Citation: 2008TCC530
Date: 20080918
Dockets: 2008-1344(EI), 2008-1345(CPP)
BETWEEN:
W. SHAWN DAVITT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Webb J.
[1]
This is a Motion of the Respondent
to strike two Notices of Appeal filed by the Appellant – one is a 119 page
Notice of Appeal in relation to an appeal under the Employment Insurance Act
(“EI Act”), and the other is a 118 page Notice of Appeal in relation to
an appeal under the Canada Pension Plan (“CPP”).
[2]
The Notices of Appeal are stated
to be filed under the “General Procedure”. During the hearing of the Motion,
the Appellant confirmed that the appeal related to the EI Act was filed
under section 103 of the EI Act and that the appeal related to the CPP
was filed under section 28 of the CPP. The Informal Procedure and not
the General Procedure applies to appeals filed under the EI Act and to
appeals filed under the CPP (section 18.29 of the Tax Court of Canada
Act). The applicable rules will be the Tax Court of Canada Rules of Procedure
Respecting the Employment Insurance Act for the appeal filed under section
103 of the EI Act (see paragraph 4 of these rules) and the Tax Court
of Canada Rules of Procedure Respecting the Canada Pension Plan for the
appeal filed under section 28 of that Act (see paragraph 4 of these
rules).
[3]
The first part of the Notice of
Appeal related to the EI Act provides that:
1) The Appellant appeals the assessment of the amount of his Employment Insurance
(“EI”) premiums payable for the year 2006 on the grounds the EI premiums
charged for 2006 pursuant to section 66 of the Employment Insurance Act
a. discriminate on the basis of age contrary to subsection 15(1)
of the Canadian Charter of Rights and Freedoms (the “Charter”) and
b. are not authorized by the Employment Insurance Act (i.e.
are ultra vires)
c. excessive EI premiums are being charged in order to further
criminal misconduct by the Government of Canada, namely the publication of
fraudulent financial statements in violation of section 399 of the Criminal
Code and section 3 of the Charter.
Remedies
Sought
2) The
Appellant requests:
- a reduction
of his 2006 EI premiums payable to $nil and a refund of all EI premiums
collected (both employee portion and those collected via his employers) during
2006 ($1,750.32);
- punitive
damages of $11,000,000 pursuant to section 24 of the Charter;
- interest;
- costs;
- such further
and other remedies as the Appellant may advise and the Honourable Court may permit.
[4]
The balance of the Notice of Appeal
sets out the facts and arguments as submitted by the Appellant in relation to
this appeal.
[5]
The first part of the Notice of
Appeal filed in relation to the appeal under the Canada Pension Plan
provides as follows:
The Appellant appeals the assessment of the amount of his Canada Pension
Plan (“CPP”) contributions payable for the year 2006 on the grounds the CPP
contribution rates set out in section 11.1 of the CPP Act
a. discriminate on the basis of age contrary to subsection 15(1)
of the Canadian Charter of Rights and Freedoms (the “Charter”),
and
b. The Canada Pension Plan is a Ponzi scheme and violates
paragraph 206(1)(e) of the Criminal Code.
Remedies
sought
The Appellant
requests:
- a reduction
of his 2006 CPP contributions payable to $nil and a refund of all CPP
contributions collected (both employee portion and those collected via his employers)
during 2006 ($3,821.40);
- punitive
damages of $11,000,000 pursuant to section 24 of the Charter;
- interest;
- costs;
- such further
and other remedies as the Appellant may advise and the Honourable Court may
permit.
[6]
The balance of the Notice of
Appeal filed under the CPP sets out the facts and arguments as submitted
by the Appellant in relation to this appeal. Included in the Notice of Appeal
filed in relation to the EI Act are the facts and reasons related to the
appeal filed in relation to the CPP and vice versa. The Appellant is
making very serious allegations including allegations that financial statements
prepared by the Government of Canada and by a major accounting firm are not
accurate. However, the facts and arguments will only be relevant in any
proceedings before this Court if this Court has the jurisdiction to review the premium
rate as determined pursuant to section 66 of the EI Act and the
contribution rate as set out in the schedule to the CPP.
