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Citation: 2003TCC366
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Date: 20030522
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Docket: 1999-3963(IT)G
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BETWEEN:
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SCOTT IRWIN SIMSER,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Rowe, D.J.T.C.C.
[1] The appellant appeals from an
assessment of income tax for his 1997 taxation year. In computing
the appellant's income for that taxation year, the Minister
of National Revenue (the "Minister") included into
income the sum of $1,500 ($2,000 minus the $500 exemption) in
respect of a Province of Ontario bursary which the appellant
received but had not reported as income in his return. The
inclusion of this bursary amount resulted in an assessment of
additional federal tax.
[2] First, the appellant's
position is that the funds obtained from the Special Opportunity
Grant (SOG) in the form of a Bursary for Students with
Disabilities (BSWD) was used solely to enable him to purchase the
accommodation services - sign language interpretation
and real-time captioning - required in order to compensate for
his disability - profound deafness - and, although identified as
a "Disabled Student Bursary" on the T4A issued to the
appellant, this amount was actually a form of Canada Study Grant,
authorized by the Canada Student Financial Assistance Act,
and designated under the Regulations as "Special
Opportunities Grant for Students with Permanent
Disabilities". As a result, the appellant maintains the sum
received is not subject to inclusion into income under paragraph
56(1)(n) of the Income Tax Act (the
"Act") because it does not meet the
definition of "bursary"," scholarship",
"fellowship" or "prize" as contemplated by
that provision.
[3] Second, the appellant appealed on
the basis that if the SOG did fall within the meaning of said
paragraph, the inclusion into income of the amount received from
the Province of Ontario is contrary to s. 15(1) of the
Charter of Rights and Freedoms (the
"Charter") and discriminates against him based
on a physical disability and such violation cannot be justified
on the basis it is a reasonable infringement under s. 1 of the
Charter.
[4] Upon consent of counsel, the
following exhibits were entered:
Exhibit A-1 - Brief of Documents for Scott Simser - tabs 1 to
21, inclusive.
Exhibit A-2 - Brief of Documents - Federal Task Force on
Disability Issues, tabs 1 to 3, inclusive.
Exhibit A-3 - Brief of Documents - Financial Assistance for
Students with Disabilities - tabs 1 to 6, inclusive.
Exhibit A-4 - Binder containing sheets of calculations
entitled Summary of Scenarios.
Exhibit A-5 - Expert Report of Professor Lisa Philipps.
Exhibit A-6 - Expert Report of Dr. Carol Musselman.
Exhibit A-7 - Binder containing transcript of evidence of
Frank Thomas Smith as recorded on September 26, 2000, in the
matter of the complaint of Scott Wignall before the
Canadian Human Rights Commission.
Exhibit A-8 - a binder of documents previously entered was
later withdrawn.
Exhibit A-9 - Brief of Documents - In Unison: A Canadian
Approach to Disability Issues.
[5] Counsel agreed the transcript of
the testimony of Frank Thomas Smith - from the
Wignall hearing - could be used in the same manner
as though received viva voce in the within appeal.
[6] In the course of the within
appeal, the appellant - Scott Simser (Simser) - utilized
real-time captioning technology which permitted him to read words
on a screen almost contemporaneously as they were being spoken
and also relied on the services of sign language
interpreters.
[7] In oral testimony, Simser stated
he is a lawyer residing and working in Toronto. He has a wife and
3-year old son and was called to the Ontario Bar in February,
1999 after having completed his studies at Osgoode Hall Law
School under York University. Following his admission, he worked
as a tax litigator for the Department of Justice. Simser stated
he suffers from a bi-lateral sensory loss and had become deaf at
the early age of 7 months. The medical examinations revealed he
had suffered a hearing loss of 105 decibels (dB) in both ears and
had been classified as profoundly deaf. The condition has not -
and cannot - improve. Simser stated he cannot talk on the
telephone except with immediate family members and cannot
understand radio broadcasts or television programs without
captioning. Originally, he wore hearing aids but - at age 30 -
contracted a virus which affected his eardrums to the point where
during a period of nearly 3 years he could no longer use these
devices most of the time. At age 33, he received a cochlear
implant, a surgical procedure which bypasses the eardrum and
picks up sound in the form of electronic signals. Earlier, the
appellant had taken speech therapy, a long process during which
he learned sounds of the English language, one by one. He also
learned lip reading and attributes 80% of his overall
comprehension to this acquired skill. The balance of his
understanding of speech results from a combination of hearing the
spoken words and interpreting body language. However, in a
classroom setting, Simser stated he would be totally lost without
the aid of real-time captioning. At the time of his early
diagnosis, his family was living in Kanata, Ontario. He attended
public elementary school there because his parents declined to
follow medical advice - offered by
three physicians - that he become educated at a
special school for the deaf. Instead, the appellant's mother
consulted with the principal of the local school who permitted
Simser to use an FM transmitter in the classroom - to increase
sound levels - and agreed the appellant could take speech therapy
three times per week during the regular lunch hour. Throughout
his schooling, there was never any additional cost to the
appellant or his parents because all educational support to
accommodate his disability was paid for by the local school
board. In Montréal, he took speech therapy at McGill
pre-school. As time progressed, he was able to instruct his
parents on the methods by which they could teach him and his
mother later followed a course of study which led to her becoming
a teacher for the deaf, a career which she currently pursues on
an international basis. Simser stated he did not learn American
Sign Language (ASL) until age 20 and described his years in high
school as a period of extreme isolation due to the nature of his
disability. Following high school, the appellant attended the
University of Ottawa and graduated - in 1988 - with a Bachelor of
Administration degree. During his three-year course of study, he
utilized the services of a note taker who had been provided -
free of charge - by the university's own Office of Students
with Disabilities. He worked for one year at an accounting firm
in Toronto and then attended York University - in 1989 and
1990 - in order to obtain his Master of Business Administration
(MBA). While pursuing this academic goal, he was provided with
note takers and also relied on the services of sign language
interpreters. All persons providing assistance were supplied - at
no cost - by the university pursuant to a provincially-funded
Vocational Rehabilitation Services Program designed to assist
students with disabilities in order to permit them - as much as
possible - to be placed on an equal footing with other students.
After obtaining his MBA, the appellant worked at IBM Canada until
February, 1992, at which point be became employed by the Ministry
of Environment of Ontario where he remained until 1995. During
this period, he enrolled in the Certified Management Accountant
(CMA) program and obtained his designation in October, 1994. The
study was undertaken by correspondence and through attendance at
weekend seminars during which he used the services of ASL
interpreters who were paid directly by his employer. In late
1995, the appellant accepted a severance payment as part of a
downsizing program pursued by the provincial government. Earlier
- in 1994 - he had decided to enroll at Osgoode Hall Law School.
Simser stated he wanted to become the first deaf lawyer in
Ontario and - thereafter - use his professional skills to assist
others with hearing disability. During his first year at law
school, he used the services of an ASL interpreter as well as
note takers who were fellow students. In 1996 and 1997, he had
the benefit of either real-time captioning or sign language
interpretation but not at the same time. Simser stated he did not
want to incur debt in order to attend law school and continued to
work at the Ministry of Environment until February 1, 1996. The
law school paid for his note takers, interpreters and real-time
captioners and he was never subject to any income tax liability
as a result of receiving these services. While employed by the
Ministry of Environment, sign language interpreters were provided
- and paid for - by the provincial government. Following
graduation from law school, Phase 1 of the requisite Bar
Admission Course began in May, 1997, and continued for one month.
During morning sessions, Simser was able to follow the lectures
by using real-time captioning but during the more interactive
afternoon sessions, he had to rely on sign language
interpretation in order to participate in the proceedings. At
that point in his academic and professional career, Simser stated
he was accustomed to reading books and manuscripts so it was much
easier to use real-time captioning in order to understand course
material. However, the technology is not sufficiently mobile for
purposes of group interaction and role playing where spoken
language is fast, fluid and responsive. Prior to commencing the
Bar Admission Course, Simser had been advised by the Law Society
of Upper Canada (Law Society) that it would not provide the
real-time captioning services required. As a result, he decided
to seek a bursary for students with disabilities. Simser referred
to the binder - Exhibit A-1 - and the brochure - at tab 1 -
describing therein various aspects of a student loans program as
it related to students with permanent disabilities including the
SOGs - at page 8 - which - at that time - had a $3,000 limit
(unless otherwise stated, future reference to tabs in the course
of Simser's testimony will indicate the document(s) are to be
found in Exhibit A-1). Simser stated he was aware this grant
would cover the cost of interpreters and note takers and assumed
it would also include real-time captioning services. On January
22, 1997, the appellant applied for financial assistance - tab 2
- in the sum of $3,625, based on his calculation of the expense
associated with meeting his requirements for completing the Bar
Admission Course. He received a reply - tab 3 - indicating he had
qualified for assistance under the BSWD program but was advised
the maximum amount available was $2,000. Simser stated that since
the purpose of his application for financial assistance had been
to receive sign language interpretation and real-time captioning,
he had to sign a declaration certifying that funds had been spent
for the intended purposes and was required to provide receipts -
to a maximum of $2,000 - within 30 days of receiving his
cheque. At tab 4, the appellant wrote to the funding office and,
although he had spent additional amounts totalling $850.65 - tab
5 - enclosed individual receipts totalling $1,978.50 - tab 4 - so
as to remain within the $2,000 limit. The total expenditure for
interpretation and real-time captioning services provided to the
appellant during the one-month Bar Admission Course was
$4,341.65. Simser stated he understood the sum of $2,000 would -
ordinarily - be included into the income of a grant recipient for
tax filing purposes but advised the funding source that he was
prepared to appeal any subsequent assessment of income tax based
on said inclusions, on several grounds including an invocation of
the Charter, if required. For the third phase of the Bar
Admission Course - lasting more than three months - the Law
Society agreed to provide interpreting and captioning services to
the appellant. Simser rated his ability to hear spoken words in a
classroom setting at 1 or 2 on a scale ranging from 0 to 10. In
his opinion, the provision of captioning and/or sign language
interpretation services was necessary just to enable him to
comprehend course content in accordance with the level already
enjoyed by classmates who were not profoundly deaf. Certain
invoices - tab 5 - issued by an interpreting
service and a real-time captioner were paid directly- on the
appellant's behalf - by the Department of Justice because he
was articling there at the time. The value of those services -
$2,363.15 - was not regarded as a taxable benefit or otherwise
included into his income. Simser described a note taker as a
student - taking the same course - who records salient portions
of lectures for his subsequent perusal. However, law school is
more complex than undergraduate studies and Simser stated he
preferred to utilize real-time captioning rather than sign
language interpretation. In his view, he would never have been
able to qualify as a lawyer without having had access to those
services. On August 6, 1997, the appellant wrote a letter - tab 6
- to the Rulings Committee at Revenue Canada in which he advised
that he would be completing an income tax return by April 30,
1998 - for the 1997 taxation year - but would be taking the
position that the sum of $2,000 received from the Province of
Ontario - in the form of an SOG - was not taxable
for the reasons stated in the letter which are consistent with
the grounds for this appeal from the Minister's subsequent
assessment. In effect, the appellant was attempting to obtain an
advance ruling regarding those funds he had received under the
SOG program as it pertained to students with disabilities. He
followed up with further correspondence - tab 7 - and received a
reply - dated September 26, 1997 - tab 8 - stating that no
advance ruling would be forthcoming and advising him that his
letters had been forwarded to the Department of Finance (DOF)
since it was responsible for legislative changes.
Mr. Louis Lévesque, Director, Personal Income
Tax Division, Department of Finance, replied to the appellant by
letter - tab 9 - dated October 28, 1997 - in which he advised the
government had announced that the list of expenses eligible for
the medical tax credit would be expanded to included sign
language interpreter's fees. In addition, Lévesque
offered the opinion that "[I]n many cases, the tax relief
provided through the medical expense tax credit will fully offset
the tax on the grant". The appellant stated that - for his
2000 taxation year - he had claimed the $9,000 cost of a cochlear
implant and the ongoing expense of purchasing batteries as well
as the cost of some devices to assist him in daily living such as
flashing doorbells and a telephone/teletype (TTY) device which
enables him to communicate by telephone but requires special,
expensive paper. He also incurred the cost of listening and
speech therapy which was billed out at $55 per hour by the
particular service provider. In contrast, Simser stated he
considered the expenses associated with merely gaining access to
a classroom as being in a different category due - in part - to
the requirement that said expenses only become deductible once
they exceed 3% of net income. He explained his position in a
letter to Lévesque (tab 10). The Ministry of
Education and Training of the Province of Ontario issued a T4A -
tab 11 - to the appellant describing the sum of $2,000 paid to
him as a "disabled student bursary". The appellant
received another letter - dated March 30, 1998 - tab 12 - from
Louis Lévesque detailing the effect - on personal income
tax - of claiming a disability tax credit in addition to
qualifying medical expenses. Simser stated he has claimed the
disability tax credit each year since 1985 on the basis that he
satisfied the requirements of the provision because his inability
to hear affected a basic activity of daily living. On March 30,
1998, the appellant completed his tax return - tab 13 - for his
1997 taxation year and attached the T4A received from the
Province of Ontario. However, he made a deliberate choice not to
enter the sum of $2,000 - at line 130 - under the category of
other income. He sent a letter - tab 14 - dated April 7, 1998 -
to Revenue Canada - with a copy to Louis Lévesque -
setting out his calculations concerning the effect of inclusion
into income of the sum of $1,500 from the bursary ($2,000 less an
exemption of $500) even if he chose to claim the interpreting and
captioning costs under the head of eligible medical expenses. On
April 30, 1998, the Minster issued an assessment
- tab 15 - accepting the appellant's tax
return as filed. On January 18, 1999, another assessment - tab 16
- was issued to the appellant in which the entire sum of $2,000
received from the government of Ontario was included into income.
On January 26, 1999, the appellant directed a letter - tab
17 - to Revenue Canada in which he pointed out that the first
$500 of the bursary was exempt from taxation and - on April 7,
1999 - filed a Notice of Objection - tab 18 - to the assessment.
On May 3, 1999, the Minister issued a Notice of Reassessment -
tab 19 - in which the sum of $500 was deducted from the bursary
amount previously included into the appellant's income but
otherwise confirming that the balance of $1,500 was a taxable
amount. On June 21, 1999, another reassessment was issued - tab
21 - but it merely corrected an earlier mathematical error on the
part of the appellant when filing his return. The appellant
stated he made his position known to Revenue Canada - and to DOF
- because he believed he should not have to beg for accommodation
in order to be able to enter a classroom. In that sense, Simser
stated he did not feel it proper that he should be taxed on an
amount that merely enabled him to participate fully in a
classroom in order to receive instruction. He had totally
expended the amount of the SOG in order to obtain accommodation
services but was required to pay additional income tax - federal
and provincial - in the sum of nearly $600 as a result of the SOG
payment being included into income. As a result, Simser stated he
felt discriminated against because of his deafness and regarded
mere accommodation for his disability as a right when it
pertained to his education. In taking that position, Simser
stated he accepted that he must pay for his disability in many
ways including the purchase of certain equipment and accessories
- required to assist him in his daily life - such as expensive
batteries which often last less than one day - and considered his
deafness has been an obstacle to earning an annual income
generally associated with someone holding several degrees and/or
certifications in business, law and accounting.
[8] Counsel for the respondent did not
cross-examine.
[9] William Holder - co-counsel for
the appellant - conducted the examination-in-chief of
Rosaria Zompanti. She testified she is a Chartered Accountant and
has a Master of Accounting in Taxation. She is currently employed
- in Toronto - as a senior staff accountant in
the tax division of the accounting firm BDO Dunwoody and in the
course of her career has prepared several hundred income tax
returns. She was provided with the appellant's 1997 tax
return and the assessment and reassessments relating thereto. No
medical expense tax credit (METC) had been claimed by the
appellant. In accordance with instructions received from counsel
for the appellant, she prepared a report - Exhibit A-4 - in which
various scenarios were presented in order to identify different
tax treatment under theAct. At page 3 of her report,
Ms. Zompanti set out - in schedule form - the calculations
pertaining to four different scenarios itemized at the top of
page 1 of said report. In each scenario, the Disability Tax
Credit (DTC) is claimed. Scenario #1 is based on Simser's
original filing (minus the original mathematical error); scenario
#2 includes the bursary amount in the sum of $1,500 and used the
sum of $530.27 as the allowable portion of medical expenses;
scenario #3 is based on the situation as set forth in the third
assessment by the Minister in which the $1,500 amount is included
without any allowance for medical expenses since none were
claimed by the appellant in filing his return. The difference in
total federal and provincial tax owing in this instance - as
opposed to the original filing represented by scenario #1 - is
$588.90 (the difference in federal tax is $390 plus $11.70 in
individual surtax). In scenario #2, if Simser had included the
bursary amount as income but claimed language interpretation
services within the allowable amount of medical expenses, the
resulting federal tax would have been $299.85 more than in
scenario #1, based on the appellant's original return. For
purposes of illustration and comparison, Zompanti structured
scenario #4 on the basis the sum of $1,500 had been received as a
research grant in which case the amount would have been reduced
to zero after deducting the expense of his real-time captioning
and sign language interpretation services. At page 5 of Exhibit
A-4, Zompanti set out three scenarios. In scenario 5(a)(1), using
the sum of $10,000 as employment income without claiming an METC
resulted in federal tax - including surtax - payable in the total
amount of $620.55. In scenario 5(b)(1), the same amount of income
is used but $1,500 in bursary income is included and the sum of
$1,155 is claimed as the allowable portion of the medical
expenses for purposes of the tax credit. In that instance, the
total federal tax payable is $680.96. In scenario 5(c)(1), the
amount of $10,000 is used as employment income and the amount of
the bursary is included resulting in total income of $11,500. No
medical expenses are claimed and the total federal tax payable is
$883.20. In the report, Zompanti dealt with other scenarios
including those - at page 15 - based on employment income in the
sum of $29,000. At that time, there was a bracket change where
federal tax increased to 26% on any income in excess of $29,590.
In scenario 7(a)(2), the sum of $29,000 represented income and
the DTC was claimed. In scenario 7(b)(2) the sum of $1,500 from
the bursary is included into income and the allowable portion of
medical expenses - in the sum of $585 - is claimed together with
the DTC. The difference in federal tax between those two
situations is $244.26. In scenario 7(c)(2), the disability grant
is included into income, and, although the DTC is claimed, there
is no claim for medical expenses. Zompanti stated the conclusion
to be drawn is that inclusion into income of funds from a
disability grant has the effect of increasing income tax payable
and the difference in tax becomes greater as income rises to
those levels which are taxable at higher rates.
[10] In cross-examination, Rosaria Zompanti
was referred to a binder - Exhibit R-2 -
prepared at the request of counsel for the respondent -
containing several scenarios for purposes of illustrating the
effect of different methods of tax filing. In scenario #2 -
in Exhibit A-4 - Zompanti agreed she had used the sum of $1,500
as the total amount of medical expense even though Simser's
actual expenses were in the sum of $2,825 which would have
increased the amount of the tax credit. Zompanti agreed that once
the threshold is reached - after 3% of net income - the amount of
the excess medical expense was multiplied by 16% and this sum was
used to reduce tax otherwise payable. Zompanti agreed that the
average taxpayer - if entitled - usually claims medical expenses
but the appellant had chosen not to do so. Zompanti agreed that
in her example at scenario #4 - in Exhibit A-4 - she had
considered the theoretical taxpayer to have received a research
grant - reduced to zero by offsetting expenses - but had also
claimed tuition and education amounts applicable to a student.
Zompanti accepted counsel's suggestion that the majority of
students are within the lowest tax bracket. Referring to scenario
#3 in Exhibit A-4 and comparing it with scenario 8(a)
in Exhibit R-2 where the sum of $1,500 was attributed to an SOG
for women in doctoral studies - rather than a grant relating to
disability - Zompanti agreed the net result was the same with
regard to tax payable. She also agreed that - in 1997 - if the
$1,500 bursary amount was added into income and $2,000 had been
expended in eligible medical expenses that the percentage rate of
the lowest tax bracket and the rate used to calculate the
resulting tax credit on medical expenses was the same.
[11] In re-examination, Zompanti stated
there can be a difference if someone is entitled to receive a
medical expense supplement at line 452 of the 1997 tax return. In
addition, if money is spent on real-time reporting or captioning
services, that amount was not eligible for inclusion within the
category of medical expenses even though it had been spent and
could not be used to offset inclusion of a disability grant into
income. Having regard to the examples in Exhibit R-2, Zompanti
was unable to offer an opinion as to whether the terms and
conditions pertaining to other SOGs were as stringent as those
imposed upon the appellant in respect of the amount at issue in
the within appeal.
[12] Lisa Philipps was qualified as an
expert in the field of social equality and tax policy. She is an
Associate Professor at Osgoode Hall Law School where she has
taught taxation law since 1996. Earlier, she was a professor at
the Faculty of Law at the University of Victoria and at the
University of British Columbia. Philipps also practiced taxation
law with a firm in Toronto. Her expert report was filed as
Exhibit A-5 (her complete curriculum vitae can be found at
pages 12 and 13). An accompanying Brief of Documents was filed as
Exhibit A-12. Philipps has written numerous articles and papers
for publication in a variety of academic journals and reviews
including a recent article - 2001 - entitled "Disability,
Poverty, and the Income Tax: The Case for Refundable
Credits" (Exhibit A-12 - tab 7). Philipps stated her field
of expertise involves examining the impact of the income tax
system on different groups within society and their relationship
to the Charter. In her opinion, it is evident the tax
system is used as an instrument of social policy and is a
convenient mechanism to achieve social objectives beyond the mere
raising of revenue. In performing her work, she uses an
inter-disciplinary method of analysis utilizing statistics and
social studies. Some recent issues concern whether unpaid care -
by family members - for a disabled family member should be
recognized in the form of a caregiver tax credit. Other
discussions relate to "costs of disability" which
refers to the added expenses of accommodating a disability in
order to lead a life more closely associated with normality.
