Date: 20020626
Docket:
1999-4849-IT-I
BETWEEN:
WERNER
KELLER,
Appellant,
and
HER MAJESTY THE
QUEEN,
Respondent.
Reasonsfor
Judgment
Rip, J.
[1]
The facts in this appeal by Mr. Werner Keller from a 1996 income
tax assessment are not in issue. At trial Mr. Keller's
counsel advised that the only issue to be heard on the morning of
trial was whether the provisions of subsection 118(5) of the
Income Tax Act (
"Act")
infringe rights of the appellant guaranteed by subsection 15(1)
of the Canadian Charter of Rights and Freedoms
("Charter"). If I found that the appellant's
rights were infringed, it was agreed that I would hear argument
at a later date to determine whether such infringements could be
justified in a free and democratic society under section 1 of the
Charter.
[2]
At all relevant times the appellant and his wife were legally
separated. (There is no evidence if and when they divorced.)
Mr. and Mrs. Keller entered into a Separation
Agreement (
"Agreement"), effective February 1996 by which the
spouses agreed to have joint custody of their three children and
Mr. Keller was to pay Mrs. Keller support payments of $1,000 per
month. By order of the Ontario Court (General Division), dated
May 29, 1996 ("Order"), Mr. Keller was to pay to Mrs.
Keller, as interim support for their three children the sum of
$1,400 per month starting June 1, 1996.
[3]
In filing his income tax return for 1996, the appellant claimed a
deduction for alimony and maintenance payments he made to Mrs.
Keller for the support of their children in accordance with the
Agreement and Order in the amount of $13,800. He also claimed a
tax credit with respect to his daughter pursuant to paragraph
118(1)(b) of the Act.
[4]
A final Separation Agreement ("Final Agreement"), dated
September 30, 1997 provided for a joint parenting arrangement for
the children. Among other things, the Final Agreement stated that
the parents would share physical custody and provide parenting to
their children equally. Each parent under the Final Agreement
"would continue to have a full and active role in providing
a sound, moral, social, economic and educational environment for
each child and continue that support which each child had
received". Each parent delegated the physical care of the
children to the other parent. In all other respects, the Order of
May 29, 1996 was continued. Mr. Keller's evidence was
that in 1996 and later, he and Mrs. Keller shared custody and
care of the children equally. The Final Agreement in fact
confirmed how the parents had been raising the children since
their separation and how they would continue to raise the
children in the future. The children, including the daughter with
respect to whom the tax credit was claimed, spent as much time in
their father's home as in their mother's and each parent
equally supported the children in their respective
residences.
[5]
I note that in assessing the appellant, according to the Amended
Reply to the Notice of Appeal, the Minister of National Revenue
("Minister") assumed, among other things,
that:
(k)
in the 1996 taxation year, the Appellant's former spouse had
3 qualified dependants as defined by section 122.2 of the
Act;
(l)
at all material times, the Appellant had no qualified dependants
as defined in subsection 122.2(2) of the Act;
and concluded, based on
their respective incomes, that each of Mr. and Mrs. Keller
was entitled to a child tax credit entitlement in the amount of
$Nil.
[6]
As far as I can determine, section 122.2 of the Act was
repealed by S.C. 1994, c. 7, Sched. VII, subsection 10(2)
applicable with effect to the 1993 and subsequent taxation years.
