Date: 19980813
Dockets: 96-4538-IT-I; 96-4540-IT-I
BETWEEN:
RAYMOND J. FORTIN, ELIZABETH M. FORTIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
Reasons for Judgment
Hamlyn, J.T.C.C.
[1] The appeals were heard by way of common evidence. The
Appellants are husband and wife.
[2] In their respective income tax returns for the 1995
taxation year, the Appellants stated their province of residence
was Newfoundland and calculated their provincial taxes in their
1995 income tax return accordingly.
[3] By Notices of assessment dated June 3, 1996, the Minister
of National Revenue (the “Minister”) assessed the
Appellants’ 1995 taxation year on the basis that their
province of residence was Newfoundland.
[4] From the Appellant Elizabeth M. Fortin’s Notice of
appeal, the following was adopted as part of both
Appellants’ appeals:
For 17 years and 5 months, my residence was 1235 Huntingwood,
#12, Agincort, Ontario. My husband and I also carried on a
business Small Fort Enterprises, from mid 1985 to mid 1995, at
that address. My life insurance, mutual funds, and RRSP’s
are still with Toronto firms.
Due to unexpected early retirement in July 1995, it was
decided to temporarily move to Cornerbrook to look after my
business interests here. My rental house and apartment were
seriously in need of repair and maintenance, and this work is
still going on.
In summary the year 1995 was spent less than 5 months in
Newfoundland (mid August to December 31) and seven months working
and living in Ontario at a residence of more than 17 years.
It would seem very logical therefore that Agincourt, Ontario was
more my residence than Cornerbrook, Newfoundland and that for
1995 the Ontario rate of personal tax should apply.
ISSUE
[5] In what province were the Appellants resident for tax
purposes in 1995?
FACTS
[6] Both Mr. and Mrs. Fortin moved from Ontario to
Newfoundland in August of 1995.
[7] Both were resident of Newfoundland on December 31,
1995.
[8] There is no evidence that either earned income from a
business with a permanent establishment outside Newfoundland in
1995.
[9] During 1995, the Appellants gave up their rental
residential premises in Agincourt, Ontario, opened bank accounts
in Cornerbrook, Newfoundland and gave up a business licence in
Ontario.
[10] Mrs. Fortin left her employment in Toronto although her
employer, it was suggested, could recall her.
ANALYSIS
[11] Subsection 120(4) of the Income Tax Act (the
“Act”) defines “income earned in the
year in a province” by reference to the Income Tax
Regulations (the “Regulations”).
[12] Regulation 2600(1) states:
For the purpose of paragraph 120(4)(a) of the
Act, “income earned in the year in a province”
by an individual means the aggregate of his incomes earned in the
taxation year in each province as determined in accordance with
this Part.
[13] Regulation 2601(1) states:
Where an individual resided in a particular province on the
last day of a taxation year and had no income for the year from a
business with a permanent establishment outside the province, his
income earned in the taxation year in the province is his income
for the year.
[14] As the Appellants did not earn income from a business
with a permanent residence outside Newfoundland, I find
Regulations 2600(1) and 2601(1) govern tax liability in this
situation.
[15] The phrase to be interpreted is what is the meaning of
“resided in a particular province”.
[16] The judicial meaning of the term “reside” was
dealt with at length by the Supreme Court of Canada in Thomson
v. Minister of National Revenue, 2 DTC 812. In that
case Estey J. wrote that a place where one
‘resides’ is one “where in the settled routine
of his life he regularly, normally or customarily lives”,
and contrasted this with a place where one ‘sojourns’
as “a place where he unusually, casually or intermittently
visits or stays”.[1] In this case it is more accurate to say that the
Appellants resided rather than sojourned in Newfoundland on
December 31, 1995.[2]
DECISION
[17] The appeals are dismissed.
Signed at Ottawa, Canada, this 13th day of August, 1998.
“D. Hamlyn”
J.T.C.C.
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