to
a
decree,
order,
judgment
or
written
agreement
include
those
payments
within
his
or
her
taxable
income.
To
some
extent,
it
mirrors
paragraph
60(b)
of
the
Act,
which
permits
the
payor
of
such
sums
to
deduct
these
sums
from
taxable
income.
Together,
these
two
provisions
comprise
what
is
commonly
known
as
the
inclusion/deduction
scheme.
Whereas
the
general
principle
underlying
the
Act
is
that
income
is
taxable
in
the
hands
of
the
person
who
earns
it,
paragraphs
56(1
)(b)
and
60(b)
render
income
for
child
support
taxable
only
in
the
hands
of
the
person
who
spends
it.
The
question
before
this
Court
is
whether
paragraph
56(1
)(b),
the
inclu-
sionary
half
of
the
inclusion/deduction
regime,
violates
subsection
15(1)
of
the
Charter
and,
if
so,
whether
it
can
be
saved
under
section
1.
It
must
be
underlined
at
this
juncture
that
the
present
challenge
to
paragraph
56(1
)(b)
of
the
Act
arises
only
in
respect
of
the
inclusion
of
child
support
payments.
It
is
not
necessary
for
this
Court
to
address
the
constitutionality
of
this
provision
in
relation
to
its
treatment
of
spousal
support
nor,
for
that
matter,
the
constitutionality
of
paragraph
60(b).
A.
Section
15
of
the
Charter
In
Egan,
I
set
out
the
following
factors
that
must
be
established
by
a
rights
claimant
before
the
impugned
distinction
will
be
found
to
be
discriminatory
within
the
meaning
of
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms'.
(1)
there
must
be
a
legislative
distinction;
(2)
this
distinction
must
result
in
a
denial
of
one
of
the
four
equality
rights
on
the
basis
of
the
rights
claimant’s
membership
in
an
identifiable
group;
and
(3)
this
distinction
must
be
"discriminatory"
within
the
meaning
of
section
15.
At
the
outset,
I
feel
it
important
to
underline
a
point
which
attracted
the
unanimous
agreement
of
this
Court
in
Symes
v.
Canada,
[1993]
4
S.C.R.
695,
[1994]
1
C.T.C.
40,
94
D.T.C.
6001.
At
page
753
(C.T.C.
67,
D.T.C.
6021),
lacobucci
J.
underlined
that
the
Act
is
no
less
subject
to
scrutiny
under
section
15
of
the
Charter
than
any
other
statute,
and
that
a
deferential
approach
is
not
appropriate
at
any
stage
earlier
than
the
section
1
analysis.
Inequality
is
inequality
and
discrimination
is
discrimination,
whatever
the
legislative
source.
To
water
down
one’s
analysis
of
a
legislative
distinction
or
burden
merely
because
it
arises
in
a
statute
which
makes
many
other
distinctions
is
antithetical
to
the
broad
and
purposive
approach
to
section
15
of
the
Charter
which
this
Court
has
repeatedly
endorsed.
This
being
said,
I
now
turn
to
each
of
the
three
stages
of
section
15
analysis
enumerated
above.
1.
Is
there
a
legislative
distinction?
Premised
upon
the
assumption
that
the
custodial
spouse
will
always
have
a
lower
income-and
therefore
a
lower
marginal
tax
rate-than
the
non-custodial
spouse,
the
inclusion/deduction
system
is
ostensibly
intended
to
alleviate
the
overall
tax
burden
on
separated
or
divorced
couples
in
order
to
free
up
more
money
for
child
and
spousal
support
obligations.
In
advancing
this
purpose,
paragraph
56(1
)(b)
makes
many
layers
of
distinctions.
It
distinguishes
between
parents
who
are
separated
or
divorced
and
persons
who
are
not.
Within
the
former
group,
it
further
distinguishes
between
persons
who
pay
and
receive
support
payments
"pursuant
to
a
decree,
order
or
judgment...or
pursuant
to
a
written
agreement"
and
those
who
do
not.
Amongst
those
whose
support
payment
arrangement
falls
within
the
definition
given
in
the
Act,
a
further
distinction
is
drawn
between
those
who
receive
child
support
and
those
who
pay
child
support.
These
distinctions
are,
in
many
ways,
inextricable
from
one
another.
It
would
therefore
be
artificial
to
single
out
any
one
distinction
without
looking
to
the
effects
of
the
others.
The
more
important
question,
then,
is
to
decide
whether
this
combination
of
distinctions
has
the
effect
of
imposing
a
benefit
or
burden
unequally
on
the
basis
of
one’s
membership
in
an
identifiable
group.
2.
Do
the
distinctions
result
in
a
denial
of
one
of
the
four
equality
rights
on
the
basis
of
the
rights
claimant’s
membership
in
an
identifiable
group?
At
the
outset,
I
must
emphasize
that
although
the
legislation
purports
to
confer
a
tax
benefit
upon
separated
or
divorced
couples
who
are
parties
to
a
child
support
arrangement,
and
although
Ms.
Thibaudeau
clearly
falls
within
this
group,
I
must
respectfully
disagree
with
my
colleagues
who
conclude
that
the
appropriate
unit
of
analysis
is
therefore
the
couple.
I
am
in
complete
agreement
with
McLachlin
J.
that,
notwithstanding
both
parents’
continuing
mutual
obligation
to
support
the
children
of
the
relationship,
it
is
unrealistic
to
assume
that
they
continue
to
function
as
a
single
unit
even
after
they
have
separated
or
divorced.
Furthermore,
I
note
that
the
Act,
itself,
ceases
to
treat
divorced
couples,
and
separated
couples
who
were
cohabiting,
as
a
single
economic
or
taxation
unit
in
virtually
every
other
respect,
including
such
things
as
contributions
to
spousal
RRSPs
(see,
e.g.,
Interpretation
Bulletin
IT-307R2,
"Registered
Retirement
Savings
Plan
for
Taxpayer’s
Spouse").
Recognizing
that
divorced
or
separated
couples
are
no
longer
a
single
unit
is
merely
acknowledging
a
social
reality.
With
all
due
respect
to
my
colleagues,
I
believe
that
one
should
exercise
extreme
caution
before
defining
one’s
unit
of
comparison
in
such
a
way
as
to
raise
certain
types
of
distinction
above
Charter
scrutiny.
Defining
the
unit
of
analysis
as
the
"couple"
is,
in
my
view,
inconsistent
with
the
purpose
and
spirit
of
section
15.
