Date: 20010608
Docket: 2001-72-IT-I
BETWEEN:
FRANK YATES,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
For the
Appellant:
The Appellant himself
Counsel for the Respondent: Kristy
Foreman Gear
Reasons for Judgment
(delivered orally from the Bench on May 11, 2001, at
Vancouver, British Columbia)
Campbell, J.
[1]
This appeal is under the informal procedure with respect to the
Appellant's 1999 taxation year.
[2]
The Minister initially assessed the Appellant by Notice dated May
18, 2000. By letter dated August 24, 2000, the Appellant objected
that the Minister did not allow him a deduction for Class 3
National Insurance contributions. By letter dated October 6,
2000, the Appellant objected that the Minister did not allow him
a deduction for the non-uprated portion of the United Kingdom
("U.K.") old age pension as a foreign tax. As a result,
the Minister, by Notice dated October 13, 2000, confirmed
that there was no provision under the Income Tax Act (the
"Act") which allowed a deduction for Class 3
National Insurance contributions made by the Appellant in the
amount of $781.41.
[3]
There is basically no dispute as to the facts in this case and
both parties proceeded on the basis of presentation of legal
argument. The Appellant resided in England until 1972 when he
came to Canada to live. He is a dual citizen of both countries.
From 1967 to 1972, the Appellant worked in England and
contributed to a National Insurance plan. In 1991 or 1992, the
Appellant was advised by a friend that he could apply for and pay
a lump sum payment to permit him to qualify for 82% of a future
U.K. pension. As a result, the Appellant paid the U.K. Inland
Revenue Department a lump sum payment of 4,009.92 U.K.
pounds sterling, in 1991 or 1992 for the period 1986 to 1992
under Class 3 National Insurance contributions. The amount paid
by the Appellant in the 1999 taxation year was 335.40 U.K. pounds
sterling (as per Attachment I attached to the Notice of Appeal
and being a statement from the U.K. Inland Revenue NI
Contributions Office).
[4]
The Appellant divided his Notice of Appeal and presentation into
two parts. The first part dealt with the deductibility of
"additional U.K. Class 3 National Insurance
contributions" in computing Canadian income tax in the
1999 taxation year. The second part dealt with the
deductibility of the "non-uprated portion of the U.K. old
age pension, withheld by the U.K. Government to U.K./Canadian
citizens, resident in Canada. He argued that this was a tax and
should be "deductible" or a "tax credit"
given against the amount of foreign income reported or Canadian
tax payable on the foreign source of income.
[5]
In respect to Part 1, the Appellant paid Class 3 National
Insurance contributions to the U.K. Inland Revenue Department
towards a future state pension. He referred to a statement of the
U.K. Inland Revenue NI Contributions Office, which referred to
these payments as "voluntary" yearly Class 3
contributions and I quote directly from that statement:
You applied to us to pay voluntary class 3.
He stated that he was informed these additional contributions
made to increase his future U.K. old age pension were not
deductible in computing Canadian income taxes.
[6]
The Appellant referred to subsections 20(11), 20(12), 126(1) and
126(7) of the Act. He argued that these Class 3
contributions are a tax and therefore should be deductible or an
allowable tax credit against the amount of foreign income
reported, or Canadian tax payable on the foreign source of income
in compliance with these subsections. He stated that the
contributions meet the definition of "non-business income
tax" in subsection 126(7), in that they are a tax, based on
income paid to the U.K. At the very least, he states that the
contributions should be an allowable deduction or credit against
foreign income tax reported, or deductible against Canadian tax
payable on the foreign source income. He states that when he pays
the contributions, he does so with after-tax dollars and he is of
the opinion that these amounts are taxed several times. He
states:
I understand in my own particular situation that I do not have
any income from a foreign source, but I believe in the interests
of fairness and Natural Justice that CCRA should
change their policy ...
He contends that all of this violates the Canada/U.K. Income
Tax Convention. He further contends that the "disallowance
of a deduction or use as a tax credit" for such Class 3 U.K.
pension contribution violates the Canadian Charter of Rights
and Freedoms by treating a Canadian citizen paying into a
Canadian state pension differently than a Canadian citizen paying
into a U.K. state pension. He believes the ground of
discrimination to be the enumerated ground of national
origin.
