Citation: 2010 TCC 409
Date: 20100823
Docket: 2009-2595(IT)I
BETWEEN:
AXEL HEUBACH,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Boyle J.
[1]
The appellant
Axel Heubach has appealed the respondent’s determination that he is not
entitled to all or a portion of the Canada Child Tax Benefit (“CCTB”) in
respect of his three children for any period since his divorce from their
mother.
[2]
Mr. Heubach and
his ex‑wife have a form of a shared custody of their children. They stay
with him three days a week and they stay with their mother four days a week
throughout each month. The applicable CCTB legislation did not provide for the
sharing of monthly CCTB amounts between parents in such circumstances.
Mr. Heubach appeals to this Court on the basis that:
(i)
the CCTB provisions are
unconstitutional to the extent they discriminate against parents with less than
50% parenting time;
(ii)
he is entitled to the
CCTB in full or on a prorated basis because he is the children’s primary
caregiver when they are staying with him which is more than 40% of the time;
and
(iii)
the Canada Revenue
Agency (“CRA”) was wrong to advise him after its investigation that he and his
ex‑wife were each entitled to one‑half of the CCTB because their
children reside with each and both parents are equally involved in the
children’s care and upbringing. His position is that the CRA should therefore not
be allowed to seek to recover five months of CCTB payments made to him on that
basis.
I. The Constitutional Question
[3]
The discrimination or
inequality complained of by Mr. Heubach with respect to the CCTB
entitlements of parents sharing custody of their children does not rise to the
level of constitutionally prohibited or restricted discrimination protected by
the Canadian Charter of Rights and Freedoms. This very issue was considered and
rejected by C. Miller J. in Barnett v. The Queen,
2005 TCC 719, 2005 DTC 1692. I concur with the analysis,
reasons and decision of C. Miller J. and find them applicable in this case.
II. Entitlement to the CCTB
[4]
The CCTB legislation as
it applied in the period in question and to date does not provide for the
sharing or prorating of the CCTB amongst parents who have shared custody of
their children: see the Federal Court of Appeal’s decision in The Queen v.
Marshall et al., 96 DTC 6292. The CCTB can only be paid to one
parent each month. In order to be the parent entitled to receive the CCTB for a
particular month in respect of the child, that parent must, in accordance with
section 122.6 of the Income Tax Act (the “Act”):
(i)
reside with the child; and
(ii)
be the parent who
primarily fulfilled the responsibility for the care and upbringing of the
child.
[5]
In addition Regulation 6302
of the Act lists a number of factors which are to be looked at in
considering a child’s care and upbringing. These are reproduced in
Appendix A hereto.
[6]
There is no basis in
this case for considering that one parent is the primary caregiver for the
children some months and the other parent is primary caregiver for the
remaining months of the year. Nothing in the relationship between the parents
and children changes from month to month. Nor is there any basis in this case
to consider one parent as the primary caregiver of some of the children and the
other parent as the primary caregiver of the other children. The parents’ legal
and living relationships with each child are essentially the same.
[7]
In this case, the
children reside with each parent at different times of the week each month.
Each parent is generally responsible for day-to‑day parenting of the
children for the days and nights each week that they are at that parent’s home.
The parents each fulfill that parental caring, supervision and responsibility
quite independently of the other.
[8]
Mr. Heubach is
undoubtedly responsible for looking after the children’s headaches, tummy
aches, earaches, cuts, bruises, sprains and bumps while they are staying with
him, including getting them medical or emergency hospital attention if needed.
Similarly, while they are with him, it is Mr. Heubach who generally
supervises their daily activities and needs, keeps them safe and secure through
the day and night, ensures they get to school and scheduled activities, ensures
they wash up, get ready for and go to bed, and then get up in time to get ready
for school, etc. Of course, the children’s mother is responsible for all of
these same things when the children are with her, which is somewhat more than
half of the time.
[9]
In the circumstances of
joint or shared custody or parenting, many of the primary caregiver considerations
listed in Regulation 6302 may not be of much assistance.
[10]
However, one of the
enumerated factors to be considered in determining which parent primarily
fulfills the responsibility for the child’s care and upbringing is “the
existence of a court order in respect of the [child] that is valid in the
jurisdiction in which the [child] resides”. The Supreme Court of Nova Scotia
issued an order under the Divorce Act in March 2008. The order was
made by the Court after hearing evidence and after the parties reached an
agreement and consented to the order. Under the terms of the consent order:
(i)
Mr. Heubach and
his ex‑wife were granted “joint custody” of the children;
(ii)
the children’s mother
was to “continue to be the primary care giver of the children”; and
(iii)
the “parenting time
with the children” was to be shared in accordance with the detailed annual
schedule which generally provided the children would live three days each week
with their father and four days each week with their mother.
[11]
A variation order was
obtained from the Supreme Court of Nova Scotia on consent in December 2008
to provide the terms upon which Mr. Heubach was to be allowed to take two
of the children on a trip to Germany. The variation order provided Mr. Heubach
would provide proof of scheduled travel and medical coverage to his ex‑wife,
whereupon she would give Mr. Heubach the children’s passports. The order
went on “Mr. Heubach shall return the passports to [his ex‑wife]
upon their return from Germany, as she is the primary care giver of the
children.”
