lacobucci,
J.:—The
basic
issue
in
this
appeal
is
whether
child
care
expenses,
on
the
facts
of
this
case,
are
deductible
as
business
expenses
in
the
determination
of
profit
under
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
I.
Facts
The
appellant
taxpayer,
Elizabeth
Symes,
is
a
lawyer
and
a
mother.
During
the
relevant
period,
she
practised
law
full-time
as
a
partner
in
a
Toronto
law
firm.
During
that
same
period,
she
was
initially
the
mother
of
one
child
(in
taxation
years
1982,
1983,
and
1984),
and
was
later
the
mother
of
two
children
(in
taxation
year
1985).
The
appellant
is
married.
The
appellant
employed
a
nanny,
Mrs.
Simpson
(Simpson),
during
these
taxation
years.
Simpson's
only
employment
function
was
to
care
for
the
appellant's
children
in
the
appellant's
home.
During
1982,
1983,
and
1984
respectively,
the
appellant
paid
Simpson
$10,075,
$11,200,
and
$13,173
to
care
for
her
one
child.
During
1985,
the
appellant
paid
Simpson
$13,359
to
care
for
her
two
children.
The
appellant
deducted
from
Simpson's
wages—and
remitted
to
Revenue
Canada—income
tax
payments,
Canada
Pension
Plan
contributions,
and
Unemployment
Insurance
premiums
as
required.
The
appellant
also
remitted
the
pension
and
unemployment
insurance
contributions
required
of
employers.
Simpson
received
a
T4
slip
from
the
appellant
with
respect
to
each
of
the
taxation
years.
In
her
personal
income
tax
returns
for
1982
to
1985,
the
appellant
deducted
the
wages
paid
to
Simpson
as
business
expenses.
In
notices
of
assessment
received
by
the
appellant
in
1983
and
1984,
Revenue
Canada
allowed
the
deductions.
However,
in
notices
of
reassessment
dated
December
9,
1985
and
November
7,
1986,
Revenue
Canada
disallowed
the
deductions
for
all
four
years.
The
appellant
objected,
but
the
disallowance
was
confirmed
for
the
stated
reason
that
the
expenses
were
not
outlays
or
expenses
incurred
for
the
purpose
of
gaining
or
producing
income
from
business.
The
expenses
were
characterized
as
personal
or
living
expenses.
In
place
of
the
disallowed
deductions,
Revenue
Canada
allowed
the
appellant
revised
child
care
deductions
of
$1,000
for
1982,
$2,000
for
each
of
1983
and
1984,
and
$4,000
for
1985,
pursuant
to
section
63
of
the
Act.
After
the
appellant's
objection
to,
and
Revenue
Canada's
confirmation
of,
the
notices
of
reassessment,
the
appellant
successfully
challenged
these
notices
in
the
Federal
Court,
Trial
Division.
The
Trial
Division
held
that
the
appellant
could
deduct
the
payments
to
Simpson
as
business
expenses:
[1989]
1
C.T.C.
476,
89
D.T.C.
5243,
40
C.R.R.
278,
25
F.T.R.
306.
The
Minister
of
National
Revenue
appealed
and,
in
allowing
the
appeal,
the
Federal
Court
of
Appeal
restored
the
notices
of
reassessment:
[1991]
2
C.T.C.
1,
91
D.T.C.
5397.
This
Court
granted
leave
to
appeal:
[1992]
1
S.C.R.
xi.
II.
Relevant
constitutional
and
statutory
provisions
A.
Constitutional
Provisions
1.
Canadian
Charter
of
Rights
and
Freedoms,
sections
1,
15
and
32.
1.
The
Canadian
Charter
of
Rights
and
Freedoms
guarantees
the
rights
and
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.
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.
(2)
Subsection
(1)
does
not
preclude
any
law,
program
or
activity
that
has
as
its
object
the
amelioration
of
conditions
of
disadvantaged
individuals
or
groups
including
those
that
are
disadvantaged
because
of
race,
national
or
ethnic
origin,
colour,
religion,
sex,
age
or
mental
or
physical
disability.
32
(1)
This
Charter
applies
(a)
to
the
Parliament
and
government
of
Canada
in
respect
of
all
matters
within
the
authority
of
Parliament
including
all
matters
relating
to
the
Yukon
Territory
and
Northwest
Territories;
and
(b)
to
the
legislature
and
government
of
each
province
in
respect
of
all
matters
within
the
authority
of
the
legislature
of
each
province.
(2)
Notwithstanding
subsection
(1),
section
15
shall
not
have
effect
until
three
years
after
this
section
comes
into
force.
2.
Constitution
Act,
1982,
subsection
52(1)
52
(1)
The
Constitution
of
Canada
is
the
supreme
law
of
Canada,
and
any
law
that
is
inconsistent
with
the
provisions
of
the
Constitution
is,
to
the
extent
of
the
inconsistency,
of
no
force
or
effect.
B.
Statutory
Provisions
Income
Tax
Act,
as
amended
and
applicable
in
taxation
years
1983
to
1985.
section
4,
subsections
9(1)
and
18(1),
sections
63
and
67.
4
(1)
For
the
purposes
of
this
Act,
(a)
a
taxpayer's
income
.
.
.
for
a
taxation
year
from
an
office,
employment,
business,
property
or
other
source
.
.
.
is
the
taxpayer's
income
.
.
.
computed
in
accordance
with
this
Act
on
the
assumption
that
he
had
during
the
taxation
year
no
income
.
.
.
except
from
that
source
.
.
.
and
was
allowed
no
deduc-
tions
in
computing
his
income
for
the
taxation
year
except
such
deductions
as
may
reasonably
be
regarded
as
wholly
applicable
to
that
source
.
.
.
and
except
such
part
of
any
other
deductions
as
may
reasonably
be
regarded
as
applicable
thereto
....
(2)
Subject
to
subsection
(3),
in
applying
subsection
(1)
for
the
purposes
of
this
Part,
no
deductions
permitted
by
sections
60
to
63
are
applicable
either
wholly
or
in
part
to
a
particular
source
.
.
.
.
(4)
Unless
a
contrary
intention
is
evident,
no
provision
of
this
Part
shall
be
read
or
construed
to
require
the
inclusion
or
to
permit
the
deduction,
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
or
his
income
or
loss
for
a
taxation
year
from
a
particular
source
or
from
sources
in
a
particular
place,
of
any
amount
to
the
extent
that
that
amount
has
been
included
or
deducted,
as
the
case
may
be,
in
computing
such
income
or
loss
under,
in
accordance
with
or
by
virtue
of
any
other
provision
of
this
Part.
9
(1)
Subject
to
this
Part,
a
taxpayer's
income
for
a
taxation
year
from
a
business
or
property
is
his
profit
therefrom
for
the
year.
18
(1)
In
computing
the
income
of
a
taxpayer
from
a
business
or
property
no
deduction
shall
be
made
in
respect
of
(a)
an
outlay
or
expense
except
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
from
the
business
or
property;
(h)
personal
or
living
expenses
of
the
taxpayer
except
travelling
expenses
(including
the
entire
amount
expended
for
meals
and
lodging)
incurred
by
the
taxpayer
while
away
from
home
in
the
course
of
carrying
on
his
business;
63
(1)
Subject
to
subsection
(2),
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
the
aggregate
of
all
amounts
each
of
which
is
an
amount
paid
in
the
year
as
or
on
account
of
child
care
expenses
in
respect
of
an
eligible
child
of
the
taxpayer
for
the
year
may
be
deducted
(b)
by
the
taxpayer
or
a
supporting
person
of
the
child
for
the
year.
.
.
to
the
extent
that
(c)
the
amount
is
not
included
in
computing
the
amount
deductible
under
this
subsection
by
an
individual
(other
than
the
taxpayer),
and
(d)
the
amount
is
not
an
amount
(other
than
an
amount
that
is
included
in
computing
a
taxpayer's
income
and
that
is
not
deductible
in
computing
his
taxable
income)
in
respect
of
which
any
taxpayer
is
or
was
entitled
to
a
reimbursement
or
any
other
form
of
assistance,
and
the
payment
of
which
is
proven
by
filing
with
the
Minister
one
or
more
receipts
each
of
which
was
issued
by
the
payee
and
contains,
where
the
payee
is
an
individual,
that
individual’s
Social
Insurance
Number;
but
not
exceeding
the
amount,
if
any,
by
which
(e)
the
least
of
(i)
$8,000,
(ii)
the
product
obtained
when
$2,000
is
multiplied
by
the
number
of
eligible
children
of
the
taxpayer
for
the
year
in
respect
of
whom
the
child
care
expenses
were
incurred,
and
(iii)
/3
of
the
taxpayer's
earned
income
for
the
year
exceeds
(f)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
deducted,
in
respect
of
the
eligible
children
of
the
taxpayer
that
are
referred
to
in
subparagraph
(e)(ii),
under
this
subsection
for
the
year
by
an
individual
(other
than
the
taxpayer)
to
whom
subsection
(2)
is
applicable
for
the
year.
(3)
In
this
section,
(a)
child
care
expense"
means
an
expense
incurred
for
the
purpose
of
providing
in
Canada,
for
any
eligible
child
of
a
taxpayer,
child
care
services
including
baby
sitting
services,
day
nursery
services
or
lodging
at
a
boarding
school
or
camp
if
the
services
were
provided
(i)
to
enable
the
taxpayer,
or
the
supporting
person
of
the
child
for
the
year,
who
resided
with
the
child
at
the
time
the
expense
was
incurred,
(A)
to
perform
the
duties
of
an
office
or
employment,
(B)
to
carry
on
a
business
either
alone
or
as
a
partner
actively
engaged
in
the
business
.
.
.
.
(b)
"earned
income”
of
a
taxpayer
means
the
aggregate
of
(i)
all
salaries,
wages
and
other
remuneration,
including
gratuities,
received
by
him
in
respect
of,
in
the
course
of,
or
by
virtue
of
offices
and
employments,
and
all
amounts
included
in
computing
his
income
by
virtue
of
section
6
and
7,
(ii)
amounts
included
in
computing
his
income
by
virtue
of
paragraph
56(1)(m),
(n)
or
(o),
and
(iii)
his
incomes
from
all
businesses
carried
on
either
alone
or
as
a
partner
actively
engaged
in
his
business.
(c)
“
eligible
child”
of
a
taxpayer
for
a
taxation
year
means
(i)
a
child
of
the
taxpayer
or
of
his
spouse,
or
(ii)
a
child
in
respect
of
whom
the
taxpayer
deducted
an
amount
under
section
109
for
the
year,
if,
at
any
time
during
the
year,
the
child
was
under
14
years
of
age
or
was
over
13
years
of
age
and
dependent
on
the
taxpayer
by
reason
of
mental
or
physical
infirmity;
and
(d)
“supporting
person"
of
an
eligible
child
of
a
taxpayer
for
a
taxation
year
means
(i)
a
parent
of
the
child,
(ii)
the
taxpayer's
spouse,
or
(iii)
an
individual
who
deducted
an
amount
under
section
109
for
the
year
in
respect
of
the
child,
if
the
parent,
spouse
or
individual,
as
the
case
may
be,
resided
with
the
taxpayer
at
any
time
during
the
year
and
at
any
time
within
60
days
after
the
end
of
the
year.
67.
In
computing
income,
no
deduction
shall
be
made
in
respect
of
an
outlay
or
expense
in
respect
of
which
any
amount
is
otherwise
deductible
under
this
Act,
except
to
the
extent
that
the
outlay
or
expense
was
reasonable
in
the
circumstances.
III.
Judgments
below
A.
Federal
Court,
Trial
Division,
[1989]
1
C.T.C.
476,
89
D.T.C.
5243
(Cullen,
J.)
1.
Child
Care
as
a
Business
Expense
Dealing
first
with
issues
of
statutory
interpretation,
Cullen,
J.
noted
that
[t]he
determination
of
profit
and
the
question
of
whether
an
expenditure
is
a
proper
business
expense
to
be
included
in
the
calculation
of
profit
are
ques-
tions
of
law"
(page
479
(D.T.C.
5246)).
Based
upon
his
review
of
case
law,
he
then
held
that,
in
determining
what
constitutes
a
legitimate
business
expense,
the
proper
approach
is
to
"ascertain
whether
the
expense
or
disbursement
was
consistent
with
ordinary
principles
of
commercial
trading
or
well
accepted
principles
of
business
practice”
(page
480
(D.T.C.
5246)).
For
Cullen,
J.
(at
page
480
(D.T.C.
5246)),
a"
business
test"
was
to
be
applied
in
order
to
determine
the
legal
meaning
of
profit”.
In
addition
to
satisfying
a
business
test,
Cullen,
J.
noted
that
a
business
expense
must
be
made
or
incurred
for
the
purpose
of
gaining
or
producing
income
from
the
business
in
order
to
satisfy
paragraph
18(1)(a)
of
the
Act.
He
reviewed
several
cases
which
have
interpreted
this
requirement,
before
suggesting
(at
page
482
(D.T.C.
5248))
that
courts
have
given
a“
"progressive
interpretation"
to
paragraph
18(1)(a).
For
Cullen,
J.,
the
concept
of
a
business
expense
has
been
"adapted
to
reflect
the
changing
ways
of
doing
business”
(page
482
(D.T.C.
5248)).
In
a
similar
vein,
Cullen,
J.
discussed
an
argument
of
the
respondent
founded
upon
the
concept
of
a
business
or
revenue-producing
"circle".
According
to
this
concept,
only
expenses
incurred
within
a
revenue-producing
circle
are
deductible;
expenses
incurred
in
order
to
approach
a
revenueproducing
circle
are
not.
The
respondent
characterized
the
payments
to
Simpson
as
an
expense
which
enabled
the
plaintiff
to
go
out
and
practise
her
profession
but
was
not
incurred
in
the
practice
of
her
profession"
(page
482
(D.T.C.
5247),
emphasis
in
original).
Cullen,
J.
rejected
this
argument
and
the
concept
itself,
since
the
concept
"would
seem
to
suggest
that
the
business
or
revenue-producing
circle
has
a
fixed
content"
(page
482
(D.T.C.
5248)).
Cullen,
J.
proceeded
to
examine
the
child
care
expenses
in
light
of
his
analysis
of
the
profit
concept.
He
noted
that
several
cases
had
been
cited
by
the
respondent
in
which
child
care
expenses
were
held
to
be
personal
in
nature.
Cullen,
J.
dismissed
the
relevance
of
these,
however,
stating
that
they
were
all
ultimately
founded
upon
Bowers
v.
Harding,
[1891]
1
Q.B.
560,
3
Tax
Cas.
22
(Q.B.)
a
case
which
"came
from
another
age,
from
another
system
dealing
with
a
tax
question
that
related
to
employment
rather
than
profits
from
a
business”
(page
483
(D.T.C.
5248)).
He
also
considered
the
expert
evidence
of
Dr.
Patricia
Armstrong
(Armstrong),
which
described
an
influx
of
women
of
child-bearing
age
into
business
and
the
workplace
during
the
late
1970s
and
into
the
19805.
In
the
result,
Cullen,
J.
was
satisfied
that
the
taxpayer
had
used
good
business
and
commercial
judgment
in
dedicating
part
of
her
resources
from
the
practice
of
law
to
the
provision
of
child
care.
He
stated
(at
page
483
(D.T.C.
5248-49)):
This
decision
was
acceptable
according
to
business
principles
which
include
the
development
of
intellectual
capital,
the
improvement
of
productivity,
the
provision
of
services
to
clients
and
making
available
the
resource
which
she
sells,
namely
her
time.
Further,
Armstrong's
evidence
supports
the
notion
that
the
availability
of
child
care
increases
productivity
by
enhancing
the
peace
of
mind
of
employees.
Enhancing
productivity
is
something
that
is
totally
in
keeping
with
well
established
business
practices.
Moreover,
Armstrong's
evidence
indicates
that
the
absence
of
child
care
is
a
barrier
to
women's
participation
in
the
economy,
in
terms
of
paid
work
and
income-generating
work
and
therefore
lowering
the
barrier
by
arriving
at
a
satisfactory
means
of
dealing
with
the
costs
of
child
care,
would
make
good
business
sense.
Having
thus
found
that
the
nanny
expenses
satisfied
section
9
and
paragraph
18(1)(a),
Cullen,
J.
examined
whether
paragraph
18(1)(h)
prohibited
their
deduction
as
personal
or
living
expenses.
On
this
question,
he
stated
that,
on
the
facts
of
the
case,
"a
distinction
has
been
made
between
child
care
which
allows
one
to
participate
in
the
economy
and
generate
income
and
child
care
which
allows
one
to
go
out
on
social
occasions”
(page
484
(D.T.C.
5249)).
According
to
Cullen,
J.,
only
the
latter
are
discretionary
personal
living
expenses.
Cullen,
J.
distinguished
the
appellant's
child
care
expenses
from
other
expenses
which
might
be
characterized
as
personal
or
living
expenses,
principally
because
of
the
appellant's
legal
obligation
to
care
for
her
children.
For
these
reasons,
as
a
matter
of
statutory
interpretation,
and
based
upon
the
facts
of
the
case,
Cullen,
J.
concluded
that
the
nanny
expenses
qualified
as
business
expenses
deductible
in
the
computation
of
a
taxpayer's
profit.
It
is
noteworthy
that
in
so
doing,
Cullen,
J.
stated
the
following
(at
pages
484-85
(D.T.C.
5249)):
“With
respect
to
section
63
of
the
Act,
I
would
like
to
note
at
this
point
in
my
reasons
that
the
defendant
has
admitted
that
if
the
nanny
expense
is
a
proper
business
expense
pursuant
to
sections
3,
9
and
18
of
the
Act,
then
section
63
cannot
prevent
it
from
being
allowed
as
such”.
Finally,
Cullen,
J.
quickly
indicated
that
there
was
no
question
as
to
the
reasonableness
of
the
sums
expended
within
the
meaning
of
section
67
of
the
Act.
2.
Subsection
15(1)
of
the
Charter
Despite
his
conclusions
on
the
interpretive
issue,
Cullen,
J.
considered
the
taxpayer's
Charter
argument
in
the
alternative.
He
recognized
that,
since
subsection
15(1)
did
not
come
into
effect
until
April
17,
1985,
and
since
that
section
does
not
operate
retrospectively,
the
taxpayer
could
not
make
a
Charter
claim
respecting
child
care
expenses
incurred
prior
to
the
section's
coming
into
force.
Cullen,
J.
quoted
extensively
from
the
decision
of
this
Court
in
Andrews
v.
Law
Society
(B.C.),
[1989]
1
S.C.R.
143,56
D.L.R.
(4th)
1,
and
relied
heavily
upon
principles
stated
therein,
in
discussing
section
15.
First,
he
noted
that
since
he
was
considering
an
Act
of
Parliament,
section
15
was
applicable.
Second,
he
looked
for
unequal
treatment
and
discrimination.
Although
his
analysis
is
undoubtedly
intended
to
consider
these
latter
two
concepts
with
respect
to
the
Act
itself,
I
note
that
Cullen,
J.
focused
upon
Revenue
Canada's
treatment
of
the
taxpayer.
On
the
question
of
unequal
treatment,
Cullen,
J.
first
looked
for
and
found
a
distinction
(at
page
488
(D.T.C.
5252)):
"by
refusing
the
plaintiff
her
deduction,
the
M.N.R.
is
treating
her
differently
from
other
taxpayers
with
expenses
that
are
considered
necessary
to
generate
business
income".
On
the
question
of
discrimination,
Cullen,
J.
characterized
the
Act
as
facially
neutral,
but
held
that
there
was
an
adverse
impact
upon
the
taxpayer,
in
so
far
as
she
was
compelled
to
pay
more
taxes
and
take
on
extra
paper
work
by
virtue
of
the
unequal
treatment.
Viewed
another
way,
he
held
that
the
taxpayer
was"denied
the
benefit
of
a
tax
deduction"
(page
489
(D.T.C.
5252-53)).
Cullen,
J.
tied
the
discrimination
to
the
“personal
characteristics
of
sex
and
family
or
parental
status"
(page
490
(D.T.C.
5253)).
In
this
fashion,
Cullen,
J.
found
that
to
deny
the
deduction
of
child
care
expenses
as
part
of
the
profit
determination
would
be
to
violate
subsection
15(1)
of
the
Charter.
Turning
to
section
1,
he
found
that
no
pressing
and
substantial
objective
for
non-deductibility
had
been
offered.
Accordingly,
he
did
not
deal
with
a
proportionality
test
per
se.
Since
Cullen,
J.
found
that
there
was
no
evidence
indicating
that
Parliament
had
made
a
legislative
choice
against
full
deductibility
of
child
care
expenses,
he
indicated
(at
page
492
(D.T.C.
5254))
that
courts
are
left
to
determine,
in
accordance
with
the
Charter,
"whether
the
concepts
of
profit
and
business
expenses”
permit
deductibility.
Upon
this
basis,
he
concluded
that
section
9
and
paragraph
18(1)(a)
permit
the
deduction
of
child
care
expenses
as
business
expenses.
This
conclusion
was
an
interpretive
one
said
to
be
“
consistent
with
the
requirements
of
the
Charter”,
and
which
involved
no
questions
of
"deleting",
"amending"
or
"reading
in"
(page
492
(D.T.C.
5254-55)).
In
the
result,
Cullen,
J.
held
that
the
taxpayer
was
allowed
to
deduct
the
payments
made
to
Simpson
as
a
business
expense
for
taxation
years
1982,
1983,
1984,
and
1985.
This
conclusion
rested
solely
upon
his
approach
to
statutory
interpretation.
With
respect
to
his
alternative
conclusion
involving
Charter
analysis,
Cullen,
J.
held
that
these
payments
were
deductible
for
1985
and
subsequent
taxation
years.
B.
Federal
Court
of
Appeal,
[1991]
2
C.T.C.
1,
91
D.T.C.
5397
(Décary
J.A.,
Pratte
and
MacGuigan
JJ.A.
concurring)
After
reviewing
the
facts
of
the
case,
Décary,
J.A.
established
a
context
for
the
decision
of
the
Federal
Court
of
Appeal.
He
discussed
the
fiscal
history
of
child
care
expenses,
and
particularly
section
63
of
the
Act,
citing
a
royal
commission
report
and
a
government
white
paper.
With
reference
to
Hansard,
he
sought
to
describe
government
policy
on
child
care
expenses.
Finally,
he
noted
various
reports
and
background
papers
dealing
with
child
care
responses
which
had
been
cited
to
the
Court.
1.
Child
Care
as
a
Business
Expense
As
a
first
point
of
analysis,
Décary,
J.A.
discussed
paragraph
18(1)(a)
of
the
Act.
With
respect
to
the
argument
that
the
taxpayer’s
child
care
expenses
were
made
in
the
ordinary
course
of
business
or
as
part
of
the
income
earning
process,
he
characterized
her
legal
obligation
to
care
for
her
children
as
an
obligation
independent
of
her
business.
For
him,
the
child
care
obligation
is
imposed
upon
both
parents,
and
is,
in
any
event,
a"
natural
obligation”
(page
8
(D.T.C.
5403)).
It
is
not
obvious
whether
Décary,
J.A.
accepted
or
rejected
the
taxpayer's
arguments
with
respect
to
the
proper
tests
to
be
applied
under
subsection
9(1)
and
18(1)(a)
of
the
Act.
It
is
clear,
however,
that
he
professed
to
agree
with
the
taxpayer
and
the
trial
judge
to
the
effect
that
judicial
interpretation
"must
be
sufficiently
flexible
and
sensitive
to
adapt
to
changing
circumstances"
(page
8
(D.T.C.
5403)).
Equally,
he
stated
that
“concepts
should
be
extended
by
the
courts
in
order
to
take
into
account
the
presence
of
women
in
the
business
world”
(page
9
(D.T.C.
5403)).
But
then
he
summarized
his
overall
disagreement
with
the
taxpayer
and
the
court
below
with
respect
to
the
proper
interpretation
of
the
Act.
He
stated
(at
page
9
(D.T.C.
5403)
that:
.
.
.
the
concept
of
a
business
expense
has
been
developed
exclusively
in
relation
to
the
commercial
needs
of
the
business,
without
any
regard
to
the
particular
needs
of
those
in
charge
of
the
business,
and
I
have
difficulty
in
seeing
how
a
change
in
the
particular
needs
of
these
persons
could
justify
modifying
an
interpretation
which
has
nothing
to
do
with
these
needs.
Having
said
that,
I
consider
that
the
case
at
bar
does
not
require
a
conclusion
on
this
point
for
the
simple
reason
that
Parliament
has
itself
already
amended
the
Income
Tax
Act
to
provide
for
the
specific
situation
relied
on
by
the
respondent.
In
support
of
this
conclusion,
Décary,
J.A.
examined
the
language
of
section
63.
His
examination
caused
him
to
conclude
that
section
63
was
clearly
intended
by
Parliament
to
apply
to
"a
parent
carrying
on
a
business
and
income
earned
by
the
parent
from
the
operation
of
a
business”
(page
9
(D.T.C.
5404)).
For
this
reason,
he
located
child
care
expenses
solely
with
section
63
of
the
Act,
excluding
such
expenses
from
the
concept
of
"business
expenses"
implicit
Within
paragraph
18(1)(a).
He
did
not
otherwise
examine
the
meaning
of
"profit"
in
section
9
of
the
Act.
2.
Subsection
15(1)
of
the
Charter
Décary,
J.A.
began
his
Charter
analysis
by
summarizing
the
taxpayer's
basic
Charter
argument.
He
noted
that
a
subsection
15(1)
violation
was
alleged,
not
with
respect
to
the
actual
language
of
the
Act,
but
with
respect
to
any
interpretation
of
the
Act's
language
which
could
prevent
child
care
expenses
from
being
deducted
as
business
expenses.
He
then
suggested
that
the
taxpayer
supported
her
argument
by
reference
to
the
decisions
of
this
Court
in
Slaight
Communications
Inc,
v.
Davidson,
[1989]
1
S.C.R.
1038,
59
D.L.R.
(4th)
416,
and
Hills
v.
A.G.
(Canada),
[1988]
1
S.C.R.
513,
48
D.L.R.
(4th)
193.
Since
Décary,
J.A.
quoted
from
these
decisions
in
a
manner
which
suggests
that
he
was
considering
the
extent
to
which
Charter
values
should
infuse
ordinary
statutory
interpretation,
it
is
somewhat
unclear
to
me
whether
some
of
his
subsequent
comments
are
intended
to
relate
to
this
kind
of
statutory
interpretation,
or
to
Charter
analysis
per
se.
In
either
event,
Décary,
J.A.
went
on
to
make
general
statements
with
respect
to
the
propriety
of
challenging
what
can
be
loosely
called
"socioeconomic
legislation"
with
the
Charter.
After
quoting
from
several
decisions,
he
cited
O.P.S.E.U.
v.
National
Citizens’
Coalition,
[1987]
2
C.T.C.
59,
87
D.T.C.
5270
(Ont.
H.C.);
aff'd
[1990]
2
C.T.C.
163,
90
D.T.C.
6326
(Ont.
C.A.),
and
in
apparent
reliance
upon
language
used
in
that
case,
stated
that
“[a]t
bottom,
the
approach
put
forward
by
the
respondent
risks
trivializing
the
Charter"
(page
11
(D.T.C.
5405)).
To
accept
the
taxpayer's
arguments
would,
according
to
him,
“be
to
fall
into
the
trap
of
overshooting
against
which
the
Supreme
Court
of
Canada
has
constantly
warned
the
courts”
(page
12
(D.T.C.
5406)).
Décary,
J.A.
recoiled
from
the
idea
that
the
taxpayer
could
use
section
15
of
the
Charter
to
obtain
a
positive
guarantee
of
equality,
one
which
would
compel
"legislatures
to
adopt
measures
enabling
.
.
.
her
to
work"
(page
13
(D.T.C.
5406)).
Departing
from
this
foundation,
Décary,
J.A.
characterized
section
63
as
a
statutory
benefit
adopted
by
Parliament
“in
the
enlightened
exercise
of
its
discretion”
(page
13
(D.T.C.
5406-07)).
He
then
came
to
the
following
conclusion,
which
is
clearly
a
conclusion
relating
to
Charter
analysis
per
se,
rather
than
to
the
use
of
Charter
values
as
an
aid
to
statutory
interpretation
(at
pages
13-14
(D.T.C.
5407)):
By
adopting
section
63
and
deciding
to
create
a
new
type
of
personal
deduction
for
parents
applying
to
child
care
expenses,
Parliament
made
a
political,
social
and
economic
choice.
On
the
evidence
presented,
that
choice
favours
women
more
than
men,
and
the
respondent
has
no
complaint
about
this.
I
do
not
see
how
a
provision
which
favours
all
women
could
directly
or
indirectly
infringe
the
right
of
women
to
equality,
and
I
am
not
prepared
to
concede
that
professional
women
make
up
a
disadvantaged
group
against
whom
a
form
of
discrimination
recognized
by
section
15
has
been
perpetrated
by
the
adopting
of
section
63,
or
would
be
perpetrated
by
this
Court's
refusal
to
interpret
paragraph
18(1)(a)
so
as
to
give
a
self-employed
mother
an
additional
deduction
for
a
business
expense;
and
even
if
there
were
discrimination
within
the
meaning
of
section
15,
I
consider
in
light
of
the
ample
evidence
of
justification
submitted
to
the
Court
that
it
is
not
the
function
of
this
Court
to
substitute
its
choice
for
the
one
made
by
Parliament,
with
full
knowledge
of
the
options
proposed
and
in
keeping
with
an
overall
policy
of
assisting
the
family.
The
Court
allowed
the
appeal,
restored
the
notices
of
assessment,
and
ordered
the
appellant
to
pay
the
respondent's
costs
at
trial
and
on
appeal.
IV.
Issues
On
July
14,
1992,
the
Chief
Justice
stated
the
following
constitutional
questions:
1.
If
sections
9,
18
and
63
of
the
Income
Tax
Act
are
not
open
to
an
interpretation
other
than
that
full
child
care
expenses
of
the
appellant
are
not
deductible
as
business
expenses,
does
any
part,
or
do
any
or
all
of
these
sections,
infringe
or
deny
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms?
2.
To
the
extent
that
the
above
sections
of
the
Income
Tax
Act
infringe
or
deny
the
rights
and
freedoms
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms,
are
these
sections
justified
by
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms
and
therefore
not
inconsistent
with
the
Constitution
Act,
1982?
In
responding
to
these
constitutional
questions,
I
will
structure
my
discussion
with
reference
to
the
following
principal
issues:
1.
Are
child
care
expenses
deductible
as
part
of
the
determination
of
profit
under
subsection
9(1)
of
the
Act?
2.
If
child
care
expenses
are
not
deductible
as
part
of
the
determination
of
profit
under
subsection
9(1)
of
the
Act,
has
there
been
a
violation
of
subsection
15(1)
of
the
Charter?
3.
If
there
has
been
a
violation
of
subsection
15(1)
of
the
Charter,
is
it
justified
under
section
1?
V.
Analysis
1.
Are
child
care
expenses
deductible
as
part
of
the
determination
of
profit
under
subsection
9(1)
of
the
Act?
There
are
two
aspects
to
this
question:
(a)
Are
child
care
expenses
deductible
under
principles
of
income
tax
law
applicable
to
business
deductions?
(b)
If
child
care
expenses
are
not
otherwise
deductible
using
such
principles,
are
they
deductible
employing
the
values
of
the
Charter
as
an
interpretive
aid?
For
the
following
reasons,
I
am
of
the
opinion
that
both
of
these
questions
must
be
answered
in
the
negative.
(a)
Are
child
care
expenses
deductible
under
principles
of
income
tax
law
applicable
to
business
deductions?
My
analysis
of
income
tax
law
principles
applicable
to
business
deductions
will
proceed
in
the
following
way.
Immediately
below,
I
will
describe
the
statutory
framework
which
supports
business
expense
deductibility.
Then,
I
will
examine
deductibility
issues
per
se
under
four
headings.
Under
the
first,
I
will
discuss
the
interrelationship
of
subsection
9(1)
and
paragraphs
18(1)(a)
and
18(1
)(h)
of
the
Act,
in
order
to
clarify
the
proper
analytical
approach
in
this
case.
Under
the
second,
I
will
comment
upon
the
historical
classification
of
child
care
expenses
as
personal
expenses,
in
order
to
define
the
relevance
of
paragraph
18(1)(h)
of
the
Act.
Under
the
third,
I
will
examine
paragraph
18(1)(a)
of
the
Act
in
a
search
for
indicia
of
business
expenses
which
can
be
compared
to
the
facts
of
this
case.
Finally,
under
the
fourth,
I
will
consider
the
relevance
of
the
child
care
expense
deduction
in
section
63
of
the
Act.
At
the
outset,
however,
it
is
helpful
to
describe
briefly
the
statutory
framework
in
which
the
subsequent
analysis
will
take
place.
Canadian
residents
pay
tax
pursuant
to
the
basic
charging
provision,
subsection
2(1)
of
the
Act.
Therein,
the
taxability
of
residents
is
established
and
made
referable
to
the
concept
of
“taxable
income”.
As
set
out
in
subsection
2(2),
calculation
of
a
taxpayer's
“
taxable
income"
first
involves
determining
the
taxpayer's
"income
for
the
year".
That
concept,
in
turn,
requires
recourse
to
section
3
of
the
Act,
where,
in
part,
it
is
established
that
to
determine
a
taxpayer's
income
for
a
taxation
year
requires
first
that
one
compute
the
taxpayer's
income
from
each
of
several
sources.
As
set
out
in
paragraph
3(a),
one
such
source
is
"income
.
.
.
from
.
.
.
business”.
As
a
self-employed
lawyer,
it
is
the
business
income
source
of
taxation
which
concerns
the
appellant.
In
essence,
she
argues
that
the
Act
is
capable
of
comprehending
a
business
expense
deduction
for
child
care
as
part
of
its
ordinary
determination
of
business
income.
This
argument,
therefore,
mandates
a
discussion
of
how
the
Income
Tax
Act
ordinarily
determines
what
constitutes
business
income.
(i)
Business
income:
The
interrelationship
of
subsection
9(1),
paragraphs
18(1)(a)
and
18(1)(h)
Leaving
aside
for
the
moment
the
potential
impact
of
section
63,
three
provisions
of
the
Act
which
deal
with
business
income
determination
are
relevant
in
this
case,
and
the
language
of
each
is
worthy
of
note.
First,
by
virtue
of
subsection
9(1),
a
taxpayer's
income
from
business
is
stated
to
be
the
taxpayer's
“
profit
therefrom
for
the
year",
"profit"
being
nowhere
defined
in
the
Act.
Second,
paragraph
18(1)(a)
provides
that
in
computing
business
income,
no
deduction
shall
be
made
for
an
expense
"except
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income”.
Finally,
in
paragraph
18(1)(h),
a
prohibition
against
deducting
"personal
or
living
expenses"
is
established.
The
proper
approach
to
these
three
provisions
is
the
initial
point
to
be
examined.
At
one
time,
it
was
not
clearly
understood
whether
the
authority
for
deducting
business
expenses
was
located
within
what
is
now
subsection
9(1)
or
within
what
is
now
paragraph
18(1)(a).
In
a
series
of
decisions
culminating
in
Royal
Trust
Co.
v.
M.N.R.,
[1957]
C.T.C.
32,
57
D.T.C.
1055
(Ex.
Ct.),
however,
Thorson,
P.
recognized
that
the
deduction
of
business
expenses
is
a
necessary
part
of
the
subsection
9(1)"profit"
calculation.
In
Daley
v.
M.N.R.,
[1950]
C.T.C.