[7]
One of the grounds that was raised
by the Respondent in her Motion is that this Court does not have the
jurisdiction to provide the remedies that the Appellant is seeking. The first remedy
that the Appellant is seeking is a reduction of his premiums payable under the EI
Act and his contributions payable under the CPP to nil. The
Appellant is attacking the premium rate set pursuant to section 66 of the EI Act
and the contribution rate set out in the schedule to the CPP. Therefore
the question that must be addressed is whether this Court has the jurisdiction
to review the rates that have been set under these two statutes.
[8]
The punitive damage remedy is being
claimed under section 24 of the Canadian
Charter of Rights and Freedoms (“Charter”).
Chief Justice McLachlin of the Supreme Court of Canada stated in R. v.
974649 Ontario Inc.,
[2001] 3 S.C.R. 575 that:
15 The
essential issue is whether the trial justice who ordered the Crown to pay costs
is a "court of competent jurisdiction" under s. 24(1) to make such an
award. This Court has considered the attributes of a "court of competent
jurisdiction" on a number of occasions, commencing with its seminal decision
in Mills, supra. In that case, Lamer J. (as he then was), with whom all
agreed on this point, defined a "court of competent jurisdiction" as
one that possesses (1) jurisdiction over the person; (2) jurisdiction over the
subject matter; and (3) jurisdiction to grant the remedy (p. 890). Subsequent
decisions of this Court have affirmed this three-tiered test for identifying
the courts and tribunals competent to issue Charter remedies under s. 24: Weber
v. Ontario Hydro, [1995] 2 S.C.R. 929; Mooring v. Canada (National
Parole Board), [1996] 1 S.C.R. 75. Only where a court or tribunal
possesses all three attributes is it considered a "court of competent
jurisdiction" for the purpose of ordering the desired Charter relief under
s. 24.
(emphasis
added)
[9]
Therefore unless this Court has
jurisdiction to review the premium rate set under the EI Act and the
contribution rate set under the CPP, this Court will not have
jurisdiction to grant the remedy sought by the Appellant under section 24 of
the Charter as this Court will not have jurisdiction over the subject
matter. As well, the other remedies claimed (interest and costs) are dependent
on this Court having jurisdiction to review the premium rate as determined
pursuant to section 66 of the EI Act and the contribution rate set under
the CPP.
[10]
The Appellant had previously filed
appeals to this Court based on his argument that the EI Act and the CPP
discriminate contrary to section 15 of the Charter. Associate Chief
Justice Bowman (as he then was) allowed the Motion of the crown and struck out
the Appellant’s notice of appeal filed in 2001 ([2001] T.C.J. No. 360,
[2001] 3 C.T.C. 2324, 2001 DTC 702). Justice MacArthur struck out a Notice
of Appeal filed by the Appellant in relation to the issue of whether the
contribution rates under the CPP discriminated based on age contrary to
subsection 15(1) of the Charter ([2003] T.C.J. No. 359).
That Notice of Appeal had also included an argument that the CPP was a
Ponzi scheme.
[11]
Justice Little struck out Notices
of Appeal filed by the Appellant in 2003 under the Income Tax Act, the EI
Act, and the CPP ([2004] T.C.J. No. 72, [2004] 2 C.T.C. 2605,
2004 DTC 2286). In the Notices of Appeal filed under the EI Act and the CPP
the Appellant was alleging that the premium rate under the EI Act and
the contribution rate under the CPP discriminate on the basis of age
contrary to section 15 of the Charter.
[12]
In 2006 the Appellant brought a
Motion to set aside the orders issued by Associate Chief Justice Bowman (as he
then was), Justice MacArthur and Justice Little referred to above. Justice
Mogan dismissed this motion ([2006] T.C.J. No. 388, [2006] 5
C.T.C.2285, 2006 DTC 3337). In his decision Justice Mogan made the following
comments:
11 If
the Appellant is right in maintaining that the Canada Pension Plan rates are
too high, that the Plan is too well-funded, that the excess goes into the
general federal revenue; or if he is right that employment insurance rates are
too high and he ought not to have paid as much as he paid in the years 1998 or
1999 or 2000; whether such rates are too high or not is an issue that, again,
is beyond the jurisdiction of this Court. Those rates are set in public debates
in Parliament depending on the particular legislation. There are parliamentary
committee hearings where different interest groups, and different political
parties make their position known. I conclude the Tax Court of Canada has
no jurisdiction to interfere with that kind of legislation.