Philipps stated the costs of disability include both direct and
indirect costs including those related to medical treatment,
pharmaceuticals, apparatus, equipment and supplies which are
eligible medical expenses for purposes of claiming the relevant
tax credit. Other direct living expenses - not required in the
absence of the particular disability - are often incurred but do
not qualify for inclusion as a medical expense for which a tax
credit may be available. As an example, Philipps referred to
costs associated with the purchase of special foods or the need
to pay someone for home delivery. In her opinion, these extra
expenditures lead to an inability to purchase another needed
item, therefore contributing to an overall lower standard of
living. Indirect costs are due to an inability to generate
adequate income as a result of living with disability. Philipps
stated it is difficult to categorize or itemize costs of
disability within the confines of a tax system or to
particularize expenses associated with a disability. In her
opinion, two groups are impacted negatively; one is comprised of
persons with significant disability costs and the other concerns
individuals who are making the transition from a program of study
to earning income in the workplace. In her view, the METC is
inadequate for severely disabled persons so that imposing income
tax on payments received solely as accommodation funding will
lead to further disadvantage. In the event the receipt of
accommodation funding has the effect of bumping the disabled
recipient into a higher tax bracket, the METC will be inadequate
to offset the costs arising from the disability. Philipps stated
she is familiar with the report of the Federal Task Force on
Disability Issues (Exhibit A-2 - tab 1) In
1996, that group was given a mandate to examine the appropriate
role of the federal government concerning issues arising from
disability. In chapter 7 of said report - commencing at page 85 -
the Task Force chaired by Andy Scott M.P. - delved into the
matter of dealing with costs of disability. At page 86
- Recommendation #41 - the Task Force recommended
that the federal government "should recognize that measures
that deal with the costs of disability need to be
separated from measures that provide income to persons with
disabilities". In the course of the following
recommendation, the Task Force recommended the federal government
receive fair tax treatment - as opposed to subsidy based on
"sympathy or charity" - in order to cope with their
disabilities. Included in that passage, were statements
recognizing that costs associated with disability are more
onerous when borne by individuals with limited income and costs
associated with disability are not limited to those with taxable
income. The Task Force also appreciated that some costs were
general and intangible while others could be supported by
receipts for expenditures and offered the opinion that tax
recognition of disability-related costs should encourage - not
discourage - employment of persons with disabilities. In
Philipp's opinion, the report recognized that accommodation
funding consists of whatever remedial efforts are required to
eliminate the negative effect of barriers flowing from
disability. At page 96 of said report, recommendation #50 stated,
"The Government of Canada should not treat Special
Opportunity Grants for students with disabilities under the
Canada Student Loans Program as taxable income". The
government did not act on that recommendation nor was any other
specific credit made available to offset the effect of tax
imposed on SOG payments. In 1988, the Disability Tax Credit was
created to replace the former deduction - introduced
in 1944 - and has remained in that form. Philipps stated the
purpose of the DTC is to offset some non-itemizable items
associated with everyday living with a disability that are not
covered by the METC provisions. Further, in the course of her
work, she has not seen any document or publication to suggest the
DTC was intended to offset costs associated with pursuit of
education by disabled persons. Philipps characterized the DTC as
extremely restrictive because the disability must satisfy
legislative definitions and the credit is based on a fixed dollar
amount multiplied by the percentage rate - 16% - in effect in
1997. As a consequence, the maximum tax reduction available was
$720 and can be applied only against tax owing by an individual
or through transfer to an eligible person pursuant to provisions
of the Act. However, it rarely provides any relief in
respect of costs associated with mental disabilities, learning
disabilities or episodic disabilities that are cyclical - such as
bi-polar disorder, fibromyalgia or multiple sclerosis - at
certain stages - rather than those medical conditions lasting for
a specified continuous period as required by the legislation. At
page 5 of her report - Exhibit A-5 - Philipps
considered the situation where a student is required to pay in
excess of $10,000 for attendant care services while attending
post-secondary education and claims the METC in respect of said
services. As a result, the student is not entitled to claim the
DTC in order to offset any tax resulting from a grant to fund
other types of accommodations. Philipps stated the federal
government had proposed amendments to further restrict the
availability of the DTC and Canada Customs and Revenue Agency
(CCRA) was in the midst of a current campaign to require
taxpayers to demonstrate they were still qualified to receive the
credit. In the course of preparing her report, Philipps referred
to an article - Exhibit A-12 - tab 2 - written by
David G. Duff - entitled: Disability and the Income Tax. In that
paper, Duff traced the development of the DTC from its inception
in 1942, when it pertained to a limited number of medical
expenses to a maximum of $400 for a single person but only to the
extent said amount exceeded 5% of the taxpayer's net income.
In 1961, the maximum limit on medical expenses was removed and
ongoing amendments lowered the threshold on deductible expenses
to 4% of net income - and then 3% - while increasing the
categories of eligible expenditures. By way of example, in 1998,
sign language interpretation was recognized as a qualifying
expense but the wording utilized in the new provision still
refers to the individual as a "patient" and any payment
must have been made to a person engaged in the business of
providing sign language interpretation services. In 2001, the
threshold was 3% of net income or $1,678 if that was the lesser
of the two amounts. In 1997, the threshold was $1,614 and the
total of the allowable expenses was multiplied by 16% in order to
arrive at the amount of the actual credit. The relevant
provisions identify the person incurring the expenditure - or on
whose behalf the funds are spent - as a "patient". Any
expenditure must be supported by receipts and must qualify in
accordance with specific language used in the provisions. Amounts
spent for nutritional items, vitamins and supplements are not
considered eligible medical expenses nor are repairs to a
wheelchair. Philipps stated that paragraph 56(1)(n) of the
Act is an omnibus provision designed to include into
income items that might not otherwise be covered. Although the
non-taxable portion of a bursary was $500 in 1997, that exemption
later been increased to $2,000 but the term "bursary"
is not defined in the taxing provision and CCRA utilizes the
ordinary dictionary meaning. Philipps referred to the different
tax treatment accorded a research grant - applicable to many
graduate students - in that certain expenses are permitted to be
deducted in accordance with paragraph 56(1)(o) of the
Act. In Philipps' opinion, even though a student may
have a disability, many disabilities are not capable of meeting
the criteria required to qualify for a DTC. The services provided
by note takers or by real-time captioning reporters are not
included in the category of allowable medical expenses for
purposes of the METC. An expense incurred to pay tutors is not
included at the post-secondary level. Because the DTC is intended
to offset the cost of living with a disability - in a general
sense - a person could obtain an SOG but remain ineligible for
the DTC. Tax on the SOG might well be taxed at a higher rate
while the DTC is calculated on the basis of 16%. In Philipps'
opinion, the METC will probably not offset the effect of
inclusion of an SOG amount into income because expenses such as
real-time captioning are not included and there is still a
threshold of 3% of net income to be reached prior to qualifying
for any credit in relation to excess amounts. Philipps stated she
considered any payment or grant designed to permit a disabled
person to enter a classroom on a more or less equal footing with
other students should not be seen as conferring an advantage. In
her view, including the amount of an SOG payment into income
inflates it - artificially - and can have an impact on a
taxpayer's entitlement to a Goods and Services Tax (GST)
credit or a child tax credit. Inclusion of this sort of payment
can also have the effect of increasing the tax burden of a person
defined as a supporting person under the Act. Philipps
stated that students with high costs associated with permanent
disability are a vulnerable group of individuals in transition
from study to earning income from a business or employment. Once
employed, certain disability-related employment benefits are
excluded from income pursuant to subsection 6(16) of the
Act. Pursuant to paragraph 56(1)(u) of the
Act, a social assistance payment is included into income
and a corresponding provision - paragraph 110(1)(f) -
removes it. As late as the 1980's, Philipps stated Revenue
Canada - the predecessor of CCRA - was still abiding by a series
of former rulings and technical interpretations to the effect
that SOG-type funds were considered to be non-taxable and were
treated in the same manner as social assistance payments.
Philipps stated that as a result of a technical interpretation
undertaken by CCRA - in 1998 - in relation to the Alberta Skills
Development Program - payments made under that program were
considered to be non-taxable. In her opinion, payments to
students with disabilities for accommodation services should be
characterized as "a social assistance payment made on the
basis of a means, needs or income test" within the meaning
of paragraph 56(1)(u) because the particular term
"social assistance" is not defined by reference to
provincial programs commonly referred to in that manner. If costs
incurred as a result of securing the appellant's attendance
in a classroom - in order to permit him to participate in the Bar
Admission Course - are equal to the amount of the SOG, the
question posed by Philipps is whether it can be said there is
truly income to the appellant under those circumstances because
some means or income testing was a pre-condition to receipt of
the grant. In her experience, there are several instances where
mere receipt of funds does not attract income tax - such as
amounts received in compensation for personal injuries or strike
pay - and the courts have been reluctant to include other unusual
payments not caught by the wording of specific, enumerated
provisions of the Act. Turning to the specific matter of
the funds received by the appellant in the within appeal,
Philipps stated Simser had expended nearly $2,000 in
sign-language interpretation services and - in
accordance with the strict terms of the SOG - had no discretion
to use any portion of that amount for any other purpose. In
Philipps' experience, a bursary or scholarship would not
ordinarily be as restrictive and - generally - would require
enrolment in a course of study or at a particular institution
without additional terms and conditions. Philipps examined the
criteria contained in manuals pertaining to the Canada Student
Loans Program Policy and Procedures Manual
- Exhibit A-3 - tab 1A
- and discovered that within the SOG program - designed to offset
exceptional education-related costs - most of the funding was
based on a set amount per week without restrictions on spending
or any requirement to produce receipts. At tab 2, the SOG for
Female Doctoral Students did not have specific restrictions on
spending the amount received except that it was to be used for
the intended purposes of the course of study. In Philipps'
opinion, the payment of funds to Simser was different and had
been provided specifically on the basis of need in order to
offset his disability and the resultant exceptional
education-related costs.
[13] In cross-examination by counsel for the
respondent, Professor Philipps stated that, although she was not
certain if the programs in the 1980's - referred to earlier -
were the same as the SOGs relevant to the within appeal, they
seemed to be similar in nature as revealed by the language of the
rulings she had studied. Philipps acknowledged that there may be
grants with specific use requirements and agreed that if a
disabled student were to receive an ordinary bursary, it would be
taxable. Philipps acknowledged disabled persons are specifically
mentioned in s. 15 of the Charter but added that
historically - and currently - vulnerable groups face a different
set of difficulties that one might consider as a barrier - other
than physical - to the pursuit of higher education. A lack of
income or having to pay exceptional expenses can detract from
resources that might otherwise be devoted to educational
purposes. Philipps was referred to her own article - Exhibit
A-12, tab 7 - and agreed that even if the SOG payment had been
regarded as a social assistance payment, it would remove the
federal tax but might continue to be considered as income for
other purposes by one or more provinces or by governmental and/or
non-governmental agencies. Philipps re-stated her opinion that a
payment clearly identifiable as an accommodation grant - in the
context in which this term is used - should not be included into
income along with ordinary bursaries, scholarships, fellowships,
as enumerated in paragraph 56(1)(n) of the Act. She
agreed that the list of eligible medical expenses is amended from
time to time in an effort to remain current but pointed out that
some anomalies remain.
[14] Dr. Carol Musselman was qualified as an
expert in the field of barriers and access to education
experienced by students with disabilities and in the importance
of accommodation services within an educational setting.
Musselman has been a registered psychologist with the Ontario
College of Psychologists since 1996. She is also a Professor
(Emeritus) with the Department of Human Development and Applied
Psychology at the Ontario Institute for Studies in Education at
the University of Toronto (OISE/UT). She received her PhD in
Social Psychology - in 1970 - from the University of Michigan.
She worked - as a Research Associate - with the Toronto Board of
Education until 1974 when she became an Assistant Professor
within the Department of Special Education at the University of
Toronto. Between 1979 and 1994, she was an Associate Professor at
OISE/UT and upon obtaining her full Professorship - in 1994 -
remained in that capacity until 2001. For more than 25 years,
Musselman has studied and taught in the field related to the
development and educational needs of deaf and hard of hearing
students and has published a variety of articles and research
papers which are detailed in her curriculum vitae which is
attached as Appendix A to her expert report filed as
Exhibit A- 6. There are three volumes of documents related
to her expert report: Volume I, Exhibit A-13; volume II,
Exhibit A-14; volume III, Exhibit A-15. In the course of her
career, Musselman stated she studied the educational needs of
students who were deaf and/or hard of hearing and children with
communication exceptionalities including learning disabled and
autistic children or those who were developmentally impaired. She
taught courses at the Master and Doctoral level and investigated
educational interventions to determine the best methods to assist
deaf and hearing-impaired children to become educated. She
participated in studies of deaf children - aged 3 to 15 - and was
able to track a broad range of development over many years in the
course of a study - funded by University of Toronto and others -
involving fairly large numbers of children. Beginning in 1978,
the study was completed in 1992 and is widely known within that
particular discipline. Musselman stated Simser would have missed
being included in the study
- in 1978 -- due to his age. The study
revealed that deaf children have enormous difficulties in
acquiring language skills even for use in a social setting let
alone in a classroom. The result is that literacy suffers due to
a lack of both reading and writing skills. Sign language became
the choice of many deaf children as a means of becoming capable
of communicating more complex concepts. Musselman stated that
during their early years, deaf children are able to cope better
because language is not so important when - for example - playing
at the beach and most have some ability to hear and commence
learning in an auditory or spoken language program. However, at
the high school level, spoken communication drops to 25% by
members of that group. Later, most deaf adults have sufficient
spoken language skills to order and pay for simple items at the
corner store but could not communicate symptoms of distress to a
doctor. Musselman described American Sign Language or ASL as a
visually-based language with its own vocabulary and grammar.
There are several varieties of English-based sign systems and
certain signs are used to represent the plural, past tense,
gerund or present participle. Among deaf people, ASL is probably
the most popular since it is more comprehensive than other forms.
In terms of defining an accommodation within an educational
setting, Musselman explained it is more likely to relate to a
specific disability. The service provided by a tutor would be
included in that sense whereas an intervention is considered to
be a broad term used to define a service or program employed by
an educator, such as phonics or sight recognition techniques used
to teach reading. As a student advances through the system,
Musselman stated there is a clear link between disability and
attainment of educational goals. In her opinion, deaf and hard of
hearing students face systemic barriers that prevent them from
accessing education on an equal basis and many studies have
ascertained the number of disabled students obtaining university
degrees is 50% less than non-disabled students and only
1.7% of profoundly deaf students are able to attain that level of
education as opposed to 14% of the general population. A report
- Exhibit A-13 - tab 6 -
prepared for The Canadian Hearing Society - indicated that deaf
people are more likely to be unemployed, under-employed or
working less than full time. Although deaf students can access
education at the community college level, most choose to study in
the United States at Gallaudet University in Washington, D.C., or
at the Rochester Institute in New York state because there are no
university programs - for the deaf - in Canada. In the report to
the Hearing Society, various barriers to university attendance
were discussed including physical barriers for wheelchair users
and faulty acoustics in classrooms or a lack of FM systems or TTY
apparatus to aid understanding and communication. The paper also
dealt with attitudes of teachers and other students towards
disabled people and referred to a reluctance - or
refusal - on the part of some educators to cooperate in accepting
the presence of the accommodation services required. Often,
people are evaluated on the basis of communication skills and
that ability is equated to intelligence. Musselman noted that
even among deaf people who speak very well, most will continue to
have a "deaf accent". In financial terms, there are
costs both direct and indirect. Direct costs include paying for
accommodation services - not provided by a university or other
institution - such as expenditures for material to be recorded or
the cost associated with recording services or specialized
transportation. Indirect costs flow from an inability to work
part-time during school or to obtain summer jobs at the same rate
as other students because initial job training takes longer to
complete. Other direct costs include those pertaining to sign
language interpreters, note takers, real-time captioners, tape
recording, photocopying, tutors, editorial assistance to improve
written grammar, ongoing speech therapy, costs associated with
hearing devices, and TTYs for offices together with specialized
software for computers. The usual fee for a sign language
interpreter is $50 per hour with a 2-hour minimum. Usually,
two interpreters will be required over an extended period since
signing is a very strenuous activity physically and is also so
mentally fatiguing that most interpreters need to be relieved
after 30 to 45 minutes. In Musselman's opinion, attendance in
class by a profoundly deaf person without interpreters or
real-time captioning is nearly useless and, even with that expert
assistance, the deaf person receives only 85% of the information
delivered. There is also the added expense of vocational and
personal counselling due to frustration caused by communication
barriers not only in a classroom but through other interaction
with other students. The disability - itself - creates stress and
nearly all expenditures stem from communication problems and are
incurred with the intent to accommodate those barriers. Reading
is arduous for deaf children since words in print are related to
sound and learning to speak is extremely difficult depending on
the degree of hearing loss. Musselman stated most deaf people
have a sensory bilateral neural loss and the 105 dB loss
experienced by the appellant is defined as a very profound loss.
She noted it is very unusual for someone with that extreme
hearing deficiency to be able to develop the ability to speak at
such a high level. As a result, it is generally difficult for
deaf persons to access information or to express themselves - in
order to demonstrate competence - or to integrate into the
community of scholars. By way of example, Musselman stated it is
difficult for deaf students to develop a relationship with others
in order to participate in study groups. Ordinary speech occurs
at 60 dB and - for most people - a sound at 120 dB would
subject them to an extremely uncomfortable sensation probably at
or near the threshold of pain. Musselman stated that since the
English language is like beads on a string, it is necessary to
invent signs in order to indicate articles and tense and using
space and visual concepts makes it much faster to display the
content of spoken words. Musselman noted the appellant had
obtained a Bachelor and a Master degree in business together with
a law degree and an accounting designation and considered it
should be evident that he needed accommodation services in order
to understand the complex material presented to him throughout
his academic career including the study required for the Bar
Admission Course. In her opinion, that intense study would
require the services of a real-time captioner to be utilized
concurrently with other interpretation services. She considers
the purpose of accommodations is to make access possible and to
address particular barriers in the sense that a properly designed
ramp overcomes the obstacle created by ordinary steps. In terms
of the spoken word, a sign language interpreter or a real-time
captioner achieves the same result.
[15] Counsel for the respondent did not
cross-examine.
[16] Donald Wilson was called to the stand
by counsel for the respondent. He has been employed as Acting
Chief of Employment and Education, Personal Income Tax Division,
Department of Finance (DOF) since 2001. Before assuming that
position, he was Senior Policy Analyst in Finance and had earlier
worked as a policy analyst in various departments of the federal
government. Wilson stated the Department of Finance is
responsible for drafting text and policy concerning the
Act while CCRA undertakes collection of funds in
accordance with the legislation. The express purpose of paragraph
56(1)(n) of the Act is to ensure that any amount
received - as enumerated - is included into income under the
category of "other income". In his view, that inclusion
is consistent with the fundamental principle that income from all
sources should be taken into account. As income levels rise,
those with higher earnings pay a larger share of income tax.
Although there are some provisions in the Act to offset
financial effects of disability-related expenses, Wilson
acknowledged they do not afford complete relief to everyone. In a
related sense, those provisions associated with the status of
parenthood or advanced age also do not totally recompense
specific expenses by taxpayers within those groups. In the view
of DOF, a grant is non-repayable and provides a gain to the
recipient. The Student Opportunity Grants - or SOGs - were
administered by Human Resources Development Canada (HRDC) - on
behalf of the federal government - and the provinces. The maximum
grant to a full-time student with a permanent disability was
subsequently increased to $5,000 - from $3,000 in 1997 - and has
since been raised to $8,000. In 2002, the non-taxable portion
thereof was increased to $3,000 but was only $500 in 1997. Grants
to women in doctoral studies were also increased and Wilson
stated he understood CCRA's position is that assistance of
this nature provided to students falls within paragraph
56(1)(n) of the Act. By way of further example,
Wilson referred to the Millennium Scholarship Program which
provides 100,000 awards per year - at an average of $3,000 -
based on individual needs, all of which are taxable by virtue of
said provision. A program providing employability assistance or
for education or devices to assist disabled persons within the
context of educational pursuit as well as those scholarships and
bursaries provided by private institutions are all considered to
be taxable as other income. In Wilson's view, other bursaries
and scholarships including the CN Aboriginal Scholarship and the
William and Jane Sewell bursary for disabled students at Simon
Fraser University, meet the dictionary definition of the words
used in paragraph 56(1)(n) of the Act and any
amounts received from those sources were included in income of
the recipient. The Act also provides a system of tuition
credits - at the rate of 16% - on tuition fees and an education
credit - based on a fixed monthly amount - based on full or
part-time attendance at named educational institutions both
inside and outside Canada. The credits are transferable to a
parent and there is now an ability to carry forward unused
credits. A disabled student who was unable to attend full time at
an educational institution is still eligible to obtain the
full-time credit of $400 per month. Other provisions in the
Act such as the DTC and the METC - which recognize
specific expenditures in accordance with threshold requirements -
also serve to offset the costs related to disability. In 1997,
the first federal tax bracket was at 16%. Wilson stated he was
aware the Task Force chaired by Andy Scott M.P. recommended - in
1997 - that SOG payments to students with permanent disabilities
no longer be subject to income tax. At Exhibit R-1,
tab 2, Wilson referred to an excerpt from the report by the
Task Force as contained within Recommendation #50. The
committee concluded that the proposal to add - in the 1997
federal budget - sign language interpreter's fees to the list
of expenses eligible for the METC was partly motivated by the
recommendation to exempt SOGs from tax because that particular
expense was the most significant item recognized under the SOG
program but not under the METC provisions. Wilson stated that, in
deciding not to adopt the recommendation of the Task Force, the
attitude of DOF was that it was better to work within the
existing system of providing offsetting provisions rather than by
creating a special exemption from taxation. Currently, real-time
captioning expenses are not included on the list of qualifying
medical expenses under the Act. Prior to the Minister of
Finance making a recommendation to Parliament whether a
particular expense should be included as a qualifying medical
expense for purposes of the METC, a certain amount of analysis is
undertaken by departmental staff. Other forms of grants - such as
research grants - are analyzed and these grants often include
specific terms requiring research to be undertaken in a
particular field. Overall, CCRA takes the position that any such
grant must advance knowledge as opposed to undertaking a general
inquiry. Research grants are provided to some students but most
often are awarded to professors and doctoral candidates and are
taxable by virtue of paragraph 56(1)(o) of the
Act. By contrast, Wilson stated most bursaries and
scholarships do not require the recipient to carry out a specific
course of action. Research grants and grants to artists provide
for certain deductions of expenses on a limited basis. In
Wilson's opinion, the view at DOF was that it would be
difficult to recommend to the Minister a narrow change in
approach concerning taxability of SOGs to disabled students as
opposed to other recipients in other categories. In his view,
such policy would create disparity and all similar types of
assistance would then have to be included within the exemption
from taxation. Since the vast majority of students do not have
taxable income, a maximum student loan - comprised of
federal and provincial participation - is $11,000 per year and is
based on an examination of assets rather than income flow.
