Citation: 2013 TCC 238
Date: 20130724
Docket: 2012-3429(IT)I
BETWEEN:
GERALD ARMSTRONG,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Angers J.
[1]
The
appellant’s notice of appeal originally referred to an appeal from the Minister
of National Revenue (the “Minister”) determination of Canada Child Tax Benefits
(CCTB) for the 2009, 2010 and 2011 base taxation years. The Minister has made
no determinations of the CCTB for the 2010 and 2011 base taxation years and the
appellant has informed the Court that he was in agreement with that fact. This
appeal, therefore, concerns only the determination of CCTB for the 2009 base
taxation year.
[2]
The
issue in this appeal is whether the Minister has properly determined the
appellant’s entitlement to the CCTB in respect of J. for the 2009 base taxation
year. It is the respondent’s position that the appellant is not the “eligible
individual” as defined in section 122.6 of the Income Tax Act (the
“Act”) for the period covering July 2010 to June 2011 as J. did not reside
with the appellant and he was not the person who primarily fulfilled the care
and upbringing of J. at the beginning of that period. Alternatively, and in any
event, it is submitted that the appellant is not entitled to the CCTB as he has
not filed a “return of income” as defined in section 122.6 of the Act for
the 2009 taxation year, as required under subsection 122.61(1) of the Act.
[3]
It has
emerged from the evidence that, at the time of the trial, the appellant had not
filed a “return of income” for his 2009 taxation year. A tax return for 2009
had been prepared but not yet mailed and filed. Indeed, no return of income had
been filed by the appellant for his 2010 and 2011 taxation years as well. The
appellant was arbitrarily assessed under subsection 152(7) of the Act for
his 2009 taxation year.
[4]
The
definition of “eligible individual” applicable for the period in issue namely
for the 2009 base taxation year reads as follows:
“eligible
individual” – “eligible individual” in respect
of a qualified dependant at any time means a person who at that time
(a) resides
with the qualified dependant,
(b) is the parent of the qualified dependant who
primarily fulfils the responsibility for the care and upbringing of the
qualified dependant,
(c) is resident in Canada or, where the person is the
cohabiting spouse or common-law partner of a person who is deemed under
subsection 250(1) to be resident in Canada throughout the taxation year that
includes that time, was resident in Canada in any preceding taxation year,
(d) is
not described in paragraph 149(1)(a) or (b), and
(e) is, or whose cohabiting spouse or common-law
partner is, a Canadian citizen or a person who
i.
is a permanent resident within the meaning of
subsection 2(1) of the Immigration and Refugee Protection Act,
ii.
is a temporary resident within the meaning of
the Immigration and Refugee Protection Act, who was resident in Canada
throughout the 18 month period preceding that time, or
iii.
is a protected person within the meaning of the Immigration
and Refugee Protection Act,
iv.
was determined before that time to be a member
of a class defined in the Humanitarian Designated Classes Regulations
made under the Immigration Act,
and
for the purposes of this definition,
(f) where a qualified dependant resides with the
dependant's female parent, the parent who primarily fulfils the responsibility
for the care and upbringing of the qualified dependant is presumed to be the
female parent,
(g) the presumption referred to in paragraph (f)
does not apply in prescribed circumstances, and
(h) prescribed factors shall be considered in
determining what constitutes care and upbringing;
[5]
An
eligible individual must be a resident of Canada, must reside with the
qualified dependant and must be the parent who primarily fulfills the
responsibility for the care and upbringing of the qualified dependant. It is
not disputed in this case that J. is a qualified dependant.
[6]
Regulation 6302
sets out the factors to be considered to determine what constitutes care and
upbringing of a qualified dependant.
6302.
Factors -- For the purposes of paragraph (h) of the
definition “eligible individual” in section 122.6 of the Act, the following
factors are to be considered in determining what constitutes care and
upbringing of a qualified dependant:
1.
the supervision of the daily activities and
needs of the qualified dependant;
2.
the maintenance of a secure environment in which
the qualified dependant resides;
3.
the arrangement of, and transportation to,
medical care at regular intervals and as required for the qualified dependant;
4.
the arrangement of, participation in, and
transportation to, educational, recreational, athletic or similar activities in
respect of the qualified dependant;
5.
the attendance to the needs of the qualified
dependant when the qualified dependant is ill or otherwise in need of the
attendance of another person;
6.
the attendance to the hygienic needs of the
qualified dependant on a regular basis;
7.
the provision, generally, of guidance and
companionship to the qualified dependant; and
8.
the existence of a court order in respect of the
qualified dependant that is valid in the jurisdiction in which the qualified
dependant resides.
