Merrins v. The Queen, 2002 DTC 1848 (TCC)

In finding that the taxpayer (who was a resident of Ireland in receipt of both Canadian old age security payments and also pension income that would be exempt under the Canada-Ireland Treaty in the absence of the making of an election under s. 217) was not entitled to receive both the credit under s. 217(6) in respect of the pension income and also to treat the pension income by virtue of the Treaty as being exempt from Canadian income tax, Ripp T.C.J. applied (at p. 1854) the principle that:

"Taxpayers should not be allowed to take inconsistent positions with respect to the application of tax treaties and domestic tax laws in order to duplicate a benefit."

In finding that the taxpayer (who was a resident of Ireland in receipt of both Canadian old age security payments and also pension income that would be exempt under the Canada-Ireland Treaty in the absence of the making of an election under s. 217) was not entitled to receive both the credit under s. 217(6) in respect of the pension income and also to treat the pension income by virtue of the Treaty as being exempt from Canadian income tax, Ripp T.C.J. applied (at p. 1854) the principle that:

"Taxpayers should not be allowed to take inconsistent positions with respect to the application of tax treaties and domestic tax laws in order to duplicate a benefit."

Although the taxpayer was a resident of Ireland, he qualified for payments under the Old Age Security Act (Canada) because at the time he left Canada he had resided in Canada for more than 20 years.

The taxpayer unsuccessfully submitted that the old age security payments qualified as a "pension" for purposes of the Canada-Ireland Treaty (which define pensions as "periodic payments made in consideration of past services") because those payments were granted in consideration of twenty years of residence in Canada during which he rendered a contribution to the Canadian economy. The old age security payments were not related to the performance of past services, but rather to age and residency requirements.