254,
4
D.T.C.
877
(Ex.
Ct.),
Thorson,
P.
commented
upon
section
3
(the
forerunner
to
section
9)
and
subsection
6(a)
(the
forerunner
to
paragraph
18(1)(a))
of
the
Income
War
Tax
Act,
R.S.C.
1927,
c.
97,
in
the
following
terms
(at
page
261
(D.T.C.
880)):
The
correct
view,
in
my
opinion,
is
that
the
deductibility
of
the
disbursements
and
expenses
that
may
properly
be
deducted
“in
computing
the
amount
of
the
profits
or
gains
to
be
assessed"
is
inherent
in
the
concept
of
"annual
net
profit
or
ain”
in
the
definition
of
taxable
income
contained
in
section
3.
The
deductibility
rom
the
receipts
of
a
taxation
year
of
the
appropriate
disbursements
or
expenses
stems,
therefore,
from
section
3
of
the
Act,
if
it
stems
from
any
section,
and
not
at
all,
even
inferentially,
from
paragraph
(a)
of
section
6.
In
other
words,
the
"profit"
concept
in
subsection
9(1)
is
inherently
a
net
concept
which
presupposes
business
expense
deductions.
It
is
now
generally
accepted
that
it
is
subsection
9(1)
which
authorizes
the
deduction
of
business
expenses;
the
provisions
of
subsection
18(1)
are
limiting
provisions
only.
See
MerBan
Capital
Corp.
v.
R.,
[1989]
2
C.T.C.
246,
89
D.T.C.
5404
(F.C.A.).
To
so
describe
subsection
9(1)
and
paragraph
18(1)(a)
does
not,
however,
clarify
the
proper
approach
in
this
case.
While
paragraphs
18(1)(a)
and
(h)
may
first
appear
logically
to
limit—within
the
structure
of
the
Act—deductions
which
have
already
satisfied
subsection
9(1),
this
structure
can
make
less
logical
sense
than
one
might
suppose.
This
is
because
it
is
generally
not
clear
what
kinds
of
expenses
would
be
deductible
under
subsection
9(1),
yet
prohibited
by
paragraph
18(1)(a)
or
(h).
Under
subsection
9(1),
deductibility
is
ordinarily
considered
as
it
was
by
Thorson,
P.
in
Royal
Trust,
supra,
(at
page
40
(D.T.C.
1059)):
.
.
.
the
first
approach
to
the
question
whether
a
particular
disbursement
or
expense
was
deductible
for
income
tax
purposes
was
to
ascertain
whether
its
deduction
was
consistent
with
ordinary
principles
of
commercial
trading
or
well
accepted
principles
of
business
.
.
.
practice
.
.
.
.
[Emphasis
added.]
Thus,
in
a
deductibility
analysis,
one's
first
recourse
is
to
subsection
9(1),
a
section
which
embodies,
as
the
trial
judge
suggested,
a
form
of"
business
test”
for
taxable
profit.
This
is
a
test
which
has
been
variously
phrased.
As
the
trial
judge
rightly
noted,
the
determination
of
profit
under
subsection
9(1)
is
a
question
of
law:
Neonex
International
Ltd.
v.
The
Queen,
[1978]
C.T.C.
485,
78
D.T.C.
6339
(F.C.A.).
Perhaps
for
this
reason,
and
as
Neonex
itself
impliedly
suggests,
courts
have
been
reluctant
to
posit
a
subsection
9(1)
test
based
upon
generally
accepted
accounting
principles”
(G.A.A.P.):
see
also"
Business
Income
and
Taxable
Income”
(1953
Conference
Report:
Canadian
Tax
Foundation)
cited
in
B.
J.
Arnold
and
T.
W.
Edgar,
eds.,
Materials
on
Canadian
Income
Tax
(9th
ed.
1990),
at
page
336.
Any
reference
to
G.A.A.P.
connotes
a
degree
of
control
by
professional
accountants
which
is
inconsistent
with
a
legal
test
for
"profit"
under
subsection
9(1).
Further,
whereas
an
accountant
questioning
the
propriety
of
a
deduction
may
be
motivated
by
a
desire
to
present
an
appropriately
conservative
picture
of
current
profitability,
the
Income
Tax
Act
is
motivated
by
a
different
purpose:
the
raising
of
public
revenues.
For
these
reasons,
it
is
more
appropriate
in
considering
the
subsection
9(1)
business
test
to
speak
of
"well
accepted
principles
of
business
(or
accounting)
practice"
or
“well
accepted
principles
of
commercial
trading”.
Adopting
this
approach
to
deductibility,
it
becomes
immediately
apparent
that
the
well
accepted
principles
of
business
practice
encompassed
by
subsection
9(1)
would
generally
operate
to
prohibit
the
deduction
of
expenses
which
lack
an
income
earning
purpose,
or
which
are
personal
expenses,
just
as
much
as
paragraphs
18(1)(a)
and
(h)
operate
expressly
to
prohibit
such
deductions.
For
this
reason,
there
is
an
artificiality
apparent
in
the
suggestion
that
one
can
first
examine
subsection
9(1)
in
order
to
determine
whether
a
deduction
is
authorized,
and
can
then
turn
to
subsection
18(1)
where
another
analysis
can
be
undertaken:
N.
Brooks,
"The
Principles
Underlying
the
Deduction
of
Business
Expenses”
in
B.
G.
Hansen,
V.
Krishna
and
J.
A.
Rendall,
eds.,
Essays
on
Canadian
Taxation
(1978),
249,
at
pages
253-54;
V.
Krishna,
The
Fundamentals
of
Canadian
Income
Tax
(4th
ed.
1992),
at
page
365,
footnote
44,
and
page
367.
Although
paragraphs
18(1)(a)
and
(h)
may,
therefore,
simply
be
analytically
repetitive
or
confirmatory
of
prohibitions
already
embodied
in
subsection
9(1),
they
may
serve
to
reinforce
the
point
already
made,
namely,
that
the
subsection
9(1)
test
is
a
legal
test
rather
than
an
accountancy
test.
At
the
same
time,
they
conveniently
summarize
what
might
otherwise
be
abstract
principles
of
commercial
practice.
As
noted
by
D.
Ish,
J.
A.
Rendall,
and
C.
A.
Brown
("Deductions"
in
Materials
on
Canadian
Income
Tax,
supra,
at
pages
387-88):
.
.
.
the
frequency
with
which
paragraph
18(1)(a)
appears
in
the
cases
confirms
that
it
is
useful,
if
not
necessary,
for
the
Minister
to
have
specific
statements
which
can
be
relied
upon
.
.
.
.
Arguably,
paragraph
18(1)(h)
is
just
a
refinement
of
paragraph
18(1)(a);
indeed,
one
might
suppose
that
the
taxpayer's
personal
or
living
expenses
would
not
be
deducted
according
to
standard
practices
of
accounting
for
business
profits,
the
test
erected
by
subsection
9(1).
The
process
we
are
describing
is
one
in
which
the
focus
is
progressively
narrowed.
Although
a
personal
or
living
expense
prohibited
by
paragraph
18(1)(h)
arguably
would
also
be
prohibited
by
paragraph
18(1)(a)
.
.
.
the
Minister
may
nevertheless
find
it
very
useful
to
concentrate
attention
on
the
specific
characterization
of
a
disputed
expense
as
being
of
a
personal
consumption
nature.
There
is
no
doubt
that,
in
some
cases,
subsection
9(1)
will
operate
in
isolation
to
scrutinize
deductions
according
to
well
accepted
principles
of
business
practice.
In
this
respect,
I
refer
to
cases,
also
noted
by
the
trial
judge,
in
which
the
real
issue
was
whether
a
particular
method
of
accounting
could
be
used
to
escape
tax
liability:
e.g.
Associated
Investors
of
Canada
Ltd.
v.
M.N.R.,
[1967]
C.T.C.
138,
67
D.T.C.
5096
(Ex.
Ct.);
Canadian
General
Electric
Co.
v.
M.N.R.,
[1962]
S.C.R.
3,
[1961]
C.T.C.
512,
61
D.T.C.
1300.
In
other
cases,
including
the
present
case,
however,
the
real
issue
may
be
whether
a
deduc
tion
is
prohibited
by
well
accepted
principles
of
business
practice
for
the
reason
that
it
is
not
incurred
for
the
purpose
of
earning
income,
or
for
the
reason
that
it
is
a
personal
or
living
expense.
In
such
cases,
any
treatment
of
the
issue
will
necessarily
blur
subsection
9(1)
with
paragraphs
18(1)(a)
and
(h).
I
proceed,
therefore,
to
deal
with
closely
related
arguments
respecting
the
specific
language
of
paragraphs
18(1)(a)
and
18(1)(h).
In
so
doing,
I
mean
to
cast
no
doubt
upon
the
proposition
that
subsection
9(1)
contains
the
authority
for
deduction,
nor
do
I
wish
to
suggest
that
subsection
9(1)
is
not
the
first
section
against
which
a
deduction
is
to
be
measured.
Instead,
I
simply
wish
to
acknowledge
that,
on
the
facts
of
this
case,
I
cannot
respond
to
the
arguments
of
the
parties
without
necessarily
addressing
the
general
language
of
subsection
9(1),
and
the
specific
language
of
paragraphs
18(1)(a)
and
18(1)(h),
at
the
same
time.
(ii)
Personal
expenses
and
paragraph
18(1)
(h)
I
begin
with
paragraph
18(1)(h),
since
traditional
tax
analysis
characterized
child
care
expenses
as
personal
expenses,
such
that
in
modern
terms,
paragraph
18(1)(h)
would
operate
to
specifically
prohibit
them.
I
do
not
propose
to
review
the
numerous
cases
which
might
be
cited
to
demonstrate
this
point:
see
B.
J.
Arnold,
"The
Deduction
for
Child
Care
Expenses
in
the
United
States
and
Canada:
A
Comparative
Analysis”
(1973),
12
West.
Ont.
L.
Rev.
1,
at
page
27,
footnote
141;
J.
E.
Hershfield,
Recent
Trends
in
the
Deduction
of
Expenses
in
Computing
Income,
1989
Conference
Report
(Canadian
Tax
Foundation),
at
page
44:2,
footnote
3.
It
is
sufficient
to
note,
as
did
the
trial
judge
below,
that
the
line
of
reasoning
supporting
such
a
characterization
is
ultimately
founded
upon
the
English
decision
of
Bowers
v.
Harding,
supra,
and
brief
examination
of
that
case
can
help
to
explain
the
historical
classification
of
child
care
expenses
as
personal
expenses.
In
Bowers,
supra,
the
Hardings
(a
married
couple)
were
employed
in
the
operation
of
a
school,
and
they
received
a
joint
salary
for
this
employment.
Mr.
Harding
engaged
a
household
servant,
according
to
the
admitted
facts
of
the
case,
in
order
“to
enable
his
wife
to
have
time
to
perform
her
duties
as
schoolmistress"
(page
23).
Since
the
relevant
tax
legislation
treated
the
couple's
joint
salary
as
Mr.
Harding's
alone,
he
sought
to
deduct
the
expense
of
the
housekeeper
upon
the
basis
that
it
was
incurred
“wholly,
exclusively,
and
necessarily
in
the
performance
of
the
duties
of
his
.
.
.
employment":
Income
Tax
Act
(U.K.),
16
&
17
Vict.,
c.
34,
section
51.
The
attempted
deduction
was
disallowed.
In
the
eyes
of
the
court,
the
Hardings
were
proposing
a"
but
for"
test
for
deductibility.
In
other
words,
they
were
arguing
that
"but
for
the
housekeeper”,
the
income
could
not
have
been
earned.
Baron
Pollock
rejected
this
test
in
the
following
terms
(at
page
564):
When
a
man
and
a
woman
accept
an
office
there
are
certain
detriments
as
well
as
profits,
but
this
is
in
no
sense
an
expenditure
which
enables
them
to
earn
the
income,
in
the
sense
of
its
being
money
expended
upon
goods,
or
in
the
payment
of
clerks,
whereby
a
tradesman
or
a
merchant
is
enabled
to
earn
an
income.
.
.
.
If
we
were
to
go
into
these
questions
with
great
nicety,
we
should
have
to
consider
the
district
in
which
the
person
lives,
the
price
of
meat,
and
the
character
of
the
clothing
that
he
would
require,
in
many
places
indeed
the
character
of
the
services
and
the
wages
paid
to
particular
servants,
and
the
style
in
which
each
person
lives,
before
we
could
come
to
any
conclusion.
I
am
aware
that
many
people
might
question
the
applicability
of
the
lan-
guage
and
circumstances
of
Bowers,
supra.
Indeed,
there
are
many
ways
that
it
might
be
distinguished.
First,
it
deals
with
income
from
employment,
rather
than
with
income
from
business.
Second,
the
expense
in
question
related
to
"housekeeping",
rather
than
to
child
care
(or,
at
least,
if
child
care
was
in-
volved,
the
case
report
fails
to
disclose
so).
Third,
the
expense
was
compared
against
the
very
strict
requirement
that
it
be
made
“wholly,
exclusively
and
necessarily”
for
the
purpose
of
earning
the
income,
and
no
identical
requirement
arises
on
the
facts
of
this
case.
Finally,
perhaps,
like
the
trial
judge
below,
one
could
merely
focus
upon
the
fact
that
the
case
came
from
"another
age"
and
from
"another
system"
(page
483
(D.T.C.
5248)):
Even
without
distinguishing
Bowers,
supra,
in
this
fashion,
however,
I
believe
that
I
should
move
beyond
paragraph
18(1)(h)
of
the
Act
and
the
traditional
classification
of
child
care
in
the
analysis
of
whether
child
care
expenses
are
truly
personal
in
nature.
The
relationship
between
expenses
and
income
in
Bowers,
supra,
was
subsumed
in
that
case,
as
it
was
in
cases
to
follow,
within
an
apparent
dichotomy.
As
stated
by
Professor
Arnold,
"The
Deduction
for
Child
Care
Expenses",
supra,
at
page
27:
The
test
established
by
the
case
for
distinguishing
between
personal
and
living
expenses
involved
a
determination
of
the
origin
of
the
expenses.
If
the
expenses
arose
out
of
personal
circumstances
rather
than
business
circumstances
the
expense
was
a
non-deductible
personal
expense.
There
are
obvious
tautologies
within
this
approach.
"Personal
expenses"
are
said
to
arise
from
"personal
circumstances",
and
“
business
expenses"
are
said
to
arise
from
“
business
circumstances".
But,
how
is
one
to
locate
a
particular
expense
within
the
business/personal
dichotomy?
This
appeal
presents
a
particular
expense
which
has
been
traditionally
characterized
as
personal
in
nature.
If,
in
coming
to
a
decision,
this
Court
stated
that
since
such
expenses
have
always
been
personal,
they
must
now
be
personal,
the
conclusion
could
be
easily
and
deservedly
attacked.
For
this
reason,
proper
analysis
of
this
question
demands
that
the
relationship
between
child
care
expenses
and
business
income
be
examined
more
critically,
in
order
to
determine
whether
that
relationship
can
be
sufficient
to
justify
the
former's
deductibility.
This
proposition,
in
my
opinion,
leads
naturally
to
paragraph
18(1)(a),
which
sets
out
the
relationship
required
by
the
Income
Tax
Act.
In
turning
to
paragraph
18(1)(a),
however,
I
must
take
pains
not
to
eviscerate
needlessly
paragraph
18(1)(h)
and
its
related
jurisprudence.
When
faced
with
a
particular
expense,
it
may
be
both
proper
and
expedient
to
refer
to
past
decisions
which
have
characterized
the
expense
as
"personal"
within
18(1)(h),
such
that
an
extensive
analytical
approach
involving
the
words
of
paragraph
18(1)(a)
may
not
be
required.
On
the
facts
of
this
case,
paragraph
18(1)(a)
may
be
of
greater
assistance
than
the
simple
prohibition
against
deducting
"personal
expenses"
in
paragraph
18(1)(h),
as
I
reexamine
whether
child
care
expenses
truly
constitute
personal
expenses.
However,
not
every
expense
which
has
been
traditionally
characterized
as
a
personal
expense
will
deserve
a
similar
re-examination.
Why,
in
this
case,
is
it
appropriate
to
re-examine
extensively
whether
child
Care
expenses
are
appropriately
characterized
as
personal
expenses?
Relying
upon
the
evidence
of
the
expert
witness,
Armstrong,
the
trial
judge
had
this
to
say
(at
page
483
(D.T.C.
5248)):
.
.
.
there
has
been
a
significant
social
change
in
the
late
1970s
and
into
the
1980s,
in
terms
of
the
influx
of
women
of
child-bearing
age
into
business
and
into
the
workplace.
This
change
post-dates
the
earlier
cases
dismissing
nanny
expenses
as
a
legitimate
business
deduction
and
therefore
it
does
not
necessarily
follow
that
the
conditions
which
prevailed
in
society
at
the
time
of
those
earlier
decisions
will
prevail
now.
I
consider
the
existence
of
the
trend
discussed
in
this
paragraph
to
be
relatively
non-controversial,
such
that
the
point
could
have
been
accepted
even
without
the
assistance
of
an
expert.
The
decision
to
characterize
child
care
expenses
as
personal
expenses
was
made
by
judges.
As
part
of
our
case
law,
it
is
susceptible
to
re-examination
in
an
appropriate
case.
In
Salituro
v.
The
Queen,
[1991]
3
S.C.R.
654,
68
C.C.C.
(3d)
289,
this
Court
had
occasion
to
state
the
following
(at
page
670
(C.C.C.
301):
Judges
can
and
should
adapt
the
common
law
to
reflect
the
changing
social,
moral
and
economic
fabric
of
the
country.
Judges
should
not
be
quick
to
perpetuate
rules
whose
social
foundation
has
long
since
disappeared.
Nonetheless,
there
are
significant
constraints
on
the
power
of
the
judiciary
to
change
the
law.
.
.
The
judiciary
should
confine
itself
to
those
incremental
changes
which
are
necessary
to
keep
the
common
law
in
step
with
the
dynamic
and
evolving
fabric
of
our
society.
The
increased
participation
of
women
in
the
Canadian
workforce
is
undoubtedly
a
change
in
the
“social
foundation"
within
the
meaning
of
Salituro.
Accordingly,
I
do
not
feel
that
I
must
slavishly
follow
those
cases
which
have
characterized
child
care
expenses
as
personal
in
nature.
It
now
falls
to
be
considered
whether
the
alternative
is
appropriate.
In
other
words,
are
child
care
expenses
not
prohibited
by
paragraph
18(1)(a)
of
the
Income
Tax
Act?
(iii)
Business
expenses
and
paragraph
18(1)(a)
In
order
to
be
deductible
as
business
expenses,
the
appellant's
child
care
expenses
must
have
been
incurred
"for
the
purpose
of
gaining
or
producing
income
from
the
business”
within
the
meaning
of
paragraph
18(1)(a)
of
the
Act.
This
is
not
to
say
that
the
expenses
must
directly
lead
to
the
production
of
income.
Even
with
respect
to
the
more
restrictively
worded
ancestor
of
paragraph
18(1)(a),
it
was
recognized
in
Imperial
Oil
Ltd.
v.
M.N.R.,
[1947]
C.T.C.
353,
3
D.T.C.
1090
(Ex.
Ct.),
at
page
371
(D.T.C.
1098),
that
it
is
not
necessary
to
prove
a
Causative
relationship
between
a
particular
expense
and
a
particular
receipt.
Indeed,
provided
that
an
expense
otherwise
satisfies
paragraph
18(1)(a),
an
expense
may
be
deductible
even
if
it
results
in
a
loss.
There
is
some
difficulty
associated
with
determining
how
an
expense
can
otherwise
satisfy
paragraph
18(1)(a),
however.
Several
cases
which
gave
important
consideration
to
the
question
did
so
with
respect
to
the
more
restrictive
language
of
the
Income
War
Tax
Act,
R.S.C.
1927,
c.
97,
subsection
6(a).
That
section
prohibited
the
deduction
of
expenses
to
the
extent
that
they
were
not
wholly,
exclusively
and
necessarily
laid
out
or
expended
for
the
purpose
of
earning
the
income”
(emphasis
added).
The
leading
case
which
considered
subsection
6(a)
of
the
Income
War
Tax
Act
was
Dominion
Natural
Gas
Co.
v.
M.N.R.,
[1941]
S.C.R.
19,
[1940-41]
C.T.C.
155,
1
D.T.C.
499-133.
That
case
involved
a
taxpayer
who
incurred
substantial
legal
expenses
in
defending
a
natural
gas
franchise.
This
Court
characterized
the
expenses
as
non-deductible
capital
expenditures,
and
suggested
that
the
expenses
did
not
satisfy
subsection
6(a).
In
the
words
of
Duff,
C.J.,
subsection
6(a)
referred
to
“working
expenses;
that
is
to
say,
expenses
incurred
in
the
process
of
earning
'the
income'"
(page
22
(C.T.C.
158,
D.T.C.
499-134)
emphasis
added).
Dominion
Natural
Gas
thus
established
a
test
for
business
expenses
frequently
referred
to
as
the
"income
earning
process"
test.
In
subsequent
cases,
this
test
was
applied
by
courts,
but
not
always
in
a
manner
which
suggests
that
the
application
was
straightforward.
In
Kellogg
Co.
of
Canada
Ltd.
v.
M.N.R.,
[1942]
C.T.C.
51,
2
D.T.C.
549
(Ex.
Ct.),
aff'd
[1943]
S.C.R.
58,
[1943]
C.T.C.
1,
2
D.T.C.
601,
for
example,
Kellogg
incurred
substantial
legal
expenses
in
the
defence
of
an
action
alleging
a
trademark
infringement.
Notwithstanding
Dominion,
supra,
Maclean,
J.
in
Kellogg
held
that
such
expenses
were
currently
deductible
as
business
expenses.
Maclean,
J.
focused
upon
the
fact
that
Kellogg's
legal
expenses
were
involuntary,
the
action
not
having
been
commenced
by
the
taxpayer,
and
seemed
to
disregard
the
fact
that
the
same
was
true
of
the
legal
expenses
in
Dominion,
supra.
A
similar
discomfort
can
be
discerned
within
Imperial
Oil,
supra,
and
Hudson's
Bay
Co.
v.
M.N.R.,
[1947]
C.T.C.
86,
3
D.T.C.
968
(Ex.
Ct.):
see
Brooks,
supra,
at
page
255.
In
1948,
the
statutory
language
which
governed
in
the
above
cases
was
replaced
by
the
immediate
forerunner
of
paragraph
18(1)(a)
:
the
Income
Tax
Act,
S.C.
1948,
c.
52,
paragraph
12(1)(a).
It
is
important
to
highlight
the
changes
which
were
thus
introduced.
First,
whereas
the
old
provision
required
that
an
expense
be
incurred
“wholly,
exclusively
and
necessarily"
for
the
stated
purpose,
the
current
provision
does
not
relate
the
purpose
requirement
to
any
modifier.
Second,
whereas
the
old
provision
stated
that
a
business
expense
was
an
expense
incurred
for
the
"purpose
of
earning
the
income”,
the
current
provision
speaks
of"
gaining
or
producing"
the
income.
On
more
than
one
occasion
since
the
amendment,
it
has
been
recognized
that
the
current
language
of
the
Act
suggests
a
broader
rationale
for
deductibility
than
did
the
former.
In
M.N.R.
v.
Premium
Iron
Ores
Ltd.,
[1966]
S.C.R.
685,
[1966]
C.T.C.
391,
66
D.T.C.
5280,
a
taxpayer
incurred
substantial
legal
expenses
in
resisting
the
tax
claim
of
a
foreign
jurisdiction.
In
discussing
the
deductibility
of
such
expenses,
Martland,
J.
suggested
that
[i]t
seems
clear
that
the
present
wording
of.
.
.
[paragraph
18(1)(a)]
was
intended
to
broaden
the
definition
of
deductible
expenses"
(page
702
(C.T.C.
394,
D.T.C.
5281)).
See
also
Hall,
J.
at
page
711
(C.T.C.
404,
D.T.C.
5286);
Royal
Trust,
supra,
at
page
39
(D.T.C.
1059).
The
Court
in
Premium,
supra,
found
such
expenses
to
be
currently
deductible,
and
rejected
that
operations
should
be
segregated
into
revenue
producing
as
distinct
from
revenue
retaining
functions"
(page
711
(C.T.C.
404,
D.T.C.
5286)
per
Hall,
J.).
In
considering
the
extent
to
which
these
cases,
and
others
cited
by
the
trial
judge,
demonstrate
a
liberalization
of
principles
of
deduction
with
respect
to
paragraph
18(1)(a)
of
the
Act,
it
is
relevant
to
acknowledge
their
historical
context.
In
particular,
I
note
that
since
the
cases
discussed
above
were
decided
prior
to
1972,
they
arose
in
the
context
of
a
taxation
system
which
did
not
allow
deductions
in
respect
of
intangible
capital
expenditures.
For
this
reason,
when
confronted
with
an
expenditure
for
intangibles,
courts
had
two
choices.
First,
the
expenditure
could
be
characterized
as
being
on
account
of
capital,
in
which
case
it
could
not
be
deducted
at
all
since
capital
expenditures
could
only
be
deducted
within
the
capital
cost
allowance
system,
a
system
which
provides
only
for
the
depreciation
of
tangible
property:
see
Income
Tax
Regulations,
C.R.C.,
c.
945,
Schedule
II,
Class
8(i).
Second,
an
intangible
expenditure
could
be
characterized
as
a
current
expenditure,
in
which
case
it
would
be
totally
deductible
as
such.
In
dealing
with
intangibles
such
as
substantial
legal
expenses,
therefore,
pre-1972
courts
may
have
been
influenced
by
more
than
simply
a
liberalized
formulation
of
the
paragraph
18(1)(a)
test.
In
discussing
the
treatment
of
intangible
capital
expenditures
prior
to
1972,
Professor
Woodman
has
stated
("A
Child
Care
Expenses
Deduction,
Tax
Reform
and
the
Charter:
Some
Modest
Proposals"
(1989),
8
Can.
J.
Fam.
L.
371,
at
page
377):
Courts,
recognizing
the
adverse
effect
of
such
a
characterization,
attempted
to
circumvent
the
paragraph
18(1)(b)
prohibition
by
stretching
the
definition
of
a
current
deductible
business
expense.
In
other
words,
it
is
true
that
the
courts
have
expanded
the
ambit
of
deductibility,
but
it
does
not
necessarily
follow
that
the
next
step
is
to
make
child
care
expenses
deductible.
Today,
the
treatment
of
business
deductions
occurs
in
a
statutory
environment
which
provides
for
capital
intangibles
through
the
concept
of
eligible
capital
expenditures:
see
section
14
and
paragraph
20(1)(b)
of
the
Act.
Without
dismissing
the
importance
of
the
observation
just
described,
it
is
nonetheless
true
that
the
current
wording
of
paragraph
18(1)(a)
is
sufficient
justification
for
the
view
that
Parliament
acted
to
amend
its
predecessor
section
in
such
a
way
as
to
broaden
the
scope
for
business
expense
deductibility.
Professor
Brooks
adopts
this
view,
and
suggests
that
the
only
true
question
under
paragraph
18(1)(a)
is:
was
the
expense
incurred
for
a
personal
or
business
purpose?"
(supra,
at
page
255).
Other
commentators
propose
other
tests
which
vary
in
the
extent
to
which
they
borrow
directly
from
the
language
of
paragraph
18(1)(a).
Examples
include
a”
‘predominant
purpose”
test
(C.F.L.
Young,
"Case
Comment:
Symes
v.
The
Queen”,
[1991]
Brit.
Tax
Rev.
105,
at
page
105),
or,
more
basically,
a
test
which
requires
simply
an
income
earning
purpose:
Krishna,
The
Fundamentals
of
Canadian
Income
Tax,
supra,
at
pages
365-66;
E.
C.
Harris,
Canadian
Income
Taxation
(4th
ed.
1986),
at
pages
191-92.
All
of
these
tests
include
some
reference
to
the
purpose
of
an
expense.
In
considering
the
extent
to
which
a
purpose
test
is
appropriate,
I
wish
to
make
note
of
the
decision
of
Wilson,
J.
in
Mattabi
Mines
Ltd.
v.
M.N.R.
(Ontario),
[1988]
2
S.C.R.
175,
[1988]
2
C.T.C.
294.
Therein,
Wilson,
J.
considered
a
taxation
provision
substantially
similar
to
paragraph
18(1)(a),
she
examined
jurisprudence
on
paragraph
18(1)(a),
and
she
came
to
the
following
conclusion
(at
page
189
(C.T.C.
301)):
The
only
thing
that
matters
is
that
the
expenditures
were
a
legitimate
expense
made
in
the
ordinary
course
of
business
with
the
intention
that
the
company
could
generate
a
taxable
income
some
time
in
the
future.
In
making
this
statement,
and
in
proceeding
to
discuss
an
interpretation
bulletin
reference
to
the
"income-earning
process"
(at
pages
189-90
(C.T.C.
301)),
Wilson,
J.
was
not
considering
the
personal
versus
business
expense
dichotomy.
Instead,
she
was
rejecting
both
the
need
for
a
causal
connection
between
a
particular
expenditure
and
a
particular
receipt,
and
the
suggestion
that
a
receipt
must
arise
in
the
same
year
as
an
expenditure
is
incurred.
Her
reference
to
the
“ordinary
course
of
business"
is
merely
a
reflection
of
these
other
conclusions.
It
is
not
a
rejection
of
the
idea
that
paragraph
18(1)(a)
focuses
upon
purpose,
nor
does
it
signal
her
acceptance
of
an
"incomeearning
process"
test
intended
to
distinguish
analytically
between
personal
and
business
expenses.
Indeed,
in
this
regard,
it
is
instructive
to
note
Wilson,
J.'s
reference
to
the
“intention”
of
the
taxpayer.
The
appropriateness
of
a
purpose
test
must
also
be
measured
against
other
tests
which
have
been
proposed
in
this
case.
The
respondent
in
this
Court,
as
in
the
courts
below,
argued
in
favour
of
what
can
be
called
an
"incomeproducing
circle”
test.
According
to
such
a
test,
a
distinction
should
be
made
between
expenses
incurred
in
order
to
approach
the
income-producing
circle
(such
as
clothing
and
commuting
expenses,
for
example),
and
those
which
are
incurred
within
the
circle
itself.
Of
course,
the
test
would
presuppose
that
only
the
latter
would
be
deductible
as
business
expenses.
I
consider
this
circle
test
of
limited
help
as
an
analytic
tool
in
a
case
such
as
the
one
at
hand
though
it
may
be
of
assistance
in
understanding
generally
accepted
business
expenses.
By
suggesting
that
there
is
a
line
dividing
business
expenses
per
se
and
those
expenses
incurred
in
order
to
approach
the
realm
of
business,
this
so-called
test
does
nothing
more
than
restate
the
business/personal
dichotomy
already
being
examined.
What
is
worse,
by
disguising
this
restatement
as
a
test,
the
circle
concept
can
have
pernicious
effects.
The
trial
judge
recognized
one
of
these,
namely,
that
the
circle
concept
seems
to
suggest
that
the
content
of
the
income
producing
circle
has
been
fixed
in
time.
To
the
extent
that
the
content
of
the
circle
has
been
informed
by
gendered
and
irrelevant
considerations,
the
circle
concept
may
be
unwilling
to
respond.
In
my
view,
the
test
has
a
second
problem:
it
conjures
up
an
image
of
an
income-producing
circle
which
is
entirely
separate
and
apart
from
a
domestic
circle.
Taking
commuting
expenses
as
an
example,
one
tends
to
imagine
a
taxpayer
leaving
the
"home
circle"
and
incurring
expenses
in
order
to
approach
the
"income-producing
circle”.
This
is
a
simplistic
vision
of
the
modern
business
world.
One
need
only
consider
the
deduction
available
for
the
home
office
(subsection
18(12)
of
the
Act)
to
realize
that
a
taxpayer's
personal
and
business
activities
may
be
closely
related
within
the
taxpayer's
home
itself.
Further,
to
the
extent
that
this
Court
is
now
asked
to
consider
whether
the
needs
of
women
have
been
disregarded
in
the
definition
of
"business
expenses",
it
is
misleading
to
presuppose
that
activities
occurring
within
the
domestic
environment
are,
for
that
reason
alone,
more
likely
to
be
excluded
from
the
income-producing
circle,
since
the
concerns
of
women
have
been
confined
to
the
domestic
environment
as
an
historical
matter.
A
test
not
unrelated
to
this
circle
test
is
that
which
asks
whether
an
expense
is
an
expense
“of
the
trader"
or
"of
the
trade".
J.
E.
Hershfield,
supra,
describes
how
this
language
entered
Canadian
law
by
way
of
quotation
in
Dominion
Natural
Gas,
supra,
at
page
28
(C.T.C.
163,
D.T.C.
499-138)
(per
Crocket,
J.).
Hershfield
goes
on
to
argue
that
part
of
the
deductibility
test
must
be
"whether
the
expense
was
an
incident
of
the
trade—part
of
the
business
operation
itself.
That
the
'trader'
incurred
the
expense
to
earn
income
from
the
business
is
not
enough"
(page
44:9).
Viewed
one
way,
this
might
be
seen
as
little
more
than
a
restatement
of
the
circle
argument,
since
it
might
be
difficult
to
distinguish
between
an
"income-producing
circle”
and
"the
business
operation
itself”.
Viewed
more
charitably,
however,
to
ask
whether
an
expense
is
of
the
trader
or
of
the
trade
may
be
to
simply
realize
that
the
deductibility
of
an
expense
is
"not
to
be
determined
by
isolating
it”
(Hershfield,
supra,
at
page
44:8).
To
the
extent
that
this
test
simply
requires
child
care
expenses
to
be
viewed
in
the
context
of
the
appellant's
business
as
a
lawyer,
I
agree
with
it.
Concepts
such
as
the
"income-producing
circle”
or
the
"trade/trader"
distinction
suggest
that
the
classification
of
an
expense
involves
a
straightforward
question.
For
example,
these
concepts
ask:
Does
the
expense
satisfy
a
need
of
the
business
or
a
need
of
the
taxpayer?
Without
meaning
to
retract
the
critique
of
these
concepts
just
offered,
I
frankly
acknowledge
that
such
a
question
is
often
sufficient
when
one
classifies
expenses.
However,
I
do
not
regard
this
question
as
necessarily
sufficient
in
cases,
such
as
the
present
case,
which
involve
the
allegation
that
an
expense
is
a
"personal
expense".
In
other
words,
there
are
a
great
many
expenses
which
are
never
alleged
to
be
"personal
expenses"
at
all.
With
respect
to
these,
the
approach
is
ordinarily
much
more
objective,
and
the
analysis
is
generally
confined
to
section
9
of
the
Act.
It
is
only
when
an
expense
is
alleged
to
be
a
"personal
expense"
that
one
must
go
further
and
ask
what
is
meant
by
the
concept
of
"business
need".
Upon
reflection,
therefore,
no
test
has
been
proposed
which
improves
upon
or
which
substantially
modifies
a
test
derived
directly
from
the
language
of
paragraph
18(1)(a).
The
analytical
trail
leads
back
to
its
source,
and
I
simply
ask
the
following:
did
the
appellant
incur
child
care
expenses
for
the
purpose
of
gaining
or
producing
income
from
a
business?
As
in
other
areas
of
law
where
purpose
or
intention
behind
actions
is
to
be
ascertained,
it
must
not
be
supposed
that
in
responding
to
this
question,
courts
will
be
guided
only
by
a
taxpayer's
statements,
ex
post
facto
or
otherwise,
as
to
the
subjective
purpose
of
a
particular
expenditure.