[13]
The Appellant has again filed
Notices of Appeal under the EI Act and the CPP alleging that the
premium rate set under the EI Act and the contribution rate set under
the CPP should be reduced to nil. The first issue that must be decided
is whether this Court has the jurisdiction to review the premium rate as set under
the EI Act and the contribution rate as set under the CPP.
[14]
This Court was formed by an Act of
Parliament, the Tax Court of Canada Act. The jurisdiction of this Court is
set out in section 12 of that Act and in particular subsection 12(1) of this Act
provides as follows:
12. (1) The
Court has exclusive original jurisdiction to hear and determine references and
appeals to the Court on matters arising under the Air Travellers
Security Charge Act, the Canada Pension Plan, the Cultural
Property Export and Import Act, Part V.1 of the Customs Act, the
Employment Insurance Act, the Excise Act, 2001, Part IX
of the Excise Tax Act, the Income Tax Act, the Old Age
Security Act, the Petroleum and Gas Revenue Tax Act and the Softwood
Lumber Products Export Charge Act, 2006 when references or appeals to
the Court are provided for in those Acts.
(emphasis added)
[15]
Since this subsection provides
that the jurisdiction of this Court to hear and determine appeals on matters
arising under the CPP and the EI Act is when appeals to this
Court are provided for in these Acts, the only matters that can be appealed to
this Court are those matters for which a right of appeal to this Court is
provided in those Acts.
[16]
The right of appeal to this Court for
matters arising under the EI Act is set out in subsection 103(1) of the EI
Act. This subsection provides as follows:
103.
(1) The Commission or a person affected by a decision on an appeal to the
Minister under section 91 or 92 may appeal from the decision to
the Tax Court of Canada in accordance with the Tax Court of Canada Act
and the applicable rules of court made thereunder within 90 days after the
decision is communicated to the Commission or the person, or within such longer
time as the Court allows on application made to it within 90 days after the
expiration of those 90 days.
(emphasis
added)
[17] Section 91 of the EI Act provides that:
91. An
appeal to the Minister from a ruling may be made by the Commission at any time
and by any other person concerned within 90 days after the person is notified
of the ruling.
[18]
Subsection 90(1) of the EI Act
provides that:
90.
(1) An employer, an employee, a person claiming to be an employer or an
employee or the Commission may request an officer of the Canada Revenue Agency
authorized by the Minister to make a ruling on any of the following questions:
(a) whether an
employment is insurable;
(b) how long
an insurable employment lasts, including the dates on which it begins and ends;
(c) what is
the amount of any insurable earnings;
(d) how many
hours an insured person has had in insurable employment;
(e) whether a
premium is payable;
(f) what is
the amount of a premium payable;
(g) who is the
employer of an insured person;
(h) whether
employers are associated employers; and
(i) what
amount shall be refunded under subsections 96(4) to (10).
[19]
Subsection 90(1) of the EI Act
limits the matters that can be the subject of a ruling to those matters that
are listed therein and as a result the matters that can be appealed to the
Minister under section 91 and then to this Court under section 103 will be
limited to the same matters.
[20]
The Appellant submitted that
because paragraph 90(1)(f) of the EI Act provides that a person may
request a ruling on “what is the amount of a premium payable” that this would
mean that he would have the right to request a ruling not only on whether the
arithmetic result of the calculation of the amount payable is correct (including
whether the correct premium rate was used, whether the correct insurable earnings
amount was used, and whether the arithmetic result is correct), but also
whether the individual components of the formula are correct and, in
particular, whether the premium rate should be varied (including a reduction to
nil) on the basis that the premium rate determined under section 66 of the EI
Act violates the Charter or any other law.
[21] The components of the formula to determine the amount
of a premium that is payable are set out in section 67 of the EI Act.