I cannot understand why the Minister considered this provision in
assessing. The assumptions listed in paragraph 17 of the Amended
Reply to the Notice of Appeal, do not refer to subsection 118(5)
of the Act, the provision which together with section 15
of the Charter, served as the basis of the parties'
submissions. Appellant's counsel did not bring this to my
attention. I do note, however, that in section B of the Amended
Reply to the Notice of Appeal, entitled "Issue to be
Decided", the respondent struck out references to all
provisions of the Act set forth in the original reply,
except for subsection 118(5) of the Act and section 15 of
the Charter. There is no reference to
paragraph 118(1)(b) in the Amended Reply to the
Notice of Appeal or for that matter in the Notice of Appeal. In
the circumstances, most of the assumptions of facts and section C
of the Amended Reply to the Notice of Appeal, entitled
"Statutory Provisions, Grounds Relied On and Relief
Sought", ought to have been struck as well. The
appellant's Notice of Appeal is not any more helpful. Most of
the alleged facts relate to the exchange of correspondence
between the appellant and Revenue Canada and the notice does not
refer to any statutory provision in support of the appeal. The
appellant does claim he is entitled to the "equivalent to
spouse" credit and other credits.
[7]
The relevant portions of paragraph 118(1)(b)
and subsection 118(5) of the Act read as
follows:
(1) For the
purpose of computing the tax payable under this Part by an
individual for a taxation year, there may be deducted an amount
determined by the formula
A X
B
where
A
is the appropriate percentage for the year, and
B
is the total of,
. .
.
(b) in the case of an
individual who does not claim a deduction for the year because of
paragraph (a) and who, at any time in the year,
(i) is an
unmarried person or a married person who neither supported nor
lived with the married person's spouse and is not supported
by the spouse, and
(ii) whether
alone or jointly with one or more other persons, maintains a
self-contained domestic establishment (in which the individual
lives) and actually supports in that establishment a person who,
at that time, is
(A) except in
the case of a child of the individual, resident in
Canada,
(B) wholly
dependent for support on the individual, or the individual and
the other person or persons, as the case may be,
(C) related to
the individual, and
. .
.
(5) No amount may be deducted
under subsection (1) in computing an individual's tax payable
under this Part for a taxation year in respect of a person where
the individual is required to pay a support amount (as defined in
subsection 56.1(4)) to the individual's spouse or former
spouse in respect of the person and the individual
(a)
lives separate and apart from the spouse or former spouse
throughout the year because of the breakdown of their marriage;
or
(b)
claims a deduction for the year because of section 60 in respect
of a support amount paid to the spouse or former
spouse.
[8]
Paragraph 118(1)(b) is often referred to as an
"equivalent to spouse" or "equivalent to
married" credit.
[9]
Subsection 15(1) of the Charter states that:
15.
(1) Every individual is equal
before and under the law and has the right to the equal
protection and equal benefit of the law without discrimination
and, in particular, without discrimination based on race,
national or ethnic origin, colour, religion, sex, age or mental
or physical disability.
[10]
The appellant claims that subsection 118(5) of the Act
violates his equality rights guaranteed by subsection 15(1) of
the Charter since subsection 118(5) denies or disallows a
deduction with respect to his daughter only on the basis that he
is entitled to deduct child support payments under paragraph
60(b) of the Act. He argues that the denial of the
equivalent to married credit for any person who happens to pay
child support, most payers being men, without regard to any other
consideration, is discriminatory. The appellant further states
that the comparator
group on the facts of his appeal is his wife, who was not denied
the paragraph 118(1)(b) credit.
[11]
Before continuing with these reasons I wish to refer the
appellant to the reminder by Lebel J. (dissenting in part)
in Blencoe v. British Columbia (Human Rights Commission)
to ". . . litigants that not every case can be reduced to a
Charter case". There have been several appeals in
this Court and the Federal Court of Appeal where, on facts
similar to those at bar, the taxpayers have been unsuccessful in
arguing that subsection 118(5) of the Act violates
subsection 15(1) of the Charter.
[12]
In Werring v. Canada,
my late colleague Sobier J., held that section 118 of the
Act does not discriminate against a disadvantaged group.
As in the appeal at bar, the appellant, Mr. Werring, claimed an
equivalent to married deduction for one of his sons. His claim
was disallowed, as was Mr. Keller's, because he was entitled
to deduct child support paid to his wife: subsection 118(5).