Courts
will,
instead,
look
for
objective
manifestations
of
purpose,
and
purpose
is
ultimately
a
question
of
fact
to
be
decided
with
due
regard
for
all
of
the
circumstances.
For
these
reasons,
it
is
not
possible
to
set
forth
a
fixed
list
of
circumstances
which
will
tend
to
prove
objectively
an
income
gaining
or
producing
purpose.
Professor
Brooks
has,
however,
in
summarizing
some
reoccurring
factual
patterns,
elucidated
factors
to
be
considered,
and
I
find
his
discussion
generally
helpful:
supra,
at
pages
256-59.
In
the
following
paragraphs,
I
will
make
reference
to
some
of
these
factors.
It
may
be
relevant
in
a
particular
case
to
consider
whether
a
deduction
is
ordinarily
allowed
as
a
business
expense
by
accountants.
This
is
not
to
revert
to
the
notion
that
accountancy
will
govern
under
subsection
9(1)
of
the
Act,
since
accountants
'have
no
special
expertise
in
making"
(Brooks,
supra,
at
page
256)
the
business
versus
personal
expense
judgment.
Instead,
such
evidence
may
simply
indicate
that
a
particular
kind
of
expenditure
is
widely
accepted
as
a
business
expense.
Similarly,
it
may
be
relevant
to
consider
whether
the
expense
is
one
normally
incurred
by
others
involved
in
the
taxpayer's
business.
If
it
is,
there
may
be
an
increased
likelihood
that
the
expense
is
a
business
expense.
It
may
also
be
relevant
to
consider
whether
a
particular
expense
would
have
been
incurred
if
the
taxpayer
was
not
engaged
in
the
pursuit
of
business
income.
Professor
Brooks
comments
upon
this
consideration
in
the
following
terms
(at
page
258):
If
a
person
would
have
incurred
a
particular
expense
even
if
he
or
she
had
not
been
working,
there
is
a
strong
inference
that
the
expense
has
a
personal
purpose.
For
example,
it
is
necessary
in
order
to
earn
income
from
a
business
that
a
business
person
be
fed,
clothed
and
sheltered.
However,
since
these
are
expenses
that
a
person
would
incur
even
if
not
working,
it
can
be
assumed
they
are
incurred
for
a
personal
purpose—to
stay
alive,
covered,
and
out
of
the
rain.
These
expenses
do
not
increase
significantly
when
one
undertakes
to
earn
income.
I
recognize
that
in
discussing
food,
clothing
and
shelter,
I
am
adverting
to
a
“but
for"
test
opposite
to
the
one
discussed
earlier.
Here,
the
test
suggests
that
“but
for
the
gaining
or
producing
of
income,
these
expenses
would
still
need
to
be
incurred".
I
must
acknowledge
that
because
it
is
a"
but
for”
test,
it
can
be
manipulated.
One
can
argue,
for
example,
that
“but
for
work,
the
taxpayer
would
not
still
require
expensive
dress
clothes".
However,
in
most
cases,
the
manipulation
can
be
easily
rejected.
Continuing
with
the
same
example,
one
can
conclude
that
the
expense
of
clothing
does
“not
increase
significantly"
(Brooks,
supra,
at
page
258)
in
tax
terms
when
one
upgrades
a
wardrobe.
Alternatively,
one
can
focus
upon
the
change
in
clothing
as
a
personal
choice.
Or,
finally,
considering
that
all
psychic
satisfactions
represent
a
form
of
consumption
within
the
ideal
of
a
comprehensive
tax
base,
one
can
focus
upon
the
increased
personal
satisfaction
associated
with
possessing
a
fine
wardrobe.
Taking
up
this
last
point,
I
note
that
in
a
tax
system
which
is
at
least
partly
geared
toward
the
preservation
of
vertical
and
horizontal
equities
("[h]orizon-
tal
equity
merely
requires
that
"equals"
be
treated
equally,
with
the
term
"equals"
referring
to
equality
of
ability
to
pay"
and
“vertical
equity
merely
requires
that
the
incidence
of
the
tax
burden
should
be
more
heavily
borne
by
the
rich
than
the
poor":
V.
Krishna,
"Perspectives
on
Tax
Policy”
in
Essays
on
Canadian
Taxation,
supra,
at
pages
5
and
6-7),
one
seeks
to
prevent
deductions
which
represent
personal
consumption.
To
the
extent
that
a
taxpayer
can
make
a
lifestyle
choice
while
maintaining
the
same
capacity
to
gain
or
produce
income,
such
choices
tend
to
be
seen
as
personal
consumption
decisions,
and
the
resultant
expenses
as
personal
expenses.
Professor
Brooks
gives
the
example
of
commuting
expenses,
which
necessarily
vary
according
to
where
one
chooses
to
live
(assuming,
of
course,
that
the
taxpayer
has
some
choice
in
this
regard).
In
some
cases,
it
may
be
helpful
to
analyze
expenses
in
these
terms.
Since
I
have
commented
upon
the
underlying
concept
of
the
"business
need"
above,
it
may
also
be
helpful
to
discuss
the
factors
relevant
to
expense
classification
in
need-based
terms.
In
particular,
it
may
be
helpful
to
resort
to
a
“but
for"
test
applied
not
to
the
expense
but
to
the
need
which
the
expense
meets.
Would
the
need
exist
apart
from
the
business?
If
a
need
exists
even
in
the
absence
of
business
activity,
and
irrespective
of
whether
the
need
was
or
might
have
been
satisfied
by
an
expenditure
to
a
third
party
or
by
the
opportunity
cost
of
personal
labour,
then
an
expense
to
meet
the
need
would
traditionally
be
viewed
as
a
personal
expense.
Expenses
which
can
be
identified
in
this
way
are
expenses
which
are
incurred
by
a
taxpayer
in
order
to
relieve
the
taxpayer
from
personal
duties
and
to
make
the
taxpayer
available
to
the
business.
Traditionally,
expenses
that
simply
make
the
taxpayer
available
to
the
business
are
not
considered
business
expenses
since
the
taxpayer
is
expected
to
be
available
to
the
business
as
a
quid
pro
quo
for
business
income
received.
This
translates
into
the
fundamental
distinction
often
drawn
between
the
earning
or
source
of
income
on
the
one
hand,
and
the
receipt
or
use
of
income
on
the
other
hand.
It
remains
to
consider
the
appellant's
child
care
expenses
in
light
of
this
discussion.
First,
it
is
clear
on
the
facts
that
the
appellant
would
not
have
incurred
child
care
expenses
except
for
her
business.
It
is
relevant
to
note
in
this
regard
that
her
choice
of
child
care
was
tailored
to
her
business
needs.
As
a
lawyer,
she
could
not
personally
care
for
her
children
during
the
day
since
to
do
so
would
interfere
with
client
meetings
and
court
appearances,
nor
could
she
make
use
of
institutionalized
daycare,
in
light
of
her
working
hours.
These
are
points
which
were
recognized
by
the
trial
judge.
Second,
however,
it
is
equally
clear
that
the
need
which
is
met
by
child
care
expenses
on
the
facts
of
this
case,
namely,
the
care
of
the
appellant's
children,
exists
regardless
of
the
appellant's
business
activity.
The
expenses
were
incurred
to
make
her
available
to
practice
her
profession
rather
than
for
any
other
purpose
associated
with
the
business
itself.
Third,
I
note
that
there
is
no
evidence
to
suggest
that
child
care
expenses
are
considered
business
expenses
by
accountants.
There
is,
however,
considerable
reason
to
believe
that
many
parents,
and
particularly
many
women,
confront
child
care
expenses
in
order
to
work.
There
is,
first
of
all,
the
evidence
of
the
expert
witness,
already
discussed
above.
In
addition,
the
record
before
this
Court
includes
a
report
by
Status
of
Women
Canada,
entitled
the
Report
of
the
Task
Force
on
Child
Care
(1985),
which
demonstrates
that
a
very
large
number
of
working
parents
require
non-parental
care
for
their
children
(see,
e.g.,
Table
4.2).
As
well,
the
intervener
Canadian
Bar
Association
presented
this
Court
with
survey
information
which
specifically
addresses
the
experience
of
lawyers
in
Ontario.
That
information
suggests
that
for
lawyers
with
children,
a
significant
proportion
of
child
care
responsibility
is
borne
by
paid
child
care
workers,
and
the
mean
proportion
is
over
250
per
cent
greater
for
women
(25.56
hours
per
week)
than
for
men
(9.53
hours
per
week):
Law
Society
of
Upper
Canada,
Transitions
in
the
Ontario
Legal
Profession
(1991).
This
demographic
picture
may
increase
the
likelihood
that
child
care
expenses
are
a
form
of
business
expense.
Finally,
as
a
fourth
point
of
analysis,
I
am
uncomfortable
with
the
suggestion
that
the
appellant's
decision
to
have
children
should
be
viewed
solely
as
a
consumption
choice.
I
frankly
admit
that
there
is
an
element
of
public
policy
which
feeds
my
discomfort.
In
Brooks
v.
Canada
Safeway
Ltd.,
[1989]
1
S.C.R.
1219,
59
D.L.R.
(4th)
321,
Dickson,
C.J.
stated
(at
page
1243
(D.L.R.
339)):
That
those
who
bear
children
and
benefit
society
as
a
whole
thereby
should
not
be
economically
or
socially
disadvantaged
seems
to
bespeak
the
obvious.
It
is
only
women
who
bear
children;
no
man
can
become
pregnant
.
.
.
it
is
unfair
to
impose
all
of
the
costs
of
pregnancy
upon
one
half
of
the
population.
The
appellant
and
her
husband
freely
chose
to
have
children,
and
they
further
determined
that
the
costs
of
child
care
would
be
paid
by
the
appellant.
However,
it
would
be
wrong
to
be
misled
by
this
factual
pattern.
Pregnancy
and
childbirth
decisions
are
associated
with
a
host
of
competing
ethical,
legal,
religious,
and
socioeconomic
influences,
and
to
conclude
that
the
decision
to
have
children
should—in
tax
terms—be
characterized
as
an
entirely
personal
choice,
is
to
ignore
these
influences
altogether.
While
it
might
be
factually
correct
to
regard
this
particular
appellant's
decision
to
have
children
as
a
personal
choice,
I
suggest
it
is
more
appropriate
to
disregard
any
element
of
personal
consumption
which
might
be
associated
with
it.
What
is
more,
I
note
that
it
is
not
a
necessary
part
of
this
conclusion
that
the
appellant
bears
a
legal
obligation
to
care
for
her
children,
as
might
be
suggested
by
the
following
oft-quoted
analogy
originating
from
the
United
States
(M.J.
McIntyre,
"Evaluating
the
New
Tax
Credit
for
Child
Care
and
Maid
Service”
(1977),
5
Tax
Notes
7,
at
page
8):
The
child
care
deduction
was
somewhat
different
because
of
the
legal
obligation
to
care
for
children.
No
one
would
suggest
that
the
costs
of
caring
for
a
pet
elephant
are
deductible,
simply
because
it
is
impossible
to
go
to
work
and
leave
the
elephant
alone.
What
made
child
care
different
was
that
a
parent,
after
making
the
quintessential
personal
choice
to
have
a
child,
could
not
undo
that
decision
by
giving
the
child
to
the
local
zoo.
This
difference,
however,
is
not
sufficient
to
convert
child
care
into
a
business
expense
.
.
.
.
The
appellant's
legal
obligation
to
care
for
her
children
is
a
relevant
consideration
in
this
case:
see,
e.g.,
Criminal
Code,
R.S.C.
1985,
c.
C-46,
section
215.
However,
it
is
fallacious
to
suppose
that
one's
decision
to
have
a
pet
and
one's
decision
to
have
a
child
can
be
distinguished
solely
on
this
basis.
As
indicated
immediately
above,
these
decisions
can
also
be
distinguished
if
one
chooses
to
ignore
any
element
of
personal
consumption
associated
with
having
children,
or
to
borrow
a
phrase,
if
one
rejects
that
a
child
is
always
"the
quintessential
personal
choice”
of
the
parent.
The
factors
so
far
analyzed
suggest
that,
considering
only
section
9
and
paragraphs
18(1)(a)
and
18(1)(h),
arguments
can
be
made
for
and
against
the
classification
of
the
appellant’s
child
care
expenses
as
business
expenses.
In
another
case,
the
arguments
might
be
differently
balanced,
since
the
existence
of
a
business
purpose
within
the
meaning
of
paragraph
18(1)(a)
is
a
question
of
fact,
and
that
the
relative
weight
to
be
given
to
the
factors
analyzed
will
vary
from
case
to
case.
However,
in
general
terms,
I
am
of
the
view
that
child
care
expenses
are
unique:
expenditures
for
child
care
can
represent
a
significant
percentage
of
taxpayer
income,
such
expenditures
are
generally
linked
to
the
taxpayer's
ability
to
gain
or
produce
income,
yet
such
expenditures
are
also
made
in
order
to
make
a
taxpayer
available
to
the
business,
and
the
expenditures
are
incurred
as
part
of
the
development
of
another
human
life.
It
can
be
difficult
to
weigh
the
personal
and
business
elements
at
play.
In
this
respect,
Professor
Arnold
analyzed
the
nature
of
child
care
expenses
soon
after
section
63
was
introduced
into
the
Act.
After
addressing
the
extent
to
which
Canadian
courts
have
rationalized
the
personal
versus
business
expense
distinction
generally,
he
makes
the
following
statement
(supra,
at
pages
39-40):
This
analysis
leads
one
to
the
conclusion
that
the
distinction
between
personal
and
business
expenses
does
not
provide
a
satisfactory
rationale
for
the
treatment
of
child
care
expenses.
Child
care
expenses
are
characterized
by
personal
elements
but
they
also
have
significant
business
elements
which
distinguish
them
from
the
"purely"
personal
expenses.
I
agree
with
this
statement,
in
so
far
as
it
recognizes
that
when
one
considers
deductibility
solely
with
reference
to
section
9
and
paragraphs
18(1)(a)
and
18(1)(h),
child
care
expenses
may
remain
difficult
to
classify.
I
am
aware
that
if
I
were
compelled
to
reach
a
conclusion
with
respect
to
the
proper
classification
of
child
care
expenses
with
reference
to
only
section
9
and
paragraphs
18(1)(a)
and
18(1)(h)
of
the
Income
Tax
Act,
such
a
conclusion
would
involve
competing
policy
considerations.
On
the
one
hand,
there
is
value
in
the
traditional
tax
law
test
which
seeks
to
identify
those
expenses
which
simply
make
a
taxpayer
available
to
the
business,
and
which
proceeds
to
classify
such
expenses
as
"personal"
for
the
reason
that
a"
personal
need"
is
being
fulfilled.
On
the
other
hand,
however,
it
is
inappropriate
to
disregard
lightly
the
policy
considerations
which
suggest
that
choice
and
consumption
have
no
role
to
play
in
the
classification
of
child
care
expenses.
In
the
Federal
Court
of
Appeal,
a
needs-based
analysis
carried
the
day.
The
court
concluded
that
"the
concept
of
a
business
expense
has
been
developed
exclusively
in
relation
to
the
commercial
needs
of
the
business,
without
any
regard
to
the
particular
needs
of
those
in
charge"
(page
9
(D.T.C.
5403)).
If
other
policy
considerations
are
disregarded,
an
availability
analysis
virtually
compels
this
conclusion.
In
this
regard,
however,
I
find
interesting
the
comments
of
Professor
Macklin
which
relate
to
the
conclusion
of
the
Federal
Court
of
Appeal
just
quoted
(A.
Macklin,
“Symes
v.
M.N.R.:
Where
Sex
Meets
Class”
(1992),
5
C.J.W.L.
498,
at
pages
507-3):
This
assertion
failed
to
acknowledge
that
as
long
as
business
has
been
the
exclusive
domain
of
men,
the
commercial
needs
of
business
have
been
dictated
by
what
men
(think
they)
need
to
expend
in
order
to
produce
income.
The
fact
that
these
expenditures
also
have
a
"personal"
element
was
never
treated
as
a
complete
bar.
It
seems
closer
to
the
truth
to
suggest
that
these
practices
inhere
in
the
way
men,
or
some
men,
engage
in
business.
Of
course,
since
men
have
(until
very
recently)
been
the
only
people
engaging
in
business,
it
is
easy
enough
to
conflate
the
needs
of
businessmen
with
the
needs
of
business.
Women's
needs
in
doing
business
will
necessarily
be
different,
and
one
might
reasonably
demand
a
reconceptualization
of
“
business
expenses"
that
reflects
the
changing
composition
of
the
business
class.
Although
I
wish
to
make
no
comment
about
expenses
which
have
a
"personal"
element
but
which
are
nonetheless
currently
treated
as
business
expenses,
and
although
Professor
Macklin
fails
to
note
the
role
of
taxpayer
availability
in
her
discussion
of
"needs",
it
is
difficult
to
argue
that
history
has
not
conflated
the
"needs
of
businessmen
with
the
needs
of
business”
as
Professor
Macklin
suggests.
Therefore,
to
the
extent
that
traditional
income
tax
law
would
classify
child
care
expenses
as
"personal"
simply
because
such
expenses
are
incurred
in
order
to
make
the
taxpayer
“available”
to
the
business—and
in
the
absence
of
section
63—it
might
be
correct
to
assert
that
the
changing
composition
of
the
business
class
and
changing
social
structure
demand
a
reconceptualization.
However,
I
find
it
unnecessary
to
determine
whether
reconceptualization
is
appropriate
having
regard
to
the
presence
of
section
63
in
the
Income
Tax
Act.
Section
63
cannot
be
lightly
disregarded
(E.
A.
Driedger,
Construction
of
Statutes
(2nd
ed.
1983),
at
page
87):
.
.
.
the
words
of
an
Act
are
to
be
read
in
their
entire
context
and
in
their
grammatical
and
ordinary
sense
harmoniously
with
the
scheme
of
the
Act,
the
object
of
the
Act,
and
the
intention
of
Parliament.
In
fact,
as
I
will
now
attempt
to
demonstrate,
I
do
not
believe
that
section
9
and
paragraphs
18(1)(a)
and
18(1)(h)
can
be
interpreted
to
account
for
a
child
care
business
expense
deduction,
in
light
of
the
language
used
in
section
63.
(iv)
The
effect
of
section
63
The
appellant
argues
that
the
presence
of
section
63
in
the
Income
Tax
Act
should
not
affect
the
deductibility
of
child
care
costs
as
business
expenses.
She
suggests
that
the
language
of
that
provision
does
not
operate
to
confine
taxpayers
in
making
deductions
for
child
care
expenses.
Additionally,
she
relies
upon
the
decision
in
Olympia
Floor
&
Wall
Tile
Co.
(Quebec)
v.
M.N.R.,
[1970]
C.T.C.
99,
70
D.T.C.
6085
(Ex.
Ct.)
to
suggest
that
when
a
taxpayer
has
expenses
which
exceed
an
amount
made
deductible
by
a
specific
provision
of
the
Act,
the
taxpayer
can
have
recourse
to
a
more
general
provision
in
order
to
deduct
the
full
amount.
In
my
opinion,
her
arguments
must
fail.
Considering
first
the
language
of
section
63,
it
is
readily
apparent
that
the
Act's
definition
of
“
child
care
expenses"
specifically
comprehends
the
purpose
for
which
the
appellant
incurred
her
nanny
expenses.
According
to
part
or
that
definition,
a
child
care
expense
is
one
incurred
in
order
to
provide
child
care
services
"to
enable
the
taxpayer
.
.
.
to
carry
on
a
business
either
alone
or
as
a
partner":
clause
63(3)(a)(i)(B).
Furthermore,
paragraph
63(1)(e)
operates
to
cap
the
deduction
with
reference
to
"earned
income",
which
is
defined
in
subparagraph
63(3)(b)(iii)
to
include
“incomes
from
.
.
.
businesses
carried
on
either
alone
or
as
a
partner
actively
engaged
in
the
business".
The
fact
that
this
language
accurately
describes
the
situation
at
hand—i.e.,
a
law
partner
paying
child
care
in
order
to
work—is
itself
persuasive
reason
to
suppose
that
section
9
and
paragraphs
18(1)(a)
and
18(1)(h)
cannot
be
interpreted
to
permit
a
child
care
business
expense
deduction.
Décary,
J.A.,
in
the
Federal
Court
of
Appeal
below,
considered
this
language
to
be
"clear
and
not
open
to
question",
and
suggested
that
section
63
is
really
a
code
in
itself,
complete
and
independent"
(page
9
(D.T.C.
5404)).
In
addition
to
the
plain
language
of
the
quoted
provisions,
however,
there
are
other
reasons
to
believe
that
this
is
the
correct
interpretation.
One
such
reason
is
the
structure
of
section
63
itself.
Section
63
places
a
number
of
limitations
upon
the
child
care
deduction.
It
varies
the
deduction
according
to
the
taxpayer's
earned
income,
or,
according
to
the
product
obtained
when
a
fixed
sum
is
multiplied
by
the
number
of
children
requiring
care,
subject
to
an
annual
ceiling.
In
addition,
when
two
or
more
taxpayers
have
contributed
during
a
year
to
the
support
of
a
child,
the
scheme
established
by
section
63
ordinarily
limits
the
deduction
in
a
further
way:
it
makes
the
deduction
available
only
to
the
lower
earning
supporter
(see
subsection
63(2)).
To
the
extent
that
section
63
intends
to
limit
child
care
expense
deductions
to
lower
earning
supporters,
the
appellant's
position
could
substantially
undermine
that
intent.
In
this
case,
the
appellant
and
her
husband
admittedly
made
a
"family
decision”
to
the
effect
that
the
appellant
alone
bears
the
financial
burden
of
child
care:
see
Federal
Court
of
Appeal
judgment,
at
page
3
(D.T.C.
5399).
By
proffering
evidence
on
this
point,
the
appellant
would
seek
to
avoid
the
definition
of
“supporting
person"
in
paragraph
63(3)(d)
of
the
Act,
which
would
statutorily
define
her
husband
as
such
a
person,
notwithstanding
the
“family
decision".
In
the
result,
she
would
take
a
complete
deduction
of
the
child
care
expenses,
free
from
the
consideration
of
whether
or
not
she
is
the
lower
earning
supporter.
The
appellant's
approach
is
unworkable.
For
example,
consider
the
case
of
two
spouses
living
with
an
eligible
child,
one
of
whom
is
an
employee
earning
a
low
income,
and
the
other
of
whom
is
a
businessperson
earning
a
higher
income.
The
approach
of
the
appellant
clearly
invites
this
couple
to
make
a
“family
decision”
in
order
to
establish
that
the
cost
of
child
care
is
the
sole
responsibility
of
the
taxpayer
with
business
income.
Without
casting
aspersions
upon
the
appellant,
I
fear
that
in
many
cases
there
would
be
more
bookkeeping
than
reality
about
such
a
decision.
The
courts
being
poorly
suited
to
assess
the
validity
of
"family
decisions"
of
this
sort,
I
am
inclined
to
believe
that
the
intent
of
section
63
is
to
prevent
the
need
for
such
assessments.
Further,
by
statutorily
defining
both
parents
to
be
responsible
for
child
care
expenses
for
tax
purposes,
paragraph
63(3)(d)
is
entirely
congruent
with
a
contemporary
understanding
of
parental
obligations
in
that
regard.
Additionally,
it
is
important
to
acknowledge
the
context
of
section
63
within
the
Income
Tax
Act
as
a
whole.
Section
63
exists
within
Division
B,
Subdivision
e
of
the
Act.
As
set
out
in
paragraph
3(c),
the
deductions
permitted
by
this
subdivision
are
made
only
after
income
from
each
of
the
various
sources
has
been
calculated.
In
this
regard,
it
is
relevant
to
consider
section
4.
Paragraph
4(1)(a)
of
the
Act
provides
that
each
source
of
income
is
initially
considered
in
isolation
as
one
determines
the
taxpayer's
overall
income
for
the
year.
Then,
subsection
4(2)
provides
that
in
applying
subsection
4(1),
"no
deductions
permitted
by
sections
60
to
63
are
applicable
either
wholly
or
in
part
to
a
particular
source".
Brief
reference
to
subsection
4(2)
is
made
in
the
respondent's
factum.
Aside
from
this
reference,
the
section
was
not
otherwise
discussed
by
the
parties
in
this
case,
and
it
has
not
been
the
subject
of
any
significant
commentary
of
which
I
have
been
made
aware.
For
this
reason,
I
do
not
wish
to
overstate
the
importance
of
subsection
4(2)
to
my
analysis.
Subsection
4(2)
obviously
means
that
the
child
care
expense
deduction
in
section
63
is
not
referable
to
a
particular
source
of
income.
In
other
words,
the
section
63
calculation
is
not
relevant
to
the
computation
of
business
income.
Less
obviously,
however,
it
may
also
mean
that
the
type
of
deduction
provided
for
in
section
63
(i.e.,
any
deduction
in
respect
of
child
care
expenses)
cannot
occur
within
the
source
calculations.
In
other
words,
subsection
4(2)
may
be
further
evidence
that
section
63
is
intended
to
be
a
complete
legislative
response
to
the
child
care
expense
issue.
At
this
point,
it
is
appropriate
to
discuss
Olympia
Floor
&
Tile,
supra,
upon
which
the
appellant
relied
in
order
to
deny
that
the
specific
deduction
allowed
by
section
63
must
override
the
potential
for
a
more
general
deduction
elsewhere
in
the
Act.
In
that
case,
unchallenged
evidence
was
led
to
establish
that
between
25
and
30
per
cent
of
a
taxpayer's
sales
in
each
of
two
taxation
years
went
toward
charitable
gifts.
The
taxpayer
sought
to
deduct
the
full
amount
of
such
gifts,
arguing
that
the
sums
were
expended
in
order
to
increase
future
sales,
and
that
for
this
reason,
they
constituted
business
expenses.
The
Minister
took
the
position,
however,
that
the
deductibility
of
the
gifts
was
governed
by
paragraph
27(1)(a)
of
the
Act
(now
see
section
118.1)
which
established
that
a
taxpayer
could
deduct
charitable
"gifts"
not
exceeding
10
per
cent
of
the
taxpayer's
taxable
income
for
the
year.
Jackett,
P.
accepted
the
taxpayer's
position.
He
was
convinced
that
the
taxpayer
made
the
contributions
largely,
if
not
entirely,
"for
the
purpose
of
increasing
its
sales
and
only
subsidiarily,
if
at
all,
for
charitable
or
benevolent
reasons"
(at
page
101
(D.T.C.
6086)).
For
this
reason,
he
was
satisfied
that
the
expenses
could
constitute
business
expenses,
and
the
important
question
became
the
effect
of
paragraph
27(1)(a).
Jackett,
P.
recognized
that
paragraph
27(1)(a)
calculated
the
allowable
charitable
deduction
with
reference
to
the
taxpayer's
income,
and
stated
(at
page
104
(D.T.C.
6088)):
.
.
.
it
follows
that
what
is
being
permitted
by
that
provision
is
a
deduction
of
an
amount
that
has
been
given
out
of
the
corporation’s
income
after
it
has
been
earned
and
not
a
deduction
of
an
amount
that
has
been
laid
out
as
part
of
the
income
earning
process
.
.
.
.
From
this
position,
it
was
then
a
simple
matter
for
Jackett,
P.
to
conclude
that
the
taxpayer's
expense
was
not
the
sort
of
expense
contemplated
by
the
language
of
paragraph
27(1)(a).
He
did
so
in
the
following
terms
(at
page
105-06
(D.T.C.
6089):
In
my
view,
when
a
taxpayer
makes
an
outlay
for
the
purpose
of
producing
income—i.e.
as
part
of
his
profit
making
process—even
though
that
outlay
takes
the
form
of
a
"gift"
to
a
charitable
organization,
it
is
not
a
"gift"
within
the
meaning
of
that
word
in
paragraph
27(1)
(a)
which,
by
reason
of
the
place
it
holds
in
the
process
of
computing
taxable
income,
was
obviously
intended
to
confer
a
benefit
on
persons
who
made
contributions
out
of
income
and
was
not
intended
to
provide
deductions
for
outlays
made
in
the
course
of
the
income
earning
process.
[Emphasis
in
original.]
In
the
result,
therefore,
the
taxpayer
could
deduct
the
charitable
donations
as
part
of
its
business
profit
calculation,
notwithstanding
the
specific
provision
relating
to
the
deduction
of
charitable
gifts.
The
decision
of
Jackett,
P.
in
Olympia
Floor
&
Tile,
supra,
has
recently
been
followed
in
Impenco
Ltd.
v.
M.N.R.,
[1988]
1
C.T.C.
2339,
88
D.T.C.
1242
(T.C.C.).
I
wish
to
express
neither
approval
nor
disapproval
of
the
approach
taken
in
either
case
with
respect
to
the
charitable
donation
issue
per
se.
Instead,
it
is
sufficient
to
highlight
the
real
basis
for
the
decision
in
Olympia
Floor
&
Tile.
In
my
view,
what
that
case
says
is
that
a
particular
expenditure,
such
as
a
charitable
donation,
may
be
made
for
more
than
one
purpose.
In
such
a
case,
it
will
be
relevant
to
consider
whether
the
actual
purpose
of
the
expenditure
is
addressed
in
the
Act.
If
a
specific
provision
exists
which
limits
deductibility
in
respect
of
that
purpose,
then
that
should
be
the
end
of
the
matter.
If,
however,
the
purpose
is
not
addressed
in
a
specific
provision,
recourse
may
be
had
to
more
general
rules
governing
deductibility.
In
this
case,
the
appellant
willingly
admits—indeed,
she
argues—that
she
has
incurred
child
care
expenses
in
order
to
gain
or
produce
income.
Only
one
purpose
for
the
expenses
has
been
advanced.
On
the
facts
of
Olympia
Floor
&
Tile,
supra,
a
donation
made
with
a
truly
charitable
intent
(out
of
a
taxpayer's
previously
calculated
"income")
would
undoubtedly
have
been
limited
by
the
specific
language
of
paragraph
27(1)(a).
Likewise,
on
the
facts
of
this
case,
the
purpose
for
which
the
appellant
maintains
she
has
incurred
her
child
care
expenses
falls
squarely
within
the
language
of
section
63;
they
were,
she
argues,
incurred
in
order
to
“enable”
her
to
"carry
on
a
business
.
.
.
as
a
partner"
within
the
meaning
of
clause
63(3)(a)(i)(B),
and
they
were
incurred
for
that
reason
alone.
Since
that
purpose
is
specifically
addressed
in
section
63
of
the
Act,
she
cannot
claim
a
deduction
employing
that
same
purpose
under
section
9.
Thus,
I
do
not
find
persuasive
support
for
the
appellant's
position
from
Olympia
Floor
&
Tile,
supra.
Although
it
is
unnecessary
to
my
conclusion,
I
wish
to
note,
finally,
that
evidence
of
Parliamentary
intent
appears
to
support
my
view.
At
the
outset
of
his
reasons,
Décary,
J.A.
in
the
Federal
Court
of
Appeal
reviewed
the
fiscal
history
of
child
care
expenses,
as
well
as
government
policies
on
such
expenses,
and
I
consider
his
discussion
helpful.
I
wish,
however,
to
make
particular
note
of
the
proposals
which
directly
led
to
the
1972
introduction
of
section
63.
In
Proposals
for
Tax
Reform
(1969)
(E.
J.
Benson,
Minister
of
Finance),
the
following
approach
to
child
care
expenses
is
advocated
(at
page
15):
2.7
We
propose
to
permit
deduction
of
the
child
care
expenses
that
face
many
working
parents
today.
The
problem
of
adequately
caring
for
children
when
both
parents
are
working,
or
when
there
is
only
one
parent
in
the
family
and
she
or
he
is
working,
is
both
a
personal
and
a
social
one.
We
consider
it
desirable
on
social
as
well
as
economic
grounds
to
permit
a
tax
deduction
for
child
care
expenses,
under
carefully
controlled
terms,
in
addition
to
the
general
deduction
for
children.
2.9
This
new
deduction
for
child
care
costs
would
be
a
major
reform.
While
it
is
not
possible
to
make
an
accurate
forecast
of
the
number
who
would
benefit
from
this
new
deduction,
it
seems
likely
to
be
several
hundred
thousand
families.
It
would
assist
many
mothers
who
work
or
want
to
work
to
provide
or
supplement
the
family
income,
but
are
discouraged
by
the
cost
of
having
their
children
cared
for.
.
.
.
[Emphasis
added.]
These
proposals
suggest
to
me
that
section
63
was
intended
by
Parliament
to
address
comprehensively
child
care
expenses.
I
cannot
imagine
that
a
system
which
allowed
some
parents
to
deduct
expenses
under
general
provisions
respecting
business
income,
but
which
confined
others
to
a
section
63
regime,
would
permit
deductibility
under
carefully
controlled
terms"
within
the
meaning
of
the
above
quotation.
Further,
I
am
not
impressed
by
the
suggestion
that
Parliament
intended
section
63
to
limit
deductibility
only
for
employees.
The
proposals
do
not
specify
the
kind
of
"work"
which
is
to
be
encouraged,
and
the
language
of
section
63
clearly
addresses
income
from
business.
For
these
reasons,
a
straightforward
approach
to
statutory
interpretation
has
led
me
to
conclude
that
the
Income
Tax
Act
intends
to
address
child
care
expenses,
and
does
so
in
fact,
entirely
within
section
63.
It
is
not
necessary
for
me
to
decide
whether,
in
the
absence
of
sections
63
and
9,
paragraphs
18(1)(a)
and
18(1)(h)
are
capable
of
comprehending
a
business
expense
deduction
for
child
care.
Given
section
63,
however,
it
is
clear
that
child
care
cannot
be
considered
deductible
under
principles
of
income
tax
law
applicable
to
business
deductions.
(b)
If
child
care
expenses
are
not
otherwise
deductible
under
principles
of
income
tax
law
applicable
to
business
deductions,
are
they
deductible
as
such
using
the
values
of
the
Charter
as
an
interpretive
aid?
The
appellant
argued
that
the
values
of
the
Charter
can
be
used
in
this
case
as
an
interpretive
aid.
In
particular,
reliance
is
placed
upon
the
decisions
of
this
Court
in
Hills,
supra,
and
Slaight
Communications,
supra.
In
Hills,
supra,
this
Court
was
asked
to
interpret
the
meaning
of
the
word
"financing"
in
unemployment
insurance
legislation.
In
reaching
a
decision,
this
Court
referred,
inter
alia,
to
the
purpose
of
the
provision
containing
the
word,
to
the
purpose
of
the
statute
as
a
whole,
and
to
the
proposition
that
doubt
should
be
resolved
in
favour
of
the
claimant.
Finally,
my
colleague
L'Heureux-Dubé,
J.
had
occasion
to
state
the
following
(at
page
558
(D.L.R.
226-27)):
Appellant,
while
not
relying
on
any
specific
provision
of
the
Charter,
nevertheless
urged
that
preference
be
given
to
Charter
values
in
the
interpretation
of
a
statute,
namely
freedom
of
association.
I
agree
that
the
values
embodied
in
the
Charter
must
be
given
preference
over
an
interpretation
which
would
run
contrary
to
them
....
In
a
similar
fashion,
in
Slaight
Communications,
supra,
this
Court
was
asked
to
determine
whether
the
language
of
certain
labour
legislation
conferred
upon
an
adjudicator
the
power
to
make
a
particular
kind
of
order.
In
responding,
Lamer,
J.
(as
he
then
was)
stated
the
following
(at
page
1078
(D.L.R.