[17] In cross-examination by counsel for the
appellant, Donald Wilson stated he has been in 8 jobs in the
federal public service during the past 8 years. Since arriving at
DOF in 2001, he stated he has been aware of the legal issue
concerning taxability of certain grants and has been aware of the
nature of the Simser appeal since the summer of 2002. Wilson
stated he works in the Social Policy Division within DOF and its
mandate is to provide advice to the Minister on spending programs
including those concerning issues relating to disability and
poverty. His group is well aware of a correlation between
individuals with disabilities and persons at lower income levels.
He is also aware of statistical information regarding
participation by disabled persons in the labour market and
accepts there is a disparity. Matters pertaining to paragraph
56(1)(n) of the Act fall within Wilson's
responsibility and he has spoken to provincial officials on
issues relevant to that provision. Wilson stated that only 6% of
1% of full-time students pay any income tax. Further, there are
refundable credits - such as GST - which permit individuals to
obtain a payment from the federal government even if no tax is
owing and these transfers could amount to $200 per year for a
single individual and would increase depending on whether the
recipient had dependents. Wilson agreed the effect of including
an SOG payment into taxable income - pursuant to paragraph
56(1)(n) - would increase income and could reduce a GST
credit. Wilson acknowledged the allowable portion of an METC is
also based on an amount in excess of a specified percentage of
net income and that the child benefit is based on the number of
children - at approximately $1,000 per year per child - but is
reduced as family income attains a certain level so that at the
$70,000 mark - for a two-child family - the child tax credit
would be reduced to zero. Wilson agreed that - in some
circumstances - inclusion of an amount received by way of a grant
related to disability could have an adverse effect on
entitlements to certain other benefits and would impact on
calculations of tax payable in relation to spousal income - by
increasing income of the spouse - and the equivalent-to-spouse
credit as it applies to a dependent parent, child or relative
including a student living away from home. In addition, the
inclusion of grant or bursary amounts into income of a disabled
student could affect the infirm dependent credit - line 306 of
the 1997 return - and any other income-based tax credit including
the income-tested (up to $30,000) refundable medical expense
supplement - line 452 of the return - which is based on the
lesser of two amounts, either $525 or 25% of the allowable METC.
Wilson agreed the provision takes effect at a family income of
$2,000 per year and is targeted to low income working families
with high medical expenses. He also accepted the suggestion that
provincial tax credits to individuals are probably affected by
increased income and, while not specifically aware of the
Trillium Drug Program of the Province of Ontario which uses net
federal income as a base, acknowledged that an increased income
through inclusion of a bursary related to disability could have
an effect in this situation. Wilson stated his current role at
DOF is to make recommendations for revisions to the Act in
respect of matters relating to education and employment and, in
carrying out that function, is familiar with matters concerning
access to post-secondary education, including student financing.
He stated it is recognized that students with disabilities have
greater financial needs and DOF - specifically - and the federal
government - generally - is aware that the policy of treating
disability grants as taxable income has been the subject of
complaints from disabled students. Wilson stated he was aware of
certain representations - by letter - Exhibit A-10 - sent by Kent
Hehr, President of the National Educational Association of
Disabled Students (NEADS) to The Honourable Pierre Pettigrew,
Minister of HRDC, concerning the lack of response by the federal
government to Recommendation #50 of the Task Force that "The
Government of Canada should not treat Special Opportunity Grants
for students with disabilities ... as taxable income". A
reply - Exhibit A-11 - was sent to Hehr by The Honourable Paul
Martin, Minister of Finance in which the Minister advised that
under existing rules the disability grants received the same tax
treatment as other scholarships and bursaries. The Minister went
on to state that while the amounts were taxable "other
income tax provisions will generally ensure that little or no tax
is paid on Special Opportunity Grants". Wilson stated that
certain accommodation funding pursuant to the Employability
Assistance for Persons with Disabilities program undertaken by
the federal government and some provinces is taxed under
paragraph 56(1)(n) of the Act and noted that the
appellant's sign language services provided by York
University - free of charge - were not taxable nor were any
accommodation services in the context of employment subject to
tax where the benefit accrued primarily to the employer. Wilson
agreed that if York University had merely provided funds to
the appellant to purchase accommodation services, the amount
received would have been taxable under said paragraph on the
basis the federal government attempts to tax all forms of income
rather than on amounts received as gifts. Wilson stated he
appreciated Simser was required to fulfill certain conditions
attached to the SOG but believed the appellant was better off
than if he had not received the $2,000 grant in that he received
a financial benefit which he used to purchase a service. Wilson
agreed he was aware the other three categories of SOGs were not
as restrictive in terms of expenditures. Although familiar with
the document entitled In Unison: A Canadian Approach to
Disability Issues - Exhibit A-9 - a report produced following
a study involving HRDC and all provinces - except Québec -
Wilson stated he had not read the entire document. He stated he
was aware that persons with disabilities do not attend university
at the same rate as persons without disabilities.
[18] In re-examination by counsel for the
respondent, Donald Wilson stated that any amount which falls into
income by virtue of paragraph 56(1)(n) of the Act
can affect a credit which is dependent on income levels and
agreed that provinces may make distinctions in calculating tax
credits applicable to the provincial portion of tax collected by
the federal government.
[19] Ms. Ena Chadha - co-counsel for the
appellant - and Ms. Harwood-Jones - counsel for the
Respondent in the within appeal - were both involved in the
hearing of Scott Wignall before the Canadian Human Rights
Commission. At the outset of this appeal, they agreed the
testimony of Frank Smith - National Coordinator of the National
Educational Association of Disabled Students (NEADS) - could be
utilized as though it had been received in the course of the
within appeal. In the course of his examination-in-chief - by Ms.
Chadha - Smith described NEADS as a consumer organization
representing post-secondary students and graduates with
disabilities that conducts extensive research into issues
affecting this group. The mandate of the association is to
advocate for increased accessibility to post-secondary education
in Canada for students with all types of recognized disabilities.
Smith stated NEADS works with about 160 colleges and universities
across Canada as well as various student organizations including
the Canadian Federation of Students. In carrying out the mandate,
NEADS deals with issues of accommodation services in the form of
necessary technical equipment and support, access to reliable
transportation - both to and from school - and
attendant care services. Information gathered as a result of
research is made available to students in order to assist them in
making decisions when choosing to attend a particular
post-secondary institution. NEADS also maintains detailed
information on scholarships, grants, loans, other funding sources
and a comprehensive directory was compiled in 2000 including an
online version at the association's web site. Smith stated
that - in 1993 - he managed the research project, the purpose of
which was to survey the financial situation of students with
disabilities with respect to their pursuit of post-secondary
education. The study was funded by the Disabled Persons
Participation of the Secretary of State which - at the time - had
within its mandate the Canada Student Loans Program as well as
the responsibility for the federal government's participation
in programs in respect of persons with disabilities. The study
concluded with the publication of a report in which various
topics were discussed. One of the primary issues facing students
with disabilities is the amount of additional time required to
complete a program of study since they are more likely to study
part time rather than full time due to the effects of their
disability. The project also examined costs related to
disabilities including those associated with technical aids,
interpreters, readers, note takers and tutors. The study also
reviewed expenditures related to expensive software such as voice
recognition programs for students who are deaf or hard of hearing
or for technical aids such as phonic ears. The findings contained
in the report revealed that 44% of students with disabilities
participating in the study indicated their total income
- from all sources - was not sufficient to cover
education-related services and equipment costs. As a result, the
report - submitted to the funding department of the federal
government - recommended increased funding for students with
disabilities in order to permit them to pursue their studies and
also to alleviate concern over acquiring a large debt load
requiring repayment over an extended period following graduation.
Within that group of 44% requiring additional funding, 29%
indicated they required assistance in excess of $3,000 per year;
35% were seeking between $1,000 and $3,000 and 23% reported they
would be satisfied with $1,000 or less. The report recommended
increased funding should be made available to students with
disabilities and should be in the form of grants as opposed to
loans. In 1993, Smith stated there was no grant component in the
Canada Student Loans Program but - in 1995 - the Special
Opportunities Grant was established to support the exceptional
costs of identified groups requiring additional assistance
including students with permanent disabilities, high-needs
part-time students, women in doctoral programs. Later, a grant
was added in respect of students with dependents. The initial
maximum amount for a grant to a student with permanent disability
was $3,000. Smith stated the report was also provided to the
National Advisory Group on Student Financial Assistance,
established in 1989 or 1990 to advise the federal government on
financial assistance programs, primarily the Canada Student Loans
Program. Eligible costs for the particular SOG applicable to
students with disabilities included those services and technical
devices referred to earlier together with provision of services
to produce materials in alternate formats such as large print or
Braille. In order to qualify for the grant, a student had to
produce documentation to demonstrate his or her permanent
disability and was required to establish financial need. In
addition, an applicant had to provide written confirmation of the
services and the supports that were the subject of the grant
being sought. Smith stated that - typically - this aspect would
be confirmed by a special needs coordinator, disabled student
services coordinator or a guidance counsellor at the educational
institution in which proof of enrolment had already been provided
by the applicant. The student had to provide two separate cost
estimates and, if funds to a maximum of $3,000 had been provided,
the recipient was required to sign a declaration that the money
was spent as specified and that supporting receipts would be
produced within a certain period. In relation to the funding by
the Ontario Ministry of Education and Training applicable to the
within appeal, that limit was within 30 days of receipt of the
bursary cheque. Smith stated the terms and conditions of SOGs in
the other two categories - women in doctoral studies and
high-need part-time students - did not require recipients to
provide either cost estimates or receipts for expenditures,
although they had to meet certain eligibility criteria in order
to be eligible for the grants. An additional group
- students with dependents - was added later but
recipients of this particular grant did not have to provide cost
estimates or receipts for expenditures, leaving students with
disabilities as the only group to which this requirement applied.
Smith referred to the policy procedures manual of the Canada
Student Loans Program (CSLP) wherein the funding was described as
relating to education-related costs associated with disability,
including those expenditures categorized as exceptional in
nature. The manual also contained instructions concerning the
requirement that disabled students applying for a grant had to
produce two cost estimates and subsequent receipts. In the
1997-1998 loan years, 2,500 disabled students received an SOG.
Several recipients were concerned about the taxable nature of the
grant and representations were made by NEADS to the Minister
responsible for HRDC on this issue (Exhibit A-10). A reply
- Exhibit A-11 - was received from the
Minister of Finance. Smith stated NEADS continued to undertake
additional studies including one produced in 1999. The position
taken by NEADS was that funding by way of an SOG is a form of
accommodation for students with disabilities that supports only
exceptional education-related costs incurred while pursuing
post-secondary education as opposed to those general costs
of attending at an educational institution.
[20] In cross-examination by Ms.
Harwood-Jones, Frank Smith stated the SOG for a disabled student
was based on financial need as defined by the CSLP. A student,
although ineligible for an SOG, might qualify for other funding
programs. Otherwise, the student or his or her family would
purchase the needed services from their own resources.
[21] Counsel for the appellant read in the
following question and answer from the examination for discovery
of Louis Lévesque - Exhibit A-16 - tab 1D - entitled Brief
of Documents: Respondent's Undertakings & Examinations
for Discoveries.
Q. Mr. Levesque,
again, assuming without admitting that there is a Charter
violation, but with respect to whether the violation minimally
impairs the Charter guarantee, the government's position is
this. Given that there is relief to disabled persons provided
elsewhere in the Act to recognize the extraordinary expenses
associated with disability, both for students and non-students
alike, the impugned provision minimally impairs the Charter.
Is that the whole of the government's position regarding
whether there is a minimal impairment?
MS. HARWOOD-JONES: I can answer
that on behalf of my witness, and the answer is yes, that is the
whole of the government's position. And you adopt that
answer?
THE DEPONENT: Yes.
[22] Counsel for the appellant read in the
following question and portions of the answer of Louis
Lévesque (Exhibit A-16 at tab 1C).
Q. What is the
answer to those persons who can't avail themselves of the
medical expense tax credit?
A. Okay, there would
be two reasons why people can't avail themselves of the
medical expense credit, okay.
First, the nature of the expense being not recognized in terms of
being subject to a grant under the Canada Study Grant, let's
say, or Special Opportunity Grant, at the same time not being
recognized under the medical expense credit. There would be kind
of an eligibility, eligible for subsidy under the grant but not
eligible under the medical expense credit.
The other way you can end up in a situation where you end up with
a, quote, "net tax liability" where the tax on the
grant would not be completely offset by the credit would be --
because of the nature of how the credit works, there is a
threshold. There is a certain amount that is deemed to be, well,
you have those expenses, but they are below 3 percent of income.
We assume everybody has basically a certain amount of expenses to
incur, or most people, and they are basically in the personal
consumption nature. There is the 3 percent of income element
which is -- for most students it is very small in terms of they
have a small income.
[23] In response, counsel for the respondent
read in the remainder of the answer, as follows:
I would say, on principle, I would like to see examples in terms
of that where that would happen, and it may be small amounts, but
in terms of any significant example and that was the impetus
behind the decision on sign language interpreter fees.
If there were significant items, like major things or significant
in a particular sense that would lead to a grant because they are
clearly linked to a disability, certified by some association or
practitioner or whatever and they were not recognized on the
medical expense credit, I would say that's a problem. I would
like to see what the issue is. That would be -- if I were the
Director of Personal Income tax still, I would say show me an
example, because on a principle basis, we would like to have as
much correlation as possible between the two.
Because obviously if a grant is being given by some authority
somewhere, somebody certified that this is something that is
useful and needed by persons with disabilities. If that is the
case, from a policy perspective, I don't see why we would not
want to cover them under the medical expense credit.
So at a very basic level -- and I am pretty sure that if there
were expenses that were identified and clearly would meet those
criteria, like that they are needed by students with disabilities
and they would not be covered, I would say it wouldn't be
difficult to convince the Department or the government to
proceed. And I am sure there won't be huge costs. We would
have to have the discussion on a factual basis, like do you have
an expense for which a grant is given and that is currently not
covered, and we would have to have a factual discussion.
My understanding is that if there were such an expense, and maybe
there is a technological change and some new gizmo is available
now that was not available, the Department would be more than
willing, the government generally, to listen and say, Yes, we
should include that, and to provide adequate safeguards that it
is not a personal consumption item that has a tiny link with
disability, that this is really something that is needed by
people with disabilities. And I see no reason why the government
would not want to do that. So that is at the very general
level.
[24] Counsel for the appellant read in the
following question and answer:
Q. What is the
purpose of the disability tax credit?
A. Generally
speaking, as it said here, to recognize costs that are not easily
itemizable, the basic assumption being, and it is an assumption,
that once you reach a certain level of disability, you are facing
costs and many of them are large and itemizable and many of them
will not be easily itemizable.
[25] Counsel for the respondent read in the
remainder of the answer:
This provision is somewhat akin to income support, because it is
not linked to a particular expense. And if you read the Scott
Task Force recommendations, you can see that there is -- the
general thrust of the Task Force recommendations was to move away
from income support type measures and to focus more on
compensation for disability-related costs.
So in terms of the arsenal of recommendations that would move you
towards we should do more on the medical expense front, maybe
make it refundable, which was made in part, and increase the rate
of the refund in terms of the proportion of expense, and give
less, everything else being equal, on such things as the
disability tax credit that are not actually linked to a
particular expense, that was the general gist of it.
On that, I would add that, again, the decisions by the government
are constrained or affected by a number of factors, including the
fact that we obviously live in the federal country where the
federal role in respect to disability is limited by the fact that
a lot of programs are delivered at the provincial level, and that
is concerning the tax collection agreements, and the things we do
under tax collection agreements give rise to leverage because a
lot of the measures we do are mirroring provincial tax
legislation.
[26] Counsel for the appellant read in the
following question and answer:
Q. My next question
was going to refer to your correspondence with Andy Scott, and of
course, I have already covered that, so I am just going to see
where things stand right now.
Here is a general question for you. If the effect on
Mr. Simser of taxing the Bursary for Students with
Disabilities is to increase his education costs, if that is the
effect, then why do it?
A. Well, just from a
policy perspective, the government has a left arm and a right
arm. You cannot take government action and look at one side of
the action and say it has this effect.
[27] Counsel for the respondent read in the
remainder of the answer:
The government action is providing Mr. Simser with a
significant amount of assistance on the bursary side. The tax
side of the government is looking at that as income. So to say
that it is increasing his education costs while at the same time
both public programs in terms of the general availability of
public programs for education plus specific programs directed at
people with disabilities are increasing his costs, it is a little
bit, I would say, difficult for me to sustain on a policy
basis.
[28] Counsel for the appellant also read in
some questions and answers of Patti Cooper - a
CCRA employee - pertaining to reasons for issuing the assessment
but I have chosen not to reproduce them since counsel for the
respondent conceded - in argument - that the
assessment by the Minister was based solely on the premise that
the SOG funding had been paid in the form of a bursary and,
therefore, the amount was required to be included into the
appellant's taxable income pursuant to paragraph
56(1)(n) of the Act.
[29] Counsel for the appellant re-stated the
issues in the within appeal. First, the appellant's position
is that the SOG was not income within the meaning of paragraph
56(1)(n) of the Act. Second, if the SOG received by
the appellant does fall within the meaning of that paragraph, the
appellant argues that the decision of CCRA to include the grant
amount into his income contravenes s. 15(1) of the
Charter based on a physical disability and that this
infringement is not a reasonable limit envisaged under
s. 1.
[30] Although counsel argued the merits of
both issues in the course of their respective submissions, at
this point I will deal with the first issue - whether inclusion
of the SOG amount into income is required under paragraph
56(1)(n) of the Act - and will refer to those
portions of the arguments - together with the relevant
jurisprudence - related to this question.
[31] Counsel referred to the testimony of
Professor Philipps in which she noted there is no definition of
"income" contained in the Act and that in the
usual sense a payment must be tied to a source producing a
regular stream of income. Counsel referred to evidence adduced
for the purpose of demonstrating that the grant received by the
appellant did not permit him to spend the funds except in strict
accordance with the enumerated purposes, unlike other SOGs
available to members of other groups. Another form of student
funding, a research grant - with certain conditions and terms
attached - permitted a recipient to deduct certain expenses
associated with carrying out the specified research. Counsel
submitted the financial assistance received by the appellant - in
the form of the BSWD - was not an amount received to allow him to
pursue an education, per se, but was funding specifically
provided to accommodate his individual disability, profound
deafness. In this instance, counsel argued the restrictions
placed on the grant provided to Simser eliminated any ability to
enhance his own financial position in the same manner as one
would customarily regard an ordinary bursary as constituting a
benefit to the recipient. As discussed by Professor Philipps,
counsel suggested the SOG payment to the appellant was based on
financial need -in addition to his disability - and could fit
readily within the category of social assistance payments so that
the value thereof could be added into income pursuant to
paragraph 56(1)(u) of the Act and then taken out
under paragraph 110(1)(f) in the same manner as Revenue
Canada had treated the funding for the basic education and life
skills program undertaken by the Province of Alberta. Counsel
submitted it is not sufficient to merely assume the SOG funding
to the appellant was a bursary in the usual sense. Instead, CCRA
and/or the Minister should have recognized that the funds
provided to the appellant were solely to cover the cost of
expenditures associated with attending a mandatory course of
study in a classroom setting. As such, it represented a payment
obviously designed to remove a barrier so the appellant could
participate on an equal footing. Counsel submitted it is
inappropriate to tax this sort of accommodation funding because
it has the effect of artificially inflating the income of persons
with disabilities, thereby having an impact on certain
refundable, income-tested credits under the Act. Counsel
submitted modern rules of interpretation should be applied in
order that the context and intent of a taxing statute - rather
than its literal wording - be considered. Since none of the four
types of payments listed in paragraph 56(1)(n) are
defined within the Act, nor is the grant received by the
appellant defined in the legislation governing student financial
assistance, counsel argued it becomes evident the SOG received by
the appellant was different from other types of payments to
students. In terms of income - not defined in the Act -
counsel submitted the modern approach recognized in jurisprudence
is that to be taxable as a benefit, the receipt must increase the
taxpayer's net worth and not merely compensate for an
expense. In terms of the sum of $2,000 received as a bursary for
a student with disability, counsel suggested the appellant merely
acted as a conduit to permit money from the funding program to
flow to the ASL interpreters and real-time captioners and did not
improve his own financial position - overall - in relation to his
participation in the Bar Admission Course. Counsel submitted the
appellant was able to improve his position only to the point
where he was more or less on an equal footing with fellow
students in terms of being able to comprehend the content of
lectures, workshops and seminars integral to the course. Counsel
reiterated that, absent considerations of the Charter, the
primary relief sought by the appellant was for this Court to find
that the BSWD paid to Simser was accommodation funding and -
therefore - substantially different from a scholarship,
fellowship, bursary or prize otherwise mentioned within
paragraph 56(1)(n) of the Act. As a result,
the appellant requested the Court to refer the assessment back to
the Minister for reassessment on the basis the SOG payment
- designed to accommodate a specific disability within
the context of a course of study - should be deleted
from his income.
[32] Counsel for the respondent submitted
the sum of $2,000 paid to the appellant was in the form of a
bursary pursuant to the program whereby grants were paid to
individuals who were members of three groups, one of which
pertained to disabled students pursuing post-secondary education.
The respondent's position is that ordinary usage of the term
"bursary" and its common definition in dictionaries,
makes it evident that the money received by the appellant fell
within the ambit of paragraph 56(1)(n) of the
Act even though the word "grant" is not
specifically used therein because those two words are basically
interchangeable. With respect to the use of funds received by the
appellant, counsel submitted there is no authority for the
proposition that an essential element of a bursary is that the
funds must be within the discretionary use of the recipient. In
response to the appellant's suggestion that a grant or
bursary is not a true source of income within the ordinary
meaning of the Act, counsel submitted the clear intent of
Parliament was to include such amounts into income and the
obvious purpose of the relevant paragraph at issue was to
accomplish that goal. Counsel submitted the appellant - in asking
the Court to exclude the bursary amount - on the basis it was
different from other funding under the SOG program because it had
different administrative requirements - was seeking relief based
on what the state of the law - perhaps - should be rather than on
the existing provision of the Act which clearly set out
the intent of the legislators.
[33] The relevant portion of paragraph
56(1)(n) reads as follows:
SECTION 56: Amounts to be included in income for
year.
(1) Without restricting the generality of section
3, there
shall be included in computing the income of a taxpayer
for a taxation year,
(n) Scholarships, bursaries, etc -
the amount, if any, by which
(i) the total of all amounts ... received by the taxpayer in
the year, each of which is an amount received by the taxpayer as
or on account of a scholarship, fellowship or bursary, or a prize
for achievement in a field of endeavour ordinarily carried on by
the taxpayer, other than a prescribed prize,
exceeds the greater of $500 ...