Sobier J. held that Mr. Werring and his wife received benefits
that were equal to those received by other couples under section
118. Subsection 118(5) merely prevented them from receiving
greater benefits than those other couples. Custodial parents who
paid maintenance were not a distinct group and they were not
disadvantaged. No equality rights were violated.
[13]
In Nelson v. The Queen,
the appellant and his former spouse shared joint custody of their
two children. By virtue of their separation agreement, the
appellant paid child support for the two children to his spouse.
The appellant deducted the support payments under paragraph
60(b) of the Act. The appellant also claimed the
equivalent to married tax credit under subsection 118(1) of the
Act. The Minister disallowed the equivalent to married
credit pursuant to subsection 118(5). The appellant appealed to
the Tax Court, arguing that subsections 118(1) and (5)
discriminated against him and therefore violated subsection 15(1)
of the Charter. Brulé J. determined that
subsections 118(1) and (5) did not discriminate against the
appellant.
[14]
The Federal Court of Appeal affirmed Brul
é J.'s decision in
Nelson. Sharlow J.A. stated:
[para. 11] . .
. I would identify the relevant comparator group in Mr.
Nelson's case as a single parent who lives with and supports
a child in a shared custody arrangement with the child's
other parent but who has no legal obligation to pay child support
to the other parent.
[para. 12]
In my view, the differential treatment created by subsection
118(5) of the Income Tax Act is not based on one of the grounds
enumerated in subsection 15(1) of the Charter or an analogous
ground. Subsection 118(5) does not draw a distinction between Mr.
Nelson and the comparator group based on personal
characteristics, or the stereotypical application of presumed
group or personal characteristics, and does not bring into play
the purpose of subsection 15(1) of the Charter in remedying such
ills as prejudice, stereotyping, and historical disadvantage. Nor
does the operation of subsection 118(5) of the Income Tax Act
offend Mr. Nelson's dignity, intrinsic worthiness or
self-respect. Therefore, the differential treatment
resulting from subsection 118(5) is not discriminatory in
the Charter sense.
[para.
13]
The premise underlying Mr. Nelson's argument is that
Parliament should provide equal tax relief to all single parents
who support their children in a shared custody arrangement. While
that may be a laudable public policy objective, it is not one
that can be advanced through a claim under subsection 15(1)
of the Charter. Mr. Nelson's remedy lies with Parliament
alone.
[15]
In the case Nixon v. Canada
Bell J. of this Court, relied on the Tax Court decision in
Nelson and determined that subsections 118(1) and (5) of
the Act did not discriminate against the appellant.
Specifically, divorced male taxpayers who share joint custody of
their children with their former spouses are not an enumerated or
analogous group within subsection 15(1) of the
Charter.
[16]
The appellant presented aggressive submissions that the earlier
decisions of this Court and the Federal Court of Appeal, in
particular the decision in Nelson, are no longer good law
by virtue of the decision of the Supreme Court of Canada in
Law v. Canada (Minister of Employment and Immigration).
In Law, the Supreme Court declared the following inquiries
should be made where a court is called upon to determine a
discrimination claim under subsection 15(1) of the
Charter:
(i)
Does the impugned law (a) draw a formal distinction between the
claimant and others on the basis of one or more personal
characteristics, or (b) 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?
(ii)
Is the claimant subject to
differential treatment based on one or more enumerated and
analogous grounds?
and
(iii)
Does the differential treatment
discriminate, by imposing a burden upon or withholding a benefit
from the claimant in a manner which reflects the stereotypical
application of presumed group or personal characteristics, or
which otherwise has the effect of perpetuating or promoting the
view that the individual is less capable or worthy of recognition
or value as a human being or as a member of Canadian society,
equally deserving of concern, respect, and consideration?