[7]
The operation
of the CCTB has been well summarized by Justice Webb formerly of this Court in D’Elia
v. Q., 2012 TCC 180, in paragraphs 3 and 4 which read as follows:
3 Under
the Income Tax Act (the “Act”) the CCTB is treated as an
overpayment of the person's liability under the Act and hence, if the
individual is eligible, such amount is paid to the eligible individual as a
refund of this overpayment. Under subsection 122.61(1) of the Act the
overpayment amount is calculated on a monthly basis. This subsection provides,
in part, as follows:
122.61(1)
Where a person ... [has] filed a return of income for the year, an overpayment
on account of the person's liability under this Part for the year is deemed to
have arisen during a month in relation to which the year is the base taxation
year, equal to the amount determined by the formula
1/12
[(A - B) + C + M]
where
A
is the total of
(a)
the product obtained by multiplying $1,0901 by the number of qualified
dependants in respect of whom the person was an eligible individual at the
beginning of the month, and
…
C
is the amount determined by the formula
F
- (G x H)
where
F
is, where the person is, at the beginning of the month, an eligible individual
in respect of
(a)
only one qualified dependant, $1,4632, and
…
4 Because
the overpayment is deemed to have arisen during a month for which a person is
an eligible individual in respect of a qualified dependant at the beginning
of the month, this requires a determination of whether any particular
person was an eligible individual at the beginning of each month in respect of
that qualified dependant. As a result, it does not necessarily follow that
because one particular person was the eligible individual in respect of a
qualified dependant at the beginning of a particular month, that the same
person would then be the eligible individual at the beginning of the following
month in respect of that qualified dependant. […]
Facts
[8]
The
appellant and Amy Westbrook are the parents of J. and they have been living
separate and apart since 1998. At the time of their separation, J. stayed and
resided with her mother who had applied for, and was receiving, the CCTB.
[9]
The
appellant applied for the CCTB for J. commencing June 5, 2010. On that
day, the appellant received a call from J.’s grandfather on her mother’s side
to come over to J.’s mother. A quarrel between J. and her mother had occurred
and the appellant took J. to live with him.
[10]
The
appellant, J., another daughter, and the appellant’s common law wife testified.
Although, there may have been some uncertainties as to the year when J. moved
in with her father, I am satisfied that J. has, in fact, moved in and resided
at her father’s place after June 2010. There are sufficient other aspects of
their testimony to assist me in reaching this conclusion. J. testified that she
had not lived with her mother since that incident on June 2010 and that when
she graduated in June 2011, she was living with the appellant.
[11]
During
the year 2010, while living with her father, J., at her request, continued to
attend her school. The appellant lives in another area of town and if the
school had been informed of that fact, J. would have had to change school. She
was given a ride every day to attend that school either by the appellant or his
common law wife.
[12]
J. has
always been permitted to visit her mother and grand parents. J.’s mother has
continued to be involved in J.’s life even after she moved in with the
appellant. Each parent adduced the documents, photographs and certificates, in
support of their respective submission that they are the parent who primarily
fulfilled the responsibility for the care and upbringing of J. This involvement
of both parents in the life of J. is commendable considering the troubled
relationship of her parents.
[13]
As to the
factors set out in section 6302 of the Regulations, I find those provided
for in paragraphs (a), (b), (d) and (g) confirm
the submission of the appellant. The appellant has shown, on a balance of
probabilities, that he is the “eligible individual” as defined in the Act, and
was for all intents and purposes the parent who primarily fulfilled the
responsibility for the care and upbringing of J. in respect of CCTB benefits
payments covering July 2010 to June 2011.
[14]
Whether
or not the appellant is entitled to a CCTB will be determined once he has filed
a return of income as defined in section 122.6 of the Act for his 2009
taxation and as required under subsection 122.61(1) of the Act. The
specific wording of subsection 122.61(1) requires the taxpayer to have
filed a return of income as a precondition to applying the formula calculating
entitlement to the CCTB or a deemed overpayment. The situation is the same with
the GST/HST credit, the Refundable Medical Expense Supplement and the Working
Income Tax benefit provided for in the Act. They are all income — tested credits, to which applies the
same requirement that a return be filed.
[15]
The appeal is allowed.
Signed this 24th
day of July 2013.
“François Angers”
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