There
is
no
doubt,
for
instance,
that
an
unequal
burden
arose
in
the
old
Marital
Property
Acts
of
the
19th
century,
under
which,
upon
marriage,
the
wife’s
assets
automatically
became
those
of
the
man.
Yet
if
the
only
unit
of
analysis
were
taken
to
be
the
"couple",
we
would
be
precluded
from
looking
to
the
effects
of
these
provisions
on
each
member
of
the
couple,
and
we
would
have
to
conclude
that
they
did
not
violate
section
15
of
the
Charter.
In
the
instant
case,
although
the
purpose
of
the
impugned
legislation
may
indeed
be
to
confer
net
tax
savings
upon
couples,
it
does
not
follow
that
its
effect
is
experienced
equally
by
both
members
of
the
couple.
When
undertaking
Charter
analysis,
effect
is
just
as
important
as
purpose.
As
such,
the
unequal
effects
of
the
inclusion/deduction
system
must
be
studied.
In
particular,
the
effects
on
separated
or
divorced
custodial
parents
must
be
compared
with
the
effects
on
separated
or
divorced
non-custodial
parents.
According
to
the
government’s
own
figures
for
the
1991
taxation
year,
the
inclusion/deduction
system
permitted
non-custodial
spouses
to
deduct
$661
million
from
their
provincial
and
federal
income
taxes
while
$331
million
in
taxes
were
collected
from
custodial
spouses.
Although
these
figures
demonstrate
a
net
tax
benefit
of
approximately
$330
million
being
conferred
upon
divorced
or
separated
couples,
no
figures
are
provided
regarding
what
percentage
of
these
tax
savings
were
actually
realized
by
custodial
spouses,
or
actually
went
to
benefit
the
children
for
whom
the
support
is
intended.
As
a
logical
point
of
departure
for
our
analysis,
it
is
useful
to
examine
the
topography
of
the
playing
field
that
the
inclusion/deduction
scheme
initially
sets
up,
before
the
redistributive
effects
of
the
family
law
system
are
factored
in.
At
this
first
stage,
the
inclusion/deduction
regime
can
be
said
to
create
a
burden
in
one
sense
and
a
benefit
in
another.
The
burden
is
the
taxation
of
child
support.
By
virtue
of
paragraph
56(1)(b),
this
burden
is
initially
placed
uniquely
on
the
shoulders
of
the
person
in
receipt
of
such
support,
who
is
by
definition
the
custodial
parent.
The
benefit,
on
the
other
hand,
is
the
deduction
of
such
support
from
one’s
taxable
income.
By
virtue
of
paragraph
60(b),
this
benefit
is
initially
uniquely
available
to
the
payor
of
such
support,
who
is
the
non-custodial
parent.
Thus,
the
"playing
field"
initially
created
by
the
inclusion/deduction
regime
imposes
a
tax
burden
uniquely
on
custodial
spouses,
and
confers
a
tax
benefit
uniquely
on
non-custodial
spouses.
My
colleagues
conclude
that
any
difficulties
with
respect
to
the
equitable
division
of
both
the
benefits
and
burdens
of
this
scheme
are
attributable
to,
and
susceptible
to
correction
by,
the
family
law
system,
rather
than
originating
in
the
inclusion/deduction
regime
itself.
They,
therefore,
conclude
that
the
Income
Tax
Act
provisions
that
create
this
net
subsidy
do
not
impose
a
burden
within
the
meaning
of
section
15
of
the
Charter.
While
I
agree
that
the
effects
of
the
family
law
system
are
relevant
to
this
inquiry
because
they
are
incorporated
by
reference
into
the
inclusion/deduction
regime,
I
respectfully
disagree
with
their
conclusion
for
two
reasons.
First,
on
both
a
practical
and
theoretical
level,
I
do
not
believe
that
the
family
law
system
is
capable
of
remedying
the
initial
unequal
distribution
effectuated
by
the
inclusion/deduction
system.
Second,
even
if
the
family
law
system
were
up
to
the
task,
I
believe
that
it
would
only
address
the
symptoms
of
the
inequality,
rather
than
its
source.
(a)
The
role
of
the
family
law
system
In
order
to
understand
fully
the
interaction
between
the
family
law
system
and
the
inclusion/deduction
regime,
as
well
as
the
limits
of
the
family
law’s
capacity
to
redistribute
equitably
the
burdens
and
benefits
under
that
regime,
it
is
necessary
to
isolate
two
different
dynamics.
The
first
dynamic
is
the
"gross-up".
When
the
custodial
spouse
receives
income
in
the
form
of
child
support,
she
must
add
these
receipts
to
her
income
and
pay
tax
on
them.
Since
any
tax
paid
on
child
support
will
reduce
the
quantum
of
that
support
by
the
amount
of
the
tax,
it
is
necessary
for
a
judge
to
"gross
up"
the
support
award
by
the
amount
of
tax
payable
in
order
that
the
financial
needs
of
the
child
may
be
fully
met.
Any
"gross-up"
that
compensates
for
less
than
the
entire
amount
of
the
tax
payable
on
the
child
support
will
reduce
the
effective
value
of
the
child
support,
and
will,
therefore,
constitute
an
additional
burden
on
the
custodial
spouse
which
is
not
shared
by
the
non-custodial
spouse.
Furthermore,
we
must
recall
that
the
custodial
spouse
is
already
taxable
on
all
of
her
other
income,
including
that
part
of
her
own
financial
contribution
to
the
children’s
financial
needs.
Child
support
payments
represent
the
non-custodial
spouse
’s
fair
share
of
the
financial
needs
of
the
children.
Thus,
any
failure
to
"gross
up"
child
support
fully
for
tax
payable
on
the
child
support
payments
results
in
the
custodial
spouse
paying
some
of
the
non-custodial
spouse's
tax,
since
that
tax
relates
uniquely
to
the
non-custodial
spouse's
portion
of
the
child
support
obligation.
The
second
dynamic
is
the
"upside-down
subsidy".
The
value
of
the
tax
deduction
of
child
support
to
the
payor
depends
upon
the
payor’s
marginal
tax
rate.
Similarly,
the
cost
of
inclusion
in
taxable
income
of
child
support
depends
upon
the
recipient’s
marginal
tax
rate.
Where
the
marginal
tax
rate
of
the
payor
is
higher
than
the
marginal
tax
rate
of
the
recipient,
then
net
tax
savings
ensue
to
the
couple.
The
fact
that
a
deduction
from
revenues
is
worth
more
to
a
person
with
a
high
income
than
to
a
person
with
a
low
income
leads
to
what
is
often
referred
to
as
an
"upside-down
subsidy".
