Docket: 2012-1805(IT)I
BETWEEN:
LINDSAY LEWIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal heard on April 8, 2013 at Montréal,
Québec
Before: The Honourable
Justice Patrick Boyle
Appearances:
|
Agents for the Appellant:
|
Lisa
Moncalieri
Farid Muttalib
|
|
|
|
|
Counsel for the Respondent:
|
Me Anne Marie-Boutin
|
____________________________________________________________________
JUDGMENT
The appeal from the assessment made under
the Income Tax Act with respect to the Appellant’s 2010 taxation year is
dismissed, without costs, in accordance with the attached reasons delivered
orally at the hearing.
Signed at Ottawa, Canada this 1st
day of May 2013.
"Patrick Boyle"
Citation: 2013 TCC 137
Date: 20130501
Docket: 2012-1805(IT)I
BETWEEN:
LINDSAY LEWIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
(Appeal heard and decision rendered orally from the
Bench
on April 8, 2013 at Montréal, Québec)
Boyle J.
[1]
These are my reasons in
the Lindsay Lewis appeal of this morning in Montréal, heard under the Court’s
informal procedure.
[2]
Her appeal concerns her
stipend received for her post-doctoral fellowship research work in 2010 at McGill University.
[3]
Dr. Lewis worked as a
post-doctoral scholar in 2009 and 2010 at McGill. She received an annual
stipend of $39,500. The research project on which she was engaged was in the
area of functional neuroimaging of the visual cortex. Her supervisor was
Professor Mendola.
[4]
Prior to taking this
research position, the taxpayer had obtained her PhD. In her post-doctoral
scholar position, she was not pursuing credits, a certificate or a degree from
McGill to which her research work related. She did take some unrelated French
courses at McGill.
[5]
Prior to coming to
McGill, the taxpayer was in the United States. In order to take her position in
Canada, she was required to obtain a work permit. The Canadian permit she
obtained was not a student or study permit.
[6]
The March, 2010, Budget
announced that a legislative change was to be made to the taxation of amounts
received by post-doctoral fellows. The legislative
amendment was enacted to make it clear that a qualifying educational program for
tax-exempt scholarships only includes university research programs if the
program leads to a degree. This amendment, when enacted, applied to the 2010
and later years.
[7]
According to the
evidence presented, prior to starting work, Dr. Lewis had been informed by McGill University that her stipend qualified for the scholarship exemption. McGill did not
advise her or other post-doctoral fellows that there was any uncertainty
regarding that nor did the university inform them of the Budget change when
announced in March, 2010. The university informed post-doctoral fellows of this
change only in October, 2010, at which time it also started making tax
withholdings.
[8]
In filing her 2010 tax
return in 2011, the taxpayer reported it as scholarship income. This was consistent
with how McGill issued her 2010 T4. The taxpayer was initially assessed on this
basis. She was reassessed in late 2011 to deny her the tax exemption for
scholarships on her post-doctoral research stipend.
[9]
The taxpayer’s
position, in her appeal in this Court, is that the 2010 change should not apply
retroactively and, as a matter of fairness, it should only apply to her as of
October 2010, when McGill commenced withholding tax from payments to her.
[10]
It is clear from the
amended definition of “qualified educational program” that Dr. Lewis’
post-doctoral research work cannot qualify. It is not disputed that her work
was at least primarily research, nor is it disputed that her research work
could not lead to a diploma or degree.
[11]
These amendments apply
to the 2010 taxation year and for this reason, the taxpayer’s appeal cannot
succeed.
[12]
When the Canadian
legislature enacted the March 21, 2011 Budget announcements, they were made
applicable to the 2010 and later taxation years. They applied to all of 2010,
not just after the announcement in the March 2010 Budget.
[13]
Parliament does have
the power in Canada to pass retroactive legislation and it has clearly done so
in this case. There is no ambiguity or uncertainty in
what the legislature has chosen to do and it is within their power to do it. There is no basis for this Court not to apply properly enacted law on
grounds of equity or fairness. The taxpayer’s argument based on retroactivity
cannot succeed.
[14]
Similarly, because this
is a court of law with no power to depart from the law as clearly written on
grounds of fairness or equity, this Court cannot delay the application of the
law to the date when McGill informed its post-doctoral researchers or when it
began to withhold from them.
[15]
If the taxpayer feels
wronged by McGill, she must take that up with the university. This Court would
not have any jurisdiction over such a grievance and it would have to be pursued
in the courts of the Province of Québec.
[16]
With respect to the
taxpayer’s complaint that it seems particularly unfair that she should be
charged interest on the tax debt before McGill began withholding, again this
Court has no jurisdiction to waive interest. It follows tax automatically under
the law. She may, however, wish to pursue interest
relief administratively with the Canada Revenue Agency under its Fairness
Program. If she remains unsatisfied, CRA’s decision would be appealable to the
Federal Court, not to this Court in any event.
[17]
Finally, I should note
that the Respondent asked me to find that Dr. Lewis’ stipend was not only not
scholarship income but was employment income. This case was not assessed on
that basis. It is not necessary in this case to decide that further question to
dispose of the appeal. The Court was not presented with sufficient
evidence in this case to make an informed decision on that point in any event. It does not at all necessarily follow that because post-doctoral
research is not a qualifying educational program that amounts paid to
post-doctoral fellows is employment income. If
the Government seeks to tax post-doctoral fellows’ income as employment income,
that will have to await a different case.
[18]
For these reasons, the
appeal is dismissed. Thank you very much Dr. Lewis, Ms. Moncalieri, Mr.
Muttalib, Me Boutin and Mr. Registrar. We are
adjourned.
Boyle J.
CITATION: 2013 TCC 137
COURT FILE NO.: 2012-1805(IT)I
STYLE OF CAUSE: LINDSAY LEWIS v. HER
MAJESTY THE QUEEN
PLACE OF HEARING: Montréal, Québec
DATE OF HEARING: April 8, 2013
REASONS FOR JUDGMENT BY: The
Honourable Justice Patrick Boyle
DATE OF JUDGMENT: May 1, 2013
DATE OF ORAL
REASONS
FOR JUDGMENT: April
8, 2013
APPEARANCES:
|
Agents for the
Appellant:
|
Lisa Moncalieri
Farid Muttalib
|
|
Counsel for the
Respondent:
|
Me Anne Marie-Boutin
|
COUNSEL OF RECORD:
For the Appellant: N/A
Name:
Firm:
For the Respondent: Myles J. Kirvan
Deputy
Attorney General of Canada
Ottawa,
Canada
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