[17]
In his factum, the appellant states that the "primary
innovation of the Law ruling lies in its reformulation of
the evaluative framework to assist courts in assessing the merits
of section 15 claims". The appellant explained that
"its basic elements, underscoring a heightened focus on
human dignity, may be summarized as follows:
·
The purpose of section 15 is to prevent the violation of human
dignity and freedom by the imposition of disadvantage,
stereotyping or prejudice, and to promote equal recognition at
law of all persons as equally deserving;
· Because equality is a
comparative concept, relevant "comparators" must be
established; within the scope of the ground(s) of alleged
discrimination claimed, a court may refine a claimant's
comparison, should it be insufficient or inaccurate;
· Contextual factors that
determine whether the law demeans a claimant's dignity are to
be evaluated, first and foremost from the perspective of the
claimant an, to ensure that her or his assertion is supported
objectively, from the perspective of a reasonable person in
circumstances similar to the claimant's, who takes into
account those contextual factors;
· The list of contextual
factors raised by a section 15 claimant to show that a law is
demeaning to dignity is not closed;
· Noteworthy contextual
considerations influencing whether section 15 has been infringed
include:
(a) the effect of the challenged law always of central
significance; and (b) the extent of the link, if any, between the
ground(s) raised and the claimant's actual circumstances.
Discrimination being more difficult to establish to the degree
the law takes those circumstances into account in a way that
values the claimant;
· The claimant's burden
of establishing section 15 infringement does not oblige her or
him to adduce evidence of violation of human dignity or freedom;
the fact that a distinction in treatment is based on one or more
section 15 grounds will often be sufficient to establish such an
infringement in that it will be apparent, through judicial notice
and logic, that the distinction is
discriminatory."
[18]
I do not agree
with the appellant that in deciding Law the Supreme Court
altered its view on what constitutes discrimination under section
15 of the Charter. The Supreme Court set down guidelines
based on its previous rulings, if not to simplify, then to
explain and make clear how to determine claims under section 15
of the Charter. Law does not add anything to assist
the appellant.
[19]
The appellant argues that the analogous ground he falls within
and which subsections 118(1) and (5) discriminate against is
"family or parental status". The appellant further
submits that the relevant comparator group is his separated or
divorced wife.
[20]
In Law Iacobucci J. stated that:
The equality
guarantee is a comparative concept, which ultimately requires a
court to establish one or more relevant comparators. The claimant
generally chooses the person, group, or groups with whom he or
she wishes to be compared for the purpose of the discrimination
inquiry. However, where the claimant's characterization of
the comparison is insufficient, a court may, within the scope of
the ground or grounds pleaded, refine the comparison presented by
the claimant where warranted. Locating the relevant comparison
group requires an examination of the subject-matter of the
legislation and its effects, as well as a full appreciation of
context.
[21]
The comparator group proposed by the appellant is insufficient.
The denial of the equivalent to married credit is not based on a
taxpayer's sex or parental status, but rather on the fact
that the taxpayer paid child support and was allowed a
consequential deduction with regard to the amount paid. The
relevant comparator group is the same as that identified by
Sharlow J.A., in Nelson, namely, a single parent who lives
with and supports a child in a shared custody arrangement with
the child's other parent but who has no legal obligation to
pay child support to the other parent.
[22]
It has been recognized that subsections 118(1) and (5) of the
Act impose differential treatment between taxpayers. In
Nelson, the Federal Court of Appeal acknowledged that
subsection 118(5) imposed differential treatment between the
appellant and the identified comparator group.
[23]
In Schachtschneider v. The Queen,
the Federal Court of Appeal also determined that the equivalent
to married credit resulted in differential treatment: "No
doubt a tax credit is a benefit under the law and no doubt
subsection 118(1) provides a greater benefit to a taxpaying
couple with a child cohabiting common law than to a married
couple in like circumstances . . .".
[24]
Therefore, the
appellant's argument has passed the first part of the
section 15 analysis as set out in Law. Subsections
118(1) and (5) of the Act impose differential treatment
between taxpayers. What remains to be determined is whether the
appellant is a member of a group, which has characteristics
enumerated or analogous to those listed in subsection 15(1) of
the Charter.