The
effect
of
the
inclusion/deduction
system
is
to
confer
the
entire
benefit
of
this
"upside-down
subsidy"
on
the
non-
custodial
spouse.
This
benefit
will
only
be
shared
with
the
custodial
spouse
or
with
the
children
in
the
event
that
a
conscious
redistribution
is
made
by
the
judge
fixing
the
quantum
of
child
support,
or
by
the
good
graces
of
the
payor.
Let
us
now
examine
how
the
family
law
system
addresses
and
compensates
for
these
two
types
of
dynamics,
beginning
with
the
facts
of
the
present
case.
At
the
original
hearing,
although
the
judge
assessed
the
total
needs
of
the
children
at
between
$900
and
$1,000
per
month,
he
awarded
child
support,
including
"gross-up"
of
only
$1150.
Although
the
judgment
is
unclear
on
this
point,
it
would
appear
that
the
judge
intended
the
financial
needs
of
the
children
to
be
met
entirely
by
Mr.
Chainé,
in
light
of
the
fact
that
his
projected
income
as
a
prosthodontist
was
significantly
higher
than
that
of
Ms.
Thibaudeau.
This
assumption,
which
was
made
by
Ms.
Thibaudeau’s
expert
before
the
tax
court,
was
in
any
event
not
challenged
by
the
government.
That
expert
estimated
that
the
gross-up
awarded
to
Ms.
Thibaudeau
underestimated
the
additional
tax
liability
attributable
to
the
child
support
payments
by
over
$2,500
per
year.
Thus,
the
family
law
system
undercompensated
her
significantly
for
the
burden
flowing
from
paragraph
56(1
)(b).
It
goes
without
saying,
of
course,
that
she
also
did
not
share
in
the
"upside-down
subsidy"
enjoyed
uniquely
by
Mr.
Chainé
by
virtue
of
paragraph
60(b)
of
the
Act.
Thus,
although
Ms.
Thibaudeau
and
Mr.
Chainé
fell
within
the
67
per
cent
of
couples
that
the
government
claims
benefit
as
"couples"
from
the
inclusion/deduction
system,
the
regime
in
practice
not
only
uniquely
disadvantaged
Ms.
Thibaudeau
by
cutting
into
the
money
she
had
available
for
the
children,
but
also
uniquely
enriched
Mr.
Chainé
to
the
extent
that
he
saved
tax
because
his
marginal
tax
rate
would
have
been
higher
than
that
of
Ms.
Thibaudeau.
Ironically,
the
trial
judge
who
fixed
the
child
support
award
recognized
that
a
disproportionate
percentage
of
the
financial
burden
was
being
imposed
upon
Ms.
Thibaudeau
as
a
result
of
the
inclusion/deduction
regime
(Sup.
Ct.
Mtl.,
No.
500-12-151837-865,
December
1,
1987,
at
page
15):
When
we
consider
the
tax
impact
on
the
payer
and
on
the
receiver
of
alimony
payments
like
those
under
consideration
here
(i.e.,
a
real
cost
of
about
50
per
cent
for
the
payer
and
an
additional
real
receipt
by
the
recipient
in
a
similar
proportion
only),
it
appears
to
be
fair
and
equitable
to
continue
the
alimony
payable
for
the
children
alone
at
$1,150
per
month
for
the
moment;
in
view
of
the
tax
consequences,
that
amount
will
compel
the
applicant
to
contribute
to
the
financial
support
of
the
children,
in
addition
to
her
on-going
personal
care
of
them,
in
a
proportion
which
is
probably
higher
than
a
simple
ratio
of
the
parties’
income
would
impose
on
her.
[Emphasis
added;
translation.]
It
is,
therefore,
absolutely
indisputable
that
Ms.
Thibaudeau
suffered
a
significant
inequality.
The
question
then
becomes,
is
she
simply
an
individual
who
fell
through
the
cracks
of
an
otherwise
equitable
system,
or
is
the
system
itself
generally
unequal
to
custodial
parents
as
a
group?
In
my
view,
the
latter
view
is
more
reflective
of
reality.
Important
systemic
factors
preclude
the
family
law
system
from
properly
filling
the
lacuna
left
by
the
inclusion/deduction
provisions
of
the
Income
Tax
Act.
To
begin
with,
the
objective
of
the
inclusion/deduction
scheme
is,
in
some
respects,
substantially
at
odds
with
important
facets
of
the
family
law
system.
While
the
family
law
system,
and
society
generally,
encourages
custodial
parents
to
seek
out
additional
sources
of
income
in
a
quest
for
self-sufficiency,
it
discourages
the
frequent
applications
for
variation
of
the
original
support
order
that
may
be
necessary
in
order
to
ensure
a
constant
and
complete
"gross-up".
Recall,
however,
that
whenever
the
gross-up
is
less
than
perfect,
the
custodial
spouse
is
essentially
paying
tax
on
the
non-custodial
spouse’s
fair
share
of
the
child
support
responsibilities.
In
addition
to
the
fact
that
success
is
far
from
guaranteed
in
variation
proceedings,
the
costs
alone
of
such
court
actions
may
easily
outweigh
the
benefits
of
the
additional
gross-up,
and
may
thereby
act
as
a
significant
disincentive
to
custodial
parents
who
are
shouldering
more
than
their
fair
share
of
the
tax
burden
of
child
support.
The
process
of
applying
for
and
successfully
obtaining
such
variations
may
be
complicated
by
the
fact
that
judges,
who
set
original
support
orders,
frequently
fail
to
provide
a
precise
financial
breakdown
so
that
others
will
know
how,
or
whether,
they
calculated
the
appropriate
gross-
up
for
taxes.
The
human
elements
at
work
also
cannot
be
ignored.
A
custodial
spouse
may
quite
reasonably
fear
that
seeking
additional
gross-ups
may
antagonize
the
non-custodial
parent.
Alternatively,
especially
if
the
relationship
between
the
parents
is
not
good,
she
may
prefer
greater
poverty
than
suffering
the
indignity
of
having
to
ask
for
more
money
for
an
adequate
gross-up,
even
though
that
money
is
rightfully
hers
(or
the
children’s).
To
recapitulate,
the
custodial
parent
striving
to
become
self-sufficient
must
wage
an
unremitting
and
costly
battle,
both
emotionally
and
in
the
family
law
system,
to
avoid
absorbing
personally
part
of
the
non-custodial
parent’s
tax
liabilities
on
his
fair
share
of
the
child
support
obligation.