444)):
Although
this
Court
must
not
add
anything
to
legislation
or
delete
anything
from
it
in
order
to
make
it
consistent
with
the
Charter,
there
is
no
doubt
in
my
mind
that
it
should
also
not
interpret
legislation
that
is
open
to
more
than
one
interpretation
so
as
to
make
it
inconsistent
with
the
Charter
and
hence
of
no
force
or
effect.
Legislation
conferring
an
imprecise
discretion
must
therefore
be
interpreted
as
not
allowing
the
Charter
rights
to
be
infringed.
I
agree
with
the
sentiment
reflected
in
both
of
these
quotations,
but
I
fail
to
see
their
relevance
in
this
case.
In
both
Hills
and
Slaight
Communications,
this
Court
was
confronted
with
statutory
language
which
was
ambiguous.
In
each
case,
the
values
of
the
Charter
were
consulted
to
resolve
the
ambiguity.
However,
each
case
recognizes
that
to
consult
the
Charter
in
the
absence
of
such
ambiguity
is
to
deprive
the
Charter
of
a
more
powerful
purpose,
namely,
the
determination
of
a
statute's
constitutional
validity.
If
statutory
meanings
must
be
made
congruent
with
the
Charter
even
in
the
absence
of
ambiguity,
then
it
would
never
be
possible
to
apply,
rather
than
simply
consult,
the
values
of
the
Charter.
Futnermore,
it
would
never
be
possible
for
the
government
to
justify
infringements
as
reasonable
limits
under
section
1
of
the
Charter,
since
the
interpretive
process
would
preclude
one
from
finding
infringements
in
the
first
place.
Had
section
63
not
been
present,
it
might
be
arguable
that
the
equality
values
in
the
Charter
could
have
informed
the
interpretation
of
section
9
and
paragraphs
18(1)(a)
and
18(1)(h)
of
the
Act.
However,
as
already
discussed,
section
63
eliminates
any
question
of
ambiguity,
and
by
so
doing,
also
eliminates
the
need
for
recourse
to
Charter
values
in
this
case.
My
analysis
of
the
Income
Tax
Act
has
ineluctably
led
me
to
conclude
that
the
Act
does
not
permit
a
business
expense
deduction
in
respect
of
child
care
as
part
of
its
section
9
profit
calculation,
but
instead
limits
the
child
care
deduction
in
accordance
with
section
63.
Accordingly,
with
respect
to
those
taxation
years
not
directly
reviewable
in
constitutional
terms
by
subsection
15(1)
of
the
Charter,
I
would
affirm
the
reassessments
by
Revenue
Canada
which
disallowed
the
deductions
claimed
by
the
appellant.
2.
If
child
care
expenses
are
not
deductible
as
part
of
the
determination
of
profit
under
subsection
9(1)
of
the
Act,
has
there
been
a
violation
of
subsection
15(1)
of
the
Charter?
(a)
Can
subsection
15(1)
of
the
Charter
be
applied
to
the
Income
Tax
Act?
A
preliminary
"debate"
took
place
before
this
Court
which
questioned
the
propriety
of
using
the
Charter
to
challenge
the
scheme
of
deductibility
created
by
the
Income
Tax
Act.
With
respect
to
this
debate,
I
have
two
brief
comments.
First,
it
has
been
suggested
that
to
subject
the
Income
Tax
Act
to
the
Charter
would
risk
"overshooting"
the
purposes
of
the
Charter.
However,
the
danger
of
"overshooting"
relates
not
to
the
kinds
of
legislation
which
are
subject
to
the
Charter,
but
to
the
proper
interpretive
approach
which
courts
should
adopt
as
they
imbue
Charter
rights
and
freedoms
with
meaning:
see
R
v.
Big
M
Drug
Mart
Ltd.,
[1985]
1
S.C.R.
295,
18
D.L.R.
(4th)
321,
at
page
344
(D.L.R.
360).
Second,
it
has
been
said
that
courts
should
defer
to
legislatures
with
respect
to
difficult
economic
questions.
However,
support
for
this
proposition
is
said
to
come
from
cases
in
which
a
degree
of
deference
has
been
exhibited
as
part
of
a
s.
1
Charter
analysis:
see,
e.g.,
Public
Service
Alliance
of
Canada
v.
Canada,
[1987]
1
S.C.R.
424,
38
D.L.R.
(4th)
249,
at
page
442
(D.L.R.
261).
Such
cases
do
not
advocate
a
deferential
approach
at
any
earlier
stage
of
Charter
analysis.
Since
neither
of
the
two
propositions
upon
which
this
ry
“
debate”
was
founded
can
withstand
even
brief
critical
analysis,
I
consider
it
unnecessary
to
comment
further
in
this
regard.
The
Income
Tax
Act
is
certainly
not
insulated
against
all
forms
of
Charter
review.
(b)
Section
15(1)
of
the
Charter:
A
Method
of
Analysis
Before
turning
to
the
specifics
of
the
subsection
15(1)
infringement
alleged
by
the
appellant,
it
is
convenient
to
set
forth
some
of
the
basic
principles
of
Charter
equality
analysis
which
will
structure
my
approach.
Many
of
these
principles
are
derived
directly
from
Andrews,
supra,
wherein
this
Court
began
the
important
process
of
giving
shape
to
subsection
15(1)
of
the
Charter.
As
I
restate
these
principles,
however,
I
must
be
mindful
of
the
fact
that
equality"
is
an
elusive
concept
and,
more
than
any
of
the
other
rights
and
freedoms
guaranteed
in
the
Charter,
it
lacks
precise
definition”:
Andrews,
supra,
at
page
164
(D.L.R.
10).
At
the
outset,
it
is
important
to
realize
that,
in
order
to
determine
whether
particular
facts
demonstrate
equality
or
inequality,
one
must
necessarily
undertake
a
form
of
comparative
analysis.
For
the
purposes
of
subsection
15(1),
Andrews,
supra
has
rejected
that
the
analysis
should
be
governed
by
the
comparison
of
similarly
situated
persons.
Subsection
15(1)
guarantees
more
than
formal
equality;
it
guarantees
that
equality
will
be
mainly
concerned
with
"the
impact
or
the
law
on
the
individual
or
the
group
concerned”:
Andrews,
supra,
at
page
165
(D.L.R.
11).
McIntyre
J.
stated
(at
page
164
(D.L.R.
10))
that
equality:
.
.
.
IS
a
comparative
concept,
the
condition
of
which
may
only
be
attained
or
discerned
by
comparison
with
the
condition
of
others
in
the
social
and
political
setting
in
which
the
question
arises.
It
must
be
recognized
at
once,
however,
that
every
difference
in
treatment
between
individuals
under
the
law
will
not
necessarily
result
in
inequality
and,
as
well,
that
identical
treatment
may
frequently
produce
serious
inequality.
[Emphasis
added.]
The
subsection
15(1)
challenge,
of
course,
is
to
determine
whether
a
"difference
in
treatment”
between
individuals,
or
an
"identical
treatment"
of
individuals,
engages
the
Charter.
Stated
another
way,
the
goal
is
to
ensure
that
"a
law
expressed
to
bind
all
should
not
because
of
irrelevant
personal
differences
have
a
more
burdensome
or
less
beneficial
impact
on
one
than
another":
Andrews,
supra,
at
page
165.
In
pursuit
of
this
goal,
McIntyre,
J.
in
Andrews
took
the
comparative
analysis
a
step
further
and
suggested
that
the
Charter
was
not
intended
to
eliminate
all
distinctions,
but,
in
keeping
with
the
language
and
purpose
of
section
15,
only
those
distinctions
which
are
"discriminatory".
Fortunately,
in
both
Andrews
and
the
present
case,
this
Court
has
been
able
to
access
a
rich
jurisprudence
associated
with
human
rights
legislation.
The
concept
of
“discrimination”
within
subsection
15(1)
of
the
Charter
has
been
informed
by
this
jurisprudence,
and
McIntyre,
J.’s
definition
of
the
term
in
Andrews
is
proof
of
its
utility.
McIntyre,
J.
stated
(at
page
174
(D.L.R.
18)):
I
would
say
then
that
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.
McIntyre,
J.
went
on
to
conclude
that
an
approach
to
subsection
15(1)
which
comprehends
both
enumerated
and
analogous
grounds
of
discrimination
most
closely
accords
with
this
definition.
One
reason
for
his
conclusion
is
that
such
an
approach
has
the
advantage
of
leaving
questions
of
justification
to
section
1
of
the
Charter.
It
may
be
helpful
at
this
stage
to
underscore
two
aspects
of
the
discrimination
concept
which
emanated
from
Andrews,
supra.
First,
it
is
clear
that
a
law
may
be
discriminatory
even
if
it
is
not
directly
or
expressly
discriminatory.
In
other
words,
adverse
effects
discrimination
is
comprehended
by
subsection
15(1):
see
also
Tétreault-Gadoury
v.
Canada
(Employment
and
Immigration
Commission),
[1991]
2
S.C.R.
22,
81
D.L.R.
(4th)
358,
at
page
41
(D.L.R.
370);
McKinney
v.
University
of
Guelph,
[1990]
3
S.C.R.
229,
76
D.L.R.
(4th)
545,
at
page
279
(D.L.R.
647).
In
Ontario
Human
Rights
Commission
v.
Simpsons-
Sears
Ltd.,
[1985]
2
S.C.R.
536,
23
D.L.R.
(4th)
321,
McIntyre,
J.
contrasted
direct
discrimination
to
adverse
effects
discrimination
in
the
employment
context
(at
page
551
(D.L.R.
332)):
A
distinction
must
be
made
between
what
I
would
describe
as
direct
discrimination
and
the
concept
already
referred
to
as
adverse
effect
discrimination
in
connection
with
employment.
Direct
discrimination
occurs
in
this
connection
where
an
employer
adopts
a
practice
or
rule
which
on
its
face
discriminates
on
a
prohibited
ground.
For
example,
“No
Catholics
or
no
women
or
no
blacks
employed
here."
.
.
.
On
the
other
hand,
there
is
the
concept
of
adverse
effect
discrimination.
It
arises
where
an
employer
for
genuine
business
reasons
adopts
a
rule
or
standard
which
is
on
its
face
neutral,
and
which
will
apply
equally
to
all
employees,
but
which
has
a
discriminatory
effect
upon
a
prohibited
ground
on
one
employee
or
group
of
employees
in
that
it
imposes,
because
of
some
special
characteristic
of
the
employee
or
group,
obligations,
penalties,
or
restrictive
conditions
not
imposed
on
other
members
of
the
work
force.
In
the
same
case,
McIntyre,
J.
came
to
the
related
conclusion
that
animus
is
irrelevant
to
discrimination.
A
finding
of
discrimination
can
be
made
even
if
there
has
been
no
intention
to
discriminate.
The
second
aspect
of
discrimination
I
wish
to
note
may
be
less
a
requirement
of
subsection
15(1),
and
more
of
an
analytical
trend
which
can
be
discerned
in
Andrews,
supra,
and
which
has
been
expanded
in
subsequent
cases.
In
considering
the
extent
to
which
non-citizens
permanently
resident
in
Canada
could
claim
the
protection
of
subsection
15(1),
McIntyre,
J.
suggested
in
Andrews
that
this
group
constitutes
a
"good
example
or
a
'discrete
and
insular
minority'"
(at
page
183
(D.L.R.
24)).
In
borrowing
this
statement
from
American
jurisprudence,
McIntyre,
J.
adverted
to
the
need
to
contextualize
the
discrimination
analysis.
Wilson,
J.
expanded
upon
this
beginning
in
R.
v.
Turpin,
[1989]
1
S.C.R.
1296,48
C.C.C.
(3d)
8,
where
she
stated
(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.
A
finding
that
there
is
discrimination
will,
I
think,
in
most
but
perhaps
not
all
cases,
necessarily
entail
a
search
for
disadvantage
that
exists
apart
from
and
independent
of
the
particular
legal
distinction
being
challenged.
What
is
recognized
by
both
Andrews
and
Turpin
is
that
the
working
definition
of
"discrimination"
established
in
the
former
case
is
not
self-applying.
Instead,
within
the
analytical
parameters
established
by
that
definition,
this
Court
must"search
for
indicia
of
discrimination":
Turpin,
supra,
at
page
1333
(C.C.C.
35).
In
R.
v.
Swain,
[1991]
1
S.C.R.
933,63
C.C.C.
(3d)
481,
Lamer,
C.J.
summarized
subsection
15(1)
jurisprudence
in
terms
which
encapsulate
the
main
elements
of
the
subsection
15(1)
discussion
I
have
set
out
here.
He
stated
(at
page
992
(C.C.C.
20-521)):
The
Court
must
first
determine
whether
the
claimant
has
shown
that
one
of
the
four
basic
equality
rights
has
been
denied
(i.e.,
equality
before
the
law,
equality
under
the
law,
equal
protection
of
the
law
and
equal
benefit
of
the
law).
This
inquiry
will
focus
largely
on
whether
the
law
has
drawn
a
distinction
(intentionally
or
otherwise)
between
the
claimant
and
others,
based
on
personal
characteristics.
Next,
the
court
must
determine
whether
the
denial
can
be
said
to
result
in
"discrimination".
This
second
inquiry
will
focus
largely
on
whether
the
differential
treatment
has
the
effect
of
imposing
a
burden,
obligation
or
disadvantage
not
imposed
upon
others
or
of
withholding
or
limiting
access
to
opportunities,
benefits
and
advantages
available
to
others.
Furthermore,
in
determining
whether
the
claimant's
subsection
15(1)
rights
have
been
infringed,
the
court
must
consider
whether
the
personal
characteristic
in
question
falls
within
the
grounds
enumerated
in
the
section
or
within
an
analogous
ground,
so
as
to
ensure
that
the
claim
fits
within
the
overall
purpose
of
section
15—namely,
to
remedy
or
prevent
discrimination
against
groups
subject
to
stereotyping,
historical
disadvantage
and
political
and
social
prejudice
in
Canadian
society.
Before
making
this
statement,
the
Chief
Justice
acknowledged
that
it
is
unwise
to
attempt
exhaustive
definitions
during
the
early
years
of
subsection
15(1)
interpretation
(see
Turpin,
supra,
at
page
1326
(C.C.C.
30)).
Likewise,
I
must
mention
that
by
repeating
points
set
out
in
other
cases,
I
am
not
proposing
that
those
points
now
constitute
a
"test"
for
subsection
15(1).
Rather,
I
simply
believe
that
on
the
facts
of
this
case,
it
is
not
necessary
to
go
beyond
the
view
of
equality
summarized
above.
c.
Subsection
15(1)
of
the
Charter
in
this
case
The
appellant
argues
that
she
has
been
denied
the
equal
benefit
of
the
law
in
this
case,
and
she
further
argues
that
this
inequality
constitutes
sex-based
discrimination.
More
particularly,
in
light
of
my
interpretation
of
the
Income
Tax
Act,
the
appellant
would
seem
to
argue
two
related
points.
First,
she
seems
to
argue
that
an
Income
Tax
Act
deduction
may
be
characterized
as
a
benefit
of
which
she
can
be
deprived.
Second,
she
seems
to
argue
that
subsection
15(1)
of
the
Charter
is
infringed
by
section
63
of
the
Act
to
the
extent
that
section
63
prevents
her
from
fully
deducting
her
child
care
expenses
under
section
9.
The
appellant's
arguments
relate
only
to
that
portion
of
her
child
care
expenses
incurred
after
April
17,
1985,
the
date
on
which
subsection
15(1)
became
operative.
It
is
important
to
clarify
my
understanding
of
the
appellant's
Charter
challenge
at
the
outset,
since
the
focus
of
her
subsection
15(1)
attack
is
by
no
means
obvious.
In
particular,
I
must
deal
with
the
appellant's
preliminary
characterization
of
Income
Tax
Act
deductions
as
"benefits"
which
are
equivalent
to
"government
expenditures".
This
characterization
implicitly
involves
a
tax
theory
concept
known
as
the
"tax
expenditure".
To
prevent
that
concept
from
introducing
confusion
with
respect
to
the
subsection
15(1)
challenge,
I
must
comment
upon
it
briefly.
In
his
important
work,
Pathways
to
Tax
Reform
(1973),
Professor
Stanley
Surrey
of
Harvard
proposed
that
a
deduction
which
departs
from
the
normative
tax
system
is,
in
many
ways,
the
logical
equivalent
of
a
direct
government
subsidy.
Such
deductions
have
been
called
"tax
expenditures",
and
they
have
been
explained
in
the
following
terms
(S.
S.
Surrey
and
P.
R.
McDaniel,
Tax
Expenditures
(1985),
at
page
3):
The
tax
expenditure
concept
posits
that
an
income
tax
is
composed
of
two
distinct
elements.
The
first
element
consists
of
structural
provisions
necessary
to
implement
a
normal
income
tax,
such
as
the
definition
of
net
income,
the
specification
of
accounting
rules,
the
determination
of
the
entities
subject
to
tax,
the
determination
of
the
rate
schedule
and
exemption
levels,
and
the
application
of
the
tax
to
international
transactions.
These
provisions
compose
the
revenue-raising
aspects
of
the
tax.
The
second
element
consists
of
the
special
preferences
found
in
every
income
tax.
These
provisions,
often
called
tax
incentives
or
tax
subsidies,
are
departures
from
the
normal
tax
structure
and
are
designed
to
favor
a
particular
industry,
activity,
or
class
of
persons.
They
take
many
forms,
such
as
permanent
exclusions
from
special
rates.
Whatever
their
form,
these
departures
from
the
normative
tax
structure
represent
government
spending
for
favored
activities
or
groups,
effected
through
the
tax
system
rather
than
through
direct
grants,
loans,
or
other
forms
of
government
assistance.
I
believe
that
to
characterize
initially
the
child
care
expense
deduction
as
a
tax
expenditure
in
this
case
can
be
problematic.
In
order
to
view
the
child
care
expense
deduction
as
a
government
expenditure
within
the
meaning
of
the
above
quotation,
one
must
conclude
that
the
deduction
is
allowed
outside
of
the
normative
tax
system,
a
system
which
directly
disallows
the
deduction.
Following
this
line
of
argument,
it
then
seems
that
two
Charter
challenges
rather
than
one
would
arise:
one
would
challenge
the
expenditure
as
a
benefit,
the
other
would
challenge
the
scheme
of
the
normative
system.
In
this
case,
however,
my
approach
to
statutory
interpretation
does
not
involve
any
attempt
to
determine
whether
section
63
constitutes
a
part
of
the
normative
tax
system
or
not.
In
fact,
that
determination
is
not
a
legal
goal,
but
a
goal
of
tax
theory.
Instead,
I
have
simply
found
that
section
63
constitutes
a
complete
code
with
respect
to
child
care
expenses.
In
my
view,
therefore,
there
is
only
one
Charter
argument
available
in
this
case,
and
the
proper
focus
of
that
argument
is
section
63.
I
acknowledge
that
in
enacting
section
63,
Parliament
chose
to
dissociate
child
care
expenses
from
those
provisions
traditionally
viewed
as
part
of
the
revenue-raising
aspects
of
the
tax":
Surrey
and
McDaniel,
supra,
at
page
3.
In
other
words,
through
section
63,
Parliament
chose
not
to
deal
with
the
exclusionary
interpretation
placed
upon
section
9
and
paragraphs
18(1)(a)
and
18(1)(h),
which
has
traditionally
precluded
the
deductibility
of
child
care
expenses.
Parliament
chose
instead
to
establish
a
separate
system
to
address
such
expenses.
Having
created
such
a
system
in
section
63,
however,
the
relevant
question
is
not
whether
the
government's
response
should
have
been
theoretically
attached
to
the
so-called
normative
provisions
located
elsewhere
in
the
Act,
since
the
Act
is
silent
with
respect
to
normative
and
tax
expenditure
classifications.
There
is
no
Charter"
right"
which
demands
that
the
Income
Tax
Act
label
a
particular
deduction
as
a
business
expense
deduction”.
There
is
only
a
right
to
ensure
that
the
Act's
systemic
response
to
child
care
expenses
is
coherent
with
the
Charter.
In
this
respect,
I
agree
with
the
following
statement
which
considers
the
impact
of
the
tax
expenditure
concept
in
Charter
analysis
(Woodman,
“Some
Modest
Proposals”
supra,
at
page
386):
Tax
expenditure
analysis
is
based
on
the
concept
of
a
normative
tax
system.
In
other
words,
tax
expenditures
are
deviations
from
something;
that
is,
the
revenueraising
part
of
the
tax
system.
Therein
lies
the
Achilles
heel
of
the
concept.
Deciding
what
comprises
the
normative
tax
system
is
no
easy
task
.
.
.
.
Tax
expenditure
analysis
does
not
solve
the
problems
inherent
in
Charter
challenges
to
the
income
tax
system.
It
does,
however,
make
it
clearer
what
the
argument
is
about.
[Emphasis
added.]
As
alluded
to
within
this
quotation,
it
may
become
useful,
at
some
stage
of
a
Charter
analysis
of
income
taxation,
to
return
to
the
notion
that
a
deduction
can
be
viewed
as
a
kind
of
expenditure,
since
such
an
approach
allows
one
to
examine
the
government's
overall
approach
to
related
expenditures.
Such
an
examination,
however,
is
not
the
first
problem
to
be
addressed
under
a
subsection
15(1)
Charter
analysis.
As
will
be
discussed,
such
an
examination
more
properly
belongs
within
a
section
1
analysis.
These
brief
remarks
will,
I
hope,
clarify
the
proper
focus
for
the
appellant's
Charter
challenge.
To
proceed,
the
Charter
subsection
15(1)
question
can
be
restated.
Since
this
Court
is
confronted
with
a
provision
in
federal
statute,
there
is
no
doubt
that
a
"law",
i.e.,
section
63,
exists
within
the
meaning
of
subsection
15(1):
Andrews,
supra,
at
page
164
(D.L.R.
10).
The
relevant
question
is,
therefore,
the
following:
does
section
63
of
the
Income
Tax
Act
infringe
the
right
to
equality
guaranteed
by
subsection
15(1)
of
the
Charter?
As
my
summary
of
subsection
15(1)
jurisprudence
above
demonstrates,
the
answer
to
this
question
must
come
in
parts.
First,
it
must
be
determined
whether
section
63
establishes
an
inequality:
does
section
63
draw
a
distinction
(intentionally
or
otherwise)
between
the
appellant
and
others,
based
upon
a
personal
characteristic?
Second,
if
an
inequality
is
found,
it
must
be
determined
whether
the
inequality
results
in
discrimination:
does
the
distinction
drawn
by
section
63
have
the
effect
of
imposing
a
burden,
obligation
or
disadvantage
not
imposed
upon
others
or
of
withholding
or
limiting
access
to
opportunities,
benefits
and
advantages
available
to
others?
Finally,
assuming
that
both
an
inequality
and
discrimination
can
be
found,
it
must
be
determined
whether
the
personal
characteristic
at
issue
constitutes
either
an
enumerated
or
analogous
ground
for
the
purposes
of
subsection
15(1)
of
the
Charter.
With
respect
to
whether
section
63
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.
In
passing,
I
note
that,
while
the
trial
judge
discussed
subsection
15(1)
of
the
Charter
with
respect
to
the
"personal
characteristics
of
sex
and
family
or
parental
status"
(page
490
(D.T.C.
5253)),
the
appellant's
arguments
before
this
Court
narrowed
and
effectively
dealt
only
with
the
first
of
these.
Facially,
then,
the
distinction
created
by
section
63
is
not
based
upon
the
personal
characteristic
put
forward
by
the
appellant,
namely,
sex.
What,
however,
is
the
effect
of
the
distinction
created
by
section
63?
Does
section
63
have
an
effect
which
draws
a
distinction
on
the
oasis
of
sex?
More
particularly,
in
light
of
the
manner
in
which
this
appeal
has
been
framed,
does
section
63
have
an
adverse
effect
upon
women
who
must
incur
child
care
expenses
to
enable
the
pursuit
of
business
income?
An
abundance
of
information
was
placed
before
this
Court
which
conclusively
demonstrates
that
women
bear
a
disproportionate
share
of
the
child
care
burden
in
Canada.
For
example,
at
trial,
the
expert
witness
asserted
this
point,
and
stated
further
that
the
burden
is
disproportionate
whether
or
not
women
work
outside
the
home.
Similarly,
Statistics
Canada
reports
that
working
men
are
primarily
responsible
for
child
care
in
only
six
per
cent
of
families:
S.
Crompton,
"Who's
Looking
After
the
Kids?
Child
Care
Arrangements
of
Working
Mothers”,
in
Statistics
Canada,
Perspectives
on
Labour
and
Income,
Vol.
3,
No.
2
(Summer
1991,68).
Likewise,
it
has
been
noted
that"
most
women,
even
those
with
ver
young
children,
are
now
in
the
labour
force”,
and
that
“fully
70
per
cent
or
employed
mothers
with
children
younger
than
six
years
old
work
full
time”:
D.
S.
Lero,
Canadian
National
Child
Care
Study:
Parental
Work
Patterns
and
Child
Care
Needs
(1992),
at
page
23.
Other
material
before
this
Court
makes
similar
points
with
respect
to
women
entrepreneurs,
and
particularly,
women
lawyers.
Worthy
of
note
in
this
regard
is
the
study
entitled
The
Glass
Box:
Women
Business
Owners
in
Canada
(M.
Belcourt,
R.
J.
Burke
and
H.
Lee-Gosselin
(Canadian
Advisory
Council
on
the
Status
of
Women,
1991)),
which
found
that
most
women
entrepreneurs
assume
primary
responsibility
for
raising
and
caring
for
children.
Further,
I
have
already
made
reference
to
survey
results
obtained
by
the
Law
Society
of
Upper
Canada.
Those
results
suggest
that
women
lawyers
spend
an
average
of
48.82
hours
per
week
on
child
care,
whereas
the
people
they
live
with
spend
21.38
hours
per
week
on
such
care:
"Transitions",
supra,
at
page
47.
In
other
words,
women
lawyers,
too,
have
the
primary
responsibility
for
child
care,
notwithstanding
their
professional
positions.
Based
upon
this
information—indeed,
even
based
upon
judicial
notice—I
have
no
doubt
that
women
disproportionately
incur
the
social
costs
of
child
care.
However,
whether
or
not
such
costs
are
imposed
by
society
upon
women,
however,
is
not
the
subsection
15(1)
issue.
The
subsection
15(1)
issue
is
whether
section
63
of
the
Income
Tax
Act
has
an
adverse
effect
upon
women
in
that
it
unintentionally
creates
a
distinction
on
the
basis
of
sex.
In
my
view,
in
order
to
establish
such
an
effect,
it
is
not
sufficient
for
the
appellant
to
show
that
women
disproportionately
bear
the
burden
of
child
care
in
society.
Rather,
she
must
show
that
women
disproportionately
pay
child
care
expenses.
Only
if
women
disproportionately
pay
such
expenses
can
section
63
have
any
effect
at
all,
since
section
63's
only
effect
is
to
limit
the
tax
deduction
with
respect
to
such
expenses.
Unfortunately,
the
factual
background
of
this
case
tends
to
obscure
the
problem
faced
by
the
appellant
with
respect
to
subsection
15(1).
As
I
have
already
discussed,
the
appellant
and
her
husband
made
a
"family
decision"
to
the
effect
that
the
appellant
alone
was
to
bear
the
financial
burden
of
having
children.
If,
extrapolating
from
this
circumstance,
it
could
be
said
that
women,
far
more
than
men,
pay
child
care
expenses,
the
limitations
imposed
by
section
63
might
well
create
the
adverse
effect
the
appellant
must
demonstrate.
However,
it
is
difficult
to
imagine
how
such
statistics
could
arise.
I
say
this
because
the
“family
decision"
made
by
the
appellant
and
her
husband
is
not
mandated
by
law
and
public
policy.
In
the
Criminal
Code
provisions
alluded
to,
supra,
in
contemporary
family
law,
and
particularly
in
the
definition
of
"supporting
person"
in
paragraph
63(3)(d)
of
the
Act,
parents
(and
particularly
parents
living
with
children)
are
viewed
as
having
joint
legal
responsibility
to
care
for
children.
In
most
households
involving
more
than
one
supporting
person,
therefore,
regardless
of
“family
decisions",
the
law
will
impose
the
legal
duty
to
share
the
burden
of
child
care
expenses,
if
not
necessarily
a
duty
to
share
the
child
care
burden
itself.
Stated
another
way,
I
believe
that
the
appellant
has
presented
this
Court
with
evidence
of
the
social
burden
of
child
care,
and
has
asked
that
from
this
burden,
we
infer
that
a
positive
child
care
expense
burden
is
also
placed
directly
upon
women,
and
particularly
upon
businesswomen,
including
businesswomen
who
are
married.
I
note
the
following
remark
from
the
Abella
Report
on
equality
in
employment
(R.
S.
Abella,
Report
of
the
Commission
on
Equality
in
Employment
(1984),
at
page
177):
By
Canadian
law
both
parents
have
a
duty
to
care
for
their
children,
but
by
custom
this
responsibility
has
consistently
fallen
to
the
mother.
It
is
the
mother,
therefore,
who
bears
any
guilt
or
social
disapprobation
for
joining
the
workforce.
And
it
is
the
mother
who
normally
bears
the
psychological
and
actual
responsibility
for
making
childcare
arrangements.
If
the
adverse
effects
analysis
is
to
be
coherent,
it
must
not
assume
that
a
statutory
provision
has
an
effect
which
is
not
proved.
We
must
take
care
to
distinguish
between
effects
which
are
wholly
caused,
or
are
contributed
to,
by
an
impugned
provision,
and
those
social
circumstances
which
exist
independently
of
such
a
provision.
In
this
case,
that
means
that
one
must
be
cognizant
of
the
fact
that
section
63
defines
child
care
expenses
as
an
actual
expense
of
money.
In
order
to
demonstrate
a
distinction
between
the
sexes
within
an
adverse
effects
analysis,
one
therefore
needs
to
prove
that
section
63
disproportionately
limits
the
deduction
with
respect
to
actual
expenses
incurred
by
women.
In
my
opinion,
the
appellant
taxpayer
has
failed
to
demonstrate
an
adverse
effect
created
or
contributed
to
by
section
63,
although
she
has
overwhelmingly
demonstrated
how
the
issue
of
child
care
negatively
affects
women
in
employment
terms.
Unfortunately,
proof
that
women
pay
social
costs
is
not
sufficient
proof
that
women
pay
child
care
expenses.
Those
social
costs,
although
very
real,
exist
outside
of
the
Income
Tax
Act.
In
the
same
fashion
that
our
income
taxation
system
does
not
recognize
various
forms
of
imputed
income,
it
equally
does
not
involve
itself
with
any
form
of
imputed
expense.
In
this
respect,
this
appeal
was
not
argued
to
suggest
that
the
government
had
a
positive
obligation
to
account
for
the
social
costs
of
child
care
prior
to
taxing
its
citizens.
Such
a
suggestion
would
lead
this
Court
well
beyond
the
confines
of
the
present
appeal.
I
conclude,
therefore,
that
the
appellant
is
unable
to
demonstrate
a
violation
of
subsection
15(1)
of
the
Charter
with
respect
to
section
63
of
the
Act,
since
she
has
not
proved
that
section
63
draws
a
distinction
based
upon
the
personal
characteristic
of
sex.
In
reaching
this
conclusion,
however,
I
wish
to
note
that
I
do
not
reject
that
such
a
distinction
might
be
proved
in
another
case.
The
appellant
in
this
case
belongs
to
a
particular
subgroup
of
women,
namely,
married
women
who
are
entrepreneurs.
It
is
important
to
realize
that
her
evidentiary
focus
was
skewed
in
this
direction.
I
pause
to
note
that
the
appellant's
focus
upon
self-employed
women
to
the
exclusion
of
women
employees
is
a
very
curious
aspect
of
this
case.
It
is
useful
to
note
the
following
commentary
by
Professor
Macklin,
supra,
at
page
512):
If
the
goal
of
section
15
in
this
context
is
to
redress
the
discriminatory
impact
of
tax
laws
on
members
of
disadvantaged
groups,
there
can
be
no
pretext
for
confining
the
inquiry
to
section
18(1)
of
the
Act
or
the
remedy
to
business
women.
Insofar
as
tax
deductions
are
concerned,
the
real
issue
would
be
the
inadequacy
of
the
partial
deduction
under
section
63
in
facilitating
self-employed
and
salaried
women's
access
to
the
paid
workforce
.
.
.
.
Their
identity
as
self-employed
or
salaried
women
is
largely
immaterial
to
the
question
of
whether
the
existing
system
perpetuates
their
subordination.
[Emphasis
in
original.]
Undoubtedly,
it
was
the
juxtaposition
of
subsection
8(2)
with
section
9
of
the
Act
which
led
the
appellant
to
take
the
position
she
took.
By
virtue
of
subsection
8(2)
of
the
Act,
employees
are
generally
prohibited
from
making
any
deductions
from
employment
income.
Accordingly,
the
appellant
thought
it
desirable
to
distance
herself
from
employees
in
this
case.
When
considering
her
arguments
with
respect
to
statutory
interpretation,
this
approach
is
understandable.
When
considering
her
Charter
arguments,
it
is
less
so.
In
another
case,
a
different
subgroup
of
women
with
a
different
evidentiary
focus
involving
section
63
might
well
be
able
to
demonstrate
the
adverse
effects
required
by
subsection
15(1).
For
example,
although
I
wish
to
express
no
opinion
on
this
point,
I
note
that
no
particular
effort
was
made
in
this
case
to
establish
the
circumstances
of
single
mothers.
If,
for
example,
it
could
be
established
that
women
are
more
likely
than
men
to
head
single-parent
households,
one
can
imagine
that
an
adverse
effects
analysis
involving
single
mothers
might
well
take
a
different
course,
since
child
care
expenses
would
thus
disproportionately
fall
upon
women.
That
would
be
a
question
of
proof,
and
it
might
involve
other
complicated
questions
associated
with
the
alimony
and
maintenance
provisions
of
the
Income
Tax
Act.
This
Court
has
not
had
the
benefit
of
argument
with
respect
to
any
of
these
issues.
Equally,
the
material
which
has
been
placed
before
this
Court
demonstrates
certain
distinctions
created
by
section
63,
but
no
attempt
has
been
made
to
link
these
distinctions
to
personal
characteristics
comprehended
by
an
enumerated
or
analogous
grounds
approach
to
subsection
15(1)
of
the
Charter.
In
this
respect,
I
note
the
following
comment
from
the
Report
of
the
Task
Force
on
Child
Care,
supra,
at
page
173,
which
relates
to
the
earned
income
limitations
in
section
63:
These
limitations
penalize
families
in
which
one
spouse,
either
regularly
or
temporarily,
has
a
very
low
income.
This
affects
part-time-working
women
with
low
earnings,
business
people
who
experience
short-term
business
losses,
and
farmers
who
experience
a
loss
or
a
period
of
low
income
.
.
.
.
Even
if
the
other
spouse
has
earned
income,
no
deduction
is
allowed
because
only
the
lower-
income
spouse
can
make
the
claim.
To
the
extent
that
this
quotation
discusses
a
section
63
distinction
between
parents
and
others,
I
reiterate
that
the
appellant's
equality
argument
before
this
Court
effectively
ignored
the
relevance
of
a
parental
status
distinction.
The
same
is
certainly
true
with
respect
to
business
people
in
a
loss
position
and
farmers.
Finally,
to
the
extent
that
this
quotation
discusses
an
effect
upon
"part-time-working
women
with
low
earnings"
and,
therefore,
seems
to
indicate
an
effect
upon
women
as
a
class,
I
have
two
comments.