[7]
The second part of the Appellant's argument related to the
future event of the taxability of his U.K. old age pension when
he eventually reaches 65 years of age. The U.K. Government has a
policy of "non-uprating" meaning "not annually
increasing" the U.K. old age pension to persons living
abroad as a resident of Canada. This policy has been in effect
since 1955. He contends that a policy exists which
"freezes" a portion of his pension. He submitted that
as the non-uprated portion of the U.K. old age pension is a
tax, based on income, the disallowance of a deduction or use of a
tax credit for this non-rated portion violates Articles 17, 21,
22 and 23 of the Canada/U.K. Convention. He recognizes that the
receipt of his old age pension will be taxable as part of his
worldwide income. He states that the U.K. Government will
withhold the "frozen portion" from his pension and will
use those monies for Government purposes. He contends that the
"frozen portion" is a tax based on income which is
taxable in Canada as part of the Canadian resident's
worldwide income. He contends that all of this violates mobility
rights in respect of section 6 of the Charter, legal
rights in respect of section 7 of the Charter and equality
rights in respect to section 15 of the Charter.
[8]
And finally the Appellant argued that the U.K. old age pension is
property and therefore the tax imposed by the U.K. Government is
a tax on that property. The Appellant, as I understand it,
contends that in disallowing a deduction or tax credit on the
taxed portion of the U.K. pension which is property, it deprives
property rights to Canadians whose national origin is the U.K.
This therefore violates subsection 1(a) of the Canadian Bill
of Rights according to the Appellant, in that it deprives
property rights on the ground of national original.
[9]
The Minister states that the Appellant applied to the U.K. Inland
Revenue to pay the contributions, that these contributions are
voluntary and that they are not an income or profit tax. The
Minister states that the contributions do not qualify as a
"non-business-income tax" and that for the 1999
taxation year, the Appellant did not declare any income from
foreign sources. The Minister then contends that the relief
sought with respect to the "non-uprated portion" of the
U.K. old age pension is not within the available relief that this
Court may grant under section 171 of the Act, as the
Appellant seeks relief in respect to a future event.
[10] By letter
from the Appellant dated April 2, 2001, he asserts that he has
served all Attorneys General in compliance with section 57 of the
Federal Court Act. Although this was not raised by either
party during the hearing, it is the practice of this Court to
hear argument on Charter issues where they are raised in
the pleadings but section 57 notice requirements may not have
been met. If there is merit to the Charter arguments, the
matter would be adjourned to a further date for compliance with
notice requirements. If there is no merit, the matter can be
disposed of accordingly. I reviewed this practice at greater
length in my decision in Whalen v. R., [2001] T.C.J. No.
81.
Issues
[11] There are
four issues before me, which are as follows:
(1)
whether the U.K. Class 3 National Insurance contributions are
non-business income;
(2)
whether the Appellant is entitled to a deduction or a foreign tax
credit for the contributions in the 1999 taxation year;
(3)
whether the Court can provide any relief by way of deduction or
tax credit with respect to the "non-uprated" portion of
the U.K. old age pension; and
(4)
whether the denial of the deduction or foreign tax credit
infringes rights and freedoms under the Charter and
specifically a breach of sections 6, 7 and 15 and whether that
breach can then be justified under section 1.
Analysis
[12] The
Appellant has objected to the non-deductibility of voluntary
contributions he made to the U.K. Government to maintain his
entitlement to a U.K. old age pension.