At
the
same
time,
the
non-custodial
parent
who
pays
child
support
will
generally
and
effortlessly
receive
the
full
income
tax
benefit
of
these
payments,
featuring
the
full
"upside-down
subsidy"
as
well
as
the
benefits
of
whatever
portion
of
the
gross-up
which
the
custodial
spouse,
for
whatever
reason,
has
had
to
absorb.
Moreover,
according
to
the
government’s
own
figures,
the
inclusion/deduction
regime
acts
to
the
net
detriment
of
the
"couple"
in
29
per
cent
of
all
cases.
Although
the
loss
of
tax
credits
may
play
some
role
in
this
phenomenon,
this
situation
generally
arises
in
circumstances
where
the
marginal
tax
rate
of
the
payor
is
lower
than
that
of
the
recipient.
The
following
extract
from
E.
B.
Zweibel
and
R.
Shillington,
Child
Support
Policy:
Income
Tax
Treatment
and
Child
Support
Guidelines
(1993),
sets
out
(at
page
17)
an
important
problem
that
may
arise
in
such
circumstances:
Family
law
determines
child
support
based
on
the
children’s
needs
and
the
parent’s
relative
abilities
to
meet
those
needs.
In
some
cases,
the
child
support
is
then
adjusted
for
income
tax.
When
the
custodial
mother’s
tax
liability
exceeds
the
father’s
tax
savings,
the
tax
adjustment
becomes
more
problematic
and
less
likely.
The
father’s
tax
savings
can
no
longer
be
used
to
persuade
him
to
pay
a
fully
grossed-up
award.
If
the
father
indemnifies
the
mother
for
her
tax
liability,
the
effect
on
his
disposable
income
is
greater
than
he
anticipated
and
arguably
greater
than
he
originally
agreed
to.
But,
if
the
support
payment
is
not
fully
grossed
up,
then
the
effective
value
of
the
child
support
payment
is
considerably
diminished.
The
custodial
mother
receives
less
child
support
than
she
originally
anticipated
and
is
left
to
make
up
any
shortfall.
[Emphasis
added.]
In
such
circumstances,
although
the
non-custodial
parent
does
not
benefit
from
any
"upside-down
subsidy",
the
custodial
spouse
will,
nonetheless,
experience
an
unequal
burden
whenever
the
"gross-up"
is
not
fully
compensated
for.
Zweibel
and
Shillington
go
on
to
observe
that
even
where
the
custodial
parent’s
marginal
tax
rate
is
lower
than
that
of
the
non-custodial
parent,
such
that
the
"couple"
as
a
whole
will
benefit,
many
factors
exist
to
prevent
the
family
law
system,
as
a
practical
matter,
from
ensuring
that
this
benefit
will
be
divided
equitably
(at
page
17):
Under
the
right
circumstances,
the
deduction/inclusion
provisions
can
provide
a
beneficial
subsidy
to
separated
and
divorced
families.
The
payor’s
tax
savings
must
exceed
the
recipient’s
tax
liability.
The
payor
and
recipient
must
have
a
common
goal
of
increasing
the
support
available
for
the
children
and
they
must
be
assisted
by
accountants
and
lawyers.
However,
circumstances
are
not
always
right....
The
current
policy...ignores
the
reality
that
child
support
is
a
contentious
issue
and
that
non-custodial
fathers
seeking
to
minimize
their
payments
may
not
readily
agree
to
either
a
gross-up
or
to
a
further
sharing
of
any
tax
savings
above
the
gross-up.
The
Finance
Department's
rationale
also
ignores
the
number
of
persons
who
settle
their
child
support
arrangements
on
their
own,
without
the
assistance
of
lawyers
or
accountants,
the
number
of
lawyers
and
judges
who
rely
on
rough
estimates
and
the
number
of
cases
where,
despite
the
custodial
mother’s
lawyer’s
careful
tax
calculations,
the
"glass
ceiling"
moves
in
to
reduce
the
award.
[Emphasis
added.]
These
considerations
lead
me
to
conclude
that
the
unequal
outcome
experienced
by
Ms.
Thibaudeau
is,
and
will
continue
to
be,
more
representative
than
exceptional,
even
amongst
the
67
per
cent
of
"couples"
who,
according
to
the
government’s
figures,
benefit
as
a
whole
from
the
inclusion/deduction
regime.
See,
for
example,
Schaff
v.
Canada,
[1993]
2
C.T.C.
2695
(T.C.C.).
In
my
respectful
view,
it
is,
therefore,
virtually
undeniable
that
the
family
law
system
is,
as
a
practical
matter,
incapable
of
addressing
to
any
meaningful
extent
the
inequalities
flowing
from
the
burden
imposed
upon
custodial
spouses
of
an
imperfect
"gross-up",
as
well
as
from
the
benefits
accruing
to
non-custodial
spouses
as
a
result
of
the
"upside-down
subsidy".
(b)
Of
sources
and
symptoms
The
appellant
points
out
that
computer
programs
are
now
becoming
more
readily
available,
to
assist
couples
in
dividing
equitably
the
tax
obligations
flowing
from
the
inclusion/deduction
regime.
Although
I
have
serious
reservations
about
assuming
that
such
software,
and
the
expertise
to
use
it,
will
be
available
in
all
cases,
or
even
a
majority
of
cases,
I
am
willing
to
assume
for
the
sake
of
argument
that,
notwithstanding
the
many
impediments
listed
above,
it
would
be
possible
for
the
family
law
system
to
take
the
tax
consequences
of
the
inclusion/deduction
system
perfectly
into
account.
I
shall
now
examine
how,
even
in
such
a
rarified
environment,
the
family
law
system
still
could
not
completely
counteract
the
unequal
playing
field
established
by
the
inclusion/deduction
regime
under
two
types
of
scenarios
which,
in
my
view,
are
not
at
all
uncommon.
The
first
scenario
arises
in
circumstances
where
the
non-custodial
parent
has
a
low
income
and
where
the
custodial
parent
is,
as
a
result
of
the
inclusion
of
the
child
support
payments
in
her
income,
in
a
higher
marginal
tax
bracket.
We
must
recall
that
although
the
quantum
of
child
support
is
primarily
determined
according
to
the
needs
of
the
children,
it
is
necessarily
constrained
by
the
means
of
the
parties.
A
full
gross-up
to
account
for
tax
payable
on
needed
child
support
will
not
be
possible
when
payment
of
this
tax
liability,
at
the
marginal
rate
of
the
custodial
spouse,
would
bring
the
non-custodial
parent
below
a
minimal
standard
of
living.