First,
to
say
that
the
section
63
deduction
is
more
often
denied
to
women
is
to
recognize
a
reality,
namely,
that
when
there
are
two
supporting
persons
in
a
household,
the
woman
is
more
often
the
lower
income
earner.
Although
both
supporting
persons
contribute
to
the
actual
child
care
expenses
incurred,
the
deduction
will
be
denied
to
the
woman
as
the
lower
income
earner.
In
this
sense,
then,
the
woman
is
more
often
"affected"
by
section
63.
However,
to
describe
section
63
in
this
fashion
is
not
to
admit
that
section
63
has
an
"adverse
effect"
which
subordinates
women.
As
I
described
above,
to
deny
the
deduction
to
women
would
only
exaggerate
a
societal
inequality
if
the
woman
in
question
actually
paid
more
child
care
expenses.
Since,
as
I
have
already
indicated,
proof
is
lacking
on
this
point,
the
only
obvious
distinction
is
a
parental
one.
And,
as
just
noted,
the
appellant's
focus
has
effectively
excluded
parental
status
arguments.
My
second
comment
follows
from
the
first.
If
one
accepts
that
two
supporting
persons
actually
contribute
in
monetary
terms
to
child
care
expenses,
by
denying
a
deduction
through
the
earned
income
limitation,
section
63
will
not
always
work
a
hardship.
For
example,
in
families
involving
part-time
working
women
with
low
income,
section
63
may
provide
limited
recognition
of
"the
untaxed
preference
that
the
tax
system
gives
to
imputed
family
income
contributed
By
non-earning
spouses
by
way
of
non-market
household
services":
Report
of
the
Task
Force
on
Child
Care,
supra,
at
page
295.
The
earned
income
limitation
would,
under
this
reasoning,
underscore
a
position
of
inequality
in
the
case
of
families
with
an
overall
low
income.
Such
families
would
arguably
be
denied
the
section
63
deduction
in
the
face
of
a
demonstrated
need
for
it.
Certainly,
there
has
been
no
attempt
to
involve
the
circumstances
of
low
income
Canadians
in
this
Charter
challenge.
Having
discussed
the
manner
in
which
this
subsection
15(1)
case
was
brought
forward,
it
is
only
fair
to
add
a
few
comments
with
respect
to
the
remainder
of
the
subsection
15(1)
analysis
which
is
not,
strictly
speaking,
necessary
to
decide.
As
my
comments
immediately
above
relating
to
single
mothers
imply,
if
I
were
convinced
that
section
63
has
an
adverse
effect
upon
some
women
(for
example,
in
this
case,
self-employed
women),
I
would
not
be
concerned
if
the
effect
was
not
felt
by
all
women.
That
an
adverse
effect
felt
by
a
subgroup
of
women
can
still
constitute
sex-based
discrimination
appears
clear
to
me
from
a
consideration
of
past
decisions:
Brooks,
supra;
Janzen
v.
Platy
Enterprises
Ltd.,
[1989]
1
S.C.R.
1252,
59
D.L.R.
(4th)
352;
see
also
Schachtschneider
v.
Canada,
[1993]
2
C.T.C.
178,
93
D.T.C.
5298
(F.C.A.),
per
Linden,
J.A.
At
issue
in
Brooks,
supra,
was
whether
a
health
insurance
plan
which
denied
benefits
to
pregnant
women
was
discriminatory
on
the
basis
of
sex.
Obviously,
not
all
women
become
pregnant,
nor
do
those
women
who
become
pregnant
all
become
pregnant
at
the
same
time.
Nonetheless,
discrimination
on
the
basis
of
sex
was
found.
Dickson,
C.J.
stated
(at
page
1247
(D.L.R.
341)):
While
pregnancy-based
discrimination
only
affects
part
of
an
identifiable
group,
it
does
not
affect
anyone
who
is
not
a
member
of
the
group.
Many,
if
not
most,
claims
of
partial
discrimination
fit
this
pattern.
Similarly,
in
Janzen,
supra,
sexual
harassment
was
realized
to
constitute
discrimination
on
the
basis
of
sex,
notwithstanding
the
reality
that
a
harasser
will
not
uniformly
harass
all
women.
Dickson,
C.J.
expressed
this
realization
in
the
following
way
(at
pages
1288-89
(D.L.R.
378-79):
While
the
concept
of
discrimination
is
rooted
in
the
notion
of
treating
an
individual
as
part
of
a
group
rather
than
on
the
basis
of
the
individual’s
personal
characteristics,
discrimination
does
not
require
uniform
treatment
of
all
members
of
a
particular
group.
It
is
sufficient
that
ascribing
to
an
individual
a
group
characteristic
is
one
factor
in
the
treatment
of
that
individual.
If
a
finding
of
discrimination
required
that
every
individual
in
the
affected
group
be
treated
identically,
legislative
protection
against
discrimination
would
be
of
little
or
no
value.
In
my
view,
if
it
were
possible
in
another
case
to
rove
that
section
63
of
the
Act
caused
an
adverse
effect
for
some
subgroup
or
women,
section
63
would
be
discriminatory
on
the
basis
of
sex
following
both
Brooks,
supra,
and
Janzen,
supra.
In
some
respects,
this
seems
like
a
broad
result,
insofar
as
the
basis
of
discrimination
is
not
narrowed
beyond
"sex".
However,
a
finding
of
sex
discrimination
need
not
necessarily
have
widespread
effects.
One
must
always
consider
whether
the
discriminatory
provision
could
be
saved
by
section
1
of
the
Charter.
And,
assuming
it
could
not
be,
it
would
seem
self-evident
that
if
only
some
women
were
adversely
affected
by
a
provision,
it
might
be
possible
to
fashion
remedies
to
respond
only
to
the
affected
sub-group,
rather
than
to
all
women.
In
addition
to
recognizing
remedial
issues
which
might
need
to
be
addressed,
I
acknowledge
that
to
find
sex-based
discrimination
with
respect
to
section
63
would
involve
a
feature
not
present
in
either
Brooks
or
Janzen.
Whereas
in
Brooks
it
was
noted
that"
only
women
have
the
capacity
to
become
pregnant”
(at
page
1242
(D.L.R.
338)),
and
whereas
in
Janzen
it
was
noted
that
"only
female
employees
.
.
.
ran
the
risk
of
sexual
harassment"
(at
page
1290
(D.L.R.
379)),
in
a
case
involving
an
adverse
effects
analysis
under
section
63
of
the
Act,
it
would
be
possible
to
point
to
both
men
and
women
who
would
be
negatively
affected
by
a
limitation
on
the
child
care
expense
deduction.
Following
upon
this
acknowledgment,
however,
the
important
thing
to
realize
is
that
there
is
a
difference
between
being
able
to
point
to
individuals
negatively
affected
by
a
provision,
and
being
able
to
prove
that
a
group
or
subgroup
is
suffering
an
adverse
effect
in
law
by
virtue
of
an
impugned
provision.
As
already
noted,
proof
of
inequality
is
a
comparative
process:
Andrews,
supra.
If
a
group
or
subgroup
of
women
could
prove
the
adverse
effect
required,
the
proof
would
come
in
a
comparison
with
the
relevant
body
of
men.
Accordingly,
although
individual
men
might
be
negatively
affected
by
an
impugned
provision,
those
men
would
not
belong
to
a
group
or
subgroup
of
men
able
to
prove
the
required
adverse
effect.
In
other
words,
only
women
could
make
the
adverse
effects
claim,
and
this
is
entirely
consistent
with
statements
such
as
that
found
in
Brooks,
supra,
to
the
effect
that“
onl
women
have
the
capacity
to
become
pregnant"
(at
page
1242
(D.L.R.
338)).
Looking
at
this
point
a
different
way,
if
section
63
creates
an
adverse
effect
upon
women
(or
a
subgroup)
in
comparison
with
men
(or
a
subgroup),
the
initial
subsection
15(1)
inquiry
would
be
satisfied:
a
distinction
would
have
been
found
based
upon
the
personal
characteristic
of
sex.
In
the
second
subsection
15(1)
inquiry,
however,
the
sex-based
distinction
could
only
be
discriminatory
with
respect
to
either
women
or
men,
not
both.
The
claimant
would
have
to
establish
that
the
distinction
had
“the
effect
of
imposing
a
burden,
obligation
or
disadvantage
not
imposed
upon
others
or
of
withholding
or
limiting
access
to
opportunities,
benefits
and
advantages
available
to
others"
(Swain,
supra,
at
page
992
(C.C.C.
520)).
The
burden
or
benefit
could
not,
as
a
logical
proposition,
fall
upon
both
sexes.
Likewise,
to
the
extent
that
a
court
might
undertake
a
broader
search
for
"disadvantage
that
exists
apart
from
and
independent
of
the
particular
legal
distinction
being
challenged”
(Turpin,
supra,
at
page
1332
(C.C.C.
34)),
I
cannot
imagine
how
such
disadvantage
could
be
located
for
both
men
and
women
at
the
same
time.
(d)
Conclusions
with
respect
to
subsection
15(1)
of
the
Charter
Given
the
evidentiary
focus
of
this
case,
I
have
concluded
that
the
appellant
has
not
proved
that
section
63
of
the
Income
Tax
Act
involves
a
distinction
between
men
and
women,
as
required
by
the
equality
challenge
she
has
brought
under
subsection
15(1)
of
the
Charter.
Accordingly,
the
limitations
upon
child
care
deductions
in
that
section
have
not
been
proved
to
be
unconstitutional
in
this
case.
Revenue
Canada's
reassessment
of
the
appellant's
deductions
in
respect
of
taxation
year
1985
is
affirmed.
3.
Concluding
comments
with
respect
to
section
1
of
the
Charter
Although
many
complex
equality
issues
inform
the
present
appeal,
I
have
concluded
that
the
appeal
should
be
dismissed
since
the
evidentiary
foundation
inadequately
supports
the
appellant's
position.
In
concluding
in
that
fashion,
however,
I
felt
compelled
above
to
make
certain
remarks
relating
to
the
kind
of
evidence
needed
in
such
a
case,
and
relating
to
the
nature
of
sex
discrimination
in
an
adverse
effects
case
involving
the
Income
Tax
Act.
To
complete
this
process,
it
may
be
helpful
to
make
two
remarks
with
respect
to
section
1
of
the
Charter,
notwithstanding
that
recourse
to
section
1
is
unnecessary
in
this
case,
and
notwithstanding
that
I
do
not
intend
to
engage
in
a
section
1
analysis
as
such.
First,
I
must
express
some
concerns
with
the
extent
to
which
the
respondent
presented
a
section
1
argument.
The
government,
of
course,
bears
the
burden
of
proving
that
a
Charter
infringement
is
a
reasonable
limit,
demonstrably
justified
in
a
free
and
democratic
society:
The
Queen
v.
Oakes,
[1986]
1
S.C.R.
103,
26
D.L.R.
(4th)
200,
at
pages
136-37
(D.L.R.
225-26).
Although
a
variety
of
information
was
placed
before
this
Court
which
could
be
used
in
a
section
1
analysis
(such
as
the
white
papers,
Hansard,
and
reports
on
child
care
referred
to
by
the
Federal
Court
of
Appeal
below),
most
of
this
information
was
not
specifically
related
to
section
1
of
the
Charter
in
any
way.
Instead,
these
materials
formed
a
background
with
respect
to
the
statutory
interpretation
of
the
Income
Tax
Act.
As
noted
by
this
Court
in
Schachter
v.
Canada,
[1992]
2
S.C.R.
679,
93
D.L.R.
(4th)
1,
at
page
695
(D.L.R.
11),
courts
should
not
be
left
in
a
factual
vacuum
when
the
legislative
objective
embodied
in
an
impugned
provision
falls
to
be
determined.
Having
expressed
this
point,
however,
I
must
nonetheless
make
a
second
point
which
relates
to
the
analysis
of
legislative
objective
under
section
1
of
the
Charter.
As
I
discussed
at
the
outset
of
the
subsection
15(1)
analysis,
the
appellant's
Charter
arguments
did
not
consider
the
importance
of
viewing
section
63
as
a
complete
response
to
child
care
expenses.
I
believe
that
one
effect
of
this
approach
is
that
the
appellant's
arguments
were
presented
in
a
curious
isolation.
We
were
invited
to
consider
the
Charter
only
with
respect
to
self-employed
women,
and
it
was
suggested
to
us
that
a
remedy
could
be
granted,
without
the
need
to
consider
the
position
of
other
women,
other
parents,
or
the
government's
overall
response
to
child
care
needs.
Instead
of
focusing
upon
the
manner
in
which
section
63
of
the
Act
operates
as
a
child
care
system,
the
present
appeal
focused
only
upon
the
propriety
of
an
instrumental
result.
This
Court
was
invited
to
use
the
Charter
to
rectify
a
disadvantage
allegedly
suffered
by
businesswomen
vis-à-vis
businessmen,
and,
in
the
process,
this
Court
was
invited
to
ignore
the
effect
of
allowing
a
complete
deduction
on
the
rest
of
the
system.
At
the
section
1
stage
of
Charter
analysis,
however,
such
an
instrumental
approach
is
inappropriate.
In
order
to
examine
properly
the
validity
of
legislative
objectives
in
a
case
such
as
the
present
one,
it
is
important
to
consider
both
the
operation
of
the
Income
Tax
Act
as
a
whole,
and
the
operation
of
other
government
systems
relating
to
child
care.
With
respect
to
the
Income
Tax
Act
itself,
it
is
certainly
relevant
to
consider
how
income
tax
deductions
affect
the
class
of
taxpayers
who
need
help
with
child
care.
In
particular,
I
advert
to
the
well
known
fact
that
tax
deductions
operate
as
upside-down
subsidies.
This
feature
of
deductions
was
well
canvassed
in
the
Report
of
the
Task
Force
on
Child
Care
(supra,
at
page
169):
.
.
..
because
the
value
of
the
deduction
is
dependent
on
the
taxpayer's
highest
marginal
rate
of
tax,
the
value
of
the
deduction
is
greater
for
high-income
earners
than
for
low-income
earners,
a
prime
characteristic
of
a
regressive
tax
measure.
Indeed,
surprisingly,
the
premise
of
the
deduction
seems
to
be
that
a
person's
need
for
it
rises
proportionately
with
income.
Moreover,
the
deduction
is
of
no
benefit
whatsoever
to
individuals
who,
because
of
insufficient
income,
do
not
have
tax
to
pay,
although
their
need
is
greatest
of
all.
The
Task
Force
on
Child
Care
did
not
recommend
that
the
future
development
of
a
child
care
system
contain
relief
in
the
form
of
tax
measures,
although,
in
the
interim,
it
was
recommended
that
the
deductibility
levels
established
by
section
63
be
left
intact:
supra,
at
page
375.
In
my
opinion,
it
would
be
strange
indeed
for
this
Court
to
consider
uncapping
a
child
care
expense
deduction,
without
even
considering
the
very
real
drawbacks
of
tax
deductions
in
equality
terms.
In
a
similar
fashion,
I
do
not
believe
that
the
tax
deduction
for
child
care
expenses
could
be
properly
examined
by
this
Court
without
consideration
being
given
to
the
entire
range
of
government
responses
to
family
and
child
care
issues.
If
inequities
are
proved
to
exist
within
section
63,
surely
it
must
be
relevant
to
consider
the
extent
to
which
other
government
programs
respond
to
those
inequities.
I
do
not,
by
any
means,
wish
to
suggest
that
a
complete
response
to
child
care
exists
in
Canada,
nor
do
I
say
that
courts
need
only
arrange
the
pieces
of
a
complicated
child
care
puzzle.
Instead,
I
simply
wish
to
recognize
that
proper
examination
of
a
taxation
response
to
child
care
expenses
requires
one
to
contextualize
the
fiscal
response
to
the
greatest
degree
possible,
in
order
to
determine
whether
an
apparent
inequality
discloses
a
justifiable
legislative
objective
of
a
much
broader
kind.
Having
made
these
brief
remarks,
I
consider
it
unnecessary
to
further
consider
section
1
of
the
Charter,
or
the
appropriateness
of
the
subsection
15(1)
challenge
in
this
case.
VI.
Conclusion
For
the
foregoing
reasons,
I
conclude
that
child
care
expenses
are
deductible
solely
under
section
63
of
the
Income
Tax
Act,
and
that
section
63
represents
a
systemic
response
to
child
care
in
income
tax
terms.
With
respect
to
the
constitutional
questions,
I
conclude
that
no
violation
of
section
15
of
the
Charter
has
been
proved
in
this
case,
and,
in
particular,
that
section
63
has
not
been
proved
to
violate
the
appellant's
right
to
equality.
This
being
the
case,
it
is
unnecessary
to
consider
the
second
constitutional
question.
More
specifically,
I
would
answer
the
constitutional
questions
as
follows:
Question
1:
If
sections
9,18
and
63
of
the
Income
Tax
Act
are
not
open
to
an
interpretation
other
than
that
full
child
care
expenses
of
the
appellant
are
not
deductible
as
business
expenses,
does
any
part,
or
do
any
or
all
of
these
sections,
infringe
or
deny
the
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freeedoms?
Answer:
No.
Question
2:
To
the
extent
that
the
above
sections
of
the
Income
Tax
Act
infringe
or
deny
the
rights
and
freedoms
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms,
are
these
sections
justified
by
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms
and
therefore
not
inconsistent
with
the
Constitution
Act,
1982?
Answer:
It
is
not
necessary
to
answer
this
question.
I
would
dismiss
the
appeal
with
costs
and
affirm
the
Minister's
reassessments
which
disallowed
the
deductions
claimed
by
the
appellant.
L'Heureux-Dubé
J.:—Ms.
Elizabeth
Symes
is
a
lawyer
and
as
such
a
business
woman;
she
is
also
the
mother
of
two
children.
During
the
taxation
years
1982
through
1985,
she
claimed
her
child
care
expenses
as
a
"business
expense"
under
the
provisions
of
the
Income
Tax
Act.
This
appeal
concerns
the
statutory
interpretation
of
the
Act
and,
in
particular,
section
9,
paragraphs
18(1
)(a)
and
18(1)(h)
and
section
63.
It
also
requires
that
we
ask
fundamental
and
complex
questions
about
the
visions
of
equality
and
inclusivity
that
mould
our
legal
constructs.
I.
Facts
The
relevant
facts
can
be
easily
summarized
and
are
not
contested.
Elizabeth
Symes
practises
in
the
legal
profession
and
between
1982
and
1985
hired
a
nanny,
Mrs.
Simpson,
to
care
for
her
two
children
so
that
she
could
work.
During
the
1982,
1983,
1984
and
1985
taxation
years,
she
deducted
the
salary
she
paid
to
Mrs.
Simpson
as
a
business
expense.
The
Minister
of
National
Revenue
(M.N.R.)
disallowed
these
deductions,
although
he
allowed
a
revised
child
care
deduction
under
subsection
63(1)
of
the
Act
of
$1,000
for
the
1982
expense,
a
$2,000
deduction
for
the
1983
and
1984
expense
and
a
$4,000
deduction
for
the
1985
expense.
The
M.N.R.
disallowed
the
deductions
on
the
basis
that
the
wages
paid
were
personal
or
living
expenses
under
paragraph
18(1)(h)
of
the
Act,
and
not
outlays
or
expenses
incurred
for
the
purpose
of
gaining
or
producing
income
from
business
under
paragraph
18(1)(a)
of
the
Act.
Ms.
Symes
appealed
the
M.N.R.'s
reassessments
to
the
Federal
Court,
Trial
Division.
Cullen,
J.
concluded
that
the
child
care
expenses
could
be
deducted
as
a
business
expense.
The
respondent
appealed
to
the
Federal
Court
of
Appeal,
which
allowed
the
appeal
and
restored
the
notices
of
reassessment
issued
by
the
M.N.R.
ll.
Relevant
statutory
provisions
Income
Tax
Act,
R.S.C.
1952,
c.
148,
as
amended:
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
.
.
.
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;
4
(1)
For
the
purposes
of
this
Act,
(a)
a
taxpayer's
income
.
.
.
for
a
taxation
year
from
an
office,
employment,
business,
property
or
other
source.
.
.
is
the
taxpayer's
income
.
.
.
computed
in
accordance
with
this
Act
on
the
assumption
that
he
had
during
the
taxation
year
no
income
.
.
.
except
from
that
source
.
.
.
and
was
allowed
no
deductions
in
computing
his
income
for
the
taxation
year
except
such
deductions
as
may
reasonably
be
regarded
as
wholly
applicable
to
that
source
.
.
.
and
except
such
part
of
any
other
deductions
as
may
reasonably
be
regarded
as
applicable
thereto
....
(2)
Subject
to
subsection
(3),
in
applying
subsection
(1)
for
the
purposes
of
this
Part,
no
deductions
permitted
by
sections
60
to
63
are
applicable
either
wholly
or
in
part
to
a
particular
source
.
.
.
.
(4)
Unless
a
contrary
intention
is
evident,
no
provision
of
this
Part
shall
be
read
or
construed
to
require
the
inclusion
or
to
permit
the
deduction,
in
computing
the
income
of
the
taxpayer
for
a
taxation
year
or
his
income
or
loss
for
a
taxation
year
from
a
particular
source
or
from
sources
in
a
particular
place,
of
any
amount
to
the
extent
that
amount
has
been
included
or
deducted,
as
the
case
may
be,
in
computing
such
income
or
loss
under,
in
accordance
with
or
by
virtue
of
any
other
provision
of
this
Part.
9
(1)
Subject
to
this
Part,
a
taxpayer's
income
for
a
taxation
year
from
a
business
or
property
is
his
profit
therefrom
for
the
year.
18
(1)
In
computing
the
income
of
a
taxpayer
from
a
business
or
property
no
deduction
shall
be
made
in
respect
of
(a)
an
outlay
or
expense
except
to
the
extent
that
it
was
made
or
incurred
by
the
taxpayer
for
the
purpose
of
gaining
or
producing
income
from
the
business
or
property;
(h)
personal
or
living
expenses
of
the
taxpayer
except
travelling
expenses
(including
the
entire
amount
expended
for
meals
and
lodging)
incurred
by
the
taxpayer
while
away
from
home
in
the
course
of
carrying
on
his
business;
63
(1)
Subject
to
subsection
(2),
in
computing
the
income
of
a
taxpayer
for
a
taxation
year
the
aggregate
of
all
amounts
each
of
which
is
an
amount
paid
in
the
year
as
or
on
account
of
child
care
expenses
in
respect
of
an
eligible
child
of
the
taxpayer
for
the
year
may
be
deducted
(b)
by
the
taxpayer
or
a
supporting
person
of
the
child
for
the
year.
.
.
to
the
extent
that
(c)
the
amount
is
not
included
in
computing
the
amount
deductible
under
this
subsection
by
an
individual
(other
than
the
taxpayer),
and
(d)
the
amount
is
not
an
amount
(other
than
an
amount
that
is
included
in
computing
a
taxpayer's
income
and
that
is
not
deductible
in
computing
his
taxable
income)
in
respect
of
which
any
taxpayer
is
or
was
entitled
to
a
reimbursement
or
any
other
form
of
assistance,
and
the
payment
of
which
is
proven
by
filing
with
the
Minister
one
or
more
receipts
each
of
which
was
issued
by
the
payee
and
contains,
where
the
payee
is
an
individual,
that
individual’s
Social
Insurance
Number;
but
not
exceeding
the
amount,
if
any,
by
which
(e)
the
least
of
(i)
$8,000,
(ii)
the
product
obtained
when
$2,000
is
multiplied
by
the
number
of
eligible
children
of
the
taxpayer
for
the
year
in
respect
of
whom
the
child
care
expenses
were
incurred,
and
(iii)
/3
of
the
taxpayer's
earned
income
for
the
year
exceeds
(f)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
deducted,
in
respect
of
the
eligible
children
of
the
taxpayer
that
are
referred
to
in
subparagraph
(e)(ii),
under
this
subsection
for
the
year
by
an
individual
(other
than
the
taxpayer)
to
whom
subsection
(2)
is
applicable
for
the
year.
(3)
In
this
section,
(a)
“
child
care
expense"
means
an
expense
incurred
for
the
purpose
of
providing
in
Canada,
for
any
eligible
child
of
a
taxpayer,
child
care
services
including
baby
sitting
services,
day
nursery
services
or
lodging
at
a
boarding
school
or
camp
if
the
services
were
provided
(i)
to
enable
the
taxpayer,
or
the
supporting
person
of
the
child
for
the
year,
who
resided
with
the
child
at
the
time
the
expense
was
incurred,
(A)
to
perform
the
duties
of
an
office
or
employment,
(B)
to
carry
on
a
business
either
alone
or
as
a
partner
actively
engaged
in
the
business,
(b)
"earned
income”
of
a
taxpayer
means
the
aggregate
of
(i)
all
salaries,
wages
and
other
remuneration,
including
gratuities,
received
by
him
in
respect
of,
in
the
course
of,
or
by
virtue
of
offices
and
employments,
and
all
amounts
included
in
computing
his
income
by
virtue
of
section
6
and
7,
(ii)
amounts
included
in
computing
his
income
by
virtue
of
paragraph
56(1)(m),
(n)
or
(o),
and
(iii)
his
incomes
from
all
businesses
carried
on
either
alone
or
as
a
partner
actively
engaged
in
his
business.
(c)
“eligible
child”
of
a
taxpayer
for
a
taxation
year
means
(i)
a
child
of
the
taxpayer
or
of
his
spouse,
or
(ii)
a
child
in
respect
of
whom
the
taxpayer
deducted
an
amount
under
section
109
for
the
year,
if,
at
any
time
during
the
year,
the
child
was
under
14
years
of
age
or
was
over
13
years
of
age
and
dependent
on
the
taxpayer
by
reason
of
mental
or
physical
infirmity;
and
(d)
“supporting
person"
of
an
eligible
child
of
a
taxpayer
for
a
taxation
year
means
(i)
a
parent
of
the
child,
(ii)
the
taxpayer's
spouse,
or
(iii)
an
individual
who
deducted
an
amount
under
section
109
for
the
year
in
respect
of
the
child,
if
the
parent,
spouse
or
individual,
as
the
case
may
be,
resided
with
the
taxpayer
at
any
time
during
the
year
and
at
any
time
within
60
days
after
the
end
of
the
year.
III.
Judgments
Federal
Court,
Trial
Division
(Cullen,
J.)
Finding
for
the
appellant
Symes,
the
trial
judge
stated
that
to
determine
which
expenses
may
be
considered
business
expenses
in
the
calculation
of
business
profit,
one
should
examine
whether
the
expense
was
consistent
with
“ordinary
principles
of
commercial
trading
or
well
accepted
principles
of
business
practice”
(page
480
(D.T.C.
5246)).
Furthermore,
the
expense
should
be
made
or
incurred
"for
the
purpose
of
gaining
or
producing
income
from
the
business"
(page
480
(D.T.C.
5246)).
Cullen,
J.
found
that
there
was
an
increasing
tendency
to
interpret
paragraph
18(1)(a)
of
the
Act
more
liberally.
He
added
that,
since
the
term
"profit"
in
section
9
of
the
Act
was
not
defined,
it
was
up
to
the
courts
to
“infuse
the
term
with
meaning,
which
will
reflect
the
realities
of
the
times"
(page
482
(D.T.C.
5248)).
To
that
end,
Cullen,
J.
took
note
of
the
testimony
of
the
expert
witness,
Dr.
Patricia
Armstrong,
who
indicated
that
there
has
been
significant
social
change
in
the
late
1970s
and
into
the
1980s,
in
terms
of
the
influx
of
women
of
childbearing
age
into
business
and
into
the
workplace.
Since
this
change
postdated
the
cases
in
which
child
care
expenses
were
not
allowed
as
a
legitimate
business
deduction,
Cullen,
J.
found
that
his
interpretation
was
not
restricted
by
these
cases.
He
concluded
that"
it
can
be
said
that
there
is
a
causal
relationship
between
the
dedication
of
resources
generated
in
[the
appellant's]
practice
to
child
care
and
the
generation
of
those
resources"
(page
484
(D.T.C.
5249)).
He
also
was
satisfied
that
the
plaintiff
exercised
good
business
judgment
in
deciding
to
dedicate
part
of
her
resources
from
the
law
practice
to
the
provision
of
child
care.
He
stated,
at
pages
483-84
(D.T.C.
5248-49):
This
decision
was
acceptable
according
to
business
principles
which
include
the
development
of
intellectual
capital,
the
improvement
of
productivity,
the
provision
of
services
to
clients
ana
making
available
the
resource
which
she
sells,
namely
her
time.
Further,
Armstrong's
evidence
supports
the
notion
that
the
availability
of
child
care
increases
productivity
by
enhancing
the
peace
of
mind
of
employees.
Enhancing
productivity
is
something
that
is
totally
in
keeping
with
well
established
business
practices.
Cullen,
J.
then
examined
section
63
of
the
Act,
which
deals
with
child
care
expenses,
and
found
that
this
section
had
been
enacted
"to
facilitate
the
entry
of
women
into
the
labour
force,
thereby
promoting
economic
equality
between
the
sexes
as
well
as
providing
relief
for
low
income
families"
(page
485
(D.T.C.
5250)).
However,
he
concluded
that,
since
the
nanny's
salary
was
deductible
as
a
business
expense
pursuant
to
section
9
and
paragraph
18(1)(a)
of
the
Act,
section
63
could
not
"prevent
it
from
being
allowed
as
such”
(page
485
(D.T.C.
5249)).
Having
found
that
Ms.
Symes'
child
care
expenses
were
legitimate
business
expenses,
Cullen,
J.
was
not
required
to
examine
the
impact
of
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms.
However,
he
did.
He
held
that
section
15
of
the
Charter,
which
was
proclaimed
in
force
on
April
17,
1985,
was
applicable
to
part
of
the
1985
taxation
year
and
to
the
subsequent
taxation
years.
Cullen,
J.,
relying
on
the
decision
of
the
Supreme
Court
of
Canada
in
Andrews,
supra,
concluded
that
the
M.N.R.,
by
refusing
the
appellant's
deduction,
was
"treating
her
differently
from
other
taxpayers
with
expenses
that
are
considered
necessary
to
generate
business
income”
(page
488
(D.T.C.
5252)).
He
added
that
the
M.N.R.
was
not
treating
the
appellant
“like
a
serious
business
person
with
a
serious
expense
incurred
for
a
legitimate
purpose"
(page
488
(D.T.C.
5252)).
In
fact,
the
appellant
was
"treated
like
any
employer
who
is
incurring
a
business
expense
but
yet
she
is
not
allowed
to
deduct
that
expense",
which
meant
that
she
was
paying
more
taxes.
He
found
this
to
be
contrary
to
the
purpose
of
section
15
of
the
Charter.
Cullen,
J.
also
used
section
15
of
the
Charter
as
an
aid
in
interpreting
the
Act.
In
his
view,
since
the
Andrews
decision,
the
Act
must
be
interpreted
in
a
way
which
recognizes
the
specific
experience
of
women
as
principally
responsible
for
child
care.
He
also
observed
that
an
interpretation
of
the
Act
which
ignores
the
reality
that
women
bear
a
major
responsibility
for
child
rearing
and
which
ignores
that
the
cost
of
child
care
is
a
major
barrier
to
women's
participation
in
the
workforce
would
by
itself
violate
section
15
of
the
Charter.
Thus,
the
trial
judge
concluded
that
the
appellant
had
suffered
discrimination
based
on
her
personal
characteristics
as
a
parent
and
a
woman
and
that
this
had
the
effect
of
imposing
on
her
burdens,
obligations
and
disadvantages
not
borne
by
others.
Turning,
then,
to
section
1
of
the
Charter,
Cullen,
J.
found
that
the
respondent
had
not
proven
a
"pressing
and
substantial"
objective
to
justify
the
disallowance
of
child
care
expenses
as
a
business
deduction,
and
felt
no
need
to
engage
in
a
lengthy
section
1
analysis.
He
asserted
that
his
interpretation
of
the
word
"profit"
in
the
Act
was
in
conformity
with
the
Charter.
In
the
result,
Cullen,
J.
held
that
the
appellant
was
allowed
to
deduct
the
cost
of
her
nanny
as
a
business
expense,
pursuant
to
the
relevant
provisions
of
the
Act.
He
added
(at
page
492
(D.T.C.
5254))
that,
although
the
concepts
of
profit
and
business
expense
permitted
the
deduction
of
the
nanny's
salary
in
the
present
case,
[t]his
is
not
to
say
that
nanny
expenses
will
always
be
treated
as
a
business
expense,
or
that
section
63
of
the
Act
has
been
invalidated
under
section
52
of
the
Charter".
Federal
Court
of
Appeal
(Décary,
J.A.,
Pratte
and
MacGuigan,
JJ.A.
concurring)
The
Federal
Court
of
Appeal
reversed
the
decision
of
Cullen,
J.
Décary,
J.A.,
for
the
court,
dismissed
the
argument
that
the
existence
of
a
legal
obligation
to
care
for
children
was
a
reason
for
allowing
child
care
expenses
to
be
deducted
as
a
business
expense.
According
to
him,
this
obligation,
imposed
equally
on
both
sexes,
was
a
"natural
obligation”
which
affected
parents
at
all
times,
since
"
[t]he
law
does
not
impose
an
obligation
on
the
[appellant]
to
look
after
her
children
because
she
is
operating
a
business"
(page
8
(D.T.C.
5403).
While
agreeing
that
judicial
interpretation
should
be
"flexible
and
sensitive
to
adapt
to
changing
circumstances”,
Décary,
J.A.
pursued
at
page
9
(D.T.C.
5403):
.
.
.
the
concept
of
a
business
expense
has
been
developed
exclusively
in
relation
to
the
commercial
needs
of
the
business,
without
any
regard
to
the
particular
needs
of
those
in
charge
of
the
business,
and
I
have
difficulty
in
seeing
how
a
change
in
the
particular
needs
of
these
persons
could
justify
modifying
an
interpretation
which
has
nothing
to
do
with
these
needs
.
.
.
.
I
consider
that
the
case
at
bar
does
not
require
a
conclusion
on
this
point
for
the
simple
reason
that
Parliament
has
itself
already
amended
the
Income
Tax
Act
to
provide
for
the
specific
situation
relied
on
by
the
[appellant].
Décary,
J.A.
based
his
conclusion
on
the
fact
that,
in
his
view,
subparagraph
63(3)(a)(i)
and
paragraph
63(3)(b)
of
the
Act
covered
self-employed
parents
as
well
as
salaried
parents,
the
term
"parent"
meaning
the
individual
providing
support
for
a
child.
He
held
that
[h]ad
section
63
been
drafted
to
apply
specifically
to
the
[appellant's]
case,
it
would
not
have
been
drafted
otherwise”
and
added
that
subparagraph
63(3)(b)(iii)
of
the
Act,
which
defined
"earned
income”
as
including
"incomes
from
all
businesses
carried
on
either
alone
or
as
a
partner
actively
engaged
in
the
business”,
led
him
to
the
conclusion
that
the
appellant's
earned
income
which
derived
from
her
partnership,
was
income
which
is
covered
by
section
63"
(page
9
(D.T.C.
5404)).
He
stated
at
page
9
(D.T.C.
5404):
Section
63
is
really
a
code
in
itself,
complete
and
independent,
and
it
does
not
matter
in
the
circumstances
whether
it
was
inserted
in
one
subdivision
of
the
Act
rather
than
another,
as
by
its
very
wording,
which
is
clear
and
not
open
to
question,
it
covers
a
parent
carrying
on
a
business
and
income
earned
by
the
parent
from
the
operation
of
a
business.