[13]
Subsection 126(1) of the Act provides a formula for
calculating a foreign tax deduction, where a taxpayer, who was
resident in Canada at any time in a taxation year, paid
non-business-income tax to a Government of a country other than
Canada. The effect of the formula in subsection 126(1) is that a
foreign tax credit cannot exceed the amount of Canadian tax that
would have been payable on the foreign income had that income
been earned in Canada. "Non-business-income tax" is
defined in subsection 126(7) as follows:
"non-business-income tax" paid by a taxpayer for a
taxation year to the government of a country other than Canada
means, subject to subsections (4.1) and (4.2), the portion of any
income or profits tax paid by the taxpayer for the year to the
government of that country, or to the government of a state,
province or other political subdivision of that country, that
(a) was not included in computing the taxpayer's
business-income tax for the year in respect of any business
carried on by the taxpayer in any country other than Canada,
(b) was not deductible by virtue of subsection 20(11)
in computing the taxpayer's income for the year, and
(c) was not deducted by virtue of subsection 20(12) in
computing the taxpayer's income for the year,
but does not include a tax, or the portion of a tax,
(c.1) that is in respect of an amount deducted because
of subsection 104(22.3) in computing the taxpayer's
business-income tax,
(d) that would not have been payable had the taxpayer
not been a citizen of that country and that cannot reasonably be
regarded as attributable to income from a source outside
Canada,
(e) that may reasonably be regarded as relating to an
amount that any other person or partnership has received or is
entitled to receive from that government,
(f) that, where the taxpayer deducted an amount under
subsection 122.3(1) from the taxpayer's tax otherwise
payable under this Part for the year, may reasonably be regarded
as attributable to the taxpayer's income from employment to
the extent of the lesser of the amounts determined in respect
thereof under paragraphs 122.3(1)(c) and (d) for
the year,
(g) that can reasonably be attributed to a taxable
capital gain or a portion thereof in respect of which the
taxpayer or a spouse of the taxpayer has claimed a deduction
under section 110.6,
(h) that may reasonably be regarded as attributable to
any amount received or receivable by the taxpayer in respect of a
loan for the period in the year during which it was an eligible
loan (within the meaning assigned by subsection 33.1(1)), or
(i) that can reasonably be regarded as relating to an
amount that was deductible under subparagraph 110(1)(f)(i)
in computing the taxpayer's taxable income for the year;
[14]
Non-business-income tax does not include a tax or portion thereof
that would not have been payable had the taxpayer not been a
citizen of that county and that cannot be reasonably regarded as
attributable to income from a source outside Canada.
[15] The
Respondent has submitted that these Class 3 insurance
contributions are not a non-business-income tax under the
Act as the contributions are not income or profits
tax.
[16] Are these
contributions a tax? Judge Hamlyn of this Court in Kempe v.
R. [2001] 1 C.T.C. 2060 had to determine whether a German
state imposed church tax qualified for a deduction of foreign
tax. In referring to the Supreme Court of Canada decision in
Lawson v. Interior Tree Fruit and Vegetable Committee of
Direction, [1931] S.C.R. 357 Judge Hamlyn stated:
A tax is a levy, enforceable by law imposed under the
authority of a legislature, imposed by a public body and levied
for a public purpose.
[17] The test
for the essentials of a tax were confirmed in Attorney-General
of Canada v. Registrar of Titles of Vancouver Land Registration
District, [1934] 4 D.L.R. 764 as follows:
The tests are (1) it must be enforceable by law (2) imposed by
a public body under legislative authority and for a public
purpose. In addition "compulsion is an essential
feature" (Halifax v. Nova Scotia Car Works (1914), 18
D.L.R. 649, at p. 652).
[18] These
requirements have been confirmed in such later cases as M.N.R.
v. The Shawinigan Water and Power Co., 53 DTC 1036.
[19] In the
case of Kempe, Judge Hamlyn found that the church tax was
a compulsory obligation and that the ability of avoiding the tax
by giving up citizenship or church membership did not make it any
less a tax. In the present case, the Appellant became a resident
of Canada and reported no foreign income from the U.K. The
Appellant admitted that he chose voluntarily to continue making
contributions towards the U.K. insurance plan. The exhibits which
he presented, including the website information of the National
Insurance Plan and the statements of the amount that was payable,
refer to these Class 3 contributions as voluntary.
According to the Appellant's evidence, when he worked in the
U.K. he was required to make contributions on a weekly basis,
which amounts were taken directly off his cheque and submitted.
As pointed out by Respondent counsel, these payments were akin to
CPP premiums in Canada, where the regime is structured so that
payments are compulsory. When the Appellant left the U.K. for
Canada in the 1970's he no longer made contributions to this
plan and in fact made his first payment again only in 1993, after
discussions with a friend prompted him to do so. The Appellant
voluntarily applied to pay these contributions in order to
maintain an old age pension in the U.K. The Appellant is clearly
not obliged to pay these contributions. They are voluntary, not
compulsory.