[12]
I find it very
significant that the Supreme Court of Nova Scotia makes it clear that
notwithstanding joint custody and shared parenting time, the children’s mother
is to be the primary caregiver of the children and that the parents agreed with
and consented to that order. It was intended by the Court and by the parents
that the children’s mother would, to that extent at least, have greater
responsibility for, and rights to the children’s care. Mr. Heubach is not
alleging that order has been breached nor has he sought to have it varied.
[13]
While it is difficult
in cases involving shared custody and joint parenting by two parents much involved
with all aspects of their children’s daily lives, I am satisfied that the
children’s mother, not Mr. Heubach, was primarily responsible for their
care and upbringing for CCTB entitlement purposes. Her greater responsibility
was evidenced not only by the terms of the court orders and the fact that the
children lived with her more than half of the time, but also by the fact that
she was more responsible for monitoring and scheduling the children’s regular
medical and dental appointments, more involved in, and responsible for getting
the children registered and out to activities, mostly responsible for the
children’s clothing wardrobes (with the exception of back‑to‑school
clothes) especially such things as coats and boots and other seasonal clothing,
and it was she who gave the children a monthly allowance and guided them in its
spending.
III. The CRA’s Determination that the
Parents would share the CCTB
[14]
In response to
Mr. Heubach’s application for the CCTB following his divorce from his ex‑wife,
the CRA sent him a detailed questionnaire regarding his relationship with the
children. His ex‑wife received a similar questionnaire. In July 2008
the CRA wrote to Mr. Heubach as follows:
We have carefully reviewed the information that you and another person
provided about the care and upbringing of [your children].
As a result, we have determined that they reside with each of you,
and you are both equally involved in the children’s care and upbringing.
Consequently, we intend to alternate eligibility for the
CCTB . . . between you, every six months, starting August 1, 2008.
[15]
The letter from the CRA
goes on to set out the six‑month rotating entitlement schedule. The CRA
paid Mr. Heubach in accordance with this letter and now seeks to recover
the money. Mr. Heubach’s ex‑wife received an identical letter which
prompted her to object to losing one‑half of the CCTB. Her objection led
to the CRA determining that she was the sole parent entitled to the CCTB which
in turn led to Mr. Heubach’s appeal.
[16]
The CRA’s letter to
Mr. Heubach is shocking. It is clear from the laws governing the CCTB as
passed by Parliament that only one parent can be entitled to the CCTB each
month and that, if parental responsibilities do not change from month to month,
CCTB entitlement cannot alternate between parents. The Federal Court of Appeal
has confirmed that this is the only permissible reading of the legislation in Marshall. Just as this Court has no power to share the CCTB in
joint custody and shared parenting cases, the CRA cannot have the power to do
so in administrating the legislation. While it is entirely possible that the
CRA has the power to administer the CCTB to permit the sharing of CCTB by joint
custodial parents if those parents both agree, the CRA can have no power to order
it unilaterally. The CRA should not have told Mr. Heubach that it did. The
CRA must have known that, if either parent objected, it would be required to
determine that only one of them qualified. In circumstances such as these,
Mr. Heubach is reacting as any reasonable Canadian could be expected to in
thinking that the CRA should not now be allowed to collect back the amounts it gave
him.
[17]
Unfortunately for
Mr. Heubach, this Court has no power to order the CRA not to collect
amounts legally owing, nor to find the CRA responsible for its apparent
maladministration of the Act. There are other venues for such grievances
including the CRA Fairness Program, the Financial Administration Act and
the Federal Court. In the circumstances, I would hope the CRA will seriously
consider exercising some discretion regarding the collection of past amounts
paid to Mr. Heubach on grounds of basic and simple fairness.
[18]
The appeal is
dismissed.
Signed at Ottawa, Canada, this 23rd day of August 2010.
"Patrick Boyle"
APPENDIX A
6302. Factors — For the purposes of paragraph (h) of the definition
“eligible individual” in section 122.6 of the Act, the following factors are to
be considered in determining what constitutes care and upbringing of a
qualified dependant:
(a) the supervision of the daily activities
and needs of the qualified dependant;
(b) the maintenance of a secure environment
in which the qualified dependant resides;
(c) the arrangement of, and transportation
to, medical care at regular intervals and as required for the qualified
dependant;
(d) the arrangement of, participation in,
and transportation to, educational, recreational, athletic or similar
activities in respect of the qualified dependant;
(e) the attendance to the needs of the
qualified dependant when the qualified dependant is ill or otherwise in need of
the attendance of another person;
(f) the attendance to the hygienic needs of
the qualified dependant on a regular basis;
(g) the provision, generally, of guidance
and companionship to the qualified dependant; and
(h) the existence of a court order in
respect of the qualified dependant that is valid in the jurisdiction in which
the qualified dependant resides.
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