This section provides as follows:
67. Subject to section 70, a person employed in insurable employment
shall pay, by deduction as provided in subsection 82(1), a premium equal
to their insurable earnings multiplied by the premium rate set under section 66
or 66.3, as the case may be.
(emphasis added)
[22]
Section 66 of the EI Act provides
that:
66. (1)
Subject to subsection (2) and sections 66.1 and 66.3, the Commission shall set
the premium rate for a year, taking into account
(a) the
principle that the premium rate should generate just enough premium revenue
during that year to cover the payments that will be made under subsection 77(1)
during that year, based on the information provided by the Minister of Finance
under section 66.2, taking into account any regulations made under section 69,
and considering any changes to payments made under subsection 77(1) that have
been announced by the Minister;
(b) the report
of the chief actuary to the Commission for that year; and
(c) any public
input.
[23]
This Court will have jurisdiction
to review the premium rate set under section 66 of the EI Act only
if this is a matter that could be the subject of a ruling request under subsection
90(1) of the EI Act.
[24] The Supreme Court of Canada in The Queen v. Canada
Trustco Mortgage Company, 2005 SCC 54, 2005 DTC 5523 (Eng.), [2005] 5
C.T.C. 215, 340 N.R. 1, 259 D.L.R. (4th) 193, [2005] 2 S.C.R. 601,
stated that:
10 It has been long established as a matter
of statutory interpretation that “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”:
see 65302 British Columbia Ltd. v. R., [1999] 3 S.C.R. 804 (S.C.C.), at
para. 50. The interpretation of a statutory provision must be made according to
a textual, contextual and purposive analysis to find a meaning that is
harmonious with the Act as a whole. When the words of a provision are precise
and unequivocal, the ordinary meaning of the words play a dominant role in the interpretive
process. On the other hand, where the words can support more than one
reasonable meaning, the ordinary meaning of the words plays a lesser role. The
relative effects of ordinary meaning, context and purpose on the interpretive
process may vary, but in all cases the court must seek to read the provisions
of an Act as a harmonious whole.
[25]
It does not seem to me that
Parliament would have intended that the premium rate set by the Commission
under section 66 of the EI Act would be a matter that could be the
subject matter of a ruling request under subsection 90(1) of the EI Act.
It does not seem to me that Parliament would have intended to grant to each and
every officer of the Canada Revenue Agency authorized by the Minister to make a
ruling, the right to review the premium rate set by the Commission. It seems to
me that the only matter that could properly be the subject matter of a ruling
request pursuant to paragraph 90(1)(f) of the EI Act would be whether
the correct amounts were used for the premium rate and the insurable earnings
in determining the amount of the premium payable and whether the arithmetic
result is correct.
[26]
If the Appellant is correct that
granting a right to request a ruling of “what is the amount of a premium
payable” includes the right to review the determination of the amounts used for
the components of the formula, then why is paragraph 90(1)(c) of the EI
Act included in subsection 90(1) of this Act? If the granting of the right to
request a ruling of the amount of a premium payable included the right to
review the determination of each of the component parts of the formula, then
there would be no need to set out a separate right to request a ruling on the
amount of any insurable earnings. There are only two components of the formula
used to determine the amount of a premium payable – the premium rate and the
insurable earnings. By setting out a right to request a ruling of the amount of
the insurable earnings, Parliament must have intended that only this component
of the formula is a matter that could be reviewed by a rulings officer. A
review of the other component of the formula, the premium rate, would then not
be a matter that could be properly the subject of a ruling request under
subsection 90(1) of the EI Act.
[27]
Since the amount of the premium
rate set under section 66 of the EI Act, in my opinion, is not a matter
that could be the subject of a ruling request under subsection 90(1) of the EI
Act, the amount of the premium rate set under section 66 of the EI Act is
not a matter that can be appealed to this Court.
[28] With respect to the CPP, I have reached a
similar conclusion. The right to appeal under the CPP is set out in
section 28 of this Act which provides as follows:
28. (1) A person affected by a decision on an appeal to the
Minister under section 27 or 27.1, or the person's representative,
may, within 90 days after the decision is communicated to the person, or within
any longer time that the Tax Court of Canada on application made to it within
90 days after the expiration of those 90 days allows, appeal from
the decision to that Court in accordance with the Tax Court of Canada Act
and the applicable rules of court made thereunder.