[20]
Black's Law Dictionary defines "tax" as
follows:
A charge by the government on the income of an individual,
corporation, or trust, as well as on the value of an estate or
gift or property. The objective in assessing the tax is to
generate revenue to be used for the needs of the public.
A pecuniary burden laid upon individuals or property to
support the government, and is a payment exacted by legislative
authority. Essential characteristics of a tax are that it is not
a voluntary payment or donation, but an enforced contribution,
exacted pursuant to legislative authority.
[21] I agree
with counsel for the Respondent that the case of Kempe can
be distinguished from the present case as the church tax in
Kempe was determined to be a tax due to its compulsory
nature and that it was required by the laws of Germany. All
evidence presented here however points to the payments being
voluntary. The Class 3 contributions were not calculated as a
percentage of income earned as no income was being earned in the
U.K. All evidence of the Appellant referred to the entitlement of
the U.K. citizens to apply to make contributions if they so
wished or on a voluntary basis. The contributions were a
minimum qualification amount rather than based on
income earned. If a U.K. citizen wanted to make these
contributions he had to meet a minimum requirement of working
three years in the U.K. Thereafter these contributions could be
made voluntarily in the expectation of receiving a benefit of old
age pension. The Appellant had a choice of making these
contributions. They were not compulsory in any sense of the word.
In fact the Appellant in his evidence stated that if he ceased to
make the yearly contributions referred to in these statements,
nothing further happened. He simply would not receive future
statements from the U.K.
[22] The
Appellant argued that his contributions were not voluntary
because of the pressure and duress he felt surrounding the
freezing of the non-uprated portions of the old age pension. He
cited case law in support of this. However these cases are
distinguishable. I agree with Respondent counsel when she stated
that the issue, quite rightly here, is whether a certain type of
payment is a tax. And for it to be a tax it must be compulsory.
In any event, the Appellant had been advised his old age pension
would be frozen at 65 and frozen at the amount of his first
cheque. He was further advised that he could choose to make
voluntary contributions and clearly indicated in his evidence
that he chose to make these contributions to the U.K. plan rather
than some other type of investment, as it was a guaranteed
reliable state pension that was, to use his words, "a good
investment". Although the Appellant argued they were made
under pressure, I find no such duress in his decision to make
those contributions.
[23] As stated
earlier for an amount to qualify as a non-business-income tax, it
must reasonably be regarded as attributable to income from a
source outside Canada. The Appellant's 1999 return (filed as
Exhibit R-1) reports no foreign-source income and the
Appellant's evidence was that he had not received any U.K.
income. The contributions were paid from income from Canadian
employment. As such the contributions cannot be attributable to
income from a source outside Canada.
[24] A final
comment in respect to this issue comes from a reference to the
tax period by Respondent counsel in her summation. The amount of
4,009.92 U.K. pounds was paid in 1993 for the period 1986 to
1992-93 as a lump sum catch-up amount. Respondent counsel
submitted that only the amount paid in 1999 of 335.4 U.K.
pounds would be allowable as a deduction as the amount paid in
the year under appeal. I believe I understood Respondent counsel
to make this argument should it be determined that these
contributions are deductible or a tax credit. In any event, for
the reasons given here, I find that the contributions do not meet
the requirements of being a non-business-income tax.
[25] I turn
now to the second issue which is the Appellant's entitlement
to a deduction or a foreign tax credit for a contribution in 1999
taxation year. Respondent counsel cited several cases to support
her submission that there is no provision in the Act for a
deduction of contributions paid to a foreign insurance plan. In
the case of Bransted v. M.N.R., [1992] T.C.J. No. 2, the
Appellant there claimed a federal foreign tax deduction for tax
paid on social security benefits to the U.S. The social security
benefits were however tax exempt in the U.S. and at page 6 Judge
Sobier stated:
Paragraph 4(a) of the Convention allows a deduction in respect
of income tax paid or accrued to the United States in respect of
profits, income or gains which arise in the United States. This
income did arise in the United States, but because no tax was
paid to or accrued to the United States in respect of these
benefits, they cannot be included in a calculation of tax paid to
the United States.
[26] In the
case before me, as no tax was paid, the Appellant can have no
entitlement to a deduction or a tax credit for an amount paid to
a foreign country. The Appellant made the contributions with
after tax dollars and accordingly he will be taxed on that income
upon receipt of benefits. There is no breach of the U.K./Canada
agreement. The contributions were not a tax so there can be no
double taxation.