[25]
The decision as to what constitutes an analogous ground is to be
made in light of the purpose of section 15 and is based on
whether the proposed ground is analogous to the listed ones. The
factors taken into consideration when determining if a ground is
analogous include whether the personal characteristic is one that
cannot be changed without high personal cost and whether there is
a history of discrimination or animosity against persons with
that characteristic. In Corbiere v. Canada,
McLachlin and Bastarache JJ. for the majority stated
that:
What then are
the criteria by which we identify a ground of distinction as
analogous? The obvious answer is that we look for grounds of
distinction that are analogous or like the grounds enumerated in
s. 15 - race, national or ethnic origin, colour, religion,
sex, age, or mental or physical disability. It seems to us that
what these grounds have in common is the fact that they often
serve as the basis for stereotypical decisions made not on the
basis of merit but on the basis of a personal characteristic that
is immutable or changeable only at unacceptable cost to personal
identity. This suggests that the thrust of identification of
analogous grounds at the second stage of the Law analysis is to
reveal grounds based on characteristics that we cannot change or
that the government has no legitimate interest in expecting us to
change to receive equal treatment under the law. To put it
another way, s. 15 targets the denial of equal treatment on
grounds that are actually immutable, like race, or constructively
immutable, like religion. Other factors identified in the cases
as associated with the enumerated and analogous grounds, like the
fact that the decision adversely impacts on a discrete and
insular minority or a group that has been historically
discriminated against, may be seen to flow from the central
concept of immutable or constructively immutable personal
characteristics, which too often have served as illegitimate and
demeaning proxies for merit-based decision making.
[26]
An obligation to pay child support is not an immutable or
constructively immutable characteristic similar to race or
religion. Further, joint custodial parents required to pay child
support do not constitute a group that is a discrete and insular
minority nor are these parents a group that has been historically
discriminated against in society. Subsections 118(1) and (5) of
the Act do not draw a distinction between the appellant
and the comparator group based on personal characteristics, or
the stereotypical application of a presumed group or personal
characteristics, and does not bring into play the purpose of
section 15 of the Charter in remedying such ills as
prejudice, stereotyping and historical disadvantage. Nor does
subsection 118(5) offend the appellant's dignity, intrinsic
worthiness or self-respect. The appellant is not subject to
differential treatment based on one or more enumerated and
analogous grounds. Accordingly, subsection 118(5) of the
Act does not infringe section 15 of the
Charter.
[27]
The appeal is dismissed.
Signed at Ottawa, Canada, this 26th day of
June, 2002.
"Gerald J. Rip"
J.T.C.C.
COURT FILE
NO.:
1999-4849(IT)I
STYLE OF
CAUSE:
Werner H. Keller and
Her Majesty The Queen
PLACE OF
HEARING:
Windsor, Ontario
DATE OF
HEARING:
May 28, 2002
REASONS FOR JUDGMENT
BY: The Hon. Judge Gerald J.
Rip
DATE OF
JUDGMENT:
June 26, 2002
APPEARANCES:
Counsel for the Appellant: Craig J.
Allen
Counsel for the
Respondent:
Justine Malone
COUNSEL OF RECORD:
For the
Appellant:
SUTTS, STROSBERG LLP
Barristers & Solicitors
Address:
600 Westcourt Place
251 Goyeau Street
Windsor, Ontario N9A 6V4
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-4849(IT)I
BETWEEN:
WERNER KELLER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on May 28, 2002, at Windsor,
Ontario, by
the Honourable Judge Gerald J. Rip
Appearances
Counsel for the
Appellant:
Craig J. Allen
Counsel for the
Respondent:
Justine Malone
JUDGMENT
The appeal from the assessment made under the Income Tax
Act for the 1996 taxation years is dismissed.
Signed at Ottawa, Canada,
this 26th day of June 2002.
J.T.C.C.
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