[34] The position of the appellant is that
this provision contains no definition of bursary. In addition,
the payment received by the appellant is described in the
Canada Student Financial Assistance Act, S.C. 1994, c. 28
and in the Regulations made under that legislation and, in
subsequent materials prepared for use by students, that type of
payment is referred to as a Special Opportunity Grant and - in
later years - as a Canada Student Grant.
[35] Obviously, Parliament did not deem it
necessary to define the term "bursary", although there
is additional detail provided with respect to a "prize"
in the sense that in order to be taxable it has to have a nexus
with the taxpayer's usual discipline, unless it is a
prescribed prize. A separate provision - paragraph
56(1)(o) was utilized to deal with the matter of research
grants including a method for identifying those expenses
deductible from income received by the recipient. The lack of a
special provision prevented the Minister from including strike
pay into the income of the taxpayer in the case of Fries (W.)
v. Canada, [1990] 2 C.T.C. 439, a decision of the Supreme
Court of Canada allowing an appeal from a decision of the Federal
Court of Appeal. In his brief judgment, Sopinka J. (Per Curiam)
stated:
We are not satisfied that the payments by way of strike pay in
this case come within the definition of "income ... from a
source" within the meaning of section 3 of the Income Tax
Act. In these circumstances the benefit of the doubt must go to
the taxpayers...
[36] There are numerous decisions wherein
courts decided that a particular receipt did not constitute
taxable income from an unenumerated source. In the case of
Schwartz v. Canada, [1996] 1 S.C.R. 254, the Supreme Court
of Canada held that s. 56(1)(a)(ii) of the Act
did not provide for the taxation of settlements for loss of
intended employment. La Forest J. stated at p. 257:
... While s. 3(a) of the Act contemplates the
possibility that income arising from sources other than those
enumerated in s. 3(a) and in Subdivision d of Division B
of Part 1 of the Act may nonetheless be taxable, to find that the
damages received by the appellant are taxable under the general
provision of s. 3(a) would disregard the fact that
Parliament, in amending the Income Tax Act in 1983, has
chosen to deal with the taxability of such payments in the
provisions relating to retiring allowances. Such an approach
would amount to giving precedence to a general provision over the
detailed provisions enacted by Parliament. This would be
inconsistent with basic principles of interpretation.
The damages received by the appellant cannot be considered a
"retiring allowance" within the meaning of s. 248(1) of
the Act - and therefore are not taxable under
s. 56(1)(a)(ii) - because they were not received
"in respect of a loss of ... employment". When one
considers the ordinary meaning to be given to the words found in
the definition of "employment" in s. 248(1), a
distinction must be made between the start of the contractual
relationship agreed upon by the employer and the employee and the
moment, according to the terms of the contract, at which the
employee is bound to start providing services to the employer.
The statutory requirement that one must be "in the
service" of another person to be characterized as an
"employee" excludes any notion of prospective or
intended employment. An employee is thus only "in the
service" of his employer from the moment he becomes under
obligation to provide services under the terms of the contract.
It follows that "loss of employment" cannot occur
before an employee becomes under obligation to provide services
to his future employer because he cannot, before that moment, be
"in the service" of that employer.
[37] The appellant also relied on a line of
authorities supporting the proposition that to constitute income
under the Act, a receipt must confer an economic benefit
in the sense that it must increase the recipient's net worth.
In the case of Krull v. Canada (Attorney-General),
[1996] 1 C.T.C. 131, the Federal Court of Appeal considered the
payment to five taxpayers each of whom were required by the
employer to relocate from Calgary to Toronto. In order to offset
the differential in housing costs between those two cities, the
employer paid any increase in interest charges on mortgages taken
on the more expensive Toronto homes to a certain maximum
calculated in accordance with a formula prepared by real estate
experts. The entire subsidy plan was directed to defraying
increased interest costs and could not be applied to principal.
It also ended upon termination of employment by any employee
participating in the plan. Relevant to the analysis in the within
appeal, is that portion of the judgment of Linden J.A. dealing
with the issue whether the mortgage interest subsidy was taxable
under paragraph 6(1)(a) of the Act. At
pp. 134-137 of his judgment, he stated:
Is the mortgage interest subsidy taxable under
paragraph 6(1)(a)?
Paragraph 6(1)(a) reads as follows:
6(1) Amounts to be included as income from office or
employment - There shall be included in computing the income
of the taxpayer for a taxation year as income from an office or
employment such of the following amounts as are applicable:
(a) value of benefits - the value of board,
lodging and other benefits of any kind whatever received or
enjoyed by him in the year in respect of, in the course of, or by
virtue of an office or employment...
Four of the five Tax Court Judges decided that the interest
subsidy was not a taxable benefit pursuant to paragraph
6(1)(a). The sole question hinged on whether the receipt
was a "benefit" within the meaning of paragraph
6(1)(a). The matter of whether it was "in respect
of", "in the course of" or "by virtue
of" employment did not cause any difficulty; all agreed that
the receipt was sufficiently linked to the employment.
The first issue to consider therefore, is whether there was a
"benefit".
The classic statement of what comprises a taxable benefit
derives from the Supreme Court of Canada case, R. v. Savage
(sub nom. The Queen v. Savage), [1983] 2 S.C.R. 428, [1983]
C.T.C. 393, 83 D.T.C. 5409. In that case Mr. Justice Dickson, as
he then was, explained in clear and simple terms the principle
which distinguishes taxable from non-taxable receipts:
If it is a material acquisition which confers an economic
benefit on the taxpayer and does not constitute an exemption, eg.
loan or gift, then it is within the all-embracing
definition of section 3.
According to the Supreme Court of Canada, then, to be taxable
as a "benefit", a receipt must confer an economic
benefit. In other words, a receipt must increase the
recipient's net worth to be taxable. Conversely, a receipt
which does not increase net worth is not a benefit and is not
taxable. Compensation for an expense is not taxable, therefore,
because the recipient's net worth is not increased
thereby.
Our jurisprudence has long accepted the focus on net gain as
the basis for determining whether a receipt is a
"benefit" and whether it is therefore taxable. In the
1967 decision of the Exchequer Court of Canada, Ransom v.
Minister of National Revenue, [1967] C.T.C. 346, 67 D.T.C.
5235, Noël J. applied the net gain concept to circumstances
not too dissimilar from the present. An employee was transferred
by the employer company to a different city and was reimbursed by
that company for losses incurred on the sale of a house. In
deciding that these reimbursements were not income, Noël J.
stated:
In a case such as here, where the employee is subject to being
moved from one place to another, any amount by which he is out of
pocket by reason of such a move is in exactly the same category
as ordinary travelling expenses. His financial position is
adversely affected by reason of that particular facet of
his employment relationship. When his employer reimburses him for
any such loss, it cannot be regarded as remuneration, for if that
were all that he received under his employment arrangement, he
would not have received any amount for his services.
Economically, all that he would have received would be the amount
that he was out of pocket by reason of the employment.
This is merely another way of describing the net gain idea
that a receipt is not taxable if it does not improve the economic
situation of the taxpayer; if it only reimburses for an amount
for which an employee would otherwise be "out of
pocket", it is not a "benefit". He treats
relocation costs in the same way as ordinary travelling expenses.
Reimbursement for out of pocket expenses incurred as a result of
a move, explains Noël J., cannot be considered a benefit
because it adds nothing of value to the recipient's economic
situation. He states:
It appears to me quite clear the reimbursement of an employee
by an employer for expenses or losses incurred by reason
of the employment (which as stated by Lord McNaughton in
Tenant v. Smith, (1892) A.C. 162, puts nothing in the
pocket but merely saves the pocket) is neither remuneration as
such or a benefit "of any kind whatsoever". ...
The approach of Savage and Ransom was adopted by this Court in
Huffman v. Canada where the issue was whether a clothing
expense which was reimbursed to a plain clothes police officer
was a benefit. Heald J.A., quoting from the Tax Court Judge and
echoing Mr. Justice Dickson in Savage, held that it was
not, describing the applicable test as follows:
It is therefore necessary to consider whether the facts here
show that there was a material acquisition in conferring an
economic benefit on the taxpayer.
Mr. Justice Heald went on to conclude:
...the taxpayer was simply being restored to the same economic
situation he was in before his employer ordered him to incur the
expenses.
This Court once again applied this principle in affirming the
decision of Cullen J. in Splanev. R. (sub nom. Splane
v. Canada), [1990] 2 C.T.C. 199, 90 D.T.C. 6442 (F.C.T.D.),
at page 6446 (affirmed 92 D.T.C. 6021 (F.C.A.)). There, a
relocated employee was reimbursed for costs pertaining to an
increased interest rate on a mortgage. Deciding that such
reimbursement does not constitute a benefit, Cullen J.
stated:
The taxpayer gained no extra money in his pocket. Instead the
payments only allowed him to maintain the same position as that
which he occupied prior to his transfer, and prevented him from
having accepted the lateral transfer position at a loss.
At another point in the case, Cullen J., in characterizing the
economic effects of the receipt, explained that "the
plaintiff was simply restored to the economic situation he was in
before he undertook to assist his employer by relocating.
..."
Therefore, the question to be decided in each of these
instances is whether the taxpayer is restored or enriched. Though
any number of terms may be used to express this effect - for
example, reimbursement, restitution, indemnification,
compensation, make whole, save the pocket - the underlying
principle remains the same. If, on the whole of a transaction, an
employee's economic position is not improved, that is, if the
transaction is a zero-sum situation when viewed in its entirety,
a receipt is not a benefit and, therefore, is not taxable under
paragraph 6(1)(a). It does not make any difference whether
the expense is incurred to cover costs of doing the job, of
travel associated with work or of a move to a new work location,
as long as the employer is not paying for the ordinary, every day
expenses of the employee. [footnotes excluded]
[38] The Concise Oxford English Dictionary -
Tenth Edition, Revised, Oxford University Press - defines bursary
as:
1. a grant, especially one awarded to a student.
[39] The New Collegiate Dictionary - Thomas
Allen & Son Limited, Toronto - defines: bursary as:
2. a monetary grant to a needy student.
[40] The Canadian Oxford Paperback
Dictionary - Oxford University Press - contains the following
definition of bursary:
a financial award to a university student made primarily on
the basis of financial need or some other criterion in addition
to academic merit.
[41] The same dictionary defines
"grant" in this manner:
2a: a sum of money given by the state for any of various
purposes, e.g. to finance education.
[42] The French version of the paragraph in
question uses the term, "bourse d'études"
and "bourse", although having other definitions, is
also defined by Larousse - Dictionnaire Général -
1994 - as follows:
3. Pension accordée par l'État ou par une
institution à un élève, à un
étudiant ou à un chercheur pour l'aider
à poursuivre ses études.
[43] In the case of Ong (C.A.) v.
Canada, 1994 CarswellNat 1350, The Honourable Judge
O'Connor - Tax Court of Canada - considered the timing of the
inclusion of a grant in the taxpayer's income. At paragraph 7
of his judgment, he stated:
Paragraph 56(1)(n) of the Income Tax Act includes in
income all amounts received in the year as or on account of a
bursary. A bursary is equivalent to a grant. ...
[44] In the Ong case, there had been
some confusion over the nature of the financial assistance
provided to assist the taxpayer in meeting the cost of her
university tuition because the assistance could have taken the
form of either a loan or a grant. The loan would not have been
taxable. The amount was originally received under that category
but the Ministry of Colleges and Universities subsequently
decided the funds were a grant since the taxpayer had been
qualified to receive assistance on that basis.
[45] The appellant's application -
Exhibit A-1, tab 2 - for financial assistance was undertaken
using a form provided by the Ontario Ministry of Education and
Training. At several places, there are references to
"bursary funds", a "bursary cheque", and a
"bursary plan". It is also clear the assistance was
provided to cover the cost of the educational accommodations and
services related to the appellant's disability. The specific
services required were real-time captioning and sign language
interpretation. Relevant correspondence between Simser and the
administrators of the program referred to the funds as
constituting "bursary assistance" pursuant to an
Ontario Student Assistance Program, Bursary for Students with
Disabilities. In the context of the provision of funds - under
that particular program - for the specific purpose of affording
the appellant the means by which he could participate in the
mandatory Bar Admission Course, it is difficult to regard the
questioned payment as other than the sort of receipt that
ordinarily - and readily - falls within the definition of
"bursary" in the context in which that word is used in
paragraph 56(1)(n) of the Act. I do not see any
inherent ambiguity to be resolved in favour of the taxpayer.
Utilizing the term "accommodation services", although
an apt description of the true purpose of the funding from a
social science perspective, does not change the nature of the
payment that was described as a bursary and paid to the appellant
pursuant to a program designed to provide financial assistance to
students with disabilities. There was no definition of
"grant" contained in the umbrella federal student
funding legislation. Perhaps, if a definition had existed and was
at odds with dictionary definitions of "bursary" -
which include a grant of financial assistance to a needy student
- that discrepancy might have provided some significant leverage
to the appellant, considering the specific paragraph of the
Act did not define "bursary" nor did it mention
a "grant" other than in the context of a research grant
in subsequent paragraphs within subsection 56(1).
[46] The SOG provided to the appellant had a
specific purpose and Simser abided by the rigid conditions
imposed in respect of requisite expenditures and the provision of
adequate documentation in support thereof. Prior to receiving the
sum of $2,000, he would have had to bear the entire cost of
real-time captioning and/or sign language interpretation. The
first $500 of that bursary payment was not taxable. The appellant
spent the entire grant in the manner intended and
- fortunately - his employer paid the balance of
the cost related to provision of those required services in order
to enable the appellant to complete the Bar Admission Course. The
appellant received a grant of $2,000 and $1,500 of that amount
was included into his income by the Minister's assessment.
Had that sum not been received, he would have been compelled to
bear the total cost of the accommodation services on his own. The
marginal tax rate is still not 100%, even at the highest income
levels. The payment was not made on the basis it would merely
restore him to some prior position or compensate him for some
sort of lateral movement within an educational financial
assistance program in which he was registered and - as a result -
already entitled to receive certain benefits. In that sense, the
cases pertaining to the relocation of employees and payment of a
subsidy for certain related costs are not applicable to the
within appeal. Those decisions deal with fact situations arising
from an employer-employee relationship and the emphasis
throughout is to restore those taxpayers to a financial situation
more or less equal to that enjoyed prior to undertaking the
mandatory relocation. It is apparent that Parliament specifically
intended to include receipt of a bursary amount into taxable
income pursuant to paragraph 56(1)(n) of the Act
without restricting the generality of section 3. By doing so,
that sort of payment became an enumerated source of income. In my
view, there is no justification for regarding the SOG payment to
the appellant as other than a bursary as contemplated by that
provision. It does not meet the criteria associated with a social
assistance payment in the ordinary sense in which that term is
employed within various pieces of legislation. It would require
one to ignore the context of the SOG payment and its purpose
which is inextricably linked to a facet of post-secondary
education and - instead - to prefer a definition
that is generally applicable to a program of broad-based,
generic government funding more appropriately associated with
ameliorating the effects of lower income levels on individuals
and families over a longer term. The fact that the grant paid to
the appellant contained more restrictions than those provided to
other students within the SOG program does not disqualify this
payment from inclusion into his income in accordance with the
definition of bursary. It would not be unusual for a bursary or
scholarship to be provided in a manner whereby the recipient was
merely given credit for a reduction in tuition and/or associated
educational costs under circumstances where the granting party
paid a certain sum directly to the educational institution. Or,
if the bursary or scholarship was provided by the institution
itself, accounting entries could record a notional payment and
offsetting receipt. Any payment of a bursary or scholarship is
made within the context of an educational pursuit or achievement.
Indeed, funds are provided by a grantor for that specific overall
purpose. Depending on the precise nature of the payment, there
may be more or less strings attached in accordance with the
wishes of the payor. The degree of discretionary use of the funds
does not change the nature of the payment. In my view, all
relevant definitions contain the linkage of payment of money to a
recipient who is engaged in some sort of educational pursuit. As
an example, a level of government or an educational institution
might confer a sum of money on a qualified recipient for the
express purpose of defraying exceptional transportation costs to
and from that individual's ordinary residence in order that
personal funds can be otherwise expended directly on those goods
and/or services normally associated with pursuing a course of
study involving classroom attendance. The end result - from the
perspective of the recipient - is an enhancement of that
person's global financial position even if every cent of the
transportation bursary or grant is expended merely in travelling
to and from the educational facility. In that situation and - in
the within appeal - the receipt of money has the effect of
assisting both recipients within the context of a pursuit of
study. In the example used, the financial assistance enabled the
student to arrive at the door of the classroom. In the
appellant's case, it permitted him to purchase services in
order to comprehend the content of the study material and to
participate fully in the Bar Admission Course within the usual
classroom setting.
[47] The Supreme Court of Canada has
instructed courts not to undertake a process of statutory
interpretation without having regard to the statement contained
in Driedger, Construction of Statutes, 2nd ed.
(Toronto: Butterworths, 1983) at 87:
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...
[48] In my view, when Parliament has
provided certain pigeon holes into which various pigeons readily
fit, it is not a fruitful exercise to use routers, drills and
saws - or bits of extraneous material - to either enlarge or
reduce the dimensions of those prescribed entrances.
[49] To answer the first question at issue
in the within appeal, I find the Special Opportunities Grant for
Students with Disabilities paid to the appellant is a bursary
within the meaning of paragraph 56(1)(n) of the
Act.
[50] As stated earlier, I referred to
submissions of counsel as they related specifically to the above
issue, now decided. I will now deal with their submissions in
respect of the alternative positions taken by the appellant. The
oral argument of both counsel was supplemented with written
submissions. In addition, at the conclusion of the hearing of the
within appeal, counsel for the respondent was granted permission
to submit additional written submissions relating to arguments
raised in relation to the Charter and counsel for the
appellant was afforded the opportunity to respond - in writing -
to that additional material.
[51] Counsel for the appellant argued that
paragraph 56(1)(n) of the Act is an infringement of
Simser's rights under s. 15(1) of the Charter and
seeks a remedy of "reading down" that provision -
pursuant to s. 52(1) of the Charter - so as to render
said paragraph of the Act inapplicable to students with a
disability who receive grant monies intended solely to provide
accommodation towards ameliorating - or eliminating - a barrier
created by said disability.
[52] In the alternative, the appellant
requested the Court to declare paragraph 56(1)(n) of
the Act to be of no force and effect - pursuant to s.
52(1) of the Charter - when applied to his receipt of the
disability grant - in 1997 - or to any other members of the group
of persons with a disability who receive grant monies under the
Canada Study Grant - intended solely to provide accommodation
toward a disability - in order to prevent an inconsistency with
s. 15(1) of the Charter.
[53] In the further alternative, the
appellant submitted the appellant is entitled to claim the METC
with respect to all receipts for sign language interpretation
submitted to the Ontario Ministry of Education - as required by
the terms of his grant - and requested that this Court refer his
assessment back to the Minister for reassessment on that
basis.
[54] Counsel for the appellant submitted the
Supreme Court of Canada has confirmed the Charter is to be
read purposively so that its objects may be given effect. With
respect to the matter of discrimination experienced by persons
with disabilities, counsel submitted that a law of general
application often fails to take into account special
circumstances encountered by these individuals. Unlike other
enumerated prohibited grounds within s. 15(1) of the
Charter, counsel submitted any analysis of disability
discrimination requires an individualized approach because that
specific ground is capable of variation depending on the
particular individual and the nature of the disability. As
disclosed by the testimony and expert reports of Professor
Philipps and Dr. Musselman, counsel referred to the effects of
discrimination encountered by deaf persons who must deal with
marginalization and unequal treatment as part of their daily
lives. The proposition advanced through the opinions of those
expert witnesses is that deaf persons experience unequal
treatment in Canadian society primarily as a result of a failure
to accommodate and render oral communication accessible to them.
That failure is exacerbated in the context of education where it
is even more important for barriers to be removed because the
historical consequence for persons with disabilities has been
that they have not received an adequate education or have been
required to become educated in a segregated setting. Counsel
submitted the appellant has the right to accessible education
without incurring extra costs - personally - whether the
subsequent expense attributable to providing necessary
accommodation services is paid for by the particular educational
institution or by programs funded by one or more levels of
government. With regard to the document entitled "In Unison:
A Canadian Approach to Disability Issues" - Exhibit A-9 -
counsel referred to page 11 (lower left column) where it was
recognized that "[P]ersons with disabilities are more
likely, for example, to have lower educational levels and to be
socially isolated and discriminated against in the
workplace". At page 13 (middle right column) counsel quoted
from the report wherein the joint federal/ provincial (except
Québec)/territorial panel recognized that
"[C]urrently, persons with disabilities face significant
barriers to work because access to disability supports is tied
rigidly to eligibility for specific programs such as income
support, training and employment". At page 22 of the report,
there was an acknowledgement that "[A]t all educational
levels, students with disabilities often report that they find
themselves at a disadvantage. Many have difficulty gaining access
to the supports they require to enter or remain at school".
Counsel submitted the report made it plain that disabled persons
face systemic barriers and the joint study group recognized that
relatively limited assistance is available to offset the costs of
living with a disability. Counsel referred to the Canada
Student Financial Assistance Regulations - contained at
tab 15 of Volume 111 of the Appellant's Brief of
Authorities - at paragraph 34 - where the language used therein
made it evident that a special opportunity grant was available to
a qualifying student who "is in need of exceptional
education-related services or equipment that are required for the
student to perform the daily activities necessary to participate
in studies at a post-secondary school level ..."
[55] Counsel for the appellant further
submitted the current tax policy of the federal government has
the effect of increasing the educational costs of persons living
with disabilities compared to other students who are not
disabled. As a consequence of adding the sum of $1,500 to the
appellant's income - in 1997 - counsel referred to evidence
which established that his total tax bill was increased by the
sum of $588.90 even though all funds received in the form of the
disability grant pursuant to the SOG program were spent on the
accommodation services of real-time captioning and sign language
interpretation. Counsel submitted the end result of that funding
was to discriminate against the appellant because he was required
to use his disabled student grant for specialized services in
order to gain access to a classroom for the sole purpose of
participating in a mandatory course of study. By way of contrast,
counsel suggested that a student without a disability is entitled
to receive a bursary and could use the funds as he or she saw fit
within broad permissible limits applicable to the specific
category under which it was provided. In that sense, counsel
submitted the tax policy enforced by the Minister created an
unjustifiable difference in wealth between persons with
disabilities and non-disabled persons. By erecting such a
barrier, it affected the rights of persons with disabilities -
generally - and had an adverse impact upon the appellant, an
individual profoundly deaf since birth. Counsel urged the Court
should apply a "purposive and contextual" approach to
s. 15(1) of the Charter and take into account all
circumstances relevant to a person with a particular disability.