In
such
circumstances,
a
court
cannot
gross
up
the
award
fully
for
tax
consequences,
and
the
custodial
spouse
will
have
to
absorb
that
portion
of
the
tax
burden
created
by
the
inclusion/deduction
scheme
that
the
non
custodial
spouse
cannot
pay.
In
other
words,
notwithstanding
all
the
computer
software
in
the
world,
the
custodial
spouse
in
such
situations
will
have
to
pay
tax
on
money
intended
to
fulfil
the
non-custodial
spouse’s
child
support
obligation.
The
second
type
of
scenario
arises
in
circumstances
involving
high
income
non-custodial
parents.
Where
the
marginal
tax
rate
of
the
parent
receiving
child
support
is
lower
than
that
of
the
payor,
and
where
the
payor’s
income
is
sufficiently
high
that
the
reasonable
needs
of
the
children
are
already
fully
met
by
child
support,
then
the
family
law
system
has
no
incentive
or
established
mechanism
to
reapportion
the
"upsidedown
subsidy"
enjoyed
uniquely
by
the
high
income
payor
as
a
result
of
the
difference
between
his
marginal
tax
rate
and
that
of
the
custodial
parent.
As
a
result,
the
inclusion/deduction
regime
confers
a
benefit
on
that
non-custodial
parent
which
is
in
no
way
shared
by
the
custodial
spouse.
Essentially,
it
gives
to
the
non-custodial
spouse
money
which
is
not
needed
for
child
support.
This
type
of
situation
will
arise,
I
suspect,
with
some
frequency,
since
it
occurs
whenever
the
amount
of
the
"upside-down
subsidy"
to
the
payor
exceeds
any
additional
contribution
required
to
accommodate
the
children’s
reasonable
needs.
On
every
such
occasion,
the
non-custodial
spouse
will
be
uniquely
rewarded
by
the
existing
tax
system
and
the
custodial
spouse
will
be
left
out
in
the
cold.
To
summarize,
even
if
the
family
law
system
were
to
operate
perfectly,
the
net
effect
of
the
inclusion/deduction
regime
is
to
tax
money
away
from
custodial
spouses
whose
spouses
are
in
a
lower
income
tax
bracket
than
they
are
and,
effectively,
to
transfer
it
into
the
hands
of
high
income
non-custodial
spouses
who
benefit
from
a
tax
reduction
that
is
not
necessary
to
meet
the
reasonable
needs
of
the
children.
Only
in
the
presumably
rare
circumstance
where
the
child
support
payments
are
fully
grossed
up,
the
reasonable
needs
of
the
children
are
fully
met,
and
the
custodial
parent
is
in
a
higher
tax
bracket
than
the
non-
custodial
parent
does
the
existing
system
actually
have
the
potential
to
disadvantage
the
non-custodial
parent.
A
denial
of
equality
does
not
necessarily
require
that
all
members
of
a
group
be
adversely
affected
by
the
distinction.
It
suffices
that
a
particular
group
is
significantly
more
likely
to
suffer
an
adverse
effect
as
a
result
of
a
legislative
distinction
than
any
other
group.
Applying
that
principle
to
the
present
context,
I
am
satisfied
that
the
inclusion/deduction
regime
is,
on
the
whole,
very
likely
to
disadvantage
custodial
spouses
and,
concomitantly,
very
likely
to
advantage
non-custodial
spouses.
The
converse
will
only
arise
in
rare
circumstances.
As
such,
I
am
satisfied
that
the
regime
denies
custodial
spouses
the
equal
benefit
of
the
law.
That
this
inequality
stems
from
the
Income
Tax
Act
rather
than
from
the
family
law
system
might
perhaps
be
more
clearly
illustrated
with
a
simple
hypothetical.
Let
us
suppose
that,
in
a
new
initiative
designed
to
respond
to
the
high
costs
of
maintaining
separate
households,
the
government
decided
to
provide
a
net
subsidy
of
$1,000
to
all
separated
couples
with
children
in
order
to
help
them
meet
their
childrens’
financial
needs.
Let
us
further
suppose
that
this
$1,000
net
subsidy
was
accomplished
by
giving
$2,000
to
the
non-custodial
spouse
and
by
clawing
back
$1,000
in
tax
from
the
custodial
spouse.
Finally,
let
us
assume
that
although
the
new
program
provides
that
the
custodial
spouse
may
attempt
to
claim
his
or
her
rightful
share
of
the
net
subsidy
via
existing
procedures
within
the
family
law
system,
no
formal
mechanism
is
implemented
to
ensure
the
equal
division
of
these
additional
benefits
and
liabilities.
Does
such
a
program
confer
an
advantage
upon
non-custodial
spouses
and
a
disadvantage
upon
custodial
spouses?
Does
it
create
an
unequal
burden
or
benefit?
In
my
view,
it
undeniably
does.
It
is
no
answer
for
the
government
to
say
that
the
program
confers
a
net
benefit
and
that
the
only
inequality
is
that
which
flows
from
the
imperfect
operation
of
the
family
law
system,
which
should
theoretically
take
those
benefits
and
liabilities
completely
into
account.
To
give
credence
to
such
an
argument
is
to
confuse
the
source
of
the
inequality,
which
is
attributable
to
the
government
program,
with
the
perpetuation
of
the
inequality,
which
is
attributable
to
the
family
law
system.
Alternatively,
let
us
suppose
that
our
hypothetical
government
program
did,
in
fact,
incorporate
an
express
mechanism
to
redistribute
this
net
subsidy
appropriately
between
custodial
and
non-custodial
parents,
but
that
this
mechanism
was
poorly
tailored
to
the
task,
thereby
leading
to
ineffective
and
incomplete
division
of
the
benefits
and
burdens
flowing
from
the
government
program.
Given
that
the
source
of
the
inequality
actually
lies
in
the
initial
distribution
of
benefits
and
burdens
within
the
program
itself,
attacking
the
constitutionality
of
the
redistribution
mechanism
may
very
well
be
addressing
the
problem
at
the
wrong
end.
Although
section
15
of
the
Charter
does
not
impose
upon
governments
the
obligation
to
take
positive
actions
to
remedy
the
symptoms
of
systemic
inequality,
it
does
require
that
the
government
not
be
the
source
of
further
inequality.
Such
a
scheme,
in
my
view,
would
constitute
a
source
of
further
inequality.
The
inclusion/deduction
system
is
obviously
considerably
more
complex
than
the
simplistic
examples
given
above.
Though
its
system
of
tax
liabilities
and
benefits
is
more
masked
and
indirect,
and
though
it
affects
different
people
differently,
I
believe
that,
at
the
end
of
the
day,
its
effect
on
custodial
and
non-custodial
parents
is
substantially
the
same
as
that
in
my
hypothetical
(E.
