Citation: 2014TCC70
Date: 20140305
Docket: 2013-528(IT)I
BETWEEN:
PETER D'AMBROSIO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller J.
[1]
This appeal relates to
the Appellant’s 2009, 2010 and 2011 taxation years in which he was denied tax
credits in respect of his son on the basis that subsection 118(5) of the Income
Tax Act (“ITA”) applied. It is the Appellant’s position that both
the Interim Order made by the Ontario Superior Court of Justice and the
application of subsection 118(5) are infringements of his rights under section
15 of the Canadian Charter of Rights and Freedoms (the “Charter”).
[2]
Subsection 15(1) of the
Charter reads:
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.
The Order
[3]
The Appellant and his
Former Spouse separated on March 1, 2008. On September 18, 2009, an Interim
Order from the Ontario Superior Court of Justice (the “Order”) awarded them
joint custody of their son. According to this Order, their son’s primary
residence was with the Former Spouse and the Appellant was to have “generous
access” to his son. The Appellant was ordered to pay child support of $630
monthly and spousal support of $850 monthly.
[4]
In the Order, Belleghem
J wrote; “I cannot be sure of Mother’s Income” and the Former Spouse was not
required to pay child support but she was required to pay the costs for the
upkeep of the household pending the sale of the home.
[5]
It is the Appellant’s
position that Bellegham J made a distinction between him and his Former Spouse
by presuming that he, the Appellant, earned more income than she did. This he
argued infringed his section 15 Charter rights and he asks this Court to
alter or to ignore the Order.
[6]
As I explained to the
Appellant at the hearing of this appeal, this Court does not have the
jurisdiction to alter or interfere with an Order made by another court. This
Court’s jurisdiction is limited by section 12 of the Tax Court of Canada Act
and by subsection 171(1) of the ITA. In an appeal against an assessment
under the ITA, this Court’s jurisdiction is limited to (a) dismissing
the appeal or (b) allowing the appeal and (i) vacating the assessment, (ii)
varying the assessment or (iii) referring the assessment back to the Minister
for reconsideration and reassessment.
[7]
I have not been given
any evidence which would allow me to ignore the Order. The Appellant and his
Former Spouse were each represented by counsel at the hearing before the
Ontario Superior Court of Justice. They were able to each put forth their
relevant information and arguments. It is clear from the Order that Belleghem J
considered the income earning capacity of the Former Spouse when he ordered the
Appellant to make support payments. It does not appear to me that he “presumed”
that the Appellant earned more income than his Former Spouse. His Order was
based on the evidence presented to him by the parties. He wrote:
The
extreme degree to which the Affidavits are in conflict render it difficult to
assess the veracity of either Parties’ version of the situation in which the
Parties’ only child, 3 year old _____, finds himself. This is also a short
marriage. However, as Mother’s counsel points out, if the situation was as bad
as Father makes it out to be I would have expected him to have claimed custody
when the parties separated March 1, 2008, 18 months ago, instead of waiting until
Mother brought her action. Both parties are always at liberty to have CAS check
out the health + safety concerns raised, even now. At the end of the day I am
satisfied that maintaining the Status Quo, at least for the foreseeable future
is the most appropriate outcome for today. Father is content to move out in any
event so the first term of my interim order effective September 21, 2009 will
be interim exclusive possession of the matrimonial home to Mother. Father’s
request to add the step daughters is denied. He can sue in Small Claims Court
if he wishes. It is not proper to combine the type of debt claims he wishes to
pursue in the context of a family law action. To give effect to the Status Quo
there will be a Joint Custody order, primary residence of child with Mother.
Generous access in accord with the existing work schedules of the parties, i.e.
Status Quo remains.
Father
will pay child support of $630.00 per month per Guidelines on a $68,000.00/yr
income. Rather than have Father pay both spousal support AND maintain his share
of the Matrimonial Home he will pay $850.00 per month spousal support and
Mother will bear household upkeep costs Pending sale. I cannot be sure of
Mother’s Income But she shouldn’t need more support than this to keep up the
house from her own earning capacity and the help of her daughters living with
her.