[27] There is
no provision in the Act to permit the deduction of the
contributions paid to a foreign pension plan. In Ledwidg v.
M.N.R., 71 DTC 188 the Court held, in discussing
contributions to a French National Fund by a former citizen of
France:
... the contribution ... is not a registered pension plan or a
plan accepted by the respondent. The Income Tax Act denies
the right to deduct such contributions from income earned in
Canada.
... there is nothing in the Canadian Income Tax Act
which permits the deduction of a tax in futuro.
What is deductible is the tax paid during or for the taxation
year involved. A contribution to a pension plan is not
assimilated to a tax. It may or may not in the years to come,
give rise to a levy because when the taxpayer receives the
pension he contributed to, he receives an income which is
taxable. Let's wait until then. For income tax purposes, the
possibility of an event produces no relief.
[28]
Respondent counsel also quoted the case of Stelfox v.
M.N.R., 85 DTC 100. The facts in Stelfox are
almost identical to the facts before me. The Court found there
was no provision for the deduction as the contributions were not
an investment but were more akin to the payment of insurance
premiums such as CPP or RSP which are deductible only when a
specific provision is made in the Act for such a claim. In
The Queen v. Hoffman, 85 DTC 5508, the Court there
held:
If Parliament wanted to include, as a deduction against
employment income, contributions made "to a similar plan of
a country other than Canada", it would have done so. That
Parliament expressly chose to include the phrase in respect of a
provision concerned with the determination of maximum allowable
deductibility limits of premium contributions, yet did not
expressly do so in relation to paragraph 8(1)(l),
indicates that contributions paid under social security are not
allowable deductions within the meaning of paragraph
8(1)(l).
[29] The
Act is clear, as is the case law. The Act contains
no provision to allow a deduction of contributions paid to a
foreign insurance plan.
[30] With
respect to the third issue, the Appellant's position as
outlined in Part II of his Notice of Appeal is as follows:
I believe that when I receive my United Kingdom old age
pension at the age of 65, the present policy of
'freezing' (no annual uprating) at that time
will result in a violation to the
Canada-UK double Taxation Agreement. Also it should be
noted that this also presently adversely affects existing
Canadian pensioners resident in Canada in receipt of a United
Kingdom old age pension.
It is acknowledged that upon receiving my old age pension at
age 65, it will be taxable in Canada as part of my worldwide
income.
When you reside in Canada as a United Kingdom pensioner, your
old age pension is 'frozen'.
The United Kingdom government will withhold the 'frozen
portion' of my old age pension 'at source' and
those monies withheld by the Government are used for
Government purposes such as payment towards social
security or simply go into the United Kingdom Treasury.
...
The non-uprated portion of a UK old age pension withheld by
the UK Government to a UK/Canadian citizen resident in Canada is
in fact a TAX and should be 'deductible' or a 'tax
credit' against the amount of foreign income reported, or
Canadian tax payable on the foreign source income.
[31] The
problem the Appellant complains of is with respect to a future
event but which does not relate to the Appellant's assessment
for the 1999 taxation year. The jurisdiction of this Court stems
from section 12 of the Tax Court of Canada Act. The
available relief under the Income Tax Act for an
appeal from an assessment is found in section 171.
This Court may dispose of an appeal by dismissing it, allowing it
and vacating the assessment, varying the assessment or referring
the assessment back to the Minister for reconsideration and
reassessment.
[32] It would
appear that the relief sought by the Appellant under Part II of
his submissions is declaratory in nature. He did not report
foreign source income in 1999 nor did he receive U.K. old age
pension. This Court has no authority to provide the relief which
the Appellant seeks. Although the Appellant produced documentary
evidence expressing the Canadian Government's concerns over
the unfairness of the U.K. policy and the attempts being made to
convince the U.K. to remedy this by changing its policy, this
Court can offer no assistance to the Appellant as there is no
jurisdiction for it to do so.
[33] The
fourth and final issue I must deal with is whether the denial of
a deduction of Class 3 contributions violates and infringes upon
any rights and freedoms under the Charter, specifically
sections 6, 7 and 15.