(emphasis
added)
[29]
Section 27 of the CPP provides
as follows:
27. An appeal
to the Minister from a ruling may be made by the Minister of Social Development
at any time, and by any other person concerned within 90 days after the person
is notified of the ruling.
[30] Also section 26.1 of the CPP provides as
follows:
26.1 (1) The Minister of Social Development, an employer, an employee
or a person claiming to be an employer or an employee may request an officer of
the Canada Revenue Agency authorized by the Minister of National Revenue to
make a ruling on any of the following questions:
(a) whether an
employment is pensionable;
(b) how long
an employment lasts, including the dates on which it begins and ends;
(c) what is
the amount of any earnings from pensionable employment;
(d) whether a
contribution is payable;
(e) what is
the amount of a contribution that is payable; and
(f) who is the
employer of a person in pensionable employment.
[31]
Therefore the only matters that
can be appealed to this Court are matters that could properly form the basis of
a ruling request under section 26.1 of the CPP. While one of the items
listed is the amount of a contribution that is payable, I conclude that in my
opinion, Parliament would not have intended that the determination of the
contribution rate (which is one of the components of the formula that is used
to determine the amount of a contribution that is payable) would be a matter that
could properly be included in a request for a ruling. It does not seem to me
that Parliament would have intended to grant to each and every officer of the
Canada Revenue Agency authorized by the Minister to make a ruling, the right to
review the contribution rate set under the CPP which is set by the
Governor in Council pursuant to section 113.1 of the CPP. It seems to me
that the only matter that could properly be the subject matter of a ruling
request pursuant to paragraph 26.1(1)(e) of the CPP would be whether the
correct amounts were used for the contribution rate and the employee’s earnings
in determining the amount of the contribution payable pursuant to section 8 of
the CPP and whether the arithmetic result is correct.
[32]
The components of the formula to
determine the amount of a contribution that is payable are set out in section 8
of the CPP. This section provides as follows:
8. (1) Every
employee who is employed by an employer in pensionable employment shall, by
deduction as provided in this Act from the remuneration for the pensionable
employment paid to the employee by the employer, make an employee's
contribution for the year in which the remuneration is paid to the employee of
an amount equal to the product obtained when the contribution rate for
employees for the year is multiplied by the lesser of
(a) the
employee's contributory salary and wages for the year paid by the employer,
minus such amount as or on account of the basic exemption for the year as is
prescribed, and
(b) the
employee's maximum contributory earnings for the year, minus such amount, if
any, as is determined in prescribed manner to be the employee's salary and
wages paid by the employer on which a contribution has been made for the year
by the employee under a provincial pension plan.
[33]
Section 11.1 of the CPP
provides as follows:
11.1 (1) The
contribution rate for the years 1966 to 1986 is:
(a) for
employees, 1.8% of contributory wages and salaries;
(b) for
employers, 1.8% of contributory wages and salaries; and
(c) for
self-employed persons, 3.6% of contributory self-employed earnings.
(2) The
contribution rate for employees, employers and self-employed persons for 1987
and subsequent years is as set out in the schedule, as amended from time to
time pursuant to section 113.1.
[34]
Section 12 of the CPP provides
that:
12. (1) The
amount of the contributory salary and wages of a person for a year is the
person's income for the year from pensionable employment, computed in
accordance with the Income Tax Act (read without reference to subsection 7(8)
of that Act), plus any deductions for the year made in computing that income
otherwise than under paragraph 8(1)(c) of that Act, but does not include any
such income received by the person
(a) before he
reaches eighteen years of age;
(b) during any
month that is excluded from that person's contributory period under this Act or
under a provincial pension plan by reason of disability, or
(c) after he
reaches seventy years of age or after a retirement pension becomes payable to
him under this Act or under a provincial pension plan.