Because only persons with disabilities are eligible for the
Bursary for Students with Disabilities, the effect of including
any receipt into income is to require persons
- including the appellant - to pay more for their
education than persons without disabilities. The additional tax
burden imposed upon those recipients serves as a further barrier
and becomes a deterrent to education by withholding equal access
to education. In that manner, the two-tier effect constituted an
affront to the appellant's dignity as a human being. As
Simser stated in his testimony, he could not understand why he
should have to beg for equal access to a classroom. Counsel
submitted there is no justification for taxing payments to
students with disabilities that are clearly identifiable as
accommodation funding designed to remove a barrier preventing
fair and equal access to education. However, the current tax
policy is to impose upon recipients of a disabled student grant
an extra burden not borne by non-disabled students who can use
their funding for broader purposes within the context of pursuing
an education at the post-secondary level rather than merely using
all the money for the restricted purpose of gaining access to a
classroom or simply in order to be placed in a position where
they are able to comprehend the content of a course of study.
Counsel submitted the obvious Charter violation is not
saved by s. 1 because any limit has to be reasonable and
demonstrably justified in a free and democratic society. In that
sense, counsel argued the respondent has failed to discharge the
onus of demonstrating what justification exists for compelling
Simser to pay more for his education than the rest of his
non-disabled classmates. As revealed by undertakings obtained in
the course of the examination for discovery of Louis
Lévesque, counsel stated the amount of tax revenue
generated through the taxation of SOGs - in 1997 - was
approximately $300,000, representing approximately 2 millionths
of one per cent of total federal revenues of approximately $132.1
billion for the 1996-1997 fiscal year and $145.9 billion for the
following year. In 2000, the tax-free portion of a bursary was
increased to $3,000. Counsel pointed out that if the appellant
had received his $2,000 grant that year - instead of 1997 - he
would have paid no tax on it. Counsel submits the subsequent
amendment to the relevant provision of the Act makes it
evident the federal government possessed the ability - in 1997 -
to reduce the so-called "minimal impairment" of the
appellant's rights pursuant to s. 15(1) of the
Charter by recognizing that inclusion of the bursary
amount into his income had a discriminatory effect when compared
with educational funding provided to non-disabled students.
Since the failure to do so could not possibly have been motivated
by any pressing financial need on the part of the government that
might otherwise compel it to collect the minuscule amount of
income tax raised through taxation of SOGs, counsel submitted any
justification based on that premise is not plausible.
[56] Counsel for the respondent - in the
form of written argument - submitted there is a tripartite test
to establish whether discrimination has taken place within the
context of s. 15(1) of the Charter. As a result, it
is necessary to resolve these questions:
a) does the
impugned law draw a formal distinction between the claimant and
others on the basis of one or more personal characteristics or
fail to take into account the claimant's already
disadvantaged position within Canadian society resulting in
substantively differential treatment between the claimant and
others on the basis of one or more personal characteristics;
b) if so, is the differential
treatment on the basis of one or more of the enumerated or
analogous grounds; and
c) does the differential
treatment discriminate in a substantive sense such that
s. 15(1) of the Charter is appropriate to remedy such
ills as prejudice, stereotyping and historical disadvantage.
[57] Counsel for the Respondent also
submitted the Court must make a comparison between the appellant
and an appropriate comparator group in order to determine whether
discrimination has taken place. As a result, the comparison must
be made with other people to whom the impugned provision applies
and not with other groups not affected by that rule. As such,
counsel submitted the appellant was a member of a group
identified as disabled students who were eligible to received an
SOG specific to that category. Disabled persons who received
grants other than the particular one at issue in the within
appeal - and used the funds for the same purpose as proceeds of
the disability grant were used by the appellant - must include
those grants into income pursuant to paragraph 56(1)(n) of
the Act. Counsel referred to the argument - advanced on
behalf of the appellant - to the effect that he was treated in a
substantively different manner than other SOG recipients because
his grant was used to purchase sign language interpretation and
real-time captioning services without which he would not have
been able to access the Bar Admission Course. Further, the
appellant argued that in order to obtain the grant he had to
provide cost estimates to substantiate his need for funding and
was required to verify - subsequently - the use of the grant
proceeds. Counsel for the respondent submitted it must be the
nature of the expenses for which the funds are used that must be
examined to determine substantively differential treatment.
Therefore, the receipt of funds for a particular purpose cannot
constitute differential treatment because two individuals who
receive the same amount of money are both required to include the
receipt into income under paragraph 56(1)(n) of the
Act. In addition, verification requirements relating to
expenditure of a grant could only be distinguished from those
applicable to other grant recipients if it could be established
they were not required to use their funds to purchase services or
items that also assist in overcoming some barriers that would
otherwise interfere with their access to education. The SOG
program also provided grants to students with dependent children
and certain eligibility requirements were associated with that
specific funding and various other rules applied to other SOGs.
The purpose of the grant for students with dependents is to
compensate for the loss of income - otherwise
available for expenditures relating to care of children -
incurred as a result of attending an educational institution. In
that sense, counsel submitted this type of SOG enabled a
recipient charged with the care of children to use grant funds
for food, shelter or services in order to permit the student to
attend the classroom. Referring to the expert opinion offered by
Professor Philipps, counsel noted there are other examples of
disadvantaged students who utilize bursaries or grants in order
to assist them in the pursuit of education. Although their
circumstances may differ, many students are affected by poverty
and limitations on the ability to generate adequate income, but
still utilize a bursary, grant or scholarship in order to be
afforded the opportunity to attend an educational institution.
Once there, they must still pay for books, supplies and other
expenses related to obtaining an education. If each SOG recipient
used the funds for the intended purpose and in each case the
qualification process was based - in part - on establishing
financial need, then the fact the appellant had to provide
receipts for approved expenses - and others did not - does not
amount to a substantive difference between the categories of
students. Counsel referred to the evidence of Frank Smith -
provided at the Wignall, supra, hearing before the
Canadian Human Rights Tribunal - in which Smith stated there were
hundreds of funding sources available to disabled students
designed to provide the support necessary to permit them access
to education. Counsel conceded - as stated by Dr. Musselman in
her testimony and discussed in her report - that some disabled
persons rely on the same services as those purchased by the
appellant in the within appeal to the extent that if those
services are not available, those students will not be able to
pursue an education. Counsel submitted that disabled students who
do not qualify for a grant pursuant to the SOG program may
receive a grant from another source in order to purchase the same
services while others will receive no financial assistance in the
form of a bursary or similar funding but will still purchase the
services because they are necessary. In these scenarios, counsel
contended one student will pay tax on the bursary because it
falls within paragraph 56(1)(n) of the Act, and the
other will be paying for vital services with after-tax income
which - if they qualify for inclusion as a medical expense - can
be utilized in the calculation of the METC. Counsel submitted the
appellant was not subject to differential treatment - on an
enumerated ground - in respect of taxation on SOG funding related
to accommodation for his physical disability. Instead, the
appellant was being taxed on his source of income which he chose
to access in order to overcome an otherwise insurmountable
barrier to his continuing legal education. Counsel conceded the
appellant - as a profoundly deaf person - is a member of a group
that has been subject to historical disadvantage. However, with
respect to the criterion whether there is correspondence between
the ground of disability and the actual need, capacity and
circumstances relevant to the appellant, counsel acknowledged
that paragraph 56(1)(n) might not specifically take
into account the actual needs of the appellant but the Act
- taken as a whole - did recognize extraordinary costs associated
with living with a disability through those provisions relevant
to claiming the METC and/or DTC and in permitting the full
education credit to be claimed by disabled students even though
they are not attending an educational institution on a full-time
basis. Even with these provisions, counsel acknowledged the
Act was not designed with the intent to offset the entire
costs incurred by persons living with a disability, although
there is a concerted effort made on a regular basis to expand the
category of eligible medical expenses relevant to the METC -
generally - and specifically as it pertains to disabled persons
who purchase new devices and apparatus made available by advances
in technology. Counsel addressed the issue arising from the
nature of the interest affected by the legislation at issue and
submitted the Courts have recognized that - intrinsic to taxation
policy - there are distinctions created that recognize divergent
and/or competing interests while discharging the primary purpose
of generating revenue. Counsel submitted that inclusion into
income of a disability grant under the SOG program does not have
the effect of restricting access to an educational institution,
particularly in view of the evidence that the vast majority of
students have little or no taxable income. At a lower income
level, inclusion of the cost of sign language interpretation into
the METC category would offset any tax liability resulting from
inclusion of an SOG payment. For the foregoing reasons, counsel
submitted the inclusion of the disability grant into the
appellant's income did not constitute substantively
differential treatment on the basis of an enumerated ground and -
in any event - paragraph 56(1)(n) of the Act, does
not amount to discrimination within the meaning of s. 15 of
the Charter.
[58] Counsel for the respondent then
addressed the issue as to whether paragraph 56(1)(n)
of the Act - if it is found to violate the appellant's
s. 15 rights - could be saved by s. 1 of the
Charter. With respect to the criterion requiring the
rights violation be rationally connected with the aim of
the legislation, counsel submitted the object of the Act
is to raise revenue for the government and that such objective is
obviously necessary and substantial. The purpose of the impugned
paragraph is to capture income based on the fundamental principle
that all sources of income should be recognized in the process of
determining the extent of taxable income. Regarding the condition
that the impugned provision must minimally impair the
Charter guarantee, counsel referred to the evidence
adduced in the course of the hearing as it pertained to the
operation of the DTC, METC and education tax credit, all of which
were designed to function as an offset to any income inclusion
pursuant to paragraph 56(1)(n) of the Act.
Qualification for the DTC does not depend on whether or not
bursary income is included pursuant to said paragraph and counsel
noted the appellant had chosen not to claim sign language
interpretation expenses as part of his METC - even though they
were eligible for inclusion - and as a result of this omission
was not able to receive the ameliorative effect of that
provision. Counsel referred to the evidence of
Rosaria Zompanti - Chartered Accountant - and Donald Wilson
- an official with Department of Finance - which demonstrated the
appellant - in 1997 - because of his employment had income at a
level far beyond that of the overwhelming majority of students.
As a result, the appellant - even had he chosen to claim the
eligible medical expenses - would not have been able to offset -
totally - the effect of inclusion into income of the grant by
utilizing the METC as would be the case for the vast majority of
his fellow students. Counsel submitted it was the method of
filing his tax return that caused the appellant to incur a
greater tax liability than required because he could have
obtained a credit - to offset the effect of inclusion of the
grant - had he utilized provisions of the METC to recognize his
expenditure for sign language interpretation services during the
Bar Admission Course. Counsel submitted the combined operation of
the DTC, METC and special education credit calculation for
disabled students serves to reduce any impairment of the
appellant's Charter rights to a minimum as
contemplated by relevant jurisprudence. Further, counsel
submitted that to permit the appellant to choose between not
claiming the eligible expenses as part of the METC regime and to
ignore - for reporting purposes - certain income that was
expended in order to access the Bar Admission Course would not
only subvert the intention of Parliament but such course of
action is not relevant within the context of a comparative
concept of equality.
[59] In conclusion, counsel for the
respondent submitted this Court does not have jurisdiction to
grant any relief to the appellant other than by finding the SOG
funding did not fall within the meaning of bursary under
paragraph 56(1)(n) of the Act. Even though the
Court - pursuant to section 24 of the Charter - could declare
that provision to be of no force or effect, any additional relief
such as reading down said provision to - in effect - amend the
legislation by not having it apply to the particular type of
bursary received by the appellant, is beyond the authority of the
Court because it would constitute declaratory relief.
[60] In reply to the written submissions of
counsel for the respondent, counsel for the appellant submitted a
Memorandum of Fact and Law in a volume also containing further
reported cases and other reference material. First, counsel
submitted the Tax Court of Canada has several options by which
the Charter rights of the appellant can be protected.
Pursuant to the Tax Court of Canada Act, R.S.C. 1985
c. T-2, as amended, the Tax Court has the exclusive,
original jurisdiction to hear and decide the tax appeal of the
appellant. The appellant, as required by section 57 of the
Federal Court Act, followed the procedure of serving a
Notice of Constitutional Question to every Attorney General in
Canada and none elected to intervene in the within appeal.
Further, counsel submitted that at no point in the
3½ year-history of these proceedings had the
respondent ever questioned the jurisdiction of the Tax Court of
Canada to award the Charter remedies sought by the
appellant. Counsel submitted this Court is the only forum in
which a constitutional argument - made in the course of a
taxpayer's appeal - can be given consideration. In that
sense, it would have been obvious to Parliament that this Court
would have the right to award constitutional remedies in
situations in which the Court had found violations of the
Charter. The remaining content of the
above-mentioned reply submissions are summarized, as
follows:
1. It is an established
principle that where different interpretations of a statute are
available, the courts should choose the one most consistent with
the Charter.
2. In the within appeal,
this Court is a court of competent jurisdiction and, therefore, a
source of remedial jurisdiction as envisaged by s. 24(1) of
the Charter and has the authority to allow the
appellant's appeal by vacating or varying that part of the
assessment that found the BSWD/SOG grant to constitute income
and/or to refer the assessment back to the Minister for
reassessment in accordance with the directed remedy.
3. Awarding a personal
remedy to the appellant, pursuant to s. 24 of the
Charter, does not necessarily require the making of a
declaration; instead, the Court would refer the assessment back
to the Minister for reassessment based upon the Court's
Charter analysis which is not to be construed as judicial
amendment of a legislative provision.
4. The Tax Court of Canada
is a court of competent jurisdiction for the purpose of s. 52 of
the Constitution Act, 1982 and has the power to strike
down paragraph 56(1)(n) of the Income Tax Act on
the basis it is an unconstitutional provision. However, the
appellant does not seek that remedy and - instead - requests the
Court to "read down" that provision as it pertains to
the appellant's receipt of the SOG payment at issue because
to do otherwise is to offend his rights under s. 15(1) of
the Charter.
[61] Section 15(1) of the Charter
reads as follows:
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.
[62] In the case of Eldridge v. British
Columbia (Attorney General), [1997] 3 S.C.R. 624, the
Supreme Court of Canada decided that the failure of the Medical
Services Commission and hospitals to provide necessary sign
language interpretation - in order that deaf persons could
effectively communicate with medical professionals - constituted
a denial of s.15 (1) of the Charter and was not a
reasonable limit under s. 1. The judgment of the Court was
delivered by La Forest J. At pp. 667-669 he
stated:
As deaf persons, the appellants belong to an enumerated group
under s. 15(1) - the physically disabled. While this fact is not
contested, it is nonetheless relevant. As Wilson J. held in
Turpin, the determination of whether a law is
discriminatory is a contextual exercise. It is important, she
explained, at p. 1331, "to look not only at the impugned
legislation ... but also to the larger social, political and
legal context".
It is an unfortunate truth that the history of disabled
persons in Canada is largely one of exclusion and
marginalization. Persons with disabilities have too often been
excluded from the labour force, denied access to opportunities
for social interaction and advancement, subjected to invidious
stereotyping and relegated to institutions; see generally M.
David Lepofsky, "A Report Card on the Charter's
Guarantee of Equality to Persons with Disabilities after 10 Years
- What Progress? What Prospects?" (1997), 7 N.J.C.L.
263. This historical disadvantage has to a great extent been
shaped and perpetuated by the notion that disability is an
abnormality or flaw. As a result, disabled persons have not
generally been afforded the "equal concern, respect and
consideration" that s. 15(1) of the Charter demands.
Instead, they have been subjected to paternalistic attitudes of
pity and charity, and their entrance into the social mainstream
has been conditional upon their emulation of able-bodied norms;
see Sandra A. Goundry and Yvonne Peters, Litigating for
Disability Equality Rights: The Promises and the Pitfalls
(1994), at pp. 5-6. One consequence of these attitudes is the
persistent social and economic disadvantage faced by the
disabled. Statistics indicate that persons with disabilities, in
comparison to non-disabled persons, have less education, are more
likely to be outside the labour force, face much higher
unemployment rates, and are concentrated at the lower end of the
pay scale when employed; see Minister of Human Resources
Development, Persons with Disabilities: A supplementary
Paper (1994), at pp. 3-4, and Statistics Canada, A
Portrait of Persons with Disabilities (1995), at pp.
46-49.
Deaf persons have not escaped this general predicament.
Although many of them resist the notion that deafness is an
impairment and identify themselves as members of a distinct
community with its own language and culture, this does not
justify their compelled exclusion from the opportunities and
services designed for and otherwise available to the hearing
population. For many hearing persons, the dominant perception of
deafness is one of silence. This perception has perpetuated
ignorance of the needs of deaf persons and has resulted in a
society that is for the most part organized as though everyone
can hear; see generally Oliver Sacks, Seeing Voices: A Journey
Into the World of the Deaf (1989). Not surprisingly,
therefore, the disadvantage experienced by deaf persons derives
largely from barriers to communication with the hearing
population.
[63] After discussing the concept of adverse
effects discrimination in the context of provincial human rights
legislation, La Forest J - at p. 672 commented:
Adverse effects discrimination is especially relevant in the
case of disability. The government will rarely single out
disabled persons for discriminatory treatment. More common are
laws of general application that have a disparate impact on the
disabled. This was recognized by the Chief Justice in his
dissenting opinion in Rodriguez, supra, where he
held that the law criminalizing assisted suicide violated s.
15(1) of the Charter by discriminating on the basis of
physical disability. There, a majority of the Court determined,
inter alia, that the law was saved by s. 1 of the
Charter, assuming without deciding that it infringed s.
15(1). While I refrain from commenting on the correctness of the
Chief Justice's conclusion on the application of s. 15(1) in
that case, I endorse his general approach to the scope of that
provision, which he set out as follows, at p. 549:
Not only does s. 15(1) require the government to
exercise greater caution in making express or direct distinctions
based on personal characteristics, but legislation equally
applicable to everyone is also capable of infringing the right to
equality enshrined in that provision, and so of having to be
justified in terms of s. 1. Even in imposing generally applicable
provisions, the government must take into account differences
which in fact exist between individuals and so far as possible
ensure that the provisions adopted will not have a greater impact
on certain classes of persons due to irrelevant personal
characteristics than on the public as a whole. In other words, to
promote the objective of the more equal society, s. 15(1) acts as
a bar to the executive enacting provisions without taking into
account their possible impact on already disadvantaged classes of
persons.
[64] The Supreme Court of Canada in the case
of Eaton v. Brant County Board of Education, [1997] 1
S.C.R. 241, reviewed the decision of the Ontario Court of Appeal
wherein the school board was ordered not to place a disabled
child in a segregated classroom unless it had obtained the
consent of the parents or could demonstrate the probable
inadequacy of less exclusionary forms of placement within the
mandate of meeting the special educational needs of the child.
Sopinka J. - writing the opinion for the Court on the s. 15(1)
Charter issue - concluded the rights of the child had not
be violated by the decision of the Special Education Tribunal
permitting her to be placed in a special education class because
her needs were not being met in the usual classroom setting.
Commencing at p. 272, Sopinka J. stated:
The principles that not every distinction on a prohibited
ground will constitute discrimination and that, in general,
distinctions based on presumed rather than actual characteristics
are the hallmarks of discrimination have particular significance
when applied to physical and mental disability. Avoidance of
discrimination on this ground will frequently require
distinctions to be made taking into account the actual personal
characteristics of disabled persons. In Andrews v. Law Society
of British Columbia, [1989] 1 S.C.R. 143, at p. 169, McIntyre
J. stated that the "accommodation of differences ... is the
essence of true equality". This emphasizes that the purpose
of s. 15 (1) of the Charter is not only to prevent
discrimination by the attribution of stereotypical
characteristics to individuals, but also to ameliorate the
position of groups within Canadian society who have suffered
disadvantage by exclusion from mainstream society as has been the
case with disabled persons.
The principal object of certain of the prohibited grounds is
the elimination of discrimination by the attribution of untrue
characteristics based on stereotypical attitudes relating to
immutable conditions such as race or sex. In the case of
disability, this is one of the objectives. The other equally
important objective seeks to take into account the true
characteristics of this group which act as headwinds to the
enjoyment of society's benefits and to accommodate them.
Exclusion from the mainstream of society results from the
construction of a society based solely on "mainstream"
attributes to which disabled persons will never be able to gain
access. Whether it is the impossibility of success at a written
test for a blind person, or the need for ramp access to a
library, the discrimination does not lie in the attribution of
untrue characteristics to the disabled individual. The blind
person cannot see and the person in a wheelchair needs a ramp.
Rather, it is the failure to make reasonable accommodation, to
fine-tune society so that its structures and assumptions do not
result in the relegation and banishment of disabled persons from
participation, which results in discrimination against them. The
discrimination inquiry which uses "the attribution of
stereotypical characteristics" reasoning as commonly
understood is simply inappropriate here. It may be seen rather as
a case of reverse stereotyping which, by not allowing for the
condition of a disabled individual, ignores his or her disability
and forces the individual to sink or swin within the mainstream
environment. It is recognition of the actual characteristics, and
reasonable accommodation of these characteristics which is the
central purpose of s. 15(1) in relation to disability.
[65] At p. 273, Sopinka J. commented:
It follows that disability, as a prohibited ground, differs
from other enumerated grounds such as race or sex because there
is no individual variation with respect to these grounds.
However, with respect to disability, this ground means vastly
different things depending upon the individual and the
context...
[66] In 1999, the Supreme Court of Canada
decided the case of Law v. Canada, [1999]
1 S.C.R. 497, involving a claim that a widow's
s. 15(1) Charter rights were being violated because
certain provisions of the Canada Pension Plan
discriminated against her on the basis of age because surviving
spouses under 35 - unless they become disabled - are precluded
from receiving the survivor's pension until they reach age
65. The judgment of the Court was delivered by Iacobucci J. who
undertook an extensive analysis of earlier judgments of the Court
concerning the interpretation of s. 15(1) and the
development of the concept of equal treatment of individuals. In
his judgment, Iacobucci J. reviewed the decision of McIntyre J.
in Andrews v. Law Society of British Columbia, [1989] 1
S.C.R. 143, and at p. 520 commented:
In summary, then, the Andrews decision established that
there are three key elements to a discrimination claim under
s. 15(1) of the Charter: differential treatment, an
enumerated or analogous ground, and discrimination in a
substantive sense involving factors such as prejudice,
stereotyping, and disadvantage. Of fundamental importance, as
stressed repeatedly by all of the judges who wrote, the
determination of whether each of these elements exists in a
particular case is always to be undertaken in a purposive manner,
taking into account the full social, political, and legal context
of the claim.
[67] The purpose of s. 15(1) of the
Charter was discussed by Iacobucci J, at
pp. 524-525, as follows:
As was emphasized in early Charter decisions such as
Hunter v. Southam Inc., [1984] 2 S.C.R. 145, and R. v.