In
his
view,
section
63
of
the
Act
had
been
amended
many
times
to
take
into
account
social
and
economic
changes
and
he
concluded
that
the
appellant's
situation
was
exactly
the
kind
of
situation
that
Parliament
had
in
mind
when
it
enacted
section
63
of
the
Act
and
its
amendments.
Décary,
J.A.,
then,
turned
to
section
15
of
the
Charter,
in
the
context
of
economic
rights.
To
that
end,
he
examined
the
jurisprudence
and,
in
particular,
Andrews,
supra,
and
Public
Service
Alliance
of
Canada,
supra,
to
conclude
that
the
appellant’s
approach
"risks
trivializing
the
Charter"
(at
page
11
(D.T.C.
5405))
and,
moreover,
at
pages
13-14
(D.T.C.
5406-07),
that:
The
respondent's
proposition
appears
to
mean,
for
all
practical
purposes,
that
through
the
right
to
equality
recognized
in
section
15
the
Charter
guarantees
individuals
every
right,
whether
or
not
included
in
those
expressly
defined
in
the
Charter.
For
example,
in
the
case
at
bar,
though
the
right
to
work
and
the
right
to
be
in
a
position
to
work
are
not
recognized
by
the
Charter,
an
individual—on
these
facts
a
woman,
a
parent,
but
it
could
be
anyone
who
can
make
use
of
the
provisions
of
section
15—could
under
cover
of
section
15
require
legislatures
to
adopt
measures
enabling
him
or
her
to
work
and
be
in
a
position
to
work.
That
is
not
the
effect
of
section
15.
In
my
opinion,
no
one
could
have
required
Parliament
to
adopt
section
63
and
allow
a
parent
to
deduct
child
care
costs.
Parliament
adopted
section
63
in
the
enlightened
exercise
of
its
discretion,
and
I
do
not
see
on
what
basis
a
particular
group
of
professional
women
or
parents,
benefiting
from
the
deduction
allowed
by
that
section,
could
require
that
the
section
be
amended
by
the
legislature
or
interpreted
by
the
courts
so
as
to
give
the
group
the
right
to
take
a
further
deduction
.
.
.
.
I
do
not
see
how
a
provision
which
favours
all
women
could
directly
or
indirectly
infringe
the
right
of
women
to
equality,
and
I
am
not
prepared
to
concede
that
professional
women
make
up
a
disadvantaged
group
against
whom
a
form
of
discrimination
recognized
by
section
15
has
been
perpetrated
by
the
adopting
of
section
63,
or
would
be
perpetrated
by
this
Court's
refusal
to
interpret
paragraph
18(1)(a)
so
as
to
give
a
self-employed
mother
an
additional
deduction
for
a
business
expense
.
.
.
.
In
the
event,
however,
that
there
was
discrimination
within
the
meaning
of
section
15
of
the
Charter,
Décary,
J.A.
felt
that
it
was
not
the
function
of
the
court,
based
on
the
evidence
of
justification
presented
before
the
court,
to
substitute
its
choice
for
that
of
Parliament.
IV.
Issues
The
Chief
Justice
formulated
the
following
constitutional
questions:
1.
If
sections
9,
18
and
63
of
the
Income
Tax
Act
are
not
open
to
an
interpretation
other
than
that
full
child
care
expenses
of
the
appellant
are
not
deductible
as
business
expenses,
does
any
part,
or
do
any
or
all
of
these
sections,
infringe
or
deny
rights
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms?
2.
To
the
extent
that
the
above
sections
of
the
Income
Tax
Act
infringe
or
deny
the
rights
and
freedoms
guaranteed
by
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms,
are
these
sections
justified
by
section
1
of
the
Canadian
Charter
of
Rights
and
Freedoms
and
therefore
not
inconsistent
with
the
Constitution
Act,
1982?
In
order
to
reach
these
constitutional
questions,
one
must
first
determine
whether
sections
9,
18
and
63
of
the
Act
are
open
to
an
interpretation
that
child
care
expenses
are,
in
fact,
deductible
as
a
business
expense.
Although
this
issue
is
primarily
one
of
statutory
interpretation,
nevertheless,
this
case
remains
deeply
pervaded
by
issues
of
equality.
The
appellant
asks
that
the
Court
find
that
section
15
of
the
Charter
would
be
infringed
by
an
interpretation
of
the
Act
that
would
disallow
the
deduction
of
child
care
as
a
legitimate
business
expense.
The
arguments
of
the
parties
and
interveners
make
it
clear
that,
though
ostensibly
about
the
proper
statutory
interpretation
of
the
Act,
this
case
reflects
a
far
more
complex
struggle
over
fundamental
issues,
the
mean
ing
of
equality
and
the
extent
to
which
these
values
require
that
women's
experience
be
considered
when
the
interpretation
of
legal
concepts
is
at
issue.
The
answer,
with
regard
to
the
statutory
interpretation
of
the
Act,
requires
that
the
Court
consider
the
reality
of
the
relationship
of
both
women
and
men
to
child
care
and
to
work,
as
well
as
the
impact
of
concepts
of
equality
on
the
interpretation
of
legislation.
As
Professor
Claire
F.
L.
Young
has
written
in
“Impact
of
Feminist
Analysis
on
Tax
Law
and
Policy”
in
Feminist
Analysis:
Challenging
Law
and
Legal
Processes
(1992
Institute
of
Continuing
Legal
Education
Canadian
Bar
Association—Ontario,
January
31,
1992),
at
page
1:
The
tax
system
is
.
.
.
a
powerful
tool
used
to
direct
social
and
economic
activity
in
Canada.
The
role
that
this
"powerful
tool”
may
play
in
the
prevention
of
the
attainment
of
substantive
equality
for
women
cannot
be
overlooked.
V.
Statutory
interpretation
What
type
of
expense
constitutes
a
business
expense?
In
order
to
rule
on
the
meaning
to
be
given
to
the
term
“business
expense"
in
the
Act,
the
following
questions
must
be
answered:
1.
What
is
the
meaning
of
income
from
business
or
property
in
section
9?
2.
How
do
the
limitations
set
out
in
subsection
18(1)
as
expenses
made
or
incurred
for
the
purpose
of
gaining
or
producing
income
(paragraph
a),
or
as
personal
or
living
expenses
(under
paragraph
h)
affect
this
determination?
3.
Does
section
63
affect
a
taxpayer's
ability
to
deduct
child
care
as
a
business
expense?
I
do
not
agree
with
my
colleague
lacobucci,
J.’s
reasons
with
regard
to
section
63
of
the
Act,
nor
to
section
15
of
the
Charter
and
the
eventual
result
he
reaches.
I
do,
however,
substantially
agree
with
the
approach
he
has
taken
with
regard
to
the
definition
of
“business
expense"
through
subsection
9(1),
paragraphs
18(1)(a)
and
(h)
of
the
Act
and,
as
a
result,
I
will
not
repeat
a
similarly
detailed
analysis
in
this
regard,
but
will
only
review
the
essential
points
and
provide
my
own
insight
into
the
two
first
questions
at
hand.
In
my
view,
the
logical
conclusion
to
my
colleague's
analysis,
although
he
does
not
state
it
as
such,
is
that
section
9
and
paragraphs
18(1)(a)
and
18(1)(h)
do
not
prevent
the
deduction
of
child
care
expenses
as
a
business
expense.
My
analysis,
therefore,
will
focus
primarily
on
the
clear
differences
between
our
two
positions,
specifically
with
respect
to
section
63
of
the
Act.
A.
Section
9
of
the
Income
Tax
Act:
The
Ordinary
Principles
of
Commercial
Trading
Before
embarking
upon
a
detailed
analysis
of
these
questions,
it
is
crucial
to
recognize
that
the
Canadian
system
of
taxation
is
premised
on
taxation
of
income
based
on
source
distinctions,
pursuant
to
section
3
of
the
Act,
reproduced
above.
One
such
source
of
income
is
income
from
business,
pursuant
to
paragraph
3(a),
and
it
is
this
source
with
which
we
are
concerned
in
the
present
appeal.
Pursuant
to
subsection
9(1)
of
the
Act,
reproduced
earlier,
a
taxpayer's
income
for
a
taxation
year
from
a
business
is
the
taxpayer's
profit
therefrom
for
the
year.
Profit",
although
not
defined
in
the
Act,
has
been
interpreted
to
be
a
net
concept.
The
determination
of"profit"
is
dependent
upon
the
question
of
whether
an
expenditure
is
a
proper
business
expense
to
be
included
in
the
calculation
of
such
net
gain
(Daley,
supra).
In
order
to
arrive
at
a
calculation
of
net
profit,
the
all-encompassing
question
one
must
ask
is
whether
a
deduction
is
prohibited
because
it
is
not
incurred
for
the
purpose
of
earning
income
as
required
by
paragraph
18(1)(a),
or
because
the
expense
is
personal
pursuant
to
paragraph
18(1)(h).
It
is
my
view,
a
view
shared
by
my
colleague
lacobucci,
J.,
that
this
determination
is
essentially
an
examination
of
the
interplay
between
section
9,
which
allows
deductions,
and
the
prohibition
of
some
of
these
potential
deductions
by
paragraphs
18(1)(a)
and
(h).
These
two
significant
criteria
emerged
in
Cullen,
J.'s
analysis
of
the
case
law
for
the
purposes
of
determining
whether
an
expense
may
be
deducted
from
business
income.
He
held
that:
(1)
it
must
be
in
accordance
with
ordinary
commercial
principles
and
business
practice,
having
regard
to
the
circumstances
of
each
case;
and
(2)
it
must
be
made
or
incurred
for
the
purpose
of
gaining
or
producing
income
from
the
business.
This
test
has
been
applied
by
this
Court
in
Mattabi
Mines
Ltd.,
supra,
in
which
Wilson,
J.
asserted
(at
page
189
(C.T.C.
301)):
The
only
thing
that
matters
is
that
the
expenditures
were
a
legitimate
expense
made
in
the
ordinary
course
of
business
with
the
intention
that
the
company
could
generate
a
taxable
income
some
time
in
the
future.
[Emphasis
added.]
Such
a
broad
strategy
was
adopted
by
the
trial
judge,
as
well
as
by
my
colleague
lacobucci,
J.
Its
main
function
is
to
focus
on
a
particular
taxpayer
and
to
consider
what
that
taxpayer
has
legitimately
expended
in
order
to
do
business.
The
Court
of
Appeal,
however,
rejected
this
approach
considering
that"the
concept
of
a
business
expense
has
been
developed
exclusively
in
relation
to
the
commercial
needs
of
the
business,
without
any
regard
to
the
particular
needs
of
those
in
charge
of
the
business"
(page
9
(D.T.C.
5403)).
As
a
result,
Décary,
J.A.
found
that
child
care
expenses
did
not
constitute
a
“business
expense",
since
he
had
"difficulty
in
seeing
how
a
change
in
the
particular
needs
of
these
persons
[business
persons]
could
justify
modifying
an
interpretation
which
has
nothing
to
do
with
these
needs"
(page
9
(D.T.C.
5403)).
I
cannot
agree
with
the
approach
taken
by
the
Court
of
Appeal.
What,
in
my
view,
has
traditionally
been
recognized
as
a
“commercial
need",
has
everything
to
do
with
those
persons
who
have
traditionally
held
positions
in
the
commercial
sphere—primarily
men.
Further,
a
review
of
the
developments
in
income
tax
legislation
and
its
interpretation
clearly
demonstrates
that,
as
the
needs
of
those
pursuing
business
have
changed,
the
definition
of
what
constitutes
a
business
expense
has
similarly
expanded.
I
will
review
some
of
these
developments
and
then,
briefly,
the
foundation
upon
which
the
determination
of
these
complex
questions
must
be
made.
B.
Paragraph
18(1)(a)
of
the
Income
Tax
Act:
For
the
Purpose
of
Gaining
or
Producing
Income
from
Business
There
is
a
long
history
of
jurisprudence
with
respect
to
the
meaning
of
this
section,
which
my
colleague
lacobucci,
J.
has
thoroughly
reviewed,
and,
as
a
result,
I
will
not.
What
I
do
wish
to
reemphasize,
however,
is
that
in
Premium
Iron
Ores
Ltd.,
supra,
at
page
702
(C.T.C.
394-95,
D.T.C.
5281),
this
Court
contemplated
the
present
wording
of
paragraph
18(1)(a).
Martland,
J.,
for
the
Court,
held
that
the
wording
change,
from
the
earlier
section
which
stated:
"purpose
of
earning
income”,
to
the
new
one
which
provided
for:
“
gaining
or
producing
income”,
was
intended
to
broaden
the
definition
of
deductible
expenses.
My
colleague
speculates
that
this
expansion
is
perhaps
due
to
the
fact
that,
prior
to
subsequent
amendments,
deductions
for
capital
intangibles
were
unavailable
other
than
through
the
general
deduction
provided
for
by
the
predecessor
of
paragraph
18(1)(a)
and,
as
such,
an
expansive
view
of
paragraph
18(1)(a)
developed.
This
expansive
approach
to
paragraph
18(1)(a)
may
actually
demonstrate
that
the
income
tax
system
has
had
a
longstanding
capacity
to
accommodate
novel
situations
and
developments,
through
the
general
sec-
tions
allowing
deductions.
As
my
colleague
points
out,
however,
no
test
has
any
greater
certainty
and
clarity
than
that
which
is
proclaimed
by
the
precise
wording
of
the
statute.
Therefore,
the
basic
question
which
must
be
asked
is
whether
the
appellant
incurred
child
care
expenses
for
the
purpose
of
gaining
or
producing
income
from
business»
At
this
time,
I
would
like
to
make
a
brief
comment
on
the
gendered
analysis
entangled
in
the
statutory
interpretation
in
this
case.
While
it
happens
that
the
appellant
is
a
woman
lawyer
claiming
child
care
expense
deductions
as
business
expense,
section
9
of
the
Act
is
gender
neutral.
Such
a
claim
may
also
have
been
made
by
a
businessman
in
the
same
situation
as
Ms.
Symes.
If
such
a
businessman
were,
for
example,
the
primary
caretaker
of
his
children,
the
rationale
as
well
as
the
end
result
would
have
been
the
same.
The
ability
to
deduct
a
legitimate
business
expense
that
one
incurs
in
order
to
gain
or
produce
income
from
business
should
not
be
based
on
one's
sex.
Any
business
person
would
be
entitled
to
a
deduction
if
he
or
she
can
prove
that
such
expenses
have
been
incurred
for
business
purposes.
The
reality,
however,
is
that
generally
women,
rather
than
men,
fulfil
the
role
of
sole
or
primary
caregiver
to
children
and,
as
such,
it
is
they
alone,
who
incur
and
pay
for
such
expenses.
Men,
until
very
recently,
have
rarely
been
primary
caregivers,
nor
single
parents
and,
as
a
result,
they
have
not
incurred
direct
child
care
expenses.
In
many
traditional
family
situations
child
care
issues
were
not
concrete
business
expenses
for
men
in
business,
as
most
often
their
wives
stayed
home
to
care
for
their
children
or
made
such
child
care
arrangements.
Consequently,
such
a
businessman
would
have
no
basis
on
which
to
claim
child
care
expenses
as
a
business
expense.
However,
in
light
of
our
changing
society,
in
which
men
are
being
called
upon
to
bear
a
greater
burden
of
child
care
responsibilities
and
expenses,
which
may
impede
their
ability
to
earn
a
profit,
it
is
quite
possible
that
businessmen
will
accordingly
be
entitled
to
claim
such
expenses
should
they
meet
the
criteria
for
business
expense
deductions,
as
set
out
in
paragraph
18(1)(a).
Regardless
of
this
future
possibility,
however,
at
this
time
the
reality
is
that
it
is
primarily
women
who
incur
the
cost,
both
social
and
financial,
for
child
care
and
this
decision
cannot,
as
such,
ignore
the
contextual
truth
when
examining
whether
child
care
may
be
considered
a
business
expense.
As
my
colleague
asserts,
child
care
expenses
have
traditionally
been
viewed
as
expenses
that
were
not
incurred
for
the
purpose
of
gaining
or
producing
income,
as
they
were
considered
personal
in
nature
and,
accordingly,
could
not
be
regarded
as
commercial.
My
colleague
is
of
the
view
(at
page
50)
that:
[T]here
is
value
in
the
traditional
tax
law
test
which
seeks
to
identify
those
expenses
which
simply
make
a
taxpayer
available
to
the
business,
and
which
proceeds
to
classify
such
expenses
as
"personal"
for
the
reason
that
a“
personal
need"
is
being
fulfilled.
[Emphasis
in
original.]
In
my
view,
such
a
test
serves
no
purpose.
The
rationale
of
availability
to
the
business
is
neither
objective
nor
determinative.
To
be
available
for
the
business
is
the
first
requirement
of
doing
business,
otherwise,
there
can
be
no
business.
In
this
regard,
it
would
be
unthinkable
for
a
business
person's
special
needs,
for
example
those
associated
with
a
disability,
to
be
ineligible
for
deduction
because
they
satisfy
a
"personal
need".
A
woman's
need
for
child
care
in
order
to
do
business
is
no
different.
One's
personal
needs
can
simply
not
be
objectively
determined,
they
are
by
their
very
definition
subjective.
Courts
in
the
past,
and
the
Court
of
Appeal
in
this
case,
have
also
always
assumed
that
commercial
needs
were
an
objectively
neutral
set
of
needs.
As
a
consequence,
they
did
not
examine
the
close
relationship
between
child
care
and
women’s
business
income.
It
is
crucial,
in
my
view,
to
examine
the
link
between
child
care
and
the
generation
of
income
from
business,
as
did
Cullen,
J.
After
consideration
of
the
evidence
of
the
expert
witness
Dr.
Armstrong,
the
trial
judge
went
on
to
say
(at
page
72):
.
.
.
there
has
been
a
significant
social
change
in
the
late
1970s
and
into
the
1980s,
in
terms
of
the
influx
of
women
of
child-bearing
age
into
business
and
into
the
workplace.
Dr.
Armstrong
testified
that
dramatic
and
fundamental
changes
have
been
taking
place
in
both
the
labour
market
and
the
family
structure
over
the
past
40
years.
In
1951,
only
24
per
cent
of
Canadian
women
participated
in
the
labour
force.
By
1987,
this
number
had
risen
to
56
per
cent.
With
respect
to
how
the
increase
took
place
Dr.
Armstrong
testified
that:
It’s
been
quite
rapid
from
the
mid'70s-early
‘70s
on.
It
was
fairly
slow
to
increase
in
the'50s,
but
then
the'60s,
the
acceleration
was
faster
and
it
increased
in
the
’705.
Further,
the
increase
was
most
dramatic
for
women
in
their
childbearing
years,
with
nearly
three-quarters
of
women
between
the
ages
of
16
and
44
being
counted
as
members
of
the
labour
force,
particularly
in
the
19805.
Today,
a
majority
of
women,
even
those
with
very
young
children,
are
now
in
the
labour
force.
Fully
70
per
cent
of
employed
mothers
with
children
younger
than
six
years
old
work
full
time,
as
do
75
per
cent
of
employed
mothers
with
schoolage
children
(6-15
years).
Current
forecasts
suggest
that
by
the
year
2,000,
fully
88
per
cent
of
women
aged
25
to
34
years
will
be
in
the
work
force.
This
increasing
trend
is
particularly
noteworthy,
since
women
aged
25
to
34
years
are
the
group
most
likely
to
have
young
children
at
home,
thus
requiring
child
care.
It
is
evident
that
for
most
Canadian
families,
the
issue
of
child
care
is
of
crucial
importance.
It
is
with
these
statistics
and
expert
testimony
in
mind,
that
we
must
consider
whether
child
care
expenses
can
be
accommodated
within
the
definition
of
a
business
expense.
In
this
regard,
I
agree
with
Cullen,
J.'s
thoughtful
and
thorough
analysis
of
the
complex
issues
in
this
case,
which
recognizes
the
evolution
of
our
societal
structure
and
mandates
that
the
interpretation
of
statutes
be
done
in
context,
not
in
a
vacuum
(Edmonton
Journal
v.
A.G.
(Alberta),
[1989]
2
S.C.R.
1326,
64
D.L.R.
(4th)
577,
at
page
1355
(D.L.R.
584-65)).
At
the
forefront
of
this
analysis
are
general
and
well
known
concepts
of
statutory
interpretation,
for
example,
that
the
clear
and
unambiguous
meaning
of
words
which
do
not
lead
to
an
unreasonable
result
must
be
followed
and
further,
that
the
interpretation
of
a
law
may
change
over
time
in
order
to
coincide
with
an
altered
and
ever-changing
societal
context.
(See
E.A.
Dried-
ger,
Construction
of
Statutes
(2nd
ed.
1983),
at
page
89,
and
P.
A.
Côté,
The
Interpretation
of
Legislation
in
Canada
(1991),
at
page
227.)
Our
Court
has,
in
the
past,
altered
its
interpretation
of
legislation
in
a
number
of
cases
to
conform
with
our
changing
social
framework
(see
Murdoch
v.
Murdoch,
[1975]
1
S.C.R.
423,
41
D.L.R.
(3d)
367,
Rathwell
v.
Rathwell,
[1978]
2
S.C.R.
436,
83
D.L.R.
(3d)
289,
and,
most
recently,
Canada
(Attorney
General)
v.
Mossop,
[1993]
1
S.C.R.
554,
100
D.L.R.
(4th)
658).
Furthermore,
the
respect
of
Charter
values
must
be
at
the
forefront
of
statutory
interpretation
(see
Hills,
supra,
and
Slaight
Communications,
supra).
As
I
noted
in
Mossop,
supra,
at
page
613
(D.L.R.
696),
in
Canadian
National
Railway
Co.
v.
Canada
(Canadian
Human
Rights
Commission),
[1987]
1
S.C.R.
1114,
40
D.L.R.
(4th)
193
(sub
nom.
Action
Travail
des
Femmes
v.
Canadian
National
Railway
Co.),
Dickson,
C.J.
reviewed
the
jurisprudence
on
the
interpretation
of
legislation
and,
at
page
1134
(D.L.R.
206),
enunciated
the
following
principle:
Human
rights
legislation
is
intended
to
give
rise,
amongst
other
things,
to
individual
rights
of
vital
importance,
rights
capable
of
enforcement,
in
the
final
analysis,
in
a
court
of
law.
I
recognize
that
in
the
construction
of
such
legislation
the
words
of
the
Act
must
be
given
their
plain
meaning,
but
it
is
equally
important
that
the
rights
enunciated
be
given
their
full
recognition
and
effect.
We
should
not
search
for
ways
and
means
to
minimize
those
rights
and
to
enfeeble
their
proper
impact.
Although
it
may
seem
commonplace,
it
may
be
wise
to
remind
ourselves
of
the
statutory
guidance
given
by
the
federal
Interpretation
Act,
R.S.C.
1970,
c.
1-23,
section
11,
which
asserts
that
statutes
are
deemed
to
be
remedial
and
are
thus
to
be
given
such
fair,
large
and
liberal
interpretation
as
will
best
ensure
that
their
objects
are
attained.
[Emphasis
added.]
In
my
view,
this
approach
is
equally
apposite
in
the
case
at
hand.
The
provision
for
deduction
pursuant
to
subsection
9(1)
should
also
be
given
a
"fair,
large
and
liberal
interpretation”.
In
the
past,
the
scope
of
deductible
business
disbursements
has
been
expanded
constantly.
It
has
been
held
to
include
a
wide
array
of
expenditures,
such
as
club
dues,
meals
and
entertainment
expenses,
car
expenses,
home
office
expenses,
legal
and
accounting
fees,
to
name
only
a
few.
In
order
that
the
expense
the
appellant
claims
as
a
business
expense
be
analyzed
in
the
context
of
other
"business
expenses”,
I
will
briefly
examine
some
of
the
many
deductions
that
have
been
held
to
be
legitimately
expended
for
the
purpose
of
gaining
or
producing
income
from
business.
Subsection
18(12)
of
the
Act
provides
that
a
business
person
may
deduct
the
expense
of
a
home
office.
The
test
for
the
deduction
of
one's
home
office
is,
however,
very
stringent.
The
office
must
be
used
exclusively
for
the
business,
it
must
be
the
taxpayer's
principal
place
of
business
and
it
must
be
used
regularly
and
continuously,
in
order
that
the
deduction
be
available.
Self-employed
persons
are
also
able
to
deduct
80
per
cent
of
their
entertainment
and
meal
expenses
that
are
expended
for
the
purpose
of
gaining
or
producing
income.
Section
67.1
of
the
Act
limits
the
deductible
portion
of
an
expense
in
recognition
of
the
partly
personal
benefit
which
is
received
from
these
expenses
(C.
F.
L.
Young,
"Case
Comment
on
Symes
v.
The
Queen”,
[1991]
Brit.
Tax
Rev.
105).
With
respect
to
charitable
donations,
Olympia
Floor
&
Wall
Tile,
supra,
and
Impenco
Ltd.,
supra,
clearly
indicate
that
some
seemingly
personal
charitable
donations
may
fall
within
the
realm
of
acceptable
business
deductions.
In
both
these
cases,
the
companies
donated
significant
sums
of
money
to
charitable
Organizations
in
order
to
gain
or
produce
income.
That
income,
as
they
indicated,
arose
from
the
fact
that
those
with
whom
they
did
business
were
encouraged
to
purchase
their
product
because
of
their
generally
held
reputation
in
the
community
that
the
company
was
extremely
generous
toward
charitable
organizations.
Other
deductions
found
to
be
business
expenses
are
those
incurred
for
legal
and
accounting
fees
and
damages.
In
Kellogg,
supra,
for
example,
the
legal
expenses
incurred
through
legal
dealing
with
a
trademark
infringement
were
allowed
as
a
deduction
incurred
for
the
purpose
of
gaining
or
producing
income.
Damages
and
fines,
according
to
Eva
Krasa
in
'H’he
Deductibility
of
Fines,
Penalties,
Damages,
and
Contract
Termination
Payments”
(1990),
38
Can.
Tax
J.
1399,
have
also
been
allowed
as
business
expenses
on
occasion.
In
Royal
Trust,
supra,
the
Exchequer
Court
of
Canada
held
that
the
appellant
trust
company
should
be
able
to
deduct
club
dues
and
initiation
fees
paid
on
behalf
of
its
executives
and
senior
personnel.
The
Court
held
that
the
evidence
proved
conclusively
that
the
practice
of
paying
the
club
dues
resulted
in
business
from
which
the
appellant
gained
or
produced
income.
In
Friedland
v.
The
Queen,
[1989]
2
C.T.C.
79,
89
D.T.C.
5341
(F.C.T.D.),
the
taxpayer
was
allowed
to
deduct
the
expenses
which
he
incurred
for
his
Rolls
Royce
and
BMW,
to
the
extent
that
these
automobiles
were
used
for
business.
Finally,
particularly
relevant
to
the
case
at
hand
is
the
general
recognition
that
the
concept
of
profit
is
a
net
calculation
and,
as
such,
it
is
clear
that
an
employer
or
a
business
may
claim
a
deduction
for
employees'
salaries
and
for
employer's
contributions
to
an
employee
benefit
package.
A
daycare
centre
may
constitute
such
an
employee
benefit.
(See
Kathleen
Mahoney,
"Daycare
and
Equality
in
Canada"
in
Research
Studies
of
the
Commission
on
Equality
in
Employment
(1985),
157,
at
page
166.)
In
fact,
as
was
set
out
by
Cullen,
J.,
at
page
482
(D.T.C.
5241),
with
regard
to
business
operations:
There
is
no
dispute
that
salaries
paid
to
employees
are
deductible
as
business
expenses,
provided
they
are
laid
out
to
earn
income
and
are
reasonable.
Further,
under
certain
circumstances,
wages
or
salaries
paid
to
spouses
or
children
are
also
deductible
as
business
expenses.
If
this
is
so,
the
plaintiff
contends,
why
shouldn't
the
wages
paid
to
the
plaintiff's
nanny
be
deductible
as
a
business
expense?
Certainly,
if
the
plaintiff
hired
a
junior
lawyer
or
articling
student
whose
duties
also
included
looking
after
the
partner's
children
(if
perhaps
a
daycare
service
was
provided
by
the
firm),
there
would
be
no
dispute
that
the
wages
of
the
junior
or
the
articling
student
would
be
deductible
as
a
business
expense.
As
is
apparent,
the
variety
of
allowable
deductions
has
been
expanded
to
a
number
of
situations
not
envisaged
in
earlier
times
to
accommodate
many
diverse
and
new
business
practices.
This
development
falls
within
principles
of
deductions
which
have
been
succinctly
reviewed
by
Neil
Brooks
in
"The
Principles
Underlying
the
Deduction
of
Business
Expenses"
in
Hansen,
Krishna
and
Rendall,
eds.,
Essays
on
Canadian
Taxation
(1978),
249.
The
author
notes
that
a
number
of
tests
are
used
in
order
to
determine
what
type
of
expense
may
be
deducted
as
a
business
expense.
These
considerations
include
whether
the
expense
is
deductible
according
to
generally
accepted
accounting
principles,
whether
the
expense
is
normally
incurred
by
others
in
the
particular
business,
whether
the
expense
would
have
been
incurred
by
the
taxpayer
even
if
he
or
she
had
not
been
earning
income
from
a
business,
whether
the
taxpayer
could
have
avoided
the
expense
without
affecting
gross
income,
as
well
as
many
other
facts
and
circumstances
from
which
one
may
infer
the
taxpayer's
purpose
in
incurring
the
expense.
The
multiplicity
of
tests,
in
my
view,
leaves
it
open
for
one
to
conclude
that
any
legitimate
expense
incurred
in
relation
to
a
business
may
be
deducted
as
a
business
expense.
In
fact,
in
this
regard,
Brooks
confirms
that
a
judge's
personal
experience
may
strongly
influence
the
conclusion
that
he
or
she
may
reach
as
to
whether
a
particular
disbursement
may
be
classified
as
a
business
expense.
He
writes
(at
page
259):
Judges
know
on
the
basis
of
their
own
experience
that
an
expense
incurred
under
certain
circumstances
would
be
incurred
by
them
for
a
personal
purpose;
they
infer,
therefore,
that
it
is
probable
that
some
other
person,
under
similar
circumstances,
would
incur
the
expense
for
the
same
purpose.
When
we
look
at
the
case
law
concerning
the
interpretation
of
"business
expense",
it
is
clear
that
this
area
of
law
is
premised
on
the
traditional
view
of
business
as
a
male
enterprise
and
that
the
concept
of
a
business
expense
has
itself
been
constructed
on
the
basis
of
the
needs
of
businessmen.
This
is
neither
a
surprising
nor
a
sinister
realization,
as
the
evidence
well
illustrates
that
it
has
only
been
in
fairly
recent
years
that
women
have
increasingly
moved
into
the
world
of
business
as
into
other
fields,
such
as
law
and
medicine.
The
definition
of
"business
expense"
was
shaped
to
reflect
the
experience
of
businessmen,
and
the
ways
in
which
they
engaged
in
business.
As
Dorothy
Smith
points
out
in
"A
Peculiar
Eclipsing:
Women's
Exclusion
From
Man's
Culture”
(1978),
1
Women’s
Studies
Int.
Quart.
281,
when
only
one
sex
is
involved
in
defining
the
ideas,
rules
and
values
in
a
particular
domain,
that
one-sided
standpoint
comes
to
be
seen
as
natural,
obvious
and
general.
As
a
consequence,
the
male
standard
now
frames
the
backdrop
of
assumptions
against
which
expenses
are
determined
to
be,
or
not
to
be,
legitimate
business
expenses.
Against
this
backdrop,
it
is
hardly
surprising
that
child
care
was
seen
as
irrelevant
to
the
end
of
gaining
or
producing
income
from
business
but
rather
as
a
personal
non-deductible
expense.
As
Cullen,
J.
recognized,
the
world
of
yesterday
is
not
the
world
of
today.
In
1993,
the
world
of
business
is
increasingly
populated
by
both
men
and
women
and
the
meaning
of
business
expense"
must
account
for
the
experiences
of
all
participants
in
the
field.
This
fact
is
enhanced
by
expert
evidence
which
indicates
that
the
practices
and
requirements
of
businesswomen
may,
in
fact,
differ
from
those
of
businessmen.
When
we
look
at
the
current
situation,
it
becomes
clear
that
one
of
the
critical
differences
in
the
needs
of
businessmen
and
business
women
is
the
importance
of
child
care
for
business
people
with
children,
particularly
women.
Cullen,
J.,
as
confirmed
by
the
expert
evidence
before
him,
recognized
that
child
care
is
vital
to
women's
ability
to
earn
an
income.
In
this
regard,
I
am
wholly
in
agreement
with
Cullen,
J.'s
conclusion
that
it
made
"good
business
sense"
for
Ms.
Symes
to
hire
child
care
and
that
this
expense
should
come
within
the
calculation
of
profit.
In
my
view,
Ms.
Symes'
child
care
expenses
come
within
the
definition
of
“the
purpose
of
gaining
or
producing
income"
and,
as
a
result,
are
not
prevented
by
the
wording
of
paragraph
18(1)(a)
from
deduction
under
subsection
9(1).
The
second
point,
to
which
I
will
now
turn,
is
whether
child
care
expenses
may
be
disallowed
as
a
business
expense
pursuant
to
paragraph
18(1)(h)
as
being
personal
in
nature.
C.
Paragraph
18(1)(h)
of
the
Income
Tax
Act:
Personal
or
Living
Expenses
As
previously
discussed,
taxation
logic
allows
deductions
from
gross
income
for
legitimate
business
expenses
when
calculating
income.
Personal
expenses
are
not,
however,
seen
as
legitimate
deductions.
These
expenses
are
considered
to
be
expenses
of
"consumption"
which
should
appropriately
be
included
within
the
tax
base.
It
is
argued
that
child
care
is
just
such
an
expense,
and
that
child
bearing
and
caring
decisions
are
private
decisions,
having
nothing
to
do
with
business.
Under
this
logic,
it
is
argued
that
Ms.
Symes
should
not
be
granted
special
or
preferential
treatment,
by
allowing
her
to
deduct
a
personal
expense—her
child
care
cost.
Although
my
colleague,
lacobucci,
J.,
has
examined
this
issue,
I
wish
to
express
my
own
views
with
regard
to
what
makes
an
expense
personal
and
whether
child
care
qualifies
as
any
other
such
expense.
In
my
view,
it
is
important
to
look
closely
at
the
dichotomy
of
business
as
opposed
to
personal
expenses.
If
we
survey
the
experience
of
many
men,
it
is
apparent
why
it
may
seem
intuitively
obvious
to
some
of
them
that
child
care
is
clearly
within
the
personal
realm.
This
conclusion
may,
in
many
ways,
reflect
many
men's
experience
of
child
care
responsibilities.
In
fact,
the
evidence
before
the
Court
indicates
that,
for
most
men,
the
responsibility
of
children
does
not
impact
on
the
number
of
hours
they
work,
nor
does
it
affect
their
ability
to
work.
Further,
very
few
men
indicated
that
they
made
any
work-
related
decisions
on
the
basis
of
child-raising
responsibilities.
The
same
simply
cannot
currently
be
said
for
women.
For
women,
business
and
family
life
are
not
so
distinct
and,
in
many
ways,
any
such
distinction
is
completely
unreal,
since
a
woman's
ability
to
even
participate
in
the
work
force
may
be
completely
contingent
on
her
ability
to
acquire
child
care.
The
decision
to
retain
child
care
is
an
inextricable
part
of
the
decision
to
work,
in
business
or
otherwise.
This
reality
is
expressed
by
Grace
Blumberg
in“
"Sexism
in
the
Code:
A
Comparative
Study
of
Income
Taxation
of
Working
Wives
and
Mothers"
(1971-1972),
21
Buff.