[35]
Section 26.1 of the CPP includes
a reference to a separate right to determine the amount of the earnings from pensionable
employment (which would be the income from pensionable employment and hence the
contributory salary and wages subject to the adjustments in subsection 12(1) of
the CPP). Since one component of the formula used to determine the
amount of a contribution payable is based on the earnings from pensionable
employment and since a specific right to appeal the determination of the
earnings from pensionable employment is granted under paragraph 26.1(1)(c), Parliament
must have intended that the only component of the formula that could be
specifically reviewed by a rulings officer (and therefore appealed to this Court)
would be the amount of the earnings from pensionable employment. The amount of
the contribution rate that is set out in the schedule to the CPP and
which has been determined by the Governor in Council as provided in section
113.1 of the CPP, would not be a matter that Parliament would have
intended to include as a matter that could be the subject of a ruling by an
authorized officer of the Canada Revenue Agency and hence not a matter that can
be appealed to this Court.
[36]
As a result, in my opinion, this Court
does not have the jurisdiction to review the premium rates that are set by the
Commission under section 66 of the EI Act nor does this Court have the
jurisdiction to review the contribution rates set out in section 11.1 of the CPP
and the schedule to the CPP.
[37]
In Fournier v. The Queen, 2005
FCA 131, the Federal Court of Appeal addressed the issue of whether costs could
be awarded in a proceeding where the applicable rules did not provide for the
awarding of costs. Justice Létourneau of the Federal Court of Appeal stated
that:
11 The
judge stated that he had no jurisdiction to impose costs on an appellant who
unnecessarily delayed an appeal process initiated within an informal
proceeding. I should point out that the Tax Court of Canada has the inherent
jurisdiction to prevent and control an abuse of its process: see Yacyshyn
v. Canada, [1999] F.C.A. No. 196 (F.C.A.).
12 The
awarding of costs is one mechanism for preventing or remedying abusive delays
or procedures: see Blencoe v. British Columbia (Human Rights
Commission), [2000] 2 S.C.R. 307, at paragraphs 179 and 183. In Sherman
v. Canada (Minister of National Revenue - M.N.R.), [2003] 4
F.C. 865, at paragraph 46, this Court addressed the issue in the following
terms:
It is now generally accepted that an award of costs may perform more than
one function. Costs under modern rules may serve to regulate, indemnify and
deter. They regulate by promoting early settlements and restraint.
They deter impetuous, frivolous and abusive behaviour and litigation.
They seek to compensate, at least in part, the successful party who has
incurred, sometimes, large expenses to vindicate its rights.
[Emphasis added by Justice Létourneau.]
[38]
The Federal Court of Appeal in
that case set the costs at $1,000.
[39]
As noted above, the Appellant has
previously filed three Notices of Appeal which included submissions on whether
the contribution rate as set under the CPP was appropriate and in two of
these appeals he also had submissions on whether the premium rate as determined
under the EI Act was appropriate. Justice Mogan, in his decision related
to the dismissal of the Appellant’s motion to set aside three orders of this Court,
had stated, as quoted above, that this Court does not have the jurisdiction to
review the premium rate determined pursuant to the EI Act nor the
jurisdiction to review the contribution rate set under the CPP. The appeals
that are the subject of this Motion raise the same issue. Justice Mogan had
awarded costs fixed at $500.
[40]
The Appellant, as stated in his
Notices of Appeal, is a member of the Institute of Chartered Accountants
of Ontario and the Law Society of Upper Canada. The Appellant stated during the
hearing that he was impecunious but did not provide any details. He obviously
was employed in 2006 since he is appealing the premiums that he paid under the EI
Act and his contribution paid under the CPP. He also stated during
the hearing that he is currently employed. As well his salary in 2006, as
stated in the Request for Ruling that he had submitted in relation to his
request for a ruling under the EI Act and in his request for a ruling
under the CPP (both of which were introduced as Exhibits during the
hearing of the Motion), was $82,780.
[41]
As a result the Respondent’s motion
is granted, with costs which are set at $1,000, and the Appellant’s appeals
filed under the EI Act and the CPP are quashed.
Signed at Ottawa, Ontario, this 18th day of September 2008.
“Wyman W. Webb”
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