Big M. Drug Mart Ltd., [1985] 1 S.C.R. 295, and
re-iterated by McIntyre J. in Andrews, supra, the
proper approach to the definition of rights guaranteed by the
Charter is a purposive one. The purpose of s. 15(1)
is to be sought, in the words of Dickson J. (as he then was)
in Big M, supra, at p. 344, "by reference to
the character and the larger objects of the Charter
itself, to the language chosen to articulate the specific right
or freedom, to the historical origins of the concepts enshrined,
and ... to the meaning and purpose of the other specific rights
and freedoms with which it is associated within the text of the
Charter".
Since the beginning of its s. 15(1) jurisprudence, this Court
has recognized that the existence of a conflict between an
impugned law and the purpose of s. 15(1) is essential in order to
found a discrimination claim. This principle holds true with
respect to each element of a discrimination claim. The
determination of whether legislation fails to take into account
existing disadvantage, or whether a claimant falls within one or
more of the enumerated and analogous grounds, or whether
differential treatment may be said to constitute discrimination
within the meaning of s. 15(1), must all be undertaken in a
purposive and contextual manner.
What is the purpose of the s. 15(1) equality guarantee? There
is great continuity in the jurisprudence of this Court on this
issue. In Andrews, supra, all judges who wrote
advanced largely the same view. McIntyre J. stated, at p. 171,
that the purpose of s. 15 is to promote "a society in which
all are secure in the knowledge that they are recognized at law
as human beings equally deserving of concern, respect and
consideration". The provision is a guarantee against the
evil of oppression, he explained at pp. 180-81, designed to
remedy the imposition of unfair limitations upon opportunities,
particularly for those persons or groups who have been subject to
historical disadvantage, prejudice, and stereotyping.
[68] Iacobucci J. discussed in considerable
detail several opinions of the purpose of s. 15(1) as
variously expressed by members of the Court in the course of
deciding several cases concerning matters in which claims of
discriminatory treatment had been asserted. Continuing with his
analysis, at pp. 529-531, he stated:
All of these statements share several key elements. It may be
said that the purpose of s. 15(1) is to prevent the violation of
essential human dignity and freedom through the imposition of
disadvantage, stereotyping, or political or social prejudice, and
to promote a society in which all persons enjoy equal recognition
at law as human beings or as members of Canadian society, equally
capable and equally deserving of concern, respect and
consideration. Legislation which effects differential treatment
between individuals or groups will violate this fundamental
purpose where those who are subject to differential treatment
fall within one or more enumerated or analogous grounds, and
where the differential treatment reflects the stereotypical
application of presumed group or personal characteristics, or
otherwise has the effect of perpetuating or promoting the view
that the individual is less capable, or less worthy of
recognition or value as a human being or as a member of Canadian
society. Alternatively, differential treatment will not likely
constitute discrimination within the purpose of s. 15(1) where it
does not violate the human dignity or freedom of a person or
group in this way, and in particular where the differential
treatment also assists in ameliorating the position of the
disadvantaged within Canadian society.
As noted above, one of the difficulties in defining the
concepts of "equality" and "discrimination"
is the abstract nature of the words and the similarly abstract
nature of words used to explain them. No single word or phrase
can fully describe the content and purpose of s. 15(1). However,
in the articulation of the purpose of s. 15(1) just provided on
the basis of past cases, a focus is quite properly placed upon
the goal of assuring human dignity by the remedying of
discriminatory treatment.
What is human dignity? There can be different conceptions of
what human dignity means. For the purpose of analysis under
s. 15(1) of the Charter, however, the jurisprudence
of this Court reflects a specific, albeit non-exhaustive,
definition. As noted by Lamer C.J. in Rodriguez v. British
Columbia (Attorney General), [1993] 3 S.C.R. 519 at p. 554,
the equality guarantee in s. 15(1) is concerned with the
realization of personal autonomy and self-determination.
Human dignity means that an individual or group feels
self-respect and self-worth. It is concerned with physical and
psychological integrity and empowerment. Human dignity is harmed
by unfair treatment premised upon personal traits or
circumstances which do not relate to individual needs,
capacities, or merits. It is enhanced by laws which are sensitive
to the needs, capacities, and merits of different individuals,
taking into account the context underlying their differences.
Human dignity is harmed when individuals and groups are
marginalized, ignored, or devalued, and is enhanced when laws
recognize the full place of all individuals and groups within
Canadian society. Human dignity within the meaning of the
equality guarantee does not relate to the status or position of
an individual in society per se, but rather concerns the
manner in which a person legitimately feels when confronted with
a particular law. Does the law treat him or her unfairly, taking
into account all of the circumstances regarding the individuals
affected and excluded by the law?
The equality guarantee in s. 15(1) of the Charter must
be understood and applied in light of the above understanding of
its purpose. The overriding concern with protecting and promoting
human dignity in the sense just described infuses all elements of
the discrimination analysis.
[69] In this area of jurisprudence, it has
become accepted that the guarantee of equality is a comparative
concept requiring a court to identify treatment which can be seen
as differential when compared to one or more other persons or
groups. In the course of that necessary exercise, finding the apt
comparator is important when proceeding to evaluate matters -
described as contextual factors - in order to determine whether
discrimination is present. In this context, Iacobucci J.
continued as follows at pp. 531-532:
To locate the appropriate comparator, we must consider a
variety of factors, including the subject-matter of the
legislation. The object of a s. 15(1) analysis is not to
determine equality in the abstract; it is to determine whether
the impugned legislation creates differential treatment between
the claimant and others on the basis of enumerated or analogous
grounds, which results in discrimination. Both the purpose and
the effect of the legislation must be considered in determining
the appropriate comparison group or groups. Other contextual
factors may also be relevant. The biological, historical, and
sociological similarities or dissimilarities may be relevant in
establishing the relevant comparator in particular, and whether
the legislation effects discrimination in a substantive sense
more generally: see Weatherall, supra, at pp.
877-78.
When identifying the relevant comparator, the natural starting
point is to consider the claimant's view. It is the claimant
who generally chooses the person, group, or groups with whom he
or she wishes to be compared for the purpose of the
discrimination inquiry, thus setting the parameters of the
alleged differential treatment that he or she wishes to
challenge. However, the claimant's characterization of the
comparison may not always be sufficient. It may be that the
differential treatment is not between the groups identified by
the claimant, but rather between other groups. Clearly a court
cannot, ex proprio motu, evaluate a ground of
discrimination not pleaded by the parties and in relation to
which no evidence has been adduced: see Symes,
supra, at p. 762. However, within the scope of the ground
or grounds pleaded, I would not close the door on the power of a
court to refine the comparison presented by the claimant where
warranted.
[70] Commencing at p. 532, Iacobucci J.
discussed the approach to be taken in establishing discrimination
in a purposive sense with regard to the appropriate perspective
to be applied to any consideration of the contextual factors. He
stated:
D. Establishing
Discrimination in a Purposive Sense: Contextual Factors
(1) The Appropriate Perspective
The determination of the appropriate comparator, and the
evaluation of the contextual factors which determine whether
legislation has the effect of demeaning a claimant's dignity
must be conducted from the perspective of the claimant. As
applied in practice in several of this Court's equality
decisions, and as neatly discussed by L'Heureux-Dubé
J. in Egan, supra, at para. 56, the focus of the
discrimination inquiry is both subjective and objective:
subjective in so far as the right to equal treatment is an
individual right, asserted by a specific claimant with particular
traits and circumstances; and objective in so far as it is
possible to determine whether the individual claimant's
equality rights have been infringed only by considering the
larger context of the legislation in question, and society's
past and present treatment of the claimant and of other persons
or groups with similar characteristics or circumstances. The
objective component means that it is not sufficient, in order to
ground a s. 15(1) claim, for a claimant simply to assert, without
more, that his or her dignity has been adversely affected by a
law.
As stated by L'Heureux-Dubé J. in Egan,
supra, at para. 56, the relevant point of view is
that of the reasonable person, dispassionate and fully apprised
of the circumstances, possessed of similar attributes to, and
under similar circumstances, as, the claimant. Although I stress
that the inquiry into whether legislation demeans the
claimant's dignity must be undertaken from the perspective of
the claimant and from no other perspective, a court must be
satisfied that the claimant's assertion that differential
treatment imposed by legislation demeans his or her dignity is
supported by an objective assessment of the situation. All of
that individual's or that group's traits, history, and
circumstances must be considered in evaluating whether a
reasonable person in circumstances similar to those of the
claimant would find that the legislation which imposes
differential treatment has the effect of demeaning his or her
dignity.
I should like to emphasize that I in no way endorse or
contemplate an application of the above perspective which would
have the effect of subverting the purpose of s. 15(1). I am aware
of the controversy that exists regarding the biases implicit in
some applications of the "reasonable person" standard.
It is essential to stress that the appropriate perspective is not
solely that of a "reasonable person" - a perspective
which could, through misapplication, serve as a vehicle for the
imposition of community prejudices. The appropriate perspective
is subjective-objective. Equality analysis under the
Charter is concerned with the perspective of a person in
circumstances similar to those of the claimant, who is informed
of and rationally takes into account the various contextual
factors which determine whether an impugned law infringes human
dignity, as that concept is understood for the purpose of s.
15(1).
[71] In analyzing the relationship between
the grounds of discrimination and the particular characteristics
and circumstances of the claimant, Iacobucci J. expressed his
views in the following extract of his judgment, from p. 538:
It is thus necessary to analyze in a purposive manner the
ground upon which the s. 15(1) claim is based when determining
whether discrimination has been established. As a general matter,
as stated by McIntyre J. in Andrews, supra, and by
Sopinka J. in Eaton, supra, and referred to above,
legislation which takes into account the actual needs, capacity,
or circumstances of the claimant and others with similar traits
in a manner that respects their value as human beings and members
of Canadian society will be less likely to have a negative effect
on human dignity. This is not to say that the mere fact of
impugned legislation's having to some degree taken into
account the actual situation of persons like the claimant will be
sufficient to defeat a s. 15(1) claim. The focus must always
remain upon the central question of whether, viewed from the
perspective of the claimant, the differential treatment imposed
by the legislation has the effect of violating human dignity. The
fact that the impugned legislation may achieve a valid social
purpose for one group of individuals cannot function to deny an
equality claim where the effects of the legislation upon another
person or group conflict with the purpose of the s. 15(1)
guarantee. In line with the reasons of McIntyre J. and Sopinka
J., I mean simply to state that it will be easier to establish
discrimination to the extent that impugned legislation fails to
take into account a claimant's actual situation, and more
difficult to establish discrimination to the extent that
legislation properly accommodates the claimant's needs,
capacities, and circumstances.
[72] While recognizing that the relevant
factors will vary from case to case, Iacobucci J. noted - at
p. 541:
... The general theme, though, may be simply stated. An
infringement of s. 15(1) of the Charter exists if it can
be demonstrated that, from the perspective of a reasonable person
in circumstances similar to those of the claimant who takes into
account the contextual factors relevant to the claim, the
legislative imposition of differential treatment has the effect
of demeaning his or her dignity: see Egan, supra,
at para. 56, per L'Heureux-Dubé J.
Demonstrating the existence of discrimination in this purposive
sense will require a claimant to advert to factors capable of
supporting an inference that the purpose of s. 15(1) of the
Charter has been infringed by the legislation.
[73] In discussing the nature and extent of
a claimant's burden under s. 15(1), Iacobucci J.
made it clear that there was no onus to adduce data, social
science evidence in order to demonstrate there had been a
violation of that person's freedom or dignity. There was a
recognition that courts may use judicial notice and logical
reasoning to arrive at an appropriate determination of a portion
or all of the circumstances on which such a claim is based. In
addition, Iacobucci J. reiterated earlier positions taken by the
Court that it was not necessary for a claimant to establish that
the intent of the legislation was discriminatory in nature.
Instead, the important aspect is to consider whether a claimant
has proven that the purpose of the legislation has infringed
s. 15(1) or that the effect of the offending provision has
been to discriminate. Either one will suffice. In instances where
the law has drawn a distinction upon an enumerated ground - as
argued by the appellant in the within appeal - the issue will
revolve around whether the law discriminates in such a manner
that it can be regarded as having an adverse impact on the
claimant's human dignity. At pp. 545-547, Iacobucci J.
reviewed the matters earlier discussed in his reasons and
stated:
Taking these three points into account, it should be clear
that in some cases it will be relatively easy for a claimant to
establish a s. 15(1) infringement, while in other cases it will
be more difficult to locate a violation of the purpose of the
equality guarantee. In more straightforward cases, it will be
clear to the court on the basis of judicial notice and logical
reasoning that an impugned law interferes with human dignity and
thus constitutes discrimination within the meaning of the
Charter. Often, but not always, this will be the case
where a law draws a formal distinction in treatment on the basis
of enumerated or analogous grounds, because the use of these
grounds frequently does not correlate with need, capacity, or
merit. It may be sufficient for the court simply to take judicial
notice of pre-existing disadvantage experienced by the claimant
or by the group of which the claimant is a member in order for
such a s. 15(1) claim to be made out. In other cases, it will be
necessary to refer to one or more other contextual factors. In
every case, though, a court's central concern will be with
whether a violation of human dignity has been established, in
light of the historical, social, political, and legal context of
the claim. In order to succeed under s. 15(1), it is up to the
claimant to ensure that the court is made aware of this context
in the appropriate manner.
I should pause at this juncture to comment briefly upon an
alternative method of articulating the approach to be taken under
s. 15(1). I have reviewed in these reasons the general
approach taken to s. 15(1) by this Court, which involves three
broad elements, namely (1) the existence of differential
treatment, (2) the presence of enumerated or analogous grounds,
and (3) discrimination which brings into play the purpose of
s. 15(1). However, it is possible to understand the third
element of the s. 15(1) inquiry as really being a
restatement of the requirement that there be substantive rather
than merely formal inequality in order for an infringement of s.
15(1) to have been made out. Under this alternative view, the
definition of "substantive inequality" is
"discrimination" within the meaning of the
Charter, bringing into play the claimant's human
dignity. No substantive inequality would exist where the
claimant's human dignity was not brought into play by his or
her treatment by the state.
I agree with the general idea that, in practice in some cases,
it may well be duplicative to determine first whether
differential treatment exists, and then to determine whether the
purpose of s. 15(1) has been brought into play. As I
mentioned above, this will particularly be the case where adverse
effects discrimination is at issue, since the analysis of whether
the claimant's difference has been effectively ignored by an
impugned law will usually bring into play issues of human
dignity. In such cases, there may be no real difference in
analysis or result regardless of whether one or the other
approach is used.
I do have some reservations, however, which lead me to prefer
the approach which I have reviewed in these reasons, involving
three main elements rather than two. To take the adverse effects
discrimination example again, there may be cases where a law
which applies identically to all fails to take into account the
claimant's different traits or circumstances, yet does not
infringe the claimant's human dignity in so doing. In such
cases, there could be said to be substantively differential
treatment between the claimant and others, because the law has a
meaningfully different effect upon the claimant, without there
being discrimination for the purpose of s. 15(1). Thus, by
changing the formal structure of analysis under s. 15(1) from
that expressed in the previous jurisprudence, the alternative
approach referred to above might detract in practice from the
importance placed by courts upon contextual factors and the
purpose of s. 15(1). I believe it is easier and more effective
for a court to apply an approach which distinguishes conceptually
between differential treatment, on the one hand, and the
discriminatory quality of that differential treatment, on the
other.
Accordingly, I have continued this Court's practice of
articulating s. 15(1) analysis as having the three distinct
elements which have been reviewed in these reasons. At the same
time, I do not disagree with the idea that the concept of
substantive inequality could be defined in terms of its
discriminatory purpose or effect, nor do I mean to suggest that a
court which articulated its analysis using a different structure
would err in law simply by doing that, provided it addressed
itself properly and thoroughly to the purpose of s. 15(1) and the
relevant contextual factors.
[74] In the process of concluding that the
impugned legislative provisions found in the Canada Pension
Plan did not infringe s. 15(1) of the Charter,
Iacobucci J. stated at pp. 560-561:
In referring to the existence of a correspondence between a
legislative distinction in treatment and the actual situation of
different individuals or groups, I do not wish to imply that
legislation must always correspond perfectly with social reality
in order to comply with s. 15(1) of the Charter. The
determination of whether a legislative provision infringes a
claimant's dignity must in every case be considered in the
full context of the claim. In the present case, the appellant is
more advantaged by virtue of her young age. She is challenging
the validity of legislation with an egalitarian purpose and
function whose provisions correspond to a very large degree with
the needs and circumstances of the persons whom the legislation
targets. There are no other factors suggesting that her dignity
as a younger adult is demeaned by the legislation, either in its
purpose or in its effects.
[75] Turning to the specific facts of the
case, he continued at pp. 561-562:
In conclusion with respect to the particular circumstances of
the appellant's case, I would also note that people in the
position of the appellant are not completely excluded from
obtaining a survivor's pension, although it is delayed until
the person reaches age 65 unless they become disabled before
then. The availability of the pension to the appellant
strengthens the conclusion that the law does not reflect a view
of the appellant that suggests she is undeserving or less worthy
as a person, only that the distribution of the benefit to her
will be delayed until she is at a different point in her life
cycle, when she reaches retirement age.
In these circumstances, recalling the purposes of s. 15(1), I
am at a loss to locate any violation of human dignity. The
impugned distinctions in the present case do not stigmatize young
persons, nor can they be said to perpetuate the view that
surviving spouses under age 45 are less deserving of concern,
respect or consideration than any others. Nor do they withhold a
government benefit on the basis of stereotypical assumptions
about the demographic group of which the appellant happens to be
a member. I must conclude that, when considered in the social,
political, and legal context of the claim, the age distinctions
in ss. 44(1)(d) and 58 of the CPP are not
discriminatory.
[76] In the Law, supra, decision and
other earlier cases before the Supreme Court of Canada, the
approach taken by the Court has been to focus upon three main
issues in the course of undertaking an analysis concerning the
applicability of s. 15(1) of the Charter. In the
within appeal, as the examination affects the particular
circumstances relevant to the appellant, these central issues may
be stated, as follows:
1. does paragraph
56(1)(n) of the Act impose differential treatment
between the appellant and others students, in purpose or
effect;
2. is the enumerated
ground of disability the basis for the differential
treatment;
3. does paragraph
56(1)(n) of the Act have a purpose or effect that
is discriminatory within the meaning of the equality
guarantee.
[77] As a consequence, the first matter to
be resolved depends on providing answers to the following
questions:
1. Does paragraph
56(1)(n) of the Act draw a formal distinction
between the appellant - and other students receiving bursaries -
on the basis of one or more personal characteristics?
2. Was the appellant
subject to differential treatment based on his physical
disability?
3. Did the differential
treatment discriminate by imposing a burden upon the appellant or
withholding a benefit in a manner reflective of the stereotypical
application of presumed group or personal characteristics; or,
did it have the effect of promoting the view that the appellant
was less capable or worthy of recognition or value as a human
being or as a member of Canadian society deserving concern,
consideration and respect?
[78] With respect to the first question, in
order to determine whether or not discrimination has taken place,
this Court has to make a comparison between the appellant and an
appropriate comparator group. The position of the appellant is
that only students with disabilities were eligible for the
bursary paid to students under that part of the SOG program. The
appellant submitted an application for funding - in
the sum of $3,625 - in order to pay the estimated cost of sign
language interpretation and real-time captioning services
required for participation in the Bar Admission Course. The
Ontario Ministry of Education and Training, as the ministry
responsible for provincial participation in the
federal/provincial program, responded by approving a grant in the
sum of $2,000 on the basis this was the maximum amount available.
Conditions of the grant included the requirement that the funds
be expended for the purpose stated in the application and
receipts for monies paid for those services had to be provided
within a stated time limit. As a consequence of the appellant
expending the grant money solely for the purpose of obtaining
accommodation services within the classroom so he could
comprehend the course content, counsel for the appellant
submitted Simser had to pay more for his education than a person
without a disability because he was taxed on $1,500 of the
bursary proceeds without recognizing that the funds had not been
expended in a general sense to pursue a goal in the context of
acquiring a post-secondary education but were utilized for the
sole purpose of giving the appellant equal access to the
classroom in order that he could participate on an equal footing
with his fellow law students. The comparator chosen by the
appellant is that group comprising all non-disabled students
receiving bursaries, grants, fellowships, or scholarships who are
not required to incur expenses for accommodation services merely
to access the classroom either from a physical standpoint or in
order to comprehend course material. Even within the group
qualifying for the SOGs, the position taken by the appellant is
that he was subject to certain conditions and restrictions on the
use of the granted funds that were not applicable to the other
two categories within that program. The position of the
respondent is that it is equally important to compare the
appellant to disabled persons who receive grants other than the
particular SOG funding at issue in the within appeal to ensure
that a comparison to similarly situated persons is effected.
[79] The Supreme Court of Canada in
Granovsky v. Canada, [2000] 1 S.C.R. 703, heard an
appeal in which the plaintiff had argued that the drop-out
provision under the Canada Pension Plan made an unlawful
distinction between individuals with permanent disabilities and
persons - like herself - who suffered from a temporary
disability. The Court considered whether that distinction
constituted a violation of s. 15(1) of the Charter.
The judgment of the Court was delivered by Binnie J. who -
at pp. 722-724 - stated:
This case presents the first opportunity for the Court to
consider the disability ground of s. 15(1) since rendering its
decision in Law, supra. In that decision, Iacobucci
J., speaking for a unanimous Court at para. 39, set out what he
called "a synthesis" of "various
articulations" of the s. 15(1) test. I propose at the outset
to highlight some of the relevant themes from the Court's
earlier Charter treatment of disability, in so far as
those themes bear on the proper resolution of the present appeal,
and then, in light of that earlier jurisprudence, to turn to the
application of the guidelines summarized in Law commencing
at para. 88.
The respondent is somewhat dismissive of the appellant's
physical impairment, suggesting disbelief that a severe backache
could rise to the level of a constitutional challenge. The
respondent argues that s. 15(1) protection
is for serious disabilities. ...Human Right Boards and
Tribunals in Canada have held that absences from work because of
temporary illnesses or injuries are not ordinarily characterized
as disabilities. ...
This perspective puts too much focus on the impairment itself
and not enough focus on the government's response to it. I
therefore propose to discuss what at this stage appear to be
circumstances that signal the enumerated ground of disability
while underlining the obvious fact that the analysis will undergo
further refinement in future cases as they arise.
The Charter is not a magic wand that can eliminate
physical or mental impairments, nor is it expected to create the
illusion of doing so. Nor can it alleviate or eliminate the
functional limitations truly created by the impairment. What s.