[8]
The Appellant has
argued that the Order is in violation of the Charter. This argument
should have been made before the court that made the Order. I note that the
Appellant did not appeal the Order and in November 2009, he and his Former
Spouse entered into Minutes of Settlement where they agreed to clarify the
Order as it pertained to access to their son.
Tax Credits
[9]
In his 2009, 2010 and
2011 taxation years, the Appellant claimed tax credits in the amount of
$10,320, $10,382 and $10,527 respectively in respect of an eligible dependant
under paragraph 118(1)(b) of the ITA. He also claimed tax credits
of $2,089, $2,101 and $2,131 respectively in respect of child amounts under
subparagraph 118(1)(b.1)(ii) of the ITA. As stated earlier, his
claims for the tax credits were denied but his 2009 taxation year was
reassessed to allow a deduction for spousal support payments of $619.
[10]
His Former Spouse
claimed and was allowed the tax credits for an eligible dependant and child
amounts in 2009, 2010 and 2011.
[11]
Subsection 118(5) of
the ITA provides:
118(5) No amount may be deducted under subsection (1) in computing
an individual's tax payable under this Part for a taxation year in respect of a
person where the individual is required to pay a support amount (within the
meaning assigned by subsection 56.1(4)) to the individual's spouse or
common-law partner or former spouse or common-law partner in respect of the
person and the individual
(a) lives
separate and apart from the spouse or common-law partner or former spouse or
common-law partner throughout the year because of the breakdown of their
marriage or common-law partnership; or
(b)
claims a deduction for the year because of section 60 in respect of a support
amount paid to the spouse or common-law partner or former spouse or common-law
partner.
[12]
It is clear that
subsection 118(5) applies in the circumstances of this case. The Appellant was
required to pay child support amounts to his spouse in respect of his son; and,
he and his spouse lived separate and apart during 2009, 2010 and 2011 because
of a breakdown of their marriage. Consequently, subsection 118(5) instructs
that the Appellant is not entitled to a deduction under subsection 118(1).
[13]
It is the Appellant’s
position that this provision of the ITA violates his rights under
section 15 of the Charter by allowing his Former Spouse to claim the tax
credits under subsection 118(1) while denying him the right to make the same
claim. He stated that this is “effective discrimination”. The tax credits are
intended to assist in offsetting the costs of parental care and he provides the
same or more parental care to his son as his Former Spouse.
[14]
In R v Kapp,
2008 SCC 41, the Supreme Court of Canada gave a two-part test for analysing
whether there has been discrimination under subsection 15(1) of the Charter:
The questions to be answered are: (1) Does the law create a distinction based
on an enumerated or analogous ground? (2) Does the distinction create a
disadvantage by perpetuating prejudice or stereotyping? If the first question
is answered in the negative, there is no need to proceed to the second step of
the analysis: Withler v Canada (Attorney General), 2011 SCC 12 at
paragraph 63.
[15]
Subsection 118(5) does
create a distinction but that distinction is not based on a personal
characteristic which is enumerated in section 15 of the Charter. Nor is
the distinction based on a characteristic which is analogous to those
enumerated in the Charter. The distinction is based on whether the
individual is required to pay a support amount in respect of the person for
whom the individual seeks to claim a tax credit. The obligation to pay child
support is not an immutable, or constructively immutable, personal
characteristic: Giorno v The Queen, 2005 TCC 175. In this case, the
obligation to pay child support arose out of the Order which, in my view, was
based on the Appellant’s level of income. This is not a personal characteristic
enumerated in section 15; nor is it analogous to a ground enumerated in section
15: Stanwick v Her Majesty the Queen, [1999] 1 CTC 143 (FCA).
[16]
Several judges of this
Court have also considered whether subsection 118(5) was contrary to section 15
of the Charter. They all concluded that the application of subsection
118(5) did not infringe an individual’s section 15 Charter rights. See Keller
v The Queen, [2002] 3 CTC 2499; Giorno v The Queen (supra); Frégeau
v The Queen, 2004 TCC 293; Calogeracos v The Queen, 2008 TCC
389; Sears v The Queen, 2009 TCC 22; Krashinsky v Canada,
2010 TCC 78. In Nelson v Canada, [2000] 4 CTC 252, the Federal Court of
Appeal also agreed that subsection 118(5) was not contrary to the Charter.