[34] The
Appellant states that as a result of the disallowance of the
deductibility of his contributions, his mobility rights have been
violated pursuant to section 6 of the Charter. Subsection
6(1) states:
Every citizen of Canada has the right to enter, remain in and
leave Canada.
Subsection 6(2) states:
Every citizen of Canada and every person who has the status of
a permanent resident of Canada has the right
(a)
to move to and take up residence in any province; and
(b)
to pursue the gaining of a livelihood in any province.
[35] In
Canadian Egg Marketing Agency v. Pineview Poultry Products
Ltd. and Frank Richardson operating as Northern Poultry,
[1998] 3 S.C.R. 157 the Supreme Court of Canada concluded that a
federal/provincial egg marketing scheme did not violate the
Charter even though the Northwest Territories were not allocated
a quota. Respecting Section 6, the Court held (at page 196):
... s. 6 responds to a concern to ensure one of the conditions
for the preservation of the basic dignity of the person. The
specific guarantee described in s. 6(2)(b) and s.
6(3)(a) is mobility in the gaining of a livelihood subject
to those laws which do not discriminate on the basis of
residence. The mobility guarantee is defined and supported by the
notion of equality of treatment, and absence of discrimination on
the ground normally related to mobility in the pursuit of a
livelihood.
[36] The
disallowance of a deduction or credit for the payment of
voluntary National Insurance contributions paid to the U.K. in no
way violates the Appellant's rights pursuant to this
section.
[37] I believe
the Appellant's argument is that the freezing of the U.K. old
age pension restricts his mobility since he feels pressured and
under duress to relocate to the U.K. This however is not related
in any way to a breach of his Canadian mobility rights. He is
unrestricted in his mobility within this country and he is free
to remain or return to the U.K. as he himself sees fit. The
Appellant produced no evidence, other than correspondence of a
lady who was not called as a witness, to show that he felt
pressured to move back to the U.K. In fact the Appellant will
eventually be the recipient of both the CPP pension and the U.K.
pension. While many U.K. citizens, who have moved here without
benefit of our CPP pension, are receiving only the non-uprated
portion of the U.K. old age pension, that is not the case as
presented before me in respect of this Appellant. The failure of
the Act to include a deduction or tax credit for
contributions to a foreign insurance plan in no way interferes
with the Appellant's right to move within Canada, to leave or
to pursue a livelihood here.
[38] The
Appellant then pleads that his rights under section 7 of the
Charter have been infringed. Section 7 states:
Everyone has the right to life, liberty and security of the
person and the right not to be deprived thereof except in
accordance with the principles of fundamental justice.
[39] I will
not restate them here but the three main stages of a
section 7 analysis are stated by the Supreme Court of Canada
in R. v. White, [1999] 2 S.C.R. 417.
[40] The
Appellant referred often in his submissions to the 144,000
U.K./Canadian citizens resident in Canada that were affected by
the failure of the Act to provide a deduction or a tax
credit. On several occasions I reminded the Appellant, I had only
his appeal before me and it was his circumstances that were the
focus of the appeal. The Appellant seeks a foreign tax deduction
or a foreign tax credit to reduce his tax liability in the 1999
taxation year. This is an issue of economics not deprivation of
life, liberty or security of person as the Appellant alleged.
Respondent counsel quoted both Schaff v. The Queen, [1993]
2 C.T.C. 2695 and Whitbread & Walley et al, (1988) 51
D.L.R.(4th) 509 as standing for the proposition that
section 7 does not protect economic interests nor does it
guarantee a minimum income or standard of living or include a
right to carry on a business or earn a livelihood. I agree with
Respondent counsel's contention that if there is any
interference or restriction with the Appellant's liberty it
is caused by the U.K. Government policy in regard to freezing of
the old age pension.
[41] Even
though I find no infringement of the Appellant's rights under
this section, the Minister in any event is entitled to allow
certain deductions while not allowing others. The Act by
its very nature allows some taxpayers certain benefits while
denying those very benefits to others.
[42] Lastly,
the Appellant complains of an infringement of section 15 of
the Charter which provides:
(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 grounds including those that are
disadvantaged because of race, national or ethnic origin, colour,
religion, sex, age or mental or physical disability.