15 of the Charter can do, and it is a role of immense
importance, is address the way in which the state responds to
people with disabilities. Section 15(1) ensures that governments
may not, intentionally or through a failure of appropriate
accommodation, stigmatize the underlying physical or mental
impairment, or attribute functional limitations to the individual
that the underlying physical or mental impairment does not
entail, or fail to recognize the added burdens which persons with
disabilities may encounter in achieving self-fulfilment in a
world relentlessly oriented to the able-bodied.
It is therefore useful to keep distinct the component of
disability that may be said to be located in an individual,
namely the aspects of physical or mental impairment, and
functional limitation, and on the other hand the other component,
namely the socially constructed handicap that is not located in
the individual at all but in the society in which the individual
is obliged to go about his or her everyday tasks. ...
[80] Later in his judgment, while dealing
with the issue of the comparative approach, Binnie J.
commented at pp. 729-730:
The identification of the group in relation to which the
appellant can properly claim "unequal treatment" is
crucial. The Court established at the outset of its equality
jurisprudence in Andrews, supra, that claims of
distinction and discrimination could only be evaluated "by
comparison with the conditions of others in the social and
political setting in which the question arises"
(p. 164). See also Law, supra, at para.
24:
This comparison determines whether the s. 15(1) claimant may
be said to experience differential treatment, which is the first
step in determining whether there is discriminatory inequality
for the purpose of s. 15(1).
The appellant contends that he ought to be compared to an
ordinary member of the workforce who was able-bodied during the
contribution period because the appellant was being required to
satisfy the level of contribution expected of an ordinary member
of the workforce with insufficient regard for periods of
temporary disability. However, while a s. 15 complainant is
given considerable scope to identify the appropriate group for
comparison, "the claimant's characterization of the
comparison may not always be sufficient. It may be that the
differential treatment is not between the groups identified by
the claimant, but rather between other groups" (Law,
supra, at para. 58).
Such identification has to bear an appropriate relationship
between the group selected for comparison and the benefit that
constitutes the subject matter of the complaint. As was pointed
out in Law, supra, at para. 57:
Both the purpose and the effect of the legislation must be
considered in determining the appropriate comparison group or
groups.
[81] Prior to arriving at the conclusion
there had been no infringement of s. 15 of the Charter,
Binnie J. focused directly on the issue of disability. At p. 747
he commented:
The "purposive" interpretation of s. 15 puts the
focus squarely on the third aspect of disabilities, namely on the
state's response to an individual's physical or mental
impairment. If the state's response were, intentionally on
through effects produced by oversight, to stigmatize the
underlying physical or mental impairment, or to attribute
functional limitations to the appellant that his underlying
physical or mental impairment did not warrant, or to fail to
recognize the added burdens which persons with temporary
disabilities may encounter in achieving self-fulfilment, or
otherwise to misuse the impairment or its consequences in a
discriminatory fashion that engages the purpose of s. 15, an
infringement of equality rights would be established. But neither
Parliament in the design of the CPP, nor the Minister in his
administration of the CPP in relation to the appellant, did any
of these things, in my opinion.
While I have every sympathy for the appellant's injured
back and the problematic employment history to which it may have
contributed, I do not believe that a reasonably objective person,
standing in his shoes and taking into account the context of the
CPP and its method of financing through contributions, would
consider that the greater allowance made for persons with greater
disabilities in terms of CPP contributions
"marginalized" or "stigmatized" him or
demeaned his sense of worth and dignity as a human being.
[82] Ms. Ena Chadha - co-counsel for the
appellant in the within appeal - participated in the
Wignall, supra, hearing before the Canadian Human
Rights Commission, appearing on behalf of the Council of
Canadians with Disabilities, an interested party in the
proceedings. Counsel for the respondent in the within appeal
- Ms. Tracey Harwood-Jones - acted as
counsel for the Department of National Revenue. The complainant -
Wignall - appeared on his own behalf. The decision is located at
tab 6 of Volume I of Respondent's Book of Authorities. The
facts comprising the complaint before Chairperson Guy A. Chicoine
are remarkably similar to the circumstances relevant to the
appellant in the within appeal. Understandably, counsel may have
experienced that peculiar sensation so aptly defined - by that
great philosopher, Yogi Berra - as "déja vu all over
again". The basis of the complaint was that Wignall - a
22-year old deaf student attending the University of
Manitoba's Social Work Program in the fall term of 1995
received an SOG for students with disabilities in the amount of
$3,000. The University of Manitoba had provided Wignall with sign
language interpreters - free of charge - for classroom lectures
during the regular session but had requested that he seek out
other sources of funding for these services. As a result, the SOG
was obtained from the Government of Canada. The funds were turned
over to the University of Manitoba to help defray a portion of
the cost of the interpreter services. In 1996, Wignall received a
T4A Supplementary indicating the amount of the SOG was to be
considered as income for purposes of his 1995 taxation year.
Wignall regarded the characterization of the SOG as a bursary -
subject to taxation - as unfair, discriminatory and contrary to
s. 5 of the Canadian Human Rights Act which makes it a
discriminatory practice in the provision of services ordinarily
available to the public at large to differentiate adversely in
relation to an individual on the basis of a prohibited ground of
discrimination including physical disability. In filing his
complaint before the Commission, Wignall asserted the grant
merely enabled him to deal with his disability rather than
providing him with any actual benefit and that to subject the
receipt to taxation - like an ordinary bursary - was unfair. In
the Wignall matter, the position of Revenue Canada was
that the receipt of the bursary amount fell squarely within the
confines of paragraph 56(1)(n) of the Act. Unlike
the appellant's situation in the within appeal, the inclusion
of the particular SOG into Wignall's income had no impact on
his 1995 income tax return since he was entitled to a refund of
all taxes paid at source. The only effect of the income inclusion
was to reduce Wignall's provincial tax credit by the sum of
$25. The witness - called by counsel for Revenue Canada - stated
it was not the policy of the federal government to remove one
particular source of funding within the category of scholarships,
bursaries etc., as enumerated in paragraph 56(1)(n) of the
Act and - instead - the government had chosen to take all
sources of income into account for purposes of taxation and to
provide tax assistance in specific areas by means of the tax
credit system. As in the within appeal, the SOG paid to Wignall
was linked to the Student Loan Program and was dependent on the
applicant having demonstrated financial need. The position of the
complainant - supported by counsel to the Commission - was that
the SOG had been awarded to Wignall on the basis it would be used
to cover the exceptional cost of sign language interpreters and,
as such, the funds took on the nature of an accommodation
specifically designed to alleviated the barriers created by
deafness. In the course of undertaking his analysis, Chairman
Chicoine - at paragraph 44 of his reasons - chose the comparator
group proposed by the claimant as "constituting all other
students who receive grants, bursaries, etc." At paragraph
45 of his reasons, Chairman Chicoine stated:
The first question to be answered is whether the taxation of
the Special Opportunity Grant, in the same manner as any other
grant or bursary, "draws a formal distinction between the
claimant and others on the basis of one or more personal
characteristics." In my view, the answer is that it does
not. The Special Opportunity Grant is taxed, according to Mr.
Rector, the witness called by Revenue Canada, because one of the
fundamental principles of the income tax system is to take into
consideration all sources of income in determining a person's
ability to pay. Revenue Canada has not given the Special
Opportunity Grant any special status, but treats it like any
other grant, bursary or scholarship. It should be noted that
grants, bursaries and scholarships are given to students based on
a myriad of considerations including financial need, academic
achievement, association with a particular group, as an
attraction to a particular course of study, and even on the basis
of gender, race, national or ethnic origin, religion, marital
status and age. According to Revenue Canada's policy, all of
these grants, bursaries and scholarships must be declared as
income whether or not they were awarded based on a personal
characteristic of the recipient.
[83] Chairman Chicoine decided Wignall had
not been subjected to differential treatment by the inclusion of
the SOG into his income.
[84] Turning to the facts relevant to the
within appeal, the SOG was made available to the appellant only
after he had demonstrated financial need, the overarching
component within the particular structure designed in accordance
with the overall program concerned with financing students
through loans and grants. All students receiving financial aid in
a form satisfying the ordinary definitions of the words used
within paragraph 56(1)(n) of the Act, were required
to include the taxable portion thereof into income. This
requirement applied whether the grant was for the specific
purpose of enabling a student to receive funds to cover the cost
of transportation to and from the educational institution or to
pay tuition and related fees, purchase books and supplies,
compensate tutors or acquire specialized equipment and services.
In terms of specific expenditures, there will, of course, be
differences depending on the nature and intent of the financial
aid and the needs of the recipient as recognized by the awarding
of a particular bursary, fellowship or scholarship. The
specificity of the purpose of the bursary does not amount to
differential treatment nor does verification of the amounts
expended. The other groups eligible for SOGs were female doctoral
students and students with dependent children. There is no cogent
evidence concerning the nature of restrictions imposed upon the
recipients but it is safe to assume the terms under which their
grants were provided were substantially broader in nature than
those applicable to Simser. He applied for funding in order to
obtain certain services - real-time captioning and sign language
interpretation - and the bursary was awarded - albeit in a lesser
amount than he had sought - in order that those necessary
services could be obtained for the purpose of permitting him to
attend the Bar Admission Course. However, all three categories
required potential recipients to demonstrate financial need and
to submit the appropriate documentation to support the claim of
eligibility on that ground as well as to demonstrate conformity
with several other terms and conditions. In the case of an SOG
paid to a student with dependents, the recipient probably did not
have to account for specific purchases of baby food, diapers, and
other ordinary items acquired for the benefit of the children but
it is reasonable to assume there were certain conditions
- applicable both before and after the awarding of the
grant - which were binding upon that student in a general sense.
Obviously, the purpose of aiding students with their education -
by making funds available to alleviate burdens created by
financial need - is not to provide funds to purchase items
considered as recreational in nature or to enable a student to
participate in activities not having a reasonable and
demonstrable link with the particular educational pursuit. Frank
Smith, in the course of his testimony (Exhibit A-7) in the
Wignall, supra, hearing stated that in order to
obtain an SOG relating to permanent disability, the student must
provide adequate documentation to demonstrate his or her
particular disability together with written confirmation by a
qualified individual at the post-secondary institution to verify
that the specified services - enumerated in the grant application
- were needed. In addition, the applicant had to provide two cost
estimates of the services required. Smith testified that other
students who were eligible for SOGs including high-need part-time
students, women in doctoral studies, and the newest category
- students with dependents - did not have to submit
cost estimates nor receipts for expenditures. Smith stated that
in 1997-1998, 2,500 SOGs for students with disabilities were
approved.
[85] The Federal Court of Appeal in the case
of Kasvandv. Canada, [1994] F.C.J. No. 510
considered a challenge to the constitutionality of
paragraph 146(1)(c) of the Act which defined
earned income upon which the deductible amount of RRSP premiums
is determined. At para. 3 of his judgment, Mahoney J.A.
stated:
The Applicant's perception is that paragraph
146(1)(c) denies a deduction in respect of income from
sources on which many elderly, disabled persons
disproportionately depend while allowing it in respect of income
from sources usually more accessible to younger, able bodied
persons. That may be so, but it remains that the distinction
among taxpayers is drawn on the basis of sources of income. It is
not drawn on any basis of discrimination proscribed by subsection
15(1). Elderly and disabled persons who have "earned
income" are as entitled as any other taxpayer to a deduction
while the young and able bodied are identically limited.
[86] In the within appeal, the taxable
nature of the SOG received by the appellant is due to the nature
of the funding without reference to any personal characteristics.
The specific provision of the Act - paragraph
56(1)(n) - does not draw any formal
distinction between Simser and other students - whether they were
disabled, recipients of another category of SOG or non-disabled
students obtaining financial aid by way of a bursary, scholarship
or fellowship. The legislation seeks to tax money provided
through various sources to persons who - by ordinary definition
of those terms - are engaged in the pursuit of education. The
paragraph draws a distinction between the aforementioned
categories in that an amount received as a prize is only taxable
if awarded for achievement in a field of endeavour ordinarily
carried on by the taxpayer.
[87] The second part of the question is
whether the impugned provision fails to take into account the
appellant's already disadvantaged position within Canadian
society resulting in substantively different treatment between
him and others on the basis of his disability.
[88] Returning to the Wignall,
supra, hearing, with regard to this point as raised by the
complainant in that matter, Chairman Chicoine stated:
[46] The alternative question is
whether the taxation of the Special Opportunity Grant "fails
to take into account the claimant's already disadvantaged
position within society resulting in substantively
differential treatment between the claimant and others on the
basis of one or more personal characteristics." [Emphasis
added.] Counsel for the Commission suggested in argument that
because of the fact that the Special Opportunity Grant is only
available to disabled persons, it should not be lumped with all
other scholarships, fellowships, bursaries, prizes and research
grants which "all other students" might receive. I am
unable to find, based on the evidence presented at the hearing,
that the inclusion of the Special Opportunity Grant in the income
of the recipient for taxation purposes results in
"substantively differential treatment" based on the
Complainant's personal characteristics. Mr. Wignall did not
receive the grant based on his disability only, but also because
he was able to meet the means test of the Canada/Manitoba Student
Loan program and because he agreed to use the funds to purchase
services that would assist him in accommodating his disability in
the classroom setting.
[47] Answering the part of the
question whether the policy to treat the Special Opportunity
Grant like any other grant, bursary or scholarship fails to take
into account "the claimant's already disadvantaged
position within Canadian society" requires an examination of
the larger issue of society's responsibility to assist
persons with disabilities generally. The creation of the Special
Opportunity Grant in the first place was obviously a recognition
by the Government of Canada that students with disabilities were
in need of special financial assistance to access education at
the post-secondary level. The amount which any particular
student would receive was determined, at least to some extent,
according to the student's own ability to pay. A student
could only access these funds if he met the qualifications of the
Canada/Manitoba Student Loan program.
[89] Chairman Chicoine went on to discuss
the insignificant impact on the federal treasury if SOGs were tax
free and noted the Scott Task Force report had made that specific
recommendation but the government had declined to implement it in
order to exempt this category of financial assistance from the
taxing provision.
[90] There is no doubt the appellant has
been in a difficult position since birth. His hearing loss is
profound in the most profound meaning of that word. He testified
it has required the combined energy flowing from a life-long
struggle by his devoted parents and his own concerted efforts in
order that he could obtain proper elementary schooling, secondary
and post-secondary education in a non-segregated
educational environment. He outlined some of the costs associated
with living with his particular disability and expressed the
frustration experienced on a regular basis at not being able to
communicate with others in a variety of ordinary settings that
most people take for granted. He described the disadvantage
suffered by any student when unable to participate fully in the
classroom and - equally important - thereafter in
study groups with fellow students. Dr. Musselman, in the
course of her testimony as an expert, explained the nature of the
severe difficulties faced by students with disabilities in
accessing post-secondary education and making the transition from
school to the workplace following graduation. As part of her
study, she reported that - in 1992 - only 2% of deaf Canadians
held university degrees compared to 15% of males - and 12.2% of
females - without disabilities. Students with disabilities -
other than deafness - were able to obtain university degrees at
the rate of 6.2% for males and 5.6% for females. In Dr.
Musselman's opinion, this significant difference in
university graduation rates - including those applicable to other
disabled students as compared to the deaf and hard-of-hearing
students - is attributable to the extreme disadvantages arising
from barriers to communication. While students with disabilities
will experience additional costs - both direct and indirect -
deaf students must expend considerable sums of money solely for
the purpose of addressing communication barriers and even the
best sign language interpretation can convey only about 85% of
the information being communicated in an oral classroom
environment so that additional accommodation supports such as
note takers are required.
[91] Professor Philipps testified as an
expert in issues pertaining to tax policy and social equality and
observed that the Medical Expense Tax Credit - METC - was
designed to reduce the tax payable by taxpayers who incurred
certain enumerated medical expenses. Within the context of the
provision, those persons making the payments were referred to as
"patients" and - for the most part - were not
individuals with disabilities. She stated that many expenditures
- including real-time captioning - were not recognized within the
framework of the METC and would not be available to offset the
tax paid on a bursary to a disabled student. In addition, the
METC may not apply if an individual student's qualifying
medical expenses are less than the amount established as a
threshold. Professor Philipps explained that - in 1997 - sign
language interpretation was included as an eligible expense for
purposes of the METC but it was not clear whether such
expenditure for this service - in a classroom setting as opposed
to having some nexus with medical treatment - would necessarily
qualify upon closer examination by the Minister. The Disability
Tax Credit - DTC - was considered by Professor Philipps to be
unavailable to help offset the tax payable on a bursary to a
student with disabilities because of the nature of the multiple
restrictive criteria contained in the relevant provision of the
Act. Further, she stated the purpose of the DTC was to
offset general costs of living with disability on a daily basis
and noted many costs are difficult to itemize. Since many
students qualifying for a grant based on disability would never
be able to obtain a DTC and - because the DTC was calculated at
the lowest tax rate while inclusion into income of any bursary
would be taxed at the appropriate marginal rate - Philipps
concluded the DTC would never offset the increase in tax
resulting from inclusion of the bursary amount into income
because even if there is a match in a strict accounting sense,
the DTC will not be otherwise available to counteract the effect
of the individual's indirect costs of living with the
disability. In the course of her work in the field of taxation
and social equality, Philipps ascertained that a
"barrier" can be defined as anything in the environment
that makes it impossible for an individual with a disability to
participate on an equal footing with a non-disabled person. In
order to compensate for the disability with a view to surmounting
the barrier, Philipps considered that "accommodation
funding" embraces whatever remedial measure is employed to
either eliminate - or to reduce as much as possible - that
particular set of circumstances constituting the barrier. In her
view, taxing people on amounts received purely by way of
accommodation funding is unfair and merely reinstates the prior
condition of being in an unequal position when compared to
non-disabled students who receive funding.
[92] The student loan program as it applied
to students with disabilities provided loans to part-time
disabled students if their course load represented 40% of a
full-time course load. This option was not available to
non-disabled students. Other students not qualifying for a grant
based on a disability - perhaps, because of an inability to
demonstrate financial need - would have been required to purchase
the same sort of accommodation services as those obtained by the
appellant in the within appeal. The appellant faced a
communication barrier due to his profound deafness and required
financial assistance to overcome that hurdle. Other students
whether disabled or not and whether eligible for SOGs or a myriad
of other forms of financial assistance - based on a multitude of
criteria - also required funding to overcome some circumstance
that created an otherwise seemingly insurmountable barrier to
that important pursuit. Some students might belong to a
disadvantaged group within Canadian society as in the case of an
aboriginal student living in an area of extremely high
unemployment affected by a devastatingly low per capita annual
income. As discussed earlier in another context, the requirement
that the receipt of need-based funding must be included into
income is based on the premise that all students will be treated
equally rather than attempting to create specialized categories
within that broad group even though the downstream effect will
vary from person to person - at tax time - depending on a
multitude of other factors including the amount of other taxable
income received during that taxation year. Even in 1997, there
was recognition that recipients of amounts included within
paragraph 56(1)(n) of the Act were entitled to a
$500 exemption from taxation. That amount - appropriately so -
has since been increased to $3,000. The position of the appellant
is that the Minister should have looked beyond the mere form of
the payment issued pursuant to the BSWD portion of the SOG
program which - in turn - was part of
the overall student financing framework of the Canada Student
Loans Program. By delving deeper into the true nature of the
bursary, the appellant argues the Minister could have ascertained
that it was expended - as required - for the sole purpose of
purchasing those accommodation services enabling him to access
the classroom on an equal basis. The appellant submitted the
omission of that second step fails to take into account his
lifelong disadvantaged position - as a deaf person - and that the
refusal to refine the meaning of a bursary so as to exclude
accommodation funding - as defined by experts - results in
substantively differential treatment between himself and other
students at the Bar Admission Course based solely on his personal
characteristic, namely, deafness.
[93] Taking all of the relevant evidence
into account, I cannot find that the Minister was required to
interpret paragraph 56(1)(n) of the Act in such a
manner as to create a difference between the appellant and other
recipients of bursaries, fellowships, scholarships and taxable
prizes, in order that the payment to the appellant could be
exempted from taxation. The appellant argued that even in the
event the SOG amount was initially included into income under
that paragraph on the basis it was a bursary in accordance with
ordinary usage of that term - as I have found earlier in these
reasons - then, the Minister should have analyzed all of the
circumstances surrounding that grant and categorized it as more
appropriately constituting a social assistance payment. By
undertaking that action, the relevant sum could be removed from
income and the net effect would be zero for purposes of taxation.
In my view, such subsequent exclusion from income would be based
on differential treatment because it would re-define the payment
on the basis of the intended - and actual - purpose of the
expenditure - purchasing real-time captioning and sign language
interpretation services - rather than taxing the payment because
it was one of those forms of financial assistance for students
- disabled or not - that attracts
taxation by virtue of the relevant paragraph of the Act.
The provisions of the Act pertaining to the DTC and METC
and certain special terms defining full-time attendance on the
part of disabled students could be utilized in order to
ameliorate the effects of an increased amount of tax caused by
inclusion of a bursary amount into income.
[94] In my view, the appellant has failed to
demonstrate that paragraph 56(1)(n) of the Act
failed to take into account his position within the category of
already disadvantaged persons in a manner that resulted in
substantively differential treatment between himself and other
bursary recipients on the basis that he was deaf and required
certain specialized services in order to pursue his
education.
[95] If the appellant was subject to
differential treatment between himself and other students who
receive grants, the question to be determined is whether the
difference is based on his physical disability, an enumerated
ground within s. 15(1) of the Charter. The requisite
examination necessarily involves considerable overlapping of
issues in terms of analysis and general discussion. In the
Wignall, supra, hearing, Chairman Chicoine
stated:
[49] The second question is
whether the claimant is subject to differential treatment based
on one or more enumerated and analogous grounds. Having already
decided that Mr. Wignall was not subjected to differential
treatment by the inclusion of the Special Opportunity Grant in
his income, it does not really matter that the grant was
ear-marked for interpreter services in the classroom. Its
characterization as income to the recipient did not depend on the
personal characteristics of the recipient. Mr. Wignall was not
being taxed because he was disabled. He was taxed because he
received a grant given to assist him with some of the exceptional
costs he would incur in his pursuit of an education. Whether or
not tax would be payable on the amount of the grant depended on
numerous other factors, not the least of which was the amount of
income which Mr. Wignall received from other sources.
[96] In the within appeal, Simser was not
taxed because he was deaf. He was not taxed because the grant
required him to expend the funds on the captioning and
interpretation services or because he was required to provide
receipts while other SOG recipients were not subject to this
condition. Again, the appellant was taxed on the basis of the
source of his income which was comprised of the $1,500 taxable
portion of his $2,000 bursary. The differential effect upon him
was due - in part - to his decision not to claim the amount paid
for the ASL interpretation portion of the overall accommodation
services for purposes of calculating the METC credit and the
significant impact of his total income in the 1997 taxation year.