B.
Zweibel,
"Thibaudeau
v.
R.:
Constitutional
Challenge
to
the
Taxation
of
Child
Support
Payments"
(1994),
4
N.J.C.L.
305,
at
page
342):
The
inclusion/deduction
system
starts
by
producing
a
tax
savings,
a
"win",
for
the
paying
non-custodial
parent
and
a
tax
increase,
a
"loss"
of
resources,
for
the
custodial
parent,
and
then
does
nothing
to
rebalance
the
overall
picture
to
produce
the
expected
higher
support
payments
or
"win"
for
the
children.
Rather
than
ensure
a
higher
support
payment
from
an
overall
tax
savings,
the
system
increases
the
vulnerability
of
the
custodial
parent,
who
must
now
bargain
for
the
income
tax
gross-up
in
order
to
protect
the
effective
value
of
the
child
support
payment.
[Emphasis
added.
I
A
system
that
materially
increases
the
vulnerability
of
a
particular
group
imposes
a
burden
on
that
group
which
violates
one
of
the
four
equality
rights
under
section
15.
With
respect,
I
believe
that
my
colleagues
fail
to
take
this
consideration
adequately
into
account.
An
analysis
that
looks
only
to
whether
actual
harm
has
been
suffered
is
too
narrow,
and
is
inconsistent
with
the
role
that
section
15
of
the
Charter
is
meant
to
play.
For
these
reasons,
I
am
satisfied
that
the
inclusion/deduction
regime
is
the
source
of
an
unequal
distribution
of
tax
benefits
and
burdens,
and
that
it
has
the
significant
potential
to
adversely
affect
separated
or
divorced
custodial
parents.
As
a
result,
this
scheme
both
imposes
upon
separated
or
divorced
custodial
parents
an
unequal
burden
of
the
law
and
denies
them
the
equal
benefit
of
the
law.
The
fact
that
a
distinction
has
been
found
to
deny
a
person
equal
benefit
of
the
law
on
the
basis
of
their
membership
in
an
identifiable
group
does
not
necessarily
mean
that
it
violates
the
equality
guarantees
in
the
Charter.
It
remains
for
the
rights
claimant
to
demonstrate
that
the
impugned
distinction
is
discriminatory
within
the
sense
of
section
15
of
the
Charter.
3.
Is
the
impugned
distinction
discriminatory?
In
Egan,
supra,
I
noted
that
a
distinction
will
be
discriminatory
within
the
meaning
of
section
15
where
it
is
capable
of
either
promoting
or
perpetuating
the
view
that
the
individual
adversely
affected
by
this
distinction
is
less
capable,
or
less
worthy
of
recognition
or
value
as
a
human
being
or
as
a
member
of
Canadian
society,
equally
deserving
of
concern,
respect,
and
consideration.
I
noted,
as
well,
that
this
examination
should
be
undertaken
from
a
subjective-
objective
perspective.
In
order
to
arrive
at
the
above
determination
by
a
principled
means,
I
found
it
highly
instructive
to
assess
the
discriminatory
impact
of
the
impugned
legislative
distinction
by
studying
two
categories
of
factors:
the
nature
of
the
group
adversely
affected
by
the
distinction,
and
the
nature
of
the
interest
adversely
affected
by
the
distinction.
(a)
The
nature
of
the
affected
group
As
noted
earlier,
the
group
that
is
relevant
to
this
inquiry
is
that
of
separated
or
divorced
custodial
parentparagraph
Separated
or
divorced
custodial
parents
have
suffered,
and
continue
to
suffer,
considerable
disadvantage
in
our
society.
Although
the
sources
of
this
disadvantage
are
perhaps
now
less
the
result
of
direct
social
prejudices
than
may
once
have
been
the
case,
there
is
no
denying
the
fact
that,
as
McLachlin
J.
points
out
and
as
I
underlined
in
Willick
v.
Willick,
[1994]
3
S.C.R.
670,
119
D.L.R.
(4th)
405,
the
breakup
of
relationships
involving
children
usually
marks
the
beginning
of
a
precipitous
descent
into
poverty
for
a
significant
number
of
custodial
parents
and
their
children.
On
the
whole,
moreover,
this
group
is
politically
weak,
economically
vulnerable,
and
socially
disempowered.
Another
equally
relevant
characteristic
of
the
group
of
separated
or
divorced
custodial
parents
is
that,
although
a
small
percentage
of
separated
or
divorced
custodial
spouses
are
men,
the
vast
majority
are
women.
As
Professor
Zweibel
notes
in
"Thibaudeau
v.
R.:
Constitutional
Challenge
to
the
Taxation
of
Child
Support
Payments",
supra,
at
page
334:
[Separated
custodial
mothers
share
as
common
characteristics
the
cumulative
effects
of
disproportionate
past
and
present
child-rearing
responsibilities,
pregnancy
and
child-related
workforce
disruptions,
wage
and
job
discrimination,
among
other
historical
sex-linked
disadvantages.
These
people’s
life
situations
must
be
taken
into
account
when
contemplating
the
effects
of
the
impugned
distinction
on
the
group
of
separated
or
divorced
custodial
parents
as
a
whole.
Finally,
it
is
not
without
significance
that
the
decision
to
divorce
or
to
separate
after
a
relationship
of
some
permanence
is
generally
extremely
traumatic
to
the
parties
involved.
It
is
both
difficult
and
intensely
personal.
In
some
cases,
moreover,
it
represents
the
only
possible
escape
from
a
relationship
that
may
be
either
physically
or
psychologically
abusive.
Ultimately,
whatever
the
reason,
it
is
a
decision
that
is
rarely
undertaken
lightly.
I
believe
that
the
same
can
generally
be
said
about
the
decision
to
take
custody
of
the
children
of
the
relationship.
I
am
satisfied
that
a
distinction
that
adversely
affects
an
individual
on
the
basis
that
he
or
she
is
a
separated
or
divorced
custodial
spouse
is
certainly
capable
of
touching
upon
some
very
essential
aspects
of
personal
self-worth
and
dignity.
If
one
were
to
imagine
this
group’s
defining
characteristics
along
a
spectrum
which
ranged
from
the
wholly
immutable
to
the
strictly
meritocratic
or
mutable,
I
would
place
this
group
far
nearer
the
former
than
the
latter.
For
these
reasons,
I
conclude
that
separated
or
divorced
custodial
spouses
are,
on
the
whole,
a
highly
socially
vulnerable
group,
bound
together
by
traits
that
are
very
personal,
though
not
necessarily
wholly
immutable.