L.
Rev.
49,
at
page
64,
in
similar
terms:
Child
care
.
.
.
is
an
expense
.
.
.
which
necessarily
arises
only
when
both
parents
are
employed
.
.
.
.
A
working
mother's
provision
for
child
care
is
a
nondiscretion-
ary
expense
directly
related
to
the
fact
of
her
employment.
In
the
recently
released
study
by
the
Canadian
Bar
Association
Task
Force
on
Gender
Equality
in
the
Legal
Profession
entitled
Touchstones
for
Change:
Equality,
Diversity
and
Accountability
(1993),
the
difficulties
many
women
lawyers
face
when
attempting
to
balance
career
and
family
were
highlighted.
The
report
states
(at
page
65):
One
of
the
main
causes
of
discrimination
against
women
lawyers
is
the
culture
that
surrounds
work
in
the
legal
profession.
That
culture
has
been
shaped
by
and
for
male
lawyers.
It
is
predicated
on
historical
work
patterns
that
assume
that
lawyers
do
not
have
significant
family
responsibilities.
The
"hidden
gender"
of
the
current
arrangements
for
legal
work
manifests
itself
in
many
ways,
including:
the
extremely
long
and
irregular
hours
of
work;
assumptions
about
the
availability
of
domestic
labour
to
support
a
lawyer's
activities
at
work;
promotion
within
the
law
firms
which
is
incompatible
With
the
child
bearing
and
child
rearing
cycles
of
most
women's
lives;
and
the
perceived
conflict
between
allegiances
owed
to
work
and
family.
Particularly
with
respect
to
child
care
responsibilities,
provincial
surveys
provided
clear
evidence
that
women
lawyers
bear
by
far
a
greater
responsibility
for
child
care
than
do
their
male
counterparts:
The
proportion
of
responsibility
borne
by
women
lawyers
for
their
children
is
almost
double
that
borne
by
male
lawyers.
When
asked
about
the
proportion
of
responsibility
they
bear,
women
responded
49
per
cent
(Ontario);
40
per
cent
(British
Columbia)
and
44
per
cent
(Alberta)
while
men
responded
26
per
cent
(Ontario);
20
per
cent
(British
Columbia);
and
26
per
cent
(Alberta).
The
Saskatchewan
survey
revealed
that
women
assume
primary
responsibility
for
child
care
in
all
areas
broken
down
by
activity.
For
example,
59
per
cent
of
women
report
they
care
for
children
when
the
latter
are
ill
compared
to
only
four
per
cent
of
men.
[Emphasis
in
original.]
Further,
the
surveys
revealed
that
women
lawyers
had
a
much
greater
reliance
on
paid
child
care
workers
than
did
male
lawyers:
Women
lawyers
are
much
more
likely
to
rely
on
paid
child
care
givers
than
are
male
lawyers—b
a
a
ratio
of
three
to
one.
In
Ontario,
female
respondents
identified
the
proportion
of
responsibility
borne
by
paid
child
care
workers
as
26
per
cent,
while
men
responded
10
per
cent.
In
British
Columbia
the
proportion
of
child
care
responsibility
borne
by
paid
child
care
workers
was
reported
as
26
per
cent
by
women
and
10
per
cent
by
men.
Again,
in
Alberta,
this
proportion
was
29
per
cent
for
female
lawyers
and
eight
per
cent
for
male
lawyers.
In
the
Saskatchewan
and
Quebec
surveys,
70
per
cent
of
women
reported
having
the
responsibility
for
making
child
care
arrangements.
Conversely,
male
lawyers
can
count
on
a
spouse
or
spousal
equivalent
to
be
responsible
for
child
care
at
a
rate
of
approximately
three
times
the
spousal
assistance
available
to
women.
Although
both
male
and
female
lawyers
have
experienced
stress
as
a
result
of
competing
demands
of
career
and
child
care
responsibilities,
women
reported
negative
material
effects
in
the
form
of
loss
of
income
or
reduced
career
opportunities
to
a
degree
not
reported
by
men.
For
example,
a
majority
of
women
reported
loss
of
income
due
to
child
rearing
whereas
only
a
small
minority
of
men
did
so.
[Emphasis
in
original.]
The
reality
of
Ms.
Symes'
business
life
necessarily
includes
child
care.
The
1993
concept
of
business
expense
must
include
the
reality
of
diverse
business
practices
and
needs
of
those
who
have
not
traditionally
participated
fully
in
the
world
of
business.
Décary,
J.A.’s
statement
that
the
"concept
of
a
business
expense
has
been
developed
.
.
.
without
any
regard
to
the
particular
needs
of
those
in
charge
of
the
business"
(page
523),
fails
to
recognize
this
reality.
In
this
regard,
comments
made
by
Isabel
Grant
and
Lynn
Smith
in
a
paper
prepared
for
the
Ontario
Law
Reform
Commission
("Gender
Representation
in
the
Canadian
Judiciary”,
in
Appointing
Judges:
Philosophy,
Politics
and
Practice
(1990),
57,
at
page
79)
ring
true:
.
.
.
no
one
is
"objective"
in
the
sense
of
being
without
a
frame
of
reference,
yet
we
sometimes
fail
to
notice
the
frame
of
reference
of
those
who
have
been
in
a
position
to
define
the
very
terms
and
concepts
in
which
we
think.
Audrey
Macklin
in
"Symes
v.
M.N.R.:
Where
Sex
Meets
Class”
(1992),
5
C.].
W.L.
498,
at
page
507,
retorted
that
Décary,
J.A.’s
above
assertion:
.
.
.
failed
to
acknowledge
that
as
long
as
business
has
been
the
exclusive
domain
of
men,
the
commercial
needs
of
business
have
been
dictated
by
what
men
(think
they)
need
to
expend
in
order
to
produce
income.
The
fact
that
these
expenditures
also
have
a“
"personal"
element
was
never
treated
as
a
complete
bar.
Thus,
the
courts
have
in
the
past
permitted
businessmen
to
deduct
club
fees
because
men
like
to
conduct
business
with
each
other
over
golf
[Royal
Trust
Co.,
supra]
.
.
.
.
Because
some
men
believe
expensive
cars
enhance
their
professional
image,
driving
a
Rolls
Royce
has
been
held
to
be
an
incident
of
a
professional
business
[Friedland,
supra].
As
a
consequence,
one
must
ask
whether
the
many
business
deductions
available,
for
cars,
for
club
dues
and
fees,
for
lavish
entertainment
and
the
wining
and
dining
of
clients
and
customers,
and
for
substantial
charitable
donations,
are
so
obviously
business
expenses
rather
than
personal
ones.
Although
potentially
personal,
each
one
of
these
expenses
has
been
accepted
as
a
legitimate
business
expense
and,
as
each
reflects
a
real
cost
incurred
by
certain
kinds
of
business
people
to
produce
income
from
business,
a
deduction
has
been
allowed.
The
real
costs
incurred
by
business
women
with
children
are
no
less
real,
no
less
worthy
of
consideration
and
no
less
incurred
in
order
to
gain
or
produce
income
from
business.
Finally,
with
regard
to
the
potentially
personal
nature
of
child
care
expenses,
the
issue
of
"choice"
has
been
raised
as
a
barrier
to
the
availability
of
a
deduction.
As
I
am
in
agreement
with
my
colleague
lacobucci,
J.'s
reasoning
in
this
regard,
I
will
make
only
a
few
brief
points.
While
there
is
a
personal
component
to
child
raising,
and
while
the
care
of
children
may
be
personally
rewarding,
this
“choice”
is
a
choice
unlike
any
others.
This
“choice”
is
one
from
which
all
of
society
benefits,
yet
much
of
the
burden
remains
on
the
shoulders
of
women.
Women
"choose"
to
participate
in
an
activity
which
is
not
for
their
benefit
alone,
and,
in
so
doing,
they
undertake
a
function
on
behalf
of
all
society.
As
Dickson,
C.J.
very
appropriately
remarked
in
Brooks,
supra,
at
page
1243
(D.L.R.
339):
That
those
who
bear
children
and
benefit
society
as
a
whole
thereby
should
not
be
economically
or
socially
disadvantaged
seems
to
bespeak
the
obvious.
It
is
only
women
who
bear
children;
no
man
can
become
pregnant
.
.
.
.
[I]t
is
unfair
to
impose
all
of
the
costs
of
pregnancy
upon
one
half
of
the
population.
The
decision
to
have
children
is
not
like
any
other
"consumption"
decision.
To
describe
the
raising
of
children
in
comparable
terms
to
"choosing"
to
purchase
a
certain
kind
of
automobile
or
live
in
a
certain
dwelling
is
simply
untenable.
As
well,
the
many
complexities
surrounding
child
care
make
it
inappropriate
to
adopt
the
language
of
voluntary
assumption
of
costs,
where
those
costs
may,
in
fact,
be
allocated
in
a
discriminatory
fashion—the
burden
falling
primarily
on
women.
In
conclusion
to
the
question
of
whether
child
care
expenses
are
precluded
from
being
deducted
as
a
business
expense
under
subsection
9(1)
by
the
interplay
of
either
paragraph
18(1)(a)
or
paragraph
18(1)(h)
of
the
Act,
I
answer
that
child
care
may
be
held
to
be
a
business
expense
deductible
pursuant
to
subsection
9(1)
and
paragraphs
18(1)(a)
and
(h)
of
the
Act,
all
other
criteria
being
respected.
This
result
leads
me
to
the
most
crucial
consideration
in
this
appeal,
that
is
whether
section
63
of
the
Act
precludes
the
deduction
of
child
care
expenses
as
a
business
expense.
Here,
I
part
company
with
my
colleague
since,
in
my
view,
section
63
of
the
Act,
properly
interpreted,
is
no
such
bar.
D.
Section
63
of
the
Income
Tax
Act
(i)
Overview
Section
63
of
the
Act,
reproduced
earlier,
provides
a
limited
deduction
for
child
care
expenses.
The
deduction
is
available,
in
most
circumstances,
to
the
lower
income
earning
spouse
in
a
family
unit.
It
is
a
non-source-based
deduction
available
to
all
parents.
At
trial,
the
effect
of
section
63
was
not
argued
at
length
since,
as
Cullen,
J.
briefly
noted
(at
page
485-86
(D.T.C.
5249)):
.
..
the
defendant
[respondent]
has
admitted
that
if
the
nanny
expense
is
a
proper
business
expense
pursuant
to
sections
3,
9
and
18
of
the
Act,
then
section
63
cannot
prevent
it
from
being
allowed
as
such.
On
appeal,
however,
the
M.N.R.
withdrew
this
admission
and
the
relevance
of
section
63
became
of
much
greater
import.
Décary,
J.A.,
for
the
Court
of
Appeal
concluded
that
section
63
was
a
complete
code,
and
precluded
the
deduction
of
anything
more
than
the
limits
set
out.
Thus,
even
if
child
care
had
the
potential
to
be
construed
as
a
business
expense,
which
he
did
not
find,
section
63
foreclosed
this
possibility.
My
colleague
adopts
the
same
view.
I
disagree.
Computation
of
income
under
the
Acct
is,
as
already
indicated,
based
on
the
concept
of
income
from
source.
Section
3
of
the
Act,
to
which
I
have
referred
earlier
in
these
reasons,
provides
that,
in
computing
income
for
a
taxation
year,
a
taxpayer
must
compute
the
income
from
each
source
from
which
the
income
is
received
and
the
aggregate
of
each
is
the
total
income.
In
this
case,
we
are
concerned
only
with
income
from
one
source:
the
business.
According
to
section
3
of
the
Act,
after
calculating
income,
a
taxpayer
must
compute
and
subtract
any
deductions
allowed
under
subdivision
e
of
Division
B—
Computation
of
Income.
It
is
in
this
calculation
that
a
section
63
deduction
is
taken
into
account.
Subdivision
e
differs
from
deductions
allowable
under
subdivisions
a,
b
and
c,
which
are
each
concerned
only
with
a
particular
source
of
income.
According
to
subsection
4(2)
of
the
Act,
the
section
63
deduction
is
not
applicable
either
wholly
or
in
part
to
a
particular
source
of
income.
The
argument
of
the
respondent
rests
on
the
proposition
that
the
availability
of
deductions
under
section
63
is
incompatible
with
the
availability
of
child
care
deductions
pursuant
to
subsection
9(1).
In
other
words,
the
mere
existence
of
section
63
prevents
any
deduction
for
child
care
under
subsection
9(1)
of
the
Act.
My
answer
is
twofold.
First,
there
is
nothing
in
the
wording
of
section
63
that
overrides
the
application
of
section
9.
Second,
such
an
interpretation
is,
in
my
view,
in
contradiction
with
the
purpose
and
historical
basis
for
the
enactment
of
section
63,
with
traditional
approaches
to
diverse
deductions
under
the
Act
and,
finally,
with
the
Charter.
Since
its
inception,
the
Act
has
been
extensively
interpreted.
In
Stubart
Investments
Ltd.
v.
The
Queen,
[1984]
1
S.C.R.
536,
[1984]
C.T.C.
294,
84
D.T.C.
6305,
Estey,
J.
writing
for
the
Court
held
at
page
578
(C.T.C.
316,
D.T.C.
6323),
quoting
Driedger,
Construction
of
Statutes,
supra,
at
page
87,
that:
Today
there
is
only
one
principle
or
approach,
namely,
the
words
of
an
Act
are
to
be
read
in
their
entire
context
and
in
their
grammatical
and
ordinary
sense
harmoniously
with
the
scheme
of
the
Act,
the
object
of
the
Act,
and
the
intention
of
Parliament
....
I
suggest
that,
in
this
light,
many
of
the
same
questions,
that
were
examined
With
regard
to
the
above
analysis
of
subsection
9(1)
and
paragraphs
18(1)(a)
and
18(1)(h),
must
take
place
in
the
context
of
section
63.
Just
as
these
sections
of
the
Act
have
developed
with
regard
solely
to
the
needs
of
a
traditionally
male
practice
of
business,
so
has
the
history
of
section
63
been
tainted
by
a
specific
view
of
the
world.
In
this
regard,
the
following
comment
by
Oliver
Wendell
Holmes
in
The
Common
Law
(1881),
at
page
1,
rings
as
true
today,
in
the
context
of
judicial
reasoning
with
respect
to
income
tax
legislation,
as
it
did
in
1881,
with
respect
to
the
development
of
the
common
law:
The
life
of
law
has
not
been
logic:
it
has
been
experience.
The
felt
necessities
of
the
time,
the
prevalent
moral
and
political
theories,
intuitions
of
public
policy,
avowed
or
unconscious,
even
the
prejudices
which
judges
share
with
their
fellow-
men,
have
had
a
good
deal
more
to
do
than
the
syllogism
in
determining
the
rules
by
which
men
should
be
governed.
Recognition
that
laws
are
not
neutral
is
not
new.
As
the
interpretation
of
“business
expense"
has
been
shown
to
be
wrought
with
male
perspective
and
subjectivity,
so
is
an
interpretation
of
business
expense
that
is
limited
by
section
63
of
the
Act.
Section
63
was
implemented
in
order
to
adapt
to
the
needs
of
a
society
at
that
time.
In
1972,
when
that
section
was
enacted,
societal
ideals
with
regard
to
equality
of
the
sexes
and
the
equal
participation
of
women
in
all
aspects
of
society
had
not
evolved
to
the
point
where
they
have
today.
Now,
in
1993,
as
we
approach
the
interpretation
of
laws,
one
hopes,
as
is
observed
by
Joan
Brockman
in
“Social
Authority,
Legal
Discourse,
and
Women's
Voices"
(1992),
21
Man.
L.J.
213,
at
page
233,
that
[t]he
myth
of
law's
neutrality
has
been
largely
eroded."
An
interpretation
which
holds
that
section
63
prevents
the
deduction
of
child
care
costs
which
would
otherwise
constitute
a
valid
business
expense
is
guided,
in
my
opinion,
by
the
myth
of
neutrality,
a
matter
I
will
now
examine.
(ii)
Section
63
interplay
with
subsection
9(1)
According
to
my
colleague
and,
for
that
matter,
Décary,
J.A.,
since
the
wording
of
section
63
of
the
Act
clearly
includes
the
appellant's
nanny
expenses,
section
63
acts
as
a
complete
bar,
rendering
the
appellant
Symes
ineligible
to
deduct
her
child
care
expenses
as
a
business
expense.
I
do
not
interpret
section
63
of
the
Act
in
such
a
fashion.
Section
63
and
subsection
9(1),
in
my
view,
may
co-exist.
The
fact
that
Parliament
enacted
a
section
to
benefit
all
parents
in
the
paid
work
force
without
distinction
does
not
prevent
a
taxpayer
who
is
in
business
from
deducting
an
expense
which
can
be
legitimately
claimed
as
a
business
expense.
Section
63
provides
general
relief
to
parents,
but
nothing
in
its
wording
implies
that
deductions
available
under
subsection
9(1)
are
abolished
or
restricted
in
this
respect.
Had
Parliament
intended
to
submit
the
deduction
of
child
care
expenses
to
the
application
of
section
63
it
would
have
expressed
it
in
clear
language.
In
providing
that
none
of
the
deductions
permitted
by
sections
60
to
63
are
applicable
to
a
particular
source
of
income,
subsection
4(2)
of
the
Act
clearly
provides
for
some
deductions
which
may
legitimately
fall
under
two
sections
of
the
Act.
In
addition,
it
is
not
insignificant
that
the
text
of
section
63
is
permissive
as
opposed
to
the
negative
wording
of
paragraphs
18(1)(b)
and
18(1)(e),
which
are
clearly
intended
to
limit
the
allowable
deductions
to
only
those
permitted
under
these
paragraphs.
Finally,
it
is
important
to
note
that
the
taxpayer
in
this
case
is
not
seeking
to
claim
a
section
63
deduction
from
a
source,
but
is
seeking
a
source
deduction,
independent
of
the
section
63
deduction
for
child
care,
for
a
business
expense.
The
appellant
argues
that
the
availability
of
a
deduction
for
child
care
expenses
is
consistent
with
principles
of
income
tax
as
accepted
in
Olympia
Floor
&
Wall
Tile,
supra
(followed
in
Impenco,
supra).
In
Olympia,
the
taxpayer
was
allowed
to
deduct,
as
a
business
expense,
moneys
which
it
had
donated
to
charity
for
the
purpose
of
gaining
or
producing
income
from
business.
The
Court
held
that
such
a
deduction
was
not
prohibited
under
what
is
now
section
9
of
the
Act
by
the
fact
that
it
could
also
have
been
allowed
under
subsection
27(1)
of
the
Act.
My
colleague
distinguishes
Olympia,
supra,
in
that
the
deduction
there
allowed
is
of
a
different
order
than
that
claimed
in
the
case
at
hand.
There,
the
taxpayer
argued
that
the
expense
had
been
incurred
for
two
distinct
purposes,
while,
in
the
case
at
hand,
only
one
purpose
is
argued.
This,
in
my
view,
has
absolutely
no
bearing
on
the
interpretation
of
section
63,
contrary
to
the
view
of
my
colleague.
While
it
is
true
that
the
taxpayer
in
this
case
has
claimed
only
that
the
child
care
expenses
she
has
incurred
are
in
order
to
gain
or
produce
income
from
her
business,
the
rationale
in
both
cases
is
the
same
and
the
cases
cannot
be
distinguished
with
any
significance.
Jackett,
P.'s
comments
are
apposite
here
and,
as
a
consequence,
I
will
cite
the
following
extract
from
his
reasons
at
length
(at
pages
104-
06
(C.T.C.)):
Ordinarily,
one
thinks
of
charity
as
a
personal
matter.
One
gives
of
what
one
would
otherwise
have
for
oneself
for
the
relief
of
poverty
in
others
or
for
education
or
other
“good
works".
In
its
original
concept,
therefore,
one
would
not
deduct
a
charitable
gift
in
computing
one's
profit
or
income
because
it
is,
by
definition,
a
gift
made
out
of
the
profit
or
income
after
it
is
earned.
Quite
clearly,
I
should
have
thought,
in
its
inception,
a
gift
to
charity
was
a“
personal”
outlay,
the
deduction
of
which
would
have
been
prohibited
by
the
forerunner
of
paragraph
12(1)(h).
While
hitherto
unforeseen,
however,
I
can
find
no
inherent
incompatibility
between
an
"outlay
.
.
.
for
the
purpose
of.
.
.
producing
income"
and
a
gift
to
a
charitable
organization.
If,
on
the
facts
of
a
particular
case,
such
a
gift
is
found
to
have
been
made
bona
fide,
as
an
outlay
for
the
purpose
of
producing
income,
I
am
of
the
view
that,
prima
facie,
it
escapes
the
prohibition
in
paragraph
12(1)(a).
There
remains
for
consideration
the
question
whether,
when
paragraph
27(1)(a)
is
read
with
the
other
provisions
of
the
Act,
one
must
reach
the
conclusion
that
Parliament
intended
that
gifts
to
charitable
organizations
were
not
to
be
deducted
except
in
the
manner
and
to
the
extent
authorized
by
that
provision.
In
other
words,
must
one
infer
from
the
existence
of
paragraph
27(1)(a)
a
prohibition
against
any
deduction
of
charitable
contributions
in
the
computation
of
income?
In
my
view,
when
a
taxpayer
makes
an
outlay
for
the
purpose
of
producing
income—i.e.
as
part
of
his
profit
making
process—even
though
that
outlay
takes
the
form
of
a
“gift”
to
a
charitable
organization,
it
is
not
a
"gift"
within
the
meaning
of
that
word
in
paragraph
27(1)(a)
which,
by
reason
of
the
place
it
holds
in
the
process
of
computing
taxable
income,
was
obviously
intended
to
confer
a
benefit
on
persons
who
made
contributions
out
of
income
and
was
not
intended
to
provide
deductions
for
outlays
made
in
the
course
of
the
income
earning
process.
[Emphasis
in
original.]
Both
Olympia
and
Impenco,
supra,
recognize
that
some
people
do
business
differently
and
incur
different
expenses
than
those
traditionally
viewed
as
business
expenses.
In
Olympia
and
Impenco,
the
particular
practices
of
Jewish
businessmen
were
recognized.
In
this
case,
it
is
the
particular
situation
of
a
business
woman
which
is
at
stake.
In
principle,
and
according
to
the
rationale
which
underlies
section
9
of
the
Act,
the
two
situations
are
similar.
The
fact
that
section
63
may
be
available
to
others
or
to
the
same
taxpayer
who
would
prefer
to
claim
the
deductions
under
that
section
does
not
in
any
way
impede
the
application
of
section
9,
which
clearly
applies
to
business
expenses.
Further,
even
if
the
case
at
hand
could
be
distinguished,
as
my
colleague
suggests,
I
find
that
these
cases
advance,
rather
than
negate,
the
proposition
that
even
when
one's
deductions
seemingly
fall
under
one
section
of
the
Act,
this
does
not
render
such
expenses
inadmissible
for
a
different
purpose
covered
under
another
section
of
the
Act.
In
fact,
there
are
a
number
of
instances
under
the
Act
where
a
taxpayer
may
claim
a
deduction
under
more
than
one
section
of
the
Act
for
an
expense
incurred
for
a
single
purpose.
Tuition
deductions
may
be
deducted
under
the
section
for
tuition
expenses
or
under
general
business
expenses
incurred
for
the
purpose
of
gaining
or
producing
income.
As
Professor
Woodman,
in
"A
Child
Care
Expenses
Deduction,
Tax
Reform
and
the
Charter:
Some
Modest
Proposals”
(1990),
8
Can.
J.
Fam.
L.
371,
suggests
at
page
377,
footnote
30,“
[a]
business
person
can
deduct
tuition
fees
that
may
or
may
not
fall
within
the
tuition
fee
provisions
of
I.T.A.
section
118.5
(now
a
tax
credit
but
formerly
a
deduction
in
I.T.A.
section
60)”.
As
well,
expenses
incurred
by
a
salesperson
may
be
deducted,
according
to
the
wording
of
the
Act,
under
multiple
sections,
paragraphs
8(1)(f)
and
8(1)(h),
subsection
8(9)
and
paragraph
18(1)(l).
Regardless
of
whether
the
many
factors
I
have
set
out
above
are
determinative,
certainly
these
many
considerations
lead
one
to
the
conclusion
that,
at
the
very
least,
section
63
is
ambiguous
in
its
effect
on
subsection
9(1).
In
such
circumstances
one
must
resort,
as
did
Cullen,
J.,
to
the
general
rules
of
statutory
interpretation
which
make
it
clear
that
ambiguities
are
to
be
resolved
in
favour
of
the
taxpayer.
In
The
Queen
v.
Johns-Manville
Canada
Inc.,
[1985]
2
S.C.R.
46,
[1985]
2
C.T.C.
111,85
D.T.C.
5373,
at
page
72
(C.T.C.
126,
D.T.C.
5384),
Estey
J.
stated:
The
characterization
in
taxation
law
of
an
expenditure
is,
in
the
final
analysis
(unless
the
statute
is
explicit
which
this
one
is
not),
one
of
policy
.
.
.
.
Such
a
determination
is,
furthermore,
consistent
with
another
basis
concept
in
tax
law
that
where
the
taxing
statute
is
not
explicit,
reasonable
uncertainty
or
factual
ambiguity
resulting
from
lack
of
explicitness
in
the
statute
should
be
resolved
in
favour
of
the
taxpayer.
This
residual
principle
must
be
the
more
readily
applicable
in
this
appeal
where
otherwise
annually
recurring
business
expenditures,
completely
connected
to
the
daily
business
operation
of
the
taxpayer,
afford
the
taxpayer
no
credit
against
tax
either
by
way
of
capital
cost
or
depletion
allowance
with
reference
to
a
capital
expenditure,
or
an
expense
deduction
against
revenue.
[Emphasis
added.]
Professor
Woodman,
supra,
at
page
377,
expresses
the
view,
however,
that
Estey,
J.'s
statement
was
directed
only
to
an
income
tax
system
that
failed
to
recognize
capital
expenditures.
Independent
of
the
particular
facts
of
that
case,
the
basic
concept
in
tax
law
that
ambiguities
should
be
resolved
in
favour
of
the
taxpayer
is
an
accepted
one.
Applying,
if
need
be,
this
rule
of
statutory
interpretation
to
the
present
situation,
in
the
absence
of
precise
and
clear
wording
in
the
Act
with
regard
to
the
effect
of
section
63
on
subsection
9(1),
general
child
care
expenses
which
might
be
deductible
under
section
63
may
coexist
with
child
care
expenses
deductible
as
a
business
expense.
Richard
Thomas
in
"No
to
Nanny
Expense
Deductions"
(1991),
39
Can.
Tax
J.
950,
at
page
953,
underlines
this
ambiguity:
In
our
view,
the
Crown's
admission
at
the
trial
level
was
probably
correct—the
existence
of
section
63
should
not
determine
whether
the
child
care
expenses
in
question
are
a
business
expense
for
the
purposes
of
paragraph
18(1)(a).
At
best,
the
existence
of
section
63
might,
on
an
object-and-spirit
approach
to
the
scheme
of
the
Act,
suggest
that
Parliament
assumed
that
child
care
expenses
were
not
deductible
business
expenses.
Deductions
under
section
63
of
the
Act,
as
opposed
to
business
expense
deductions,
clearly
require
that
different
criteria
be
met
for
one
to
be
eligible
for
the
deduction
under
one
or
the
other
section.
In
addition,
each
has
its
own
purpose.
Working
parents,
to
whom
the
deduction
under
section
63
applies,
would
not
be
eligible
for
any
such
deduction
had
section
63
not
been
enacted.
Business
persons,
however,
may
be
eligible
to
deduct
child
care
as
they
would
any
other
business
expense,
provided
they
were
able
to
meet
the
requirements
for
a
deduction
under
sections
9
and
18
of
the
Act.
However,
there
may
be
many
parents
who
own
businesses
who
may
not
be
able
to
meet
these
requirements
and
the
deduction
under
section
63
would,
thus,
be
available
to
them.
Finally,
in
this
regard,
one
must
not
lose
track
of
the
fact
that
section
63,
which
is
general
in
nature,
was
drafted
at
a
time
when,
as
discussed
by
lacobucci,
J.,
child
care
expenses
were
considered
an
entirely
personal
expense.
When
Parliament
enacted
section
63,
a
new
benefit,
not
then
allowed
under
any
other
section
of
the
Act,
was
conferred
to
taxpayers
generally
in
order
to
better
the
position
of
working
parents
in
society.
From
this
perspective,
it
seems
obvious
that
Parliament
could
not
have
intended
to
prohibit
the
deduction
of
child
care
as
a
business
expense.
To
conclude
that
section
63
intends
to
limit
the
opportunity
for
a
business
woman
to
deduct
child
care
expenses
is
antithetical
to
the
whole
purpose
of
the
legislation,
which
was
aimed
at
helping
working
women
and
their
families
bear
the
high
cost
of
child
care.
A
review
of
the
history
and
the
purpose
of
the
enactment
sheds
some
light
in
this
regard.
(iii)
Historical
and
Purposive
Perspective
lacobucci,
J.
refers
to
the
proposals
that
led
to
the
introduction
of
section
63
in
1972,
and
is
"not
impressed
by
the
suggestion
that
Parliament
intended
section
63
to
limit
deductibility
only
for
employees”
(page
60).
Although,
like
him,
I
find
the
history
of
section
63
very
telling,
I
draw
a
very
different
conclusion
from
the
analysis.
The
1966
report
of
the
Carter
Commission
recommended
that
tax
credits
for
working
mothers
be
instituted
(Report
of
the
Royal
Commission
on
Taxation,
vol.
3,
Taxation
of
Income:
Part
A—Taxation
of
Individuals
and
Families
(1966),
at
page
19).
Six
years
later,
in
1972,
section
63
formed
part
of
a
tax
reform
package,
in
which
Parliament
extended
to
employees
a
number
of
new
deductions.
After
noting
that
six
out
of
seven
Canadian
taxpayers
earn
wages
or
salaries,
a
limited
deduction
for
child
care
expenses,
together
with
a
number
of
other
employee
deductions
for
tools
and
travelling
expenses,
was
announced
by
E.
J.
Benson
the
then
Minister
of
Finance
in
Proposals
for
Tax
Reform
(1969),
at
page
10,
paragraph
1.33,
as
follows:
Costs
of
looking
after
young
children
when
both
parents
are
working,
or
when
there
is
only
one
parent
and
that
parent
is
working,
would
be
allowed
as
a
deduction
subject
to
certain
conditions.
This
new
plan
is
intended
primarily
to
benefit
mothers
who
need
to
work
to
support
their
families
.
.
.
.
[Emphasis
added.]
Benson,
as
quoted
by
lacobucci,
J.,
further
noted,
supra,
at
page
15,
paragraphs
2.7
and
2.9:
We
propose
to
permit
deduction
of
the
child
care
expenses
that
face
many
working
parents
today.
The
problem
of
adequately
caring
for
children
when
both
parents
are
working,
or
when
there
is
only
one
parent
in
the
family
and
she
or
he
is
working,
is
both
a
personal
and
a
social
one.
We
consider
it
desirable
on
social
as
well
as
economic
grounds
to
permit
a
tax
deduction
for
child
care
expenses,
under
carefully
controlled
terms,
in
addition
to
the
general
deduction
for
children.
This
new
deduction
for
child
care
costs
would
be
a
major
reform.
While
it
is
not
possible
to
make
an
accurate
forecast
of
the
number
who
would
benefit
from
this
new
deduction,
it
seems
likely
to
be
several
hundred
thousand
families.
It
would
assist
many
mothers
who
work
or
want
to
work
to
provide
or
supplement
the
family
income,
but
are
discouraged
by
the
cost
of
having
their
children
cared
for.
The
deduction
available
under
section
63
has
consistently
been
described
in
relation
to
employed
mothers,
as
a“
special
tax
allowance
to
working
mothers”
(House
of
Commons
Standing
Committee
on
Finance,
Trade
and
Economic
Affairs,
Minutes
of
Proceedings
and
Evidence,
June
23,
1970,
at
page
70:145).
It
is
not
insignificant
that,
as
discussed
earlier,
the
number
of
women
in
the
work
force
in
1972
was
ostensibly
less
than
it
is
today
and
the
number
of
women
who
were
in
business
was
minimal.
It
is
highly
probable
that
the
legislators
did
not
even
put
their
mind
to
the
fact
that
women
may
some
day
enter
into
business
and
the
professions
in
large
numbers
and
that
these
women
may
approach
the
world
of
business
differently
than
did
their
male
predecessors.
Most
importantly,
it
was
certainly
not
within
the
legislators'
frame
of
mind
that
child
care
would
be
viewed
as
anything
other
than
a
personal
expense.
Secondly,
I
wish
to
address
the
concern
raised
by
many
commentators,
including
my
colleague
lacobucci,
J.,
that
to
allow
child
care
expenses
to
be
deducted
as
a
business
expense
would
defeat
and
undermine
the
purpose
of
the
provision
of
section
63,
to
allow
a
general
deduction
of
child
care
expenses
to
all
parents,
whether
employed
or
self-employed.
Clearly,
this
analysis
is
very
much
tied
to
the
purpose
one
attaches
to
the
legislation.
In
a
very
thoughtful
response
to
these
concerns,
Audrey
Macklin,
supra,
notes
that,
even
under
the
section
63
deduction,
the
more
income
a
person
has
and,
consequently,
the
higher
tax
bracket
one
falls
into,
the
higher
the
deduction
available.
This
fact
also
undermines
the
goal
of
equity.
Further,
the
concern
that
employed
persons
and
business
people
will
not
be
treated
in
the
same
manner
is
a
fact
which
stems
from
the
rationale
of
the
Act
itself:
business
deductions
generally
are
restricted
to
those
in
business
and
are
not
available
to
an
employed
person.
An
employee
cannot
deduct
an
office
at
home,
car
expenses,
meal
and
entertainment
expenses,
nor
club
dues
or
fees.
In
addition,
employers
who
hire
staff
can
deduct
their
salaries
and
employers
who
provide
day
care
for
their
employees
may
deduct
the
expense
(D.
Goodison,“
Nanny
Means
Business",
CGA
Magazine,
September
1989,
15).
Employees
enjoy
no
such
comparable
deductions.
As
my
colleague
has
indicated,
our
tax
system
is
based
on
principles
of
horizontal
and
vertical
equity.
The
former
requires
that
we
tax
individuals
in
similar
circumstances
the
same,
while
the
latter
focuses
on
the
similar
taxation
of
individuals
in
different
circumstances.
These
are
important
objectives
and
were
recognized
as
of
the
highest
priority
in
the
Report
of
the
Royal
Commission
on
Taxation,
supra.
The
Carter
Commission
stated
in
vol.
2,
at
page
17:
We
assign
a
higher
priority
to
the
objective
of
equity
than
to
all
the
others.
.
.
.
[o]ur
task
requires
us
to
make
recommendations
that
would
lead
to
an
equitable
distribution
of
the
burden
of
taxation.
We
are
convinced
that
unless
this
objective
is
achieved
to
a
high
degree
all
other
achievements
are
of
little
account.
Thus
the
need
for
an
equitable
tax
system
has
been
our
major
concern
and
has
guided
us
in
all
our
deliberations.
At
the
same
time
as
we
value
equity
under
the
income
tax
system,
however,
it
is
apparent
that
the
system
creates
and
perpetuates
many
inequalities.
As
Professor
Claire
Young
notes,
supra,
at
pages
108-9:
Income
tax
legislation
is,
by
its
very
nature,
both
overtly
and
systemically
discriminatory.