The overwhelming majority of students - whether receiving
bursaries, etc. or not - traditionally have little or no taxable
income. If the appellant had been in that category, then by
claiming the DTC and the appropriate METC, the inclusion of the
bursary amount into his income would have had little or no
effect. The particular circumstances relevant to the appellant
placed him in a higher tax bracket so that the amount of the METC
- had it been claimed - was less than the marginal tax rate on
the sum of $1,500 that had been included into income. In 1997,
the tax-exempt amount of $500 was applicable to all persons
receiving payments within the ambit of paragraph 56(1)(n).
The effect of the exemption was to reduce the overall rate of
taxation - albeit, notionally - attributable to the entire amount
of the receipt. Again, the appellant required financial
assistance to overcome a barrier to education and received a
bursary to assist him in attending the Bar Admission Course.
Without that SOG funding, he faced an insurmountable barrier
which would have prevented him from becoming a fully qualified
lawyer unless he made the decision either to spend his own
resources or seek out another form of financial assistance. He
utilized the bursary to purchase services to overcome the
specific barrier created by his deafness. There is, however, no
evidence to support the conclusion that deaf students rely more
on grants as a source of funding than other disabled students.
The finding of a study referred to by Frank Smith in his
testimony at the Wignall, supra, hearing was that
44% of the participating students with disabilities reported
their total income from all sources was not sufficient to cover
their costs. The particular study concluded that an additional
sum of $3,000 was required - on average - by a disabled student
and recommended this funding become available in the form of
grants as opposed to loans. The report - prepared in 1993 - was
submitted to the Disabled Persons Participation Program,
Secretary of State. The grant component of the Canada Student
Loans Program was introduced - in 1995 - to support the
exceptional costs incurred by groups identified as requiring
additional assistance including students with permanent
disabilities, high-needs part-time students and women in doctoral
programs, followed by another category composed of students with
dependents. The relevant taxing provision at issue - paragraph
56(1)(n) of the Act - is applicable to all
recipients of those grants and no discrimination arises because
of the appellant's particular disability nor is taxability of
the SOG receipt dependent on membership within the group of
students with disabilities or the wider group of students
eligible to receive SOGs. Instead, it applies to the entire
community of students who receive certain kinds of financial
assistance designed to aid them in the pursuit of higher
education.
[97] Another requisite branch of inquiry is
to examine whether the impugned paragraph has a purpose or effect
that is discriminatory within the meaning of the equality
guarantee. One must determine whether there is differential
treatment which discriminates by imposing a burden or withholding
a benefit from the claimant in a manner which is stereotypical
when applied to a presumed group or personal characteristics. The
analysis requires consideration whether the differential
treatment has the effect of perpetuating or promoting the view
that the appellant is less capable and worthy of recognition or
value as a human being or as a member of Canadian society
deserving - in equal measure - concern, respect and
consideration. Referring again to the decision of Chairman
Chicoine in Wignall, supra, with respect to this
issue, he stated:
[51] On the facts of this case,
the question becomes: "Does the inclusion of a Special
Opportunity Grant as income of the recipient for the purpose of
calculating taxable income impose a burden upon or withhold a
benefit from a disabled person in a manner that reflects a
stereotypical attitude toward persons with disabilities or which
would perpetuate the view that a disabled person is less capable
or worthy of recognition as a human being or member of
society?" In order to answer this question in the
affirmative, one would have to conclude that Revenue Canada was
obligated to treat the recipient of this particular grant
differently from all other recipients of grants, bursaries or
scholarships because it was intended to cover certain costs
associated with a person's disability. This Tribunal is not
prepared to impose upon Revenue Canada the obligation to exempt
from taxation all income which might be used to alleviate a
person's disability. In fact, Revenue Canada is treating the
recipient of this grant like any other recipient of a grant,
bursary or scholarship. Disabled persons are not exempted from
paying personal income tax. In fact, s. 2 of the Canadian
Human Rights Act recognized that all individuals should have
an opportunity equal with other individuals to make for
themselves the lives that they are able and wish to have and to
have their needs accommodated, consistent with their duties
and obligations as members of society, without being hindered
in or prevented from doing so by discriminatory practices based
on the enumerated prohibited grounds. The taxation of the Special
Opportunity Grant does not, in my view, impose a burden or
withhold a benefit in the manner contemplated in the Law
analysis. In fact, the inclusion of the grant in income is
consistent with the duties and obligations of all persons to pay
a fair share of tax on income. The burden imposed on Mr. Wignall
in this case was minimal. It was not an affront to his dignity as
a human being to test his entitlement to the grant against the
yardstick of total income from all other sources.
[98] The evidence relevant to the within
appeal makes it clear that the appellant - as a deaf
person - is part of a larger group of disabled persons
within our society that has been historically marginalized and
treated unequally. Despite the appellant's amazing academic
success in obtaining degrees and professional designations - in
several disciplines - he testified that he is not able to
generate the level of income ordinarily attributable to a person
with his specialized qualifications and experience. In
Simser's opinion, the primary reason for this difference is
his particular disability because the need to understand and
communicate effectively is one of the most important requirements
for persons seeking to earn a living as an administrator engaged
in business or as an accountant or lawyer. On a daily basis, the
appellant incurs extraordinary costs for various devices and
ongoing maintenance of apparatus and equipment. He had to pay for
expensive surgery in order to obtain an implant in the hope it
would provide a lasting improvement to his hearing ability. The
appellant is required to function within a society that is
designed on the basis that he - like nearly everyone else - can
hear. With regard to accessing post-secondary institutions, his
position is that he is entitled to receive educational services -
like medical services - as a right and that any accommodation
provided to achieve that goal is integral rather than ancillary.
In order to be truly equal, the appellant argued that taxing a
bursary designed to pay for specialized accommodation services -
in order to alleviate the effects of a disability - is to ignore
the historical disadvantage suffered by deaf people. The
appellant's submission is that taxing such forms of
assistance as other income - in the ordinary sense - perpetuates
the problem and reduces further the likelihood that deaf persons
will pursue advanced education. The Act, as mentioned
earlier, does attempt to take into account unusual costs
associated with living with a disability by utilizing DTC and
METC provisions. Although not perfect, the METC provision
undergoes constant revision in an attempt to keep up with
advancing technology and the development of new treatments and
devices. The specific paragraph at issue does not take into
account the actual circumstances of the appellant. He is treated
as a student receiving a form of financial assistance that
required him to pay tax on any amount in excess of $500. The
real-time captioning expenditure was not an eligible expense for
purposes of the METC but it appears as though the Minister would
have allowed - initially, at least - the cost of sign language
interpretation had it been claimed in that category. From the
standpoint of the appellant, he considers the effect of the
federal government's tax policy is to increase the
educational costs of students living with disabilities compared
to those without a disability. The proposition advanced by the
appellant is that since able-bodied persons do not require
accommodation services, taxing a bursary designed to provide such
services to disabled students has the effect of forcing persons
with disabilities to pay more for their education. In my view,
the appellant fails to appreciate that there are others within
the comparator - composed of all students receiving financial
assistance as envisaged by paragraph 56(1)(n) of the
Act - who are required, either by conditions attached to
the bursary, scholarship or fellowship - or in a practical sense
- to expend the proceeds thereof in an appropriate manner that
will alleviate the burden imposed upon them by the particular
hindrance confronting them when the application for financial
assistance was submitted to the grantor. As mentioned earlier in
another context, the Act provides for a full education
credit even though a disabled student is taking less than a full
load of courses. Within the SOG program, each of the grants had
its own set of conditions and all were tailored to meet the needs
of the target group whether applicable to women in doctoral
studies - in order to correct an imbalance within certain
disciplines - or to students with dependents who required
financial assistance in order to care properly for their children
while pursuing higher education.
[99] The purpose of paragraph
56(1)(n) of the Act is to generate revenue. At this
juncture, there is little doubt that various taxing schemes of
governments are closely tied with development of social policy.
Inherent in that undertaking is a search for appropriate
mechanisms to ensure fair and equal treatment within broad
classes of persons affected by taxing legislation. By way of
example, in the Act, there have been distinctions based on
age, marital status, source of income, number of dependents,
nature and/or location of employment, residence, type of
investment, earned income in terms of definition and amount,
eligibility for tax credits and other differences regarded as an
inevitable consequence of passing laws for the purpose of
generating revenue required by the fisc. In a country with as
much geography as Canada and, considering its diversity, it is
unreasonable to expect a taxing statute to take into account
every possible distinction that could have the effect of
conferring a benefit or causing a disadvantage to some taxpayers.
As instructed in Law, supra, one must look at these
contextual factors in order to decide whether the impugned
legislation had the effect of demeaning the dignity of the
appellant, an inquiry that was stated by Iacobucci J. to be both
subjective and objective regarded from the standpoint of the
reasonable person in similar circumstances who takes into account
those factors.
[100] The evidence disclosed that local school boards
provided - without charge - the accommodation services required
by the appellant during his primary and secondary education.
Later, while pursuing his undergraduate and Master's degree
from the University of Ottawa and York University, respectively,
a variety of disability-related accommodation services were
provided to the appellant including note takers, ASL
interpretation and - subsequently - real-time captioning. Simser
did not pay for these services nor was any amount added to his
tax as a result of receiving this benefit. Following graduation,
Simser became employed by the Ontario Ministry of the Environment
and - while working - obtained his CMA designation. Simser's
employer funded the ASL interpretation services in order that he
could participate in the workshop component of the program. There
was no tax consequence accruing to him as a result of receiving
this assistance. In 1994, when the appellant entered Osgoode Hall
Law School, York University paid for a variety of needed
accommodation services including note taking, ASL interpretation
and real-time captioning so he could attend class and participate
in lectures and group discussions. After finishing law school,
the appellant had to complete the Bar Admission Course in order
to become eligible for admission to the Ontario Bar. Attendance
was mandatory and the appellant requested that the Law Society of
Upper Canada (Law Society) provide him with needed accommodation
services for Phase I of the course which lasted one month.
When the Law Society refused, the appellant applied for financial
assistance in the form of an SOG applicable to students with
disabilities. He received the sum of $2,000 for the purpose of
purchasing the ASL interpretation and real-time captioning
services. While attending Phase I of the Bar Admission Course,
the appellant was employed by the Department of Justice which
paid the balance of the accommodation expenses - in excess
of $2,300 - directly to his service providers. Phase II of the
Bar Admission Course was completed by articling at the Department
of Justice and the cost of necessary accommodation services
required for Phase III - involving substantive law and
examinations - was paid by the Law Society. The appellant
regarded the receipt of his T4A - issued by the Ontario Ministry
of Education and Training - identifying the amount of the bursary
as "other income" as inappropriate considering the
purpose for which the funds were used. In his view, as expressed
later in the course of correspondence with employees of that
Ministry and with officials at Revenue Canada and the Department
of Finance, inclusion of the bursary amount into income was
counter-productive and constituted a deterrent to any disabled
student wanting to apply for an SOG. His position was that if he
had been a student with normal hearing, he would not have
required a bursary for purposes of attending the Bar Admission
Course because there would have been no exceptional demand upon
personal financial resources. However, by being deaf and in need
of the specialized services in order to participate in the
classroom, Simser had to apply for SOG funding available to
students with permanent disability. From his perspective, the end
result was that he was faced with an increased tax bill arising
from a receipt that had only placed him in the same position as a
student with normal hearing. With respect to the appellant's
considerable ability and taking into account his particular
situation, it seems to me that Simser and his counsel have
trained their awesome firepower on the wrong target. Throughout,
while pursuing his education at all levels, there had been
accommodation services provided - without cost - by the
educational institutions or - when the education had a component
significantly linked to employment - by an employer. The
Eldridge, supra, decision issued by the Supreme Court of
Canada recognized that, while hospitals were not
"government", they carried out a specific government
objective in providing medically necessary services under the
relevant legislation. It was held that the failure to provide
sign language interpretation amounted to discrimination since it
was closely connected with the medical service delivery system.
For other reasons, and in another context, it appears as though
the educational institutions attended by the appellant throughout
his extensive academic career had already adopted the approach
later taken by the Supreme Court as it pertained to the delivery
of educational services within the framework of a system
receiving governmental assistance in one form or another. The
refusal of the Law Society to pay for the appellant's
accommodation funding in order that he might purchase necessary
accommodation services was the impetus for his application for
funding in the form of an SOG based on his disability and - not
to be overlooked - his concurrent financial need. When the SOG
was received, it was considered by the Minister to have been
received as a bursary and was taxed in accordance with the
provisions of paragraph 56(1)(n) of the Act. It was
not the inclusion of that amount into income which could have had
the effect of restricting the appellant from gaining access to
the Bar Admission Course. Instead, it was the refusal of the Law
Society to place him in a position where he was equal with other
students attending that mandatory course of study preparatory to
becoming a member of the Ontario Bar. Taxing the non-exempt
portion of the bursary did not - in my view - discriminate
against him based on his disability. The applicability of the
impugned paragraph to the receipt was based on the source and
also by taking into account the general purpose of the funding
which was to assist a student in the pursuit of advanced
specialized education. As Simser stated in his testimony, he did
not feel as though he should have been forced to beg for services
that were designed solely to eliminate a barrier to regular
participation in a classroom environment. In my view, any slight
suffered in that regard was due to the rejection - by the Law
Society - of his application for assistance in terms of
accommodating his disability. As an individual who had graduated
from law school and was articling as part of the overall Bar
Admission Course, he had every reason to assume that - as had
happened throughout his education - the necessary specialized
services would be provided to him at no cost. That expectation,
and the perceived unequal treatment - when compared to
non-disabled articling students - however, does not have a nexus
with subsequent taxation of the funding received for the
particular purpose of attending that specialized course of study
deemed mandatory by a self-regulating profession. The appellant
was employed during the 1997 taxation year and had a taxable
income in the sum of $31,825. I fail to comprehend how his
dignity as a human being was demeaned or why he would perceive
himself as someone regarded as unworthy or less capable in the
eyes of Canadian society because he - like all other
recipients of bursaries - had to pay tax on the non-exempt
portion thereof. The paragraph of the Act at issue does
not stigmatize disabled students nor does it cause any reason to
regard them as different from non-disabled students. Indeed, it
does the exact opposite in that it draws no distinction and
merely looks to the nature of the payment received. I cannot see
that the federal government has withheld any government benefit
on the basis of any stereotypical assumptions about disabled
people who are pursuing higher education and receive financial
assistance for one or more purposes.
[101] These reasons are lengthy. I have attempted to
deal with various issues and have referred to testimony,
documents, written articles, references, transcripts, and binders
of authorities which played a role in permitting me to arrive at
the conclusions stated herein. The analysis often involved
consideration of various alternatives and sometimes there is
duplication because some facts and circumstances were utilized in
a different context. Attempting to arrive at the core issues in
this highly-refined field of Charter jurisprudence is akin
to peeling onions; the degree of subtlety and attention to detail
required to examine correctly the nuances and shades of meaning
inherent in this complex process can sometimes bring tears to
one's eyes.
[102] For the reasons stated herein, I do not find there
has been any infringement of s. 15(1) of the Charter
as a result of the Minister having included the non-exempt
portion of the bursary into the appellant's income for his
1997 taxation year. As a result, there is no need to consider
s. 1.
[103] There is one remaining matter to address. Although
it was not raised by the appellant in his Notice of Objection,
and it does not form any portion of the subject matter of the
pleadings and is only referred to in the Examinations for
Discovery - and during the hearing - for comparative
purposes or otherwise in a general sense, counsel for the
appellant - in written submissions - did request that this Court
refer the assessment back to the Minister for reassessment on the
basis that all receipts for sign language interpretation
submitted to the Ontario Ministry of Education pursuant to the
terms of the appellant's bursary be utilized in order to
calculate the relevant amount of the METC. This relief was not
sought specifically in the Notice of Appeal but under the
heading, Remedy Sought, at paragraph (e) thereof, there was a
request for "[S]uch further and other relief as counsel may
request, and the Honourable Court may permit".
[104] The evidence disclosed the appellant made a
conscious choice not to use the amount paid for sign language
interpretation in order to claim his METC. In correspondence -
Exhibit A-1 at tab 10 - with Louis Lévesque - at paragraph
4 of his letter dated November 3, 1997, Simser stated:
... I am presently employed at a high enough income and would
not be entitled to any medical credit. As you know very well, 3%
of net income must be deducted from the medical credit. Secondly,
my services are provided in a classroom in a program of my
own accord. This has nothing to do with my everyday basic
activities. Therefore, I do not think I can declare it under
medical expenses (I still don't know if you answered
that point which you raised yourself in the first place).
Thirdly, I am arguing under s. 15 of the Charter. I want the
whole bursary to be exempt. I do not want to claim the expenses
under another category.
[105] In a letter - Exhibit A-1 at tab 14 - dated April
7, 1998 sent by the appellant to the assessing official at
Revenue Canada, Simser - at paragraph 5 of his letter -
stated:
... I will appeal this decision to the Tax Court, even if you
use the medical expense provision...
[106] A recent case that touches on the issue of relief
not pleaded is Dupont Canada Inc. v. R., 2002 DTC 7226,
2002 FCA 307, [2002] 4 C.T.C. 59. In this case, the appellant
asked the Federal Court of Appeal for "costs" in its
pleadings. The Court allowed the appellant's appeal and
overturned the Tax Court of Canada. The judgment granted the
appellant costs incurred in the Federal Court of Appeal. After
the judgment came out, the Appellant filed a motion to change the
order such that it could also be awarded costs incurred in the
trial before the Tax Court. Looking at the Federal Court rules,
Sharlow J.A. stated that rules 399 and 397(2) did not apply. The
only rule that the appellant could utilize was rule 397(1) but
that rule can only change an order such as to remedy the
Court's mistake, not counsel's.
[107] This case is sufficiently distinguishable from the
case at bar such that it is not of much assistance. Although both
situations involve a prayer for relief absent from the Notice of
Appeal, the stage at which the court considered the request in
Dupont, supra, is post-judgment as opposed to
pre-judgment, which is the case in the within appeal.
[108] A recent case but in a broader sense is
Zelinski v. the Queen, 2002 DTC 1204 (T.C.C.),
aff'd 2002 DTC 7395 (F.C.A.). The Honourable Judge Bowie
- Tax Court of Canada - stated at paragraph
4:
The purpose of pleadings is to define the issues in dispute
between the parties for the purposes of production, discovery and
trial. What is required of a party pleading is to set forth a
concise statement of the material facts upon which she relies.
Material facts are those facts which, if established at the
trial, will tend to show that the party pleading is entitled to
the relief sought. Amendments to pleadings should generally be
permitted, so long as that can be done without causing prejudice
to the opposing party that cannot be compensated by an award of
costs or other terms, as the purpose of the Rules is to ensure,
so far as possible, a fair trial of the real issues in dispute
between the parties.
[109] S. Goulding, Odgers on Civil Court
Actions, 24th ed. (London: Sweet & Maxwell, 1996), at 225
is supportive of Judge Bowie's view on the purpose of
pleadings:
A statement of claim should state the material facts upon
which the plaintiff relies and then claim the relief or remedy he
desires. Costs need not be specifically pleaded. As
"pleadings now are to be merely concise statements of the
facts which the party pleading deems material to his case,"
it is unnecessary to particularize the form of action in which
the relief would in former days have had to be sought. To state
what form the plaintiff's right takes is to state a
conclusion of law; and it is always unnecessary now for either
party to state conclusions of law in his pleading - the court
will draw the proper inference from the facts alleged.
[110] Odgers examines the requirements for
prayers for relief at page 235:
... It should be noted also that Order 18, r. 15(1) requires
the statement of claim to specify at least one form of relief
which the plaintiff claims; however, on proof of the necessary
facts the court is not confined to granting that particular form
of relief, but has jurisdiction to grant any relief it thinks
appropriate to the facts as proved. But if in the course of the
trial a party seeks to raise a new claim for relief not
adumbrated or stated in his pleading, the court should not give
such relief without first offering the opposite party, if taken
by surprise, an opportunity for an adjournment.
[111] The Tax Court is created by statute. As such,
sestion 171 of Act confers power upon the Tax Court to
grant only specific types of relief.
Disposal of appeal.
(1) The Tax Court of Canada may dispose of an appeal
by
(a) dismissing it; or
(b) allowing it and
(i) vacating the assessment,
(ii) varying the assessment, or
(iii) referring the assessment back to the
Minister for reconsideration and reassessment.
[112] Although it was often assumed in the course of
argument that the sign language receipts would have been allowed
by the Minister in the course of calculating the METC, I agree
with the caveat of Simser as it appears in his letter
- referred to earlier - wherein he comments on the
ambiguous sense of the word "patient" as it is used in
subsection 118.2(2) of the Act. That aspect of the
provision was also mentioned by Professor Philipps in the course
of her testimony. Merely because the person spending funds
on sign language interpretation - or his or her spouse or
qualified dependent - is referred to within the subsection as a
"patient", that does not deem it to be so; as a result,
it constitutes a particularized expenditure within the overall
context of medical services. It may be the Minister would take a
closer look at the nature of the expenses and come to the
conclusion that the expense of purchasing sign language services
for the purpose of attending a Bar Admission Course is too far
removed from the object and spirit of the medical expense
provisions when regarded in the overall context of granting
relief to persons who make certain expenditures in order to
improve their health and well-being. It is apparent the
appellant chose the battle ground. His strategy from the outset -
and as refined during subsequent stages of litigation - did not
rely on this particular aspect except for collateral purposes
while advancing the proposition that the grant received under the
SOG program was not taxable, first, because it was for the
purchase of accommodation services and - therefore - was not a
bursary in the ordinary sense and second, because it infringed
his Charter rights. Taking these factors into account, I
decline to make any finding with regard to the entitlement of the
appellant to the METC in relation to the payments for sign
language interpretation services, as to do so would be to grant
relief on the basis of certain untested assumptions in respect of
a minor issue that was not intended by the parties to be
sufficiently significant as to require a determination by this
Court. In addition, Simser specifically requested that this
particular issue be exempted from consideration by the Minister
when assessing his tax return and the question of the METC - as
it related to the cost of the ASL interpretation - never
re-surfaced in the subsequent Notice of Objection or in the
Notice of Appeal.
[113] For the foregoing reasons, the appeal is
dismissed. The respondent is entitled to costs on a party-party
basis.
Signed at Sidney, British Columbia, this 22nd day of May
2003.
D.J.T.C.C.
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