Sharlow JA stated:
12
In my view, the differential treatment created by subsection 118(5) of the
Income Tax Act is not based on one of the grounds enumerated in subsection
15(1) of the Charter or an analogous ground. Subsection
118(5) does not draw a distinction between Mr. Nelson and the comparator group
based on personal characteristics, or the stereotypical application of presumed
group or personal characteristics, and does not bring into play the purpose of
subsection 15(1) of the Charter in remedying such ills as
prejudice, stereotyping, and historical disadvantage. Nor does the operation of
subsection 118(5) of the Income Tax Act offend Mr. Nelson's dignity, intrinsic
worthiness or self-respect. Therefore, the differential treatment resulting
from subsection 118(5) is not discriminatory in the Charter sense.
[17]
It is my view that the
above is sufficient to dismiss this appeal. However, I would like to address
other arguments made by the Appellant.
[18]
He relied on statistics
published by the Department of Justice to argue that when there are
court-ordered custody arrangements, mothers are “unjustly favoured” in
receiving custody of the children. The result he states is that males are
predominantly the support payers.
[19]
The statistics he
referred to were the Selected Statistics on Canadian Families and Family Law
with respect to Child Custody for 1994-1995. There was nothing in these
statistics that disclosed a factual basis to allege that mothers were “unjustly
favoured” in receiving custody of children.
[20]
In custody cases, it is
usually the person who earns the most income who must pay support. If this
happens to be the male, it cannot be a ground for discrimination. As stated by
Webb J, as he then was, in Calogeracos:
In
this case the provision in question neither makes a formal distinction between
males and females nor does it fail to take into account the Appellant's already
disadvantaged position within Canadian society. It draws a distinction based on
whether the individual is paying child support, which is based on the income
levels of the parents since the obligation to pay child support is based on the
relative income of the parents. The fact that in most joint or shared custody
arrangements it is the male who is making child support payments cannot be
grounds for a claim for discrimination by the Appellant as males who make more
money than females are not in a disadvantaged position in Canadian society.
[21]
The Appellant also
argued that the tax credits are intended to assist in offsetting his costs of
parental care. However, his child support payments were based on the Federal
Guidelines and it appears that one of the considerations in the Guidelines was
that the supporting parent would not be receiving the tax credits. In Frégeau,
Bédard J wrote:
30 The Appellant's Agents also state that the distinction resulting
from the application of subsection 118(5)
of the Act is discriminatory because Quebec's Regulation respecting the
determination of child support payments, like the Federal Child Support Guidelines, does not take the credit for a wholly dependent person into account.
31 In my opinion, that claim is also incorrect because the Federal
Child Support Tables seem to have been designed with a number of elements in
mind, including the credit for a wholly dependent person, as indicated in the
Federal Child Support Guidelines:
6. The formula referred to in note 5 sets support amounts to reflect
average expenditures on children by a spouse with a particular number of
children and level of income. The calculation is based on the support payer's
income. The formula uses the basic personal amount for non-refundable tax
credits to recognize personal expenses, and takes other federal and
provincial income taxes and credits into account. Federal Child Tax
benefits and Goods and Services Tax credits for children are excluded from the
calculation. At lower income levels, the formula sets the amounts to take into
account the combined impact of taxes and child support payments on the support
payer's limited disposable income.
(Emphasis added)
32
Thus, in setting out the child support amounts, the Federal Guidelines assume
that the support payer will not be entitled to the credit for a wholly
dependent person. Consequently, although the taxpayer paying child support does
not benefit from the credit for a wholly dependent person because he or she
pays support, the support paid by that taxpayer was established based on the
fact that he or she is not entitled to receive the personal tax credit in
question.
[22]
In conclusion, I have
no jurisdiction to alter or interfere with the Order issued by the Ontario
Superior Court of Justice and there was no evidence given to me that would
allow me to ignore it. The Appellant’s section 15 Charter rights have
not been infringed by the application of subsection 118(5) of the ITA.
The appeal is dismissed.
Signed at Ottawa, Canada, this 5th day of March 2014.
“V.A. Miller”
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