Adverse
legislative
distinctions
on
the
basis
of
membership
in
this
group
are
therefore
very
likely
to
be
reasonably
perceived
to
have
a
discriminatory
impact
by
members
of
this
group.
(b)
The
nature
of
the
affected
interest
The
interest
most
directly
and
adversely
affected
by
the
impugned
distinction
is
the
economic
situation
of
separated
or
divorced
custodial
parents
and
their
children
over
the
short
and
medium
term.
Though
one
cannot
speak
of
this
interest
as
having
any
independent
constitutional
importance
or,
indeed,
as
relating
to
any
fundamental
social
institution,
I
would
venture
to
say
that
the
economic
well-being
of
family
units,
whatever
their
form,
is
an
important
societal
interest.
Although
subsistence
will
always
be
possible,
the
impugned
distinction
may
visit
significant
economic
hardship
upon
the
affected
group.
More
importantly,
any
failure
to
"gross
up"
completely
will
lessen
the
amount
of
money
available
to
respond
to
the
children’s
acknowledged
needs.
This
shortfall
must
be
made
up
by
the
custodial
spouse.
Failure
to
share
equitably
the
tax
consequences
of
child
support
payments
will
therefore
negatively
affect
the
standard
of
living
of
both
the
custodial
spouse
and
the
children.
In
the
instant
case,
for
instance,
the
uncompensated
tax
consequences
of
the
child
support
payments
imposed
an
additional
tax
liability
of
over
$2,500
per
year
on
Ms.
Thibaudeau.
In
addition
to
being
liable
for
tax
on
her
own
financial
contributions
to
the
children’s
needs,
she,
therefore,
paid
$2,500
of
tax
on
Mr.
Chaîné’s
share
of
the
financial
responsibility
for
the
children.
This
sum
represented
almost
20
per
cent
of
her
total
child
support
receipts
for
the
year.
Given
that
certain
costs
such
as
rent
and
utilities
are
generally
fixed,
a
20
per
cent
decrease
in
total
income
available
to
meet
the
reasonable
needs
of
the
children
magnifies
into
an
even
larger
decrease
in
disposable
income
available
to
meet
those
needs.
At
such
low
levels
of
income,
it
follows
that
the
economic
consequences
of
paragraph
56(1
)(b)
can
be
significant
indeed.
In
all
fairness,
it
is
equally
worth
noting
that
the
impugned
distinction
does
not
consist
of
a
complete
exclusion
or
non-recognition
of
the
interests
of
separated
or
divorced
custodial
parents.
It
may,
indeed,
benefit
some
custodial
parents,
by
making
more
income
available
for
the
needs
of
the
children
than
would
otherwise
be
possible.
The
fact
remains,
however,
that
this
distinction
is
an
important
source
and
perpetuator
of
inequality
to
a
very
significant
number
of
other
members
of
this
group.
I
would,
therefore,
conclude
that
the
interest
adversely
affected
by
the
impugned
distinction
is
of
some
societal
importance,
and
that
the
economic
consequences
generally
visited
upon
members
of
the
group
affected
may
be
significant.
At
the
same
time,
I
note
that,
in
my
respectful
view,
an
invidious
metamessage
flows
from
the
manner
in
which
this
net
tax
benefit
is
administered-it
initially
imposes
an
additional
financial
and
administrative
burden
upon
those
who
are
generally
less
able
to
shoulder
that
load,
and
confers
an
unconditional
benefit
upon
non-custodial
spouses
under
circumstances
which
are
predisposed
to
enriching
them
at
the
expense
of
the
custodial
spouse.
In
sum,
having
regard
to
the
vulnerability
of
the
group
affected,
the
importance
of
the
interest
affected,
and
the
extent
to
which
that
interest
is
affected
on
the
whole
of
the
circumstances,
I
am
satisfied
that
the
distinctions
drawn
in
the
inclusion/deduction
scheme,
and,
in
particular,
in
paragraph
56(1
)(b),
are
reasonably
capable
of
having
a
material
discriminatory
impact
on
separated
or
divorced
custodial
parents.
The
fact
that
some
isolated
individuals
within
this
group
may
not
be
adversely
affected
does
not
alter
or
in
any
way
undermine
the
general
validity
of
this
conclusion.
As
such,
I
conclude
that
the
legislation
is
capable
of
either
promoting
or
perpetuating
the
view
that
separated
custodial
parents
are
less
capable,
or
less
worthy
of
recognition
or
value
as
human
beings
or
as
members
of
Canadian
society,
equally
deserving
of
concern,
respect,
and
consideration.
I,
therefore,
find
paragraph
56(1
)(b
of
the
Act
to
violate
subsection
15(1)
of
the
Charter.
It
remains
to
be
seen
whether
this
distinction
can
be
justified
as
relevant
to
a
proportionate
extent
to
a
pressing
and
substantial
objective.
B.
Section
1
of
the
Charter
The
inclusion/deduction
regime
may
originally
have
been
passed
with
a
view
to
accommodating
the
financial
burdens
borne
by
many
payor
spouses
who
started
second
families.
Notwithstanding
this
fact,
I
am
willing
to
accept
the
government’s
argument
that
the
modern
purpose
of
the
inclusion/deduction
regime
is
to
place
more
money
in
the
hands
of
the
separated
or
divorced
’’couple"
for
the
purposes
of
raising
the
level
of
child
support
which
the
parents
can
afford.
The
intended
beneficiaries
of
the
scheme
are,
therefore,
the
children.
I
accept
that
this
objective
is
pressing
and
substantial.
There
is
no
doubt
in
my
mind
that
the
state
can
legitimately
construct
a
taxation
policy
that
seeks
to
mitigate
the
economic
consequences
of
divorce
or
separation.
The
real
question
is
whether
the
present
vehicle,
the
inclusion/deduction
system
comprising
paragraphs
56(1
)(b)
and
60(b)
of
the
Act,
achieves
this
goal
in
a
manner
that
is
at
all
proportionate.
In
my
view,
it
does
not.
By
the
government’s
own
figures,
the
inclusion/deduction
system
requires
separated
or
divorced
"couples"
to
pay
more
tax
in
almost
30
per
cent
of
all
cases.
However,
almost
70
per
cent
of
divorced
or
separated
"couples"
appear
to
enjoy
a
net
tax
benefit
from
the
inclusion/deduction
provisions.
I
am
satisfied
that,
in
some
of
these
cases,
some
portion
of
the
net
tax
savings
enjoyed
by
the
couple
will
filter
through
to
the
children
of
the
relationship.