For
example,
in
Canada,
the
Act
discriminates
in
favour
of
Canadian
residents
and
against
non-residents
by
imposing
higher
rates
of
tax
on
some
forms
of
income
realised
by
the
latter.
It
discriminates
in
favour
of
the
self-
employed
and
against
employees
by
allowing
the
self-employed
a
greater
range
of
deductions
from
income.
It
discriminates
in
favour
of
investors
in
equity
and
against
investors
in
debt
by
taxing
capital
gains
at
a
lower
rate
than
interest
income
and
giving
every
resident
a
lifetime
exemption
from
tax
on
$100,000
of
capital
pains.
The
basic
premise
upon
which
discussion
with
respect
to
the
differential
treatment
between
employees
and
business
persons
must
be
laid
is
the
recognition
that
the
Act
can
be
viewed
to
operate
in
a
discriminatory
fashion.
While
the
Act
may
never
have
attempted
to
maintain
equilibrium
between
persons
in
business
and
those
who
are
employed,
one
must
recognize
that
the
realities
of
doing
business
cannot
be
ignored.
Employees
do
not
incur
overhead
expenses
while
businesses
do.
Employees
are
not
able
to
deduct
any
expenses
that
they
incur
in
order
to
work
because
their
income
is
based
on
their
gross
salary,
whereas
business
income
is
based
on
the
calculation
of
the
net
profit
or
gain
of
the
business.
As
a
result,
deductions
are
a
regular
occurrence.
What
constitutes
a
business
expense
for
tax
purposes
is
not
cast
immutably
in
stone.
The
concept
of
business
expense
should
be
interpreted
in
a
way
that
takes
into
account
the
realities
of
business
women's
expenses
in
relation
to
child
care.
However,
in
recognizing
the
distinction
between
the
treatment
of
employees
and
business
persons
under
the
Act,
in
no
way
am
I
indicating
that
this
may
not
constitute
a
real
difficulty
within
our
taxation
system.
This
said,
this
case
is
most
fundamentally
not
about
the
many
vertical
inequities
that
may
exist,
but
rather
a
question
of
horizontal
equity
and
the
need
to
treat
all
business
persons
alike.
Further,
the
fact
that
the
government
has
provided
that
a
deduction
for
child
care
expenses
be
available
to
all
parents,
including
employed
persons,
who
ordinarily
enjoy
very
few
deductions,
indicates
governmental
recognition
that
child
care
is
a
legitimate
expense
of
working
parents,
in
particular
mothers.
Finally,
we
must
not
assume
that
most
self-employed
entrepreneurs,
whom
the
Act
favours,
are
multimillionaires—they
are
not,
as
the
evidence
of
Dr.
Armstrong
demonstrates.
Dr.
Armstrong
indicated
that
self-employed
women
generally
work
in
small
businesses
of
three
to
four
persons.
Their
businesses
are
mostly
in
the
service
sector,
where,
if
they
are
not
physically
present
at
the
work
site,
the
business
could
not
operate,
for
example:
beauty
salons,
shops,
doctors,
lawyers,
caterers
etc.
As
a
result
of
long
hours
and
the
requirement
to
work
at
the
place
of
business,
rather
than
at
home,
child
care
needs
are
extremely
critical
for
these
women.
Business
women
and,
for
that
matter,
men
who
legitimately
incur
child
care
expenses
for
the
purpose
of
gaining
or
producing
income
from
business,
must
not
be
deprived
of
the
benefit
of
a
business
deduction
for
their
expenses.
Finally,
on
a
technical
point,
my
colleague
suggests
that
allowing
a
deduction
for
child
care
expenses
may
result
in
the
distribution
of
child
care
responsibility
becoming
more
of
an
“accounting
measure"
than
a
reality—a
fictitious
creation
in
order
to
ensure
that
the
self-employed
spouse
be
eligible
to
deduct
child
care
as
a
business
expense.
This
determination,
in
my
view,
is
not,
however,
sufficiently
problematic
to
justify
disallowing
child
care
deductions
as
a
business
expense.
First,
the
taxpayer,
as
for
any
other
expense,
will
have
to
prove
that
child
care
is
necessary
for
her
or
him
to
gain
or
produce
income
from
business
and,
in
this
connection,
will
be
required
to
indicate
to
what
extent
the
taxpayer
is
responsible
for
child
care.
Such
scrutiny
is
really
no
different
from
the
procedure
which
the
M.N.R.
undertakes
to
determine
the
deductibility
of
home
office
expenses
and
numerous
other
expenses.
E.
Conclusion
on
Statutory
Interpretation
of
the
Income
Tax
Act
In
conclusion,
section
63
and
subsection
9(1)
of
the
Act
may,
in
my
view,
coexist.
There
is
nothing
in
the
wording
of
section
63
that
excludes
the
applica-
tion
of
section
9.
In
addition,
any
such
interpretation
is
contrary
to
the
purpose
and
historical
basis
for
the
enactment
of
section
63
and
with
traditional
approaches
to
diverse
deductions
under
the
Act.
In
any
analysis
involving
the
examination
of
the
interplay
between
subsection
9(1)
and
section
63,
one
cannot
overlook
the
effect
of
an
interpretation
which
concludes
that
section
63
overrides
the
possibility
of
a
business
deduction
for
child
care.
Although
apparently
neutral,
such
an
interpretation
may
be
shaped
by
a
selective
perspective.
Though
legislators,
no
doubt,
strive
toward
objectivity,
laws
are
inevitably
drafted
on
the
basis
of
the
law
makers'
own
vision
of
society
and
their
own
experience,
experience
which
leads
them
to
perceive
certain
interpretations
and
results
as
being
obvious
or
neutral.
However,
different
realities
may
give
rise
to
different
meanings,
as
Margrit
Eichler
notes
in
Nonsexist
Research
Methods
(1988),
at
page
78:
So
long
as
the
social
positions
of
males
and
females
are
significantly
different,
it
will
be
necessary
to
recognize
that
a
given
situation
may
have
very
different
meanings
and
implications
for
the
members
of
each
sex.
The
definition
of
a
business
expense
under
the
Act
has
evolved
in
a
manner
that
has
failed
to
recognize
the
reality
of
business
women.
It
is
thus
imperative
to
recognize
that
any
interpretation
of
section
63
which
prevents
the
deduction
of
child
care
as
a
business
expense
may,
in
fact,
be
informed
by
this
partisan
perspective.
Finally,
as
mentioned
earlier,
besides
relying
on
the
statute
presently
under
examination,
one
must
not
lose
sight
of
the
fact
that
the
values
enshrined
in
the
Charter
must
inform
such
interpretation:
Hills,
supra,
and
Slaight
Communications,
supra.
Since,
in
my
view,
either
the
Act
permits
the
deduction
of
child
care
expenses
as
a
business
expense
or
it
is
ambiguous,
one
must,
contrary
to
my
colleague's
view,
examine
that
ambiguity
through
the
prism
of
the
values
enshrined
in
the
Charter
and,
in
particular,
in
sections
15
and
28.
These
sections
encompass
and
embrace
the
importance
and
significance
of
equality
between
the
sexes
and
the
Act
must
be
interpreted
in
a
manner
that
does
not
run
contrary
to,
but
rather
enhances,
these
principles.
In
this
regard,
when
ensuring
that
laws
conform
with
the
imperatives
of
the
Charter,
it
is
important
to
consider
whether
a
situation
or
law
has
different
implications
for
men
and
women.
To
disallow
child
care
as
a
business
expense
clearly
has
a
differential
impact
on
women
and
we
cannot
simply
pay
lip
service
to
equality
and
leave
intact
an
interpretation
which
privileges
businessmen,
and
which
continues
to
deny
the
business
needs
of
business
women
with
children.
In
my
view,
consideration
of
the
Charter
values
when
interpreting
the
Act
strengthens
the
conclusion
that
Ms.
Symes
should
be
able
to
deduct
her
child
care
expenses
as
a
business
expense.
Since
I
have
reached
the
conclusion
that,
on
the
basis
of
statutory
interpretation,
Ms.
Symes
is
entitled
to
deduct
her
child
care
expenses
as
a
business
expense
pursuant
to
subsection
9(1),
paragraphs
18(1)(a)
and
(h)
and
section
63
of
the
Act,
the
constitutional
questions
do
not
have
to
be
answered.
However,
since
my
colleague,
lacobucci,
J.,
has
raised
many
areas
of
concern
and
difficulty
with
respect
to
the
effect
and
application
or
section
15
of
the
Charter
on
the
Act,
I
wish
to
make
the
following
comments.
VI.
The
Charter:
Section
15
My
colleague,
lacobucci,
J.,
has
set
out
the
basic
principles
of
Charter
analysis,
particularly
with
respect
to
section
15
and
the
rights
guaranteed
by
section
15.
I
strongly
agree
that
equality
"is
an
elusive
concept"
(Andrews,
supra,
at
page
164
(D.L.R.
10))
and
that
subsection
15(1)
guarantees
much
more
than
formal
equality.
The
goal
of
section
15,
with
regard
to
gender,
is
the
attainment
of
true
substantive
equality
between
men
and
women
and,
as
a
consequence,
the
value
of
equality
as
enshrined
in
the
Charter
must
be
given
considerable
weight
in
the
case
at
hand.
Contrary
to
my
colleague,
however,
I
believe
that
an
interpretation
which
prevents
Ms.
Symes
from
deducting
her
child
care
expenses
as
a
business
expense
under
the
Act
results
in
an
infringement
of
her
right
to
equality
pursuant
to
section
15
of
the
Charter.
There
are
a
number
of
points
made
by
my
colleague,
as
well
as
by
the
Court
of
Appeal,
on
which
I
feel
it
necessary
to
comment.
These
include
a
focus
on
section
63
of
the
Act
rather
than
on
business
deductions
as
a
whole,
whether
the
actual
cost
incurred
by
Ms.
Symes
has
been
proven
or
if
this
is
even
necessary,
and
whether
this
case
raises
the
question
of
the
cost
incurred
by
all
women
as
a
consequence
of
child
care
and
not,
simply,
business
women.
I
will
deal
with
each
in
turn.
My
colleague
focuses
his
Charter
analysis
primarily
on
section
63.
He
suggests
that
one
must
examine
whether
the
appellant
has
proven
that
she
has
suffered
discrimination
as
a
result
of
the
effect
of
section
63
of
the
Act.
In
order
to
satisfy
this
test,
according
to
him,
Ms.
Symes
must
prove
that
section
63
disproportionately
limits
the
deduction
with
respect
to
actual
expenses
incurred
by
women"
and
that"
proof
that
women
pay
social
costs
is
not
sufficient
proof
that
women
pay
child
care
expenses"
(page
79).
I
beg
to
differ.
Such
inference
is,
in
my
view,
inescapable
and,
further,
in
this
case,
it
was
proven
that
Ms.
Symes
did
incur
the
expenses
for
which
she
claims
the
deduction.
Such
inference
is
part
and
parcel
of
a
recognition
that
child
care
responsibilities
present
a
significant
obstacle
for
women
in
the
social
and
economic
domain,
that
this
issue
is
an
equality
issue
and
that
the
interpretation
of
legislation
can
and
must
accommodate
equality
and
the
changing
realities
of
our
society.
According
to
Edward
J.
McCaffery,
in
"Taxation
and
the
Family:
A
Fresh
Look
at
Behavioral
Gender
Biases
in
the
Code"
(1993),
40
UCLA
L.
Rev.
983,
at
page
987:
.
.
.
tax
laws
contribute
to
the
marginalization
of
women
in
the
workplace,
and
impede
a
more
creative
formulation
of
alternative
models
of
work
and
family.
Major,
structural
aspects
of
the
tax
laws
were
put
in
place
at
a
time
when
traditional
families—meaning
households
with
men
working
outside,
and
women
working
inside,
the
home—were
dominant.
These
aspects
persist
to
this
day,
serving
as
an
anchor
against
the
emergence
of
more
modern
and
flexible
family
models.
[Footnotes
omitted.]
This
is
the
reality
in
which
Ms.
Symes
lives—as
a
lawyer
and
as
a
mother.
A
reality
in
which
she
suffers
disproportionately
to
men
and,
as
such,
is
discriminated
against
on
the
basis
of
her
sex.
She
has
proven
that
she
has
incurred
an
actual
and
calculable
price
for
child
care
and
that
this
cost
is
disproportionately
incurred
by
women.
The
fact
that
Ms.
Symes
has
to
compare
herself
to
businessmen
is
not,
in
my
view,
a
return
to
the
similarly
situated
test.
As
McIntyre,
J.
indicates
of
equality,
in
Andrews,
supra,
at
page
164
(D.L.R.
10):
It
is
a
comparative
concept,
the
condition
of
which
may
only
be
attained
or
discerned
by
comparison
with
the
condition
of
others
in
the
social
and
political
setting
in
which
the
question
arises.
We
cannot
ignore
the
reality
that
Ms.
Symes
is
a
business
woman,
but
neither
can
this
be
taken
as
a
return
to
a
test,
which
has
been
described
by
Catherine
MacKinnon
in“
Reflections
on
Sex
Equality
under
Law"
(1991),
100
Yale
L.J.
1281,
at
page
1297,
as
follows:
Designed
for
the
exceptional
individual
whose
biography
approximates
the
male
one,
this
approach
cannot
touch
the
situation
of
most
women,
where
the
force
of
social
inequality
effectively
precludes
sex
comparisons.
Ms.
Symes
is
asking
that
she
be
treated
equally,
independently
of
her
sex,
under
the
Act.
She
has
provided
ample
evidence
that
women
suffer
the
social
cost
of
child
care
and
that
the
expense
of
child
care
which
she
incurs,
and
has
paid,
is
not
a
purely
personal
expense
but
is
incurred
for
the
purpose
of
gaining
or
producing
income
from
business.
In
my
view,
Ms.
Symes
suffers
an
actual
and
calculable
loss
as
a
result
of
not
being
able
to
deduct
a
legitimate
business
expense
which
she
incurs.
The
goal
and
the
requirement
of
equality,
as
set
out
by
section
15
of
the
Charter,
makes
it
unacceptable
that
Ms.
Symes
be
denied
the
right
to
deduct
her
business
expenses
merely
because
such
expenses
are
not
generally
incurred
by
businessmen.
Denial
of
these
deductions
would
constitute
discrimination
under
the
Act.
lacobucci,
J.
suggests
that
the
dilemma
should
not
be
framed
as
a
business
deduction
but,
rather,
as
an
issue
of
the
cost
of
child
care
that
is
placed
on
all
women
whether
employed
or
self
employed.
In
this
regard,
he
quotes
Professor
Audrey
Macklin,
supra,
at
page
512,
who
states:
If
the
goal
of
section
15
in
this
context
is
to
redress
the
discriminatory
impact
of
tax
laws
on
members
of
disadvantaged
groups,
there
can
be
no
pretext
for
confining
the
inquiry
to
section
18(1)
of
the
Act
or
the
remedy
to
business
women.
Insofar
as
tax
deductions
are
concerned,
the
real
issue
would
be
the
inadequacy
of
the
partial
deduction
under
section
63
in
facilitating
self-employed
and
salaried
women's
access
to
the
paid
workforce
.
.
.
.
Their
identity
as
self-employed
or
salaried
women
is
largely
immaterial
to
the
question
of
whether
the
existing
system
perpetuates
their
subordination.
I
am
not
unaware
of
the
issues
discussed
by
Professor
Macklin.
I
certainly
agree
that
all
women
suffer
severe
social
and
financial
costs
associated
with
child-bearing
and
rearing
and
that
these
costs
are
incurred
whether
a
woman
is
a
self-employed
small
business
owner,
a
lawyer,
an
employee
or
a
fulltime
homemaker
and
caregiver.
In
fact,
it
is
my
view
that
all
women,
as
a
consequence
of
gender,
suffer
disadvantages
associated
with
caring
for
children.
Further,
I
am
not
unaware
that
income
tax
deductions
are
undoubtedly
not
the
best
way
for
government
to
provide
assistance
with
regard
to
the
high
cost
of
child
care
and
that
the
allowed
deductions
under
section
63
are
not
representative
of
the
real
cost
of
child
care.
Perhaps
child
care
should
not
even
be
subsidized
through
the
tax
system
but,
rather,
provided
for
in
another
manner.
As
is
obvious,
income
tax
deductions
benefit
only
those
who
have
a
taxable
income
and,
as
such,
are
a
form
of
upside
down
subsidy
which
allows
a
person
with
more
income
to
spend
more
on
child
care
and,
consequently,
to
receive
a
greater
portion
of
the
government
tax
expenditure
program
in
return
and
that
the
deduction
does
not
help
families
who
cannot
afford
child
care
in
the
first
place.
Finally,
this
type
of
government
subsidy
provides
no
assistance
to
the
development
of
badly
needed
child
care
facilities.
Neither
am
I
ignorant
of
the
fact
that
the
disparate
treatment
of
employed
persons
and
business
persons
under
the
Act
is
problematic
and
may
require
future
examination.
(See
O.P.S.E.U.,
supra,
where
the
Ontario
Court
of
Appeal
held
that
the
deductions
enjoyed
by
self-employed
persons
as
opposed
to
employed
persons
did
not
constitute
a
violation
of
section
15.)
As
I
stated
earlier,
the
Act
treats
different
groups
of
people
differently
and
vertical
equity
between
the
employed
and
the
self-employed
has
never
been
maintained.
There
has
been
no
concern
about
this
dichotomy,
however,
with
regard
to
other
business
deductions
allowed
under
sections
9
and
18
of
the
Act
and,
in
my
view,
the
differential
treatment
of
business
taxpayers
and
other
taxpayers
is
not
raised
in
this
case.
If
these
many
and
complex
issues
were
before
the
Court,
a
critical
examination
of
the
interplay
of
socio-economic
class
in
the
income
tax
system,
the
position
of
all
women
in
society
and
the
implications
of
child
care
would
have
to
be
examined.
However,
these
are
not
the
issues
before
the
Court.
Ms.
Symes
has
not
put
in
issue
the
enormously
complex
quandary
of
the
disadvantagement
of
women
generally
through
the
continu-
ing
social
and
economic
cost
of
child
care.
She
has
raised
the
much
narrower
question,
although
not
in
any
way
insignificant,
of
the
discrimination
suffered
by
business
persons—primarily
women—under
an
interpretation
of
the
Act
that
disallows
child
care
expenses
as
a
business
expense
incurred
for
the
purpose
of
gaining
or
producing
income
from
her
business.
That
issue,
specifically
the
distinction
between
business
taxpayers,
must
be
answered.
Ms.
Symes’
claim
cannot
be
addressed
simply
by
pointing
to
the
greater
issue
of
the
position
of
women
generally.
To
grant
her
a
deduction
to
which
she
is
clearly
entitled
under
the
Act
in
no
way
diminishes
the
larger
issue
of
child
care
as
it
applies
to
all
parents,
particularly
women,
a
matter
to
be
left
for
another
day.
I
agree
with
the
intervener
the
Charter
Committee
on
Poverty
Issues
that
the
appellant
does
not
challenge
section
63
on
the
basis
of
either
its
inadequacy
or
its
inclusiveness;
Ms.
Symes
challenges
the
constitutionality
of
section
63
only
to
the
extent
that
it
affects
the
court's
interpretation
and
application
of
other
provisions
of
the
Act
governing
business
deductions.
My
colleague
refers
to
family
status
as
a
possible
alternative
approach,
as
well
as
to
the
fact
that
single
mothers
may
provide
a
clearer
example
of
hardship
suffered
as
a
consequence
of
child
care
than
does
Ms.
Symes.
This
may
well
be
true,
but
this
is
no
reason
why
the
appellant's
rights,
under
the
Act
or
under
section
15
of
the
Charter,
should
not
be
protected.
Discrimination
cannot
be
justified
by
pointing
to
other
discrimination.
This
is
not
the
standard
to
which
Mr.
Andrews
was
held
in
Andrews,
supra.
In
Andrews,
the
Court
did
not
look
at
the
respondent
and
justify
the
infringement
of
his
rights
under
section
15
on
the
basis
that,
in
all
other
aspects
of
his
life,
as
a
white
male
lawyer
of
British
descent,
such
discrimination
on
the
basis
of
citizenship
was
acceptable,
since
he
was
likely
better
off
than
most
other
persons
in
the
disadvantaged
group
of
non-Canadian
citizens.
Neither
can
this
be
the
standard
to
which
Ms.
Symes
is
to
be
held.
This
is
not
a
case
about
the
advantageous
position
in
society
some
women
garner
as
opposed
to
other
women,
but,
rather,
an
examination
of
the
advantaged
position
that
businessmen,
hold
in
relation
to
business
women.
If
each
claim
under
section
15
of
the
Charter
required
that
all
the
problems
of
discrimination
with
respect
to
a
particular
group
be
remedied
as
a
result
of
one
investigation,
Andrews
would
probably
not
yet
have
been
decided.
The
fact
that
Ms.
Symes
may
be
a
member
of
a
more
privileged
economic
class
does
not
by
itself
invalidate
her
claim
under
section
15
of
the
Charter.
She
is
not
to
be
held
responsible
for
all
possible
discriminations
in
the
income
tax
system,
nor
for
the
fact
that
other
women
may
suffer
disadvantages
in
the
marketplace
arising
from
child
care.
As
the
appellant
argues,
we
cannot
hold
every
woman
to
the
position
of
the
most
disadvantaged
women,
apparently
in
the
name
of
sex
equality".
I
believe
that
it
is
important
to
recall
the
context
in
which
the
determination
of
Charter
issues
must
be
considered,
as
was
set
out
by
my
colleague
in
reference
to
Wilson
J.'s
statements
in
Turpin,
supra,
and
as
I
wrote
in
R.
v.
Seaboyer,
[1991]
2
S.C.R.
577,
83
D.L.R.
(4th)
193,
at
page
647
(D.L.R.
204):
It
is
my
view
that
the
constitutional
questions
must
be
examined
in
their
broader
political,
social
and
historical
context
in
order
to
attempt
any
kind
of
meaningful
constitutional
analysis.
In
the
context
of
the
Charter
investigation
in
the
case
at
hand,
we
must
keep
foremost
in
our
minds
the
unequal
cost
of
child
care
that
women
have
traditionally
borne,
the
effect
of
such
cost
on
the
ability
of
women
to
participate
in
business
or
otherwise
be
gainfully
employed
and,
finally,
the
impact
of
child
care
on
women's
financial
ability
and
independence.
In
my
view,
such
a
"contextual"
approach
is
an
attempt
to
attack
the
problem
of
privilege
and
to
understand
the
diversity
of
people's
experiences.
When
issues
are
examined
in
context,
it
becomes
clear
that
some
so-called
"objective
truths"
may
only
be
the
reality
of
a
select
group
in
society
and
may,
in
fact,
be
completely
inadequate
to
deal
with
the
reality
of
other
groups.
As
the
Honourable
Bertha
Wilson
comments
in
Women,
the
Family,
and
the
Constitutional
Protection
of
Privacy"
(1992),
17
Queen's
L.J.
5,
at
page
13:
Real
lives,
contemporary
women's
lives,
should
not
only
be
taken
seriously
but
should
be
regarded
as
primary
in
interpreting
constitutional
guarantees
which
impact
directly
or
indirectly
on
women’s
equality.
Experiences
must
not
be“
"shoehorned"
to
fit
within
the
constitutional
guarantees;
rather,
the
constitutional
guarantees
must
be
interpreted
in
a
way
that
is
responsive
to
women's
reality.
The
divergent
effect
of
a
different
contextual
approach
can
be
significant
to
the
outcome
of
a
case
such
as
the
appeal
at
hand.
As
Professor
Audrey
Macklin,
supra,
describes,
the
contrasting
contextual
approaches
to
this
case
taken
by
the
trial
judge
and
the
Court
of
Appeal
played
a
pivotal
role
in
the
outcome
(at
pages
508-9):
The
simplest
way
to
decipher
the
diverging
views
of
Mr.
Justice
Cullen
and
Mr.
Justice
Décary
on
the
Charter
issue
is
to
imagine
the
judges
peering
at
Beth
Symes
through
different
pairs
of
glasses.
When
the
trial
judge
looked
at
her,
he
saw
a
business
woman
standing
next
to
a
businessman.
When
the
judges
of
the
Court
of
Appeal
looked
at
her,
they
saw
a
self-employed,
professional
woman
standing
next
to
a
salaried
woman.
In
the
former
scenario,
Symes
was
disadvantaged
by
her
sex
contrary
to
section
15
and
deserved
to
have
her
business
expenses
treated
the
same
as
a
businessman's.
In
the
latter,
she
was
privileged
by
her
class
and
made
a
mockery
of
section
15
of
the
Charter
by
attempting
to
use
her
status
as
a
business
woman
to
obtain
greater
benefits
than
those
available
to
salaried
women.
The
gist
of
Mr.
Justice
Décary’s
position
is
that
it
is
absurd
to
grant
Symes
parity
with
businessmen
if,
in
so
doing,
she
is
placed
in
a
superior
position
to
other
women.
To
put
it
another
way,
it
is
preferable
that
all
women
be
equally
disadvantaged
relative
to
men
if
the
alternative
is
to
improve
the
situation
of
the
best-off
women.
The
proper
interpretive
approach
to
issues
of
equality
must
recognize
that
a
real
solution
to
discrimination
cannot
be
arrived
at
without
incorporating
the
perspective
of
the
group
suffering
discrimination.
In
this
case,
section
15
of
the
Charter
demands
that
the
experience
of
both
women
and
men
shape
the
definition
of
business
expense.
Whether
child
care
is
consistent
with
the
values
of
equality
and
is
representative
of
the
reality
faced
by
women
is
not
doubtful
in
my
mind.
More
generally,
I
would
like
to
make
the
following
observations.
A.
Women
and
Child
Care
In
the
1984
Report
of
the
Commission
on
Equality
in
Employment,
Rosalie
Abella
(now
of
the
Ontario
Court
of
Appeal)
stated
(at
page
177):
By
Canadian
law
both
parents
have
a
duty
to
care
for
their
children,
but
by
custom
this
responsibility
has
consistently
fallen
to
the
mother.
It
is
the
mother,
therefore,
who
bears
any
guilt
or
social
disapprobation
for
joining
the
workforce.
And
it
is
the
mother
who
normally
bears
the
psychological
and
actual
responsibility
for
making
childcare
arrangements.
[Emphasis
added.]
The
implementation
of
section
15
of
the
Charter
in
1985
has
not
led
to
an
overnight
reversal
of
this
phenomenon.
As
Dr.
Armstrong
testified,
research
in
Canada
and
abroad
has
consistently
demonstrated
that
women
remain
primarily
responsible
for
child
care,
and
that
this
is
so
whether
women
work
inside
or
outside
the
home.
Dr.
Armstrong,
asked
to
give
a
synopsis
of
those
studies,
said
that:
.
.
.
they
all
produce
very
consistent
results,
I
think,
that
while
men
do
some
child
care
work,
that
it
is
consistently
across
Canada,
whether
it
is
Vancouver,
Halifax,
Toronto,
or
Flin
Flon,
it's
clear
that
the
primary
responsibility
and
the
major
work
load
is
women’s
work
load;
that
the
kind
of
child
care
that
men
tend
to
provide
tends
to
be
the
discretionary
sort—that
you
take
the
children
for
a
walk
or
read
them
a
bedtime
story
or
something
similar
rather
than
the
necessary
tasks
that
are
associated
with
children,
and
this
research
is
consistent
whether
we're
talking
about
a
household
in
which
the
woman
is
employed
full
time
or
whether
she's
full
time
at
home
working
there.
In
fact,
Statistics
Canada
reports
that
working
men
are
chiefly
responsible
for
child
care
in
only
six
per
cent
of
families
(Susan
Crompton,
"Who's
Looking
After
the
Kids?
Child
Care
Arrangements
of
Working
Mothers”
in
Statistics
Canada,
Perspectives
on
Labour
and
Income,
Vol.
3,
No.
2
(Summer
1991),
at
page
68).
Further,
the
responsibility
for
child
care
has
also
a
very
real
impact
on
women’s
patterns
of
employment.
According
to
the
Statistics
Canada
Family
History
Survey,
ongoing
child
care
had
a
major
impact
on
the
continuity
of
work
for
the
majority
of
women
but
almost
no
impact
on
men.
This
is
consistent
with
research
done
on
women
in
managerial
and
professional
work
which
identifies
having
children
as
a
major
disruption
in
career
patterns
and
as
a
problem
for
women.
(See
also
M.
Gunderson,
L.
Muszynski
and
J.
Keck,
Women
and
Labour
Market
Poverty
(1990),
at
page
30.)
Dr.
Armstrong
was
not
aware
of
any
similar
research
on
men
which
identifies
raising
children
as
having
an
impact
on
men's
careers.
As
well,
as
I
discussed
above,
the
study
recently
completed
by
the
Canadian
Bar
Association
indicates
that
male
lawyers
did
not
consistently
report
that
child
care
had
any
impact
on
their
career
(Touchstones
for
Change,
supra),
whereas
female
lawyers
indicated
that
they
suffered
financial
losses
as
a
result
of
child
care
responsibilities.
In
fact,
Dr.
Armstrong
observed
that
the
cost
alone
can
consume
a
large
portion
of
a
woman's
income.
Self-employed
women
do
not
differ
significantly
from
women
as
a
whole
with
respect
to
the
effect
of
child
care.
B.
Self-employed
Women
In
1991,
the
Canadian
Advisory
Council
of
the
Status
of
Women
studied
the
lives
and
business
experiences
of
more
than
200
women
business
owners
across
Canada.
The
results
of
the
Advisory
Council's
study
were
published
in
a
document
entitled
The
Glass
Box.
The
authors
of
The
Glass
Box
found
that
women's
businesses
are
clustered
in
the
retail
and
service
sectors,
notorious
for
their
long
hours,
high
personal
demands,
and
low
financial
returns.
As
in
the
work
force
generally,
where
women
are
clustered
in
jobs
such
as
office
work
and
nursing,
the
effect
of
ghettoizing
is
to
lower
the
financial
return
to
the
business
owner.
The
authors
of
the
report
describe
the
typical
female
surveyed
in
the
following
way
(at
page
10):
The
typical
respondent
could
be
described
as
a
white
woman,
married,
with
two
children,
and
owning
100
per
cent
of
a
retail
business.
She
is
a
high
school
graduate
who
worked
in
a
related
field
before
starting
her
business
but
had
no
experience
as
a
manager.
Her
current
venture
is
her
only
one,
which
she
founded
six
to
ten
years
ago
with
less
than
$25,000
in
start-up
capital,
financed
by
her
own
savings.
She
continues
to
finance
the
operation
herself,
taking
less
than
$30,000
annually
in
salary,
even
though
she
works
50
to
70
hours
a
week.
The
business
employs
an
average
of
three
people.
The
strongest
impression
remaining
after
talking
with
hundreds
of
entrepreneurs
is
the
modest
nature
of
the
business.
For
the
most
part,
these
businesses
are
not
innovative,
substantial
ventures.
The
annual
incomes
reported
by
the
women
in
The
Glass
Box
survey
serve
to
debunk
much
of
the
myth
of
the
wealthy
business
woman.
One-third
of
the
sample
reported
receiving
no
salary.
Twenty
per
cent
made
between
$30,000
and
$50,000,
and
only
15
per
cent
made
over
$50,000.
Male
business
owners
reported
annual
earnings
some
66
per
cent
higher
than
earnings
reported
by
women
business
owners.
Discrimination
was
reported
by
slightly
more
than
half
the
entrepreneurs
in
The
Glass
Box
study.
Creditors,
in
particular,
seem
to
be
using
irrelevant
criteria
such
as
marital
status
and
age
(linked
to
childbearing
potential)
to
assess
loan
applications.
The
authors
reported
that
being
married
and
having
children
contributes
to
the
perception
of
stability
in
male
applicants,
but
these
same
factors
are
taken
to
suggest
unreliability
in
women
applicants.
More
subtle
forms
of
differential
treatment
occur
when
women
discover
they
are
invisible
to
customers,
suppliers,
and
creditors,
many
of
whom
assume
that
any
man
present
in
the
business
is
the
boss.
On
page
65
of
their
report,
the
authors
of
The
Glass
Box
stated:
As
we
interviewed
women
entrepreneurs
in
industrial
malls
and
crowded
retail
centres,
the
image
of
a
woman
alone
in
a
glass
box
emerged.
Isolated
by
her
unusual
occupation
as
an
entrepreneur,
by
her
sole
ownership
of
the
business,
by
her
immigrant
status,
by
her
limited
networks
of
colleagues
and
business
friends,
and
particularly
by
the
long
hours
required
by
business
and
household
demands,
the
woman
entrepreneur
is
surrounded
by
opportunities
to
which
she
cannot
gain
access.
Thus,
in
addition
to
the
difficulties
facing
all
entrepreneurs
in
starting
and
making
a
success
of
a
new
business
venture,
a
woman
entrepreneur
faces
conditions
that
appear
to
be
attributable
almost
completely
to
the
fact
that
she
is
a
woman
in
a
non-traditional
occupation.
These
factors
co-exist
with
the
challenges,
personal
satisfaction,
and
independence
experienced
by
women
entrepreneurs.
This
is
the
situation
we
have
described
as
the
glass
box
of
female
entrepreneurship.
Surrounded
by
opportunities
but
hemmed
in
by
circumstances,
the
woman
entrepreneur
sees
her
ability
to
realize
business
and
personal
success
limited
by
a
number
of
obstacles.
Nearly
half
of
the
respondents
in
the
Glass
Box
study
were
married
with
children
at
home.
Unlike
men
entrepreneurs,
most
women
assumed
complete
responsibility
for
home
and
children.
Only
ten
per
cent
hired
household
help,
a
reflection
of
either
a
lack
of
financial
resources
or
reluctance
to
delegate
any
part
of
an
important
role.
The
authors
of
The
Glass
Box
report
found
that
child
care
responsibilities
formed
one
of
the
major
obstacles
preventing
businesswomen
from
realizing
their
full
potential
as
entrepreneurs.
It
is
with
regard
to
this
context:
the
reality
of
women's
lives
and
the
severe
implications
of
child
care,
that
the
present
Charter
analysis
must
be
approached.
VII.
Conclusion
My
incursion
into
section
15
of
the
Charter
was
mandated
only
by
my
colleague's
comments
in
that
connection.
In
my
view,
Ms.
Symes
must
succeed
primarily
on
statutory
interpretation
of
the
Act
and,
in
particular,
sections
9
and
18
of
the
Act.
Moreover,
if
section
63
is
to
inform
these
sections,
they
do
clearly
coexist.
Child
care
may
be
deductible
as
a
business
expense
in
those
cases
where
the
requirements
for
deductibility
of
business
expenses
are
met.
With
regard
to
the
section
15
of
the
Charter,
it
is
my
opinion
that
the
values
of
equality
it
implies
shape
the
determination
of
the
issues
in
the
interpretation
of
section
63
of
the
Act.
An
interpretation
that
runs
contrary
to
these
values
must
be
rejected.
In
the
result,
I
would
allow
the
appeal,
reverse
the
judgment
of
the
Court
of
Appeal
and
restore
the
judgment
of
the
trial
judge,
the
whole
with
costs
throughout.
McLachlin,
J.:—I
agree
with
Madam
Justice
L'Heureux-Dube's
interpretation
of
sections
9,
18
and
63
of
the
Income
Tax
Act
and
section
15
of
the
Canadian
Charter
of
Rights
and
Freedoms,
and
with
her
conclusion
that
the
appellant's
child
care
expenses
are
deductible
as
business
expenses
under
section
9
of
the
Income
Tax
Act.
Appeal
dismissed.
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