[43] One of
the leading cases on the interpretation of section 15 is Law
v. Canada (Minister of Employment and Immigration, [1999] 1
S.C.R. 497 (S.C.C.) which sets out the three step analysis a
court must undertake.
[44] The onus
or burden of proof is on the Appellant who alleges a breach of
section 15 of the Charter to show or prove that the
legislation is discriminatory (the case of Thibaudeau at
page 5274).
[45] The
Appellant's argument is based on national origin and the
analogous ground that he is an immigrant. His status as an
immigrant and nationality can be discussed together under the
enumerated ground of "national origin". He argues that
Canadian citizens paying into a Canadian state pension are
treated differently than a Canadian citizen paying into a U.K.
state pension.
[46] The
Appellant claimed a non-refundable tax credit in his 1999 tax
return for CPP contributions. All employed Canadian citizens are
required to make CPP contributions and are entitled to a
corresponding deduction under the Act. According to his
return it appeared that the Appellant was entitled to the
non-refundable tax credit in this respect. Citizens of this
country whether of U.K. national origin or Canadian national
origin are not entitled to a like deduction for contributions
made to a foreign insurance plan. There is no differential
treatment as nationality does not come into play. The Act
treats all Canadian citizens on the same footing regardless of
nationality. The Appellant's argument in fact if allowed
would give him preferential treatment based on national origin.
The Act in allowing deductions, benefits and credits must
do so by making distinctions. This does not necessarily make the
provisions discriminatory. There is no differential treatment
here and if it could be argued that there was, it is certainly
not discriminatory.
[47] In
Triantis v. Canada (Minister of National Revenue -
M.N.R.), [1992] T.C.J. No. 768, the Court stated in dealing
with a claim that an old age security pension claw-back
represented discrimination against those over 65 years of
age:
It is quite clear that the impugned legislation creates a
distinction between certain classes of taxpayers 65 years and
older, but that distinction is based on a level of income as
asserted by the Respondent. That distinction - which results in a
refund of the amount by Mr. Triantis, and its possible retention
by another recipient - has been accomplished by the use of the
provisions of the Income Tax Act, and that does appear to be
distasteful to Mr. Triantis. However nothing was brought forward
at the hearing which would indicate there are any limits on the
powers of Parliament to do just that - to make such a distinction
and to make it under the Income Tax Act.
[48] The
Minister is vested with the authority to generate revenue for
Canada and the further authority to make necessary distinctions
within the provisions of the legislation in accomplishing this
goal.
[49] In
conclusion, I find no breach of the Appellant's rights and
freedoms under any of the sections 6, 7 or 15 of the
Charter. Reference was also made to section 1 of the
Charter. The only comment I make in light of my finding is
that the Income Tax Act would be saved pursuant to
section 1 even if I had found some breach. The Respondent
cited the tests for the application of section 1 as found in
the decision of the Supreme Court of Canada, R. v. Oakes,
[1986] 1 S.C.R. 103. She reviewed each of these tests as
they might apply to the present case. I do not intend to embark
upon an analysis under section 1 or a review of these tests,
except to state that the provisions of the Act are within
the reasonable limits prescribed by law with the aim of
generating revenue within the country.
[50] And
finally the Appellant made reference to the Canadian Bill of
Rights. I find no violation here. The policy of freezing old
age pensions for U.K. citizens residing in Canada is a U.K.
policy not a Canadian one. In fact according to evidence
submitted by the Appellant, the Canadian government has spoken
out against what appears on its face to be an unfair regime.
However that may be, there is still no deprivation of the
Appellant's rights under this Bill within this country.
[51] Although
I sympathize with the Appellant's problems which he has
encountered with his U.K. pension, I must interpret the law as I
find it.
[52]
Accordingly I must dismiss the appeal.
Signed at Ottawa, Canada, this 8th day of June 2001.
"Diane Campbell"
J.T.C.C.
COURT FILE
NO.:
2001-72(IT)I
STYLE OF
CAUSE:
Frank Yates and
Her Majesty the Queen
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
May 9, 2001
REASONS FOR JUDGMENT BY: The Honourable
Judge Diane Campbell
DATE OF ORAL
JUDGMENT: May 11,
2001
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for the Respondent: Kristy
Foreman Gear
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
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