The
impugned
regime,
though
clearly
ineffective
in
reaching
its
desired
goal
and
though
clearly
resulting
in
disadvantage
to
separated
or
divorced
custodial
spouses
in
a
significant
number
of
cases,
is
not
so
underinclusive
as
to
fail
to
further
its
objective
in
any
significant
way.
I
am,
therefore,
satisfied
that
the
inclusion/deduction
regime
is
rationally
connected
to
its
objective.
Before
turning
to
the
question
of
whether
the
impugned
distinction
is
minimally
impairing,
I
wish
to
make
some
brief
observations
on
an
important
aspect
of
this
analysis.
The
impugned
distinction
arises
in
the
Income
Tax
Act,
a
statute
which
is
undoubtedly
the
most
complex
and
replete
with
distinctions
of
any
in
Canada.
Clearly,
the
legislature
must
be
accorded
a
reasonable
latitude
within
which
to
advance
its
varied
tax-related
purposes.
At
the
same
time,
however,
we
must
recall
that
the
Act
is
also
used
as
an
important
vehicle
for
developing
and
furthering
social
policy
initiatives.
Although
this
Court
must
generally
approach
the
government’s
legitimate
policymaking
choices
with
a
healthy
degree
of
deference,
it
must,
nonetheless,
ensure
that
Parliament,
in
exercising
its
legitimate
policy
making
function,
does
not
thereby
trample
upon
the
constitutional
guarantees
in
section
15
of
the
Charter.
The
mere
fact
that
a
distinction
arises
in
the
Act
does
not
grant
the
government
an
absolute
licence
to
undertake
indirectly
what
would
be
unconstitutional
if
pursued
directly.
A
discriminatory
distinction
will,
therefore,
not
be
justifiable
under
section
1
if
it
lies
outside
a
reasonable
range
of
minimally
intrusive
alternatives
available
to
the
government.
In
the
instant
case,
the
government
has
not
demonstrated
to
this
Court
that
the
benefit
accruing
to
the
separated
or
divorced
"couple"
is
fairly
and
equitably
shared
between
the
two
individuals.
Even
though
I
accept
that
the
family
law
system
may
sometimes
enable
such
an
outcome,
the
fact
remains
that,
in
a
significant
number
of
cases,
it
does
not
and
cannot.
The
inclusion/deduction
regime
effectively
makes
a
government
benefit
available
uniquely
to
support-paying
non-custodial
parents
and
unavailable
to
custodial
parents
in
receipt
of
child
support
payments.
This
initial
unequal
distribution
will
only
be
equally
divided
by
the
good
graces
of
the
noncustodial
spouse
or
in
the
unlikely
event
that
the
family
law
system
fully
understands,
anticipates,
and
applies
the
principles
of
tax
expenditure
analysis.
We
cannot
escape
the
fact
that
the
inclusion/deduction
regime
creates
a
significant
number
of
"losers"
within
the
very
group
of
persons
it
purports
to
assist.
As
Professors
J.
W.
Durnford
and
Paragraph
J.
Toope
point
out
in
"Spousal
Support
in
Family
Law
and
Alimony
in
the
Law
of
Taxation"
(1994),
42
C.T.J.
1,
the
legislative
objective
could
be
much
more
effectively
and
directly
achieved
with
a
progressive
system
of
child
support
credits
or
deductions.
Such
a
system
would
be
far
less
likely
to
perpetuate
or
exacerbate
the
economic
disadvantage
of
custodial
spouses
and,
at
the
very
least,
would
not
confer
its
greatest
benefits
on
high
income
noncustodial
parents,
which
is
presently
the
consequence
of
the
Act’s
"upsidedown
subsidy"
to
such
individuals.
Their
proposal
is
one
of
several
alternatives
reasonably
available
to
the
government.
Although
I
reiterate
that
considerable
deference
must
be
had
for
legitimate
policy
choices
that
entail
a
balancing
of
different
interests
and
competing
rights,
I
am
not
convinced
that
this
is
such
a
case.
The
inequality
is
too
evident,
and
the
range
of
more
palatable
alternatives
is
too
readily
available.
Thus,
I
conclude
that
the
present
regime
is
outside
the
reasonable
range
of
minimally
intrusive
options
open
to
the
government.
Although
it
is
not
strictly
necessary
for
me
to
do
so,
I
would
also
note
that
I
find
the
deleterious
effects
of
the
impugned
distinction
to
outweigh
its
salutary
effects.
The
fact
that
the
present
regime
imposes
in
many
cases
a
very
real
disadvantage
upon
custodial
spouses
is
not
outweighed
by
the
net
tax
savings
to
couples
that
it
occasions.
Simply
speaking,
the
evidence
before
this
Court
strongly
suggests
that
much
of
these
net
tax
savings
to
"couples"
actually
accrue
to
non-custodial
spouses
as
a
result
of
both
the
"upside-down
subsidy"
and
the
frequent
failure
to
"gross
up"
fully
for
the
tax
consequences
of
child
support.
With
all
due
respect,
I
cannot
see
the
logic
to
designing
a
system,
whose
central
purpose
is
to
benefit
children,
in
such
a
way
that
it
begets
as
its
primary
beneficiary
that
half
of
the
separated
or
divorced
"couple"
that
does
not
have
custody
of,
and
therefore
primary
responsibility
for,
those
same
children.
I
conclude
that
the
legislation
cannot
be
upheld
under
section
1
of
the
Charter,
and
would
accordingly
declare
it
unconstitutional.
C.
Remedy
and
disposition
For
the
reasons
I
have
given,
I
would
find
paragraph
56(1
)(b)
of
the
Act
to
violate
subsection
15(1)
of
the
Charter
and
I
would
conclude
that
it
cannot
be
saved
under
section
1.
Since
I
have
only
analyzed
the
distinctions
in
the
inclusion/deduction
scheme
in
relation
to
their
relevance
to
child
support
arrangements,
and
since
different
consideration
may
arise
in
relation
to
spousal
support,
I
would
declare
paragraph
56(1
)(b)
of
the
Act
to
be
invalid
in
respect
of
child
support
payments
only.
In
my
view,
this
is
an
appropriate
case
to
suspend
the
declaration
of
invalidity
for
a
period
of
12
months
to
enable
the
legislature
to
seek
out
and
implement
a
less
discriminatory
alternative.
I
would
not
make
any
pronouncement
on
the
constitutionality
of
paragraph
60(b)
of
the
Act.
I
would,
therefore,
dismiss
the
appeal.
I
would
order
costs
as
proposed
by
McLachlin
J.
Appeal
allowed.
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