Docket: 2005-2913(IT)I
BETWEEN:
DENIS RENAUD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals
heard on common evidence with the appeals of Bruno Beaupré (2005-2936(IT)I),
Estate of Alain Beaupré (2005‑2934(IT)I), Louis Valois (2005-2927(IT)I)),
Rénald Beaumont (2005-2926(IT)I), Yvon Robert (2005-2921(IT)I), Gary
McClean (2005‑2920(IT)I) and Hugues Guimont (2005-2915(IT)I)
June 1, 2006, at Québec, Quebec.
Before: The Honourable
Justice Paul Bédard
Appearances:
|
Agent for the Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeals from reassessments made under
the Income Tax Act for the 1998, 1999, 2000, 2001, 2002 and 2003
taxation years are dismissed in accordance with the attached Reasons for
Judgment.
Signed at Ottawa, Canada, this 8th day of
August 2006.
Paul Bédard
on this 30th day of April 2007.
Gibson Boyd, Translator
Docket: 2005-2936(IT)I
BETWEEN:
BRUNO BEAUPRÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals heard on common evidence with the
appeals of Denis Renaud (2005-2913(IT)I), Estate of Alain Beaupré (2005‑2934(IT)I),
Louis Valois (2005-2927(IT)I)), Rénald Beaumont (2005-2926(IT)I),
Yvon Robert (2005-2921(IT)I), Gary McClean (2005‑2920(IT)I)
and Hugues Guimont (2005-2915(IT)I) June 1, 2006, at Québec, Quebec.
Before: The Honourable Justice Paul Bédard
Appearances:
|
Agent for the
Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeals from reassessments made under
the Income Tax Act for the 1999, 2000, 2001, 2002 and 2003 taxation
years are dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa,
Canada, this 8th day of August 2006.
Paul Bédard
on this 30th day of April 2007.
Gibson Boyd, Translator
Docket: 2005-2934(IT)I
BETWEEN:
ESTATE OF ALAIN BEAUPRÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals heard on common evidence with the
appeals of Denis Renaud (2005-2913(IT)I), Bruno Beaupré (2005-2936(IT)I),
Louis Valois (2005‑2927(IT)I)), Rénald Beaumont (2005-2926(IT)I),
Yvon Robert (2005-2921(IT)I), Gary McClean (2005‑2920(IT)I)
and Hugues Guimont (2005-2915(IT)I) June 1, 2006, at Québec, Quebec
Before: The Honourable Justice Paul Bédard
Appearances:
|
Agent for the
Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeals from reassessments made under
the Income Tax Act for the 2000, 2001, 2002 and 2003 taxation years are
dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa,
Canada, this 8th day of August 2006.
Paul Bédard
on this 30th day of April 2007.
Gibson Boyd, Translator
Docket: 2005-2927(IT)I
BETWEEN:
LOUIS VALOIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals heard on common evidence with the
appeals of Denis Renaud (2005-2913(IT)I, Bruno Beaupré (2005-2936(IT)I),
Bruno Beaupré (2005‑2936(IT)I), Estate of Alain Beaupré (2005‑2934(IT)I),
Rénald Beaumont (2005-2926(IT)I),Yvon Robert (2005-2921(IT)I), Gary
McClean (2005‑2920(IT)I) and Hugues Guimont (2005-2915(IT)I)
June 1, 2006, at Québec, Quebec.
Before: The Honourable Justice Paul Bédard
Appearances:
|
Agent for the
Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeals from reassessments made under
the Income Tax Act for the 1998, 1999, 2001, 2002 and 2003 taxation
years are dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa,
Canada, this 8th day of August 2006.
Paul Bédard
on this 30th day of April 2007.
Gibson Boyd, Translator
Docket: 2005-2926(IT)I
BETWEEN:
RÉNALD BEAUMONT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals heard on common evidence with the
appeals of Denis Renaud (2005-2913(IT)I), Bruno Beaupré (2005-2936(IT)I),
Estate of Alain Beaupré (2005‑2934(IT)I), Louis Valois (2005‑2927(IT)I)),
Yvon Robert (2005-2921(IT)I), Gary McClean (2005‑2920(IT)I)
and Hugues Guimont (2005-2915(IT)I) June 1, 2006, at Québec, Quebec.
Before: The Honourable Justice Paul Bédard
Appearances:
|
Agent for the
Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeals from reassessments made under
the Income Tax Act for the 1998, 1999, 2000, 2001, and 2002 taxation
years are dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa,
Canada, this 8th day of August 2006.
Paul Bédard
on this 30th day of April 2007.
Gibson Boyd, Translator
Docket: 2005-2921(IT)I
BETWEEN:
YVON ROBERT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals heard on common evidence with the
appeals of Denis Renaud (2005-2913(IT)I), Bruno Beaupré (2005-2936(IT)I),
Estate of Alain Beaupré (2005‑2934(IT)I), Louis Valois (2005-2927(IT)I)),
Rénald Beaumont (2005-2926(IT)I), Gary McClean (2005‑2920(IT)I)
and Hugues Guimont (2005-2915(IT)I) June 1, 2006, at Québec, Quebec.
Before: The Honourable Justice Paul Bédard
Appearances:
|
Agent for the
Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeals from reassessments made under
the Income Tax Act for the 1999, 2000, 2001, 2002 and 2003 taxation
years are dismissed in accordance with the attached Reasons for Judgment.
Signed at Ottawa,
Canada, this 8th day of August 2006.
Paul Bédard
on this 30th day of April 2007.
Gibson Boyd, Translator
Docket: 2005-2920(IT)I
BETWEEN:
GARY MCCLEAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeals heard on common evidence with the
appeals of Denis Renaud (2005-2913(IT)I)), Bruno Beaupré (2005-2936(IT)I),
Estate of Alain Beaupré (2005‑2934(IT)I), Louis Valois (2005‑2927(IT)I)),
Rénald Beaumont (2005-2926(IT)I), Yvon Robert (2005-2921(IT)I),
and Hugues Guimont (2005-2915(IT)I) June 1, 2006, at Québec, Quebec.
Before: The Honourable Justice Paul Bédard
Appearances:
|
Agent for the
Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeals from reassessments made under
the Income Tax Act for the 1998, 1999, 2000, 2001, 2002 and 2003
taxation years are dismissed in accordance with the attached Reasons for
Judgment.
Signed at Ottawa,
Canada, this 8th day of August 2006.
Paul Bédard
Docket: 2005-2915(IT)I
BETWEEN:
HUGUES GUIMONT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
____________________________________________________________________
Appeal heard on common evidence with the
appeals of Denis Renaud (2005-2913(IT)I), Bruno Beaupré (2005-2936(IT)I),
Estate of Alain Beaupré (2005‑2934(IT)I), Louis Valois (2005-2927(IT)I)),
Rénald Beaumont (2005-2926(IT)I), Yvon Robert (2005-2921(IT)I)
and Gary McClean (2005‑2920(IT)I) June 1, 2006, at Québec, Quebec
Before: The Honourable Justice Paul Bédard
Appearances:
|
Agent for the
Appellant:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
____________________________________________________________________
JUDGMENT
The appeal from the reassessment made under
the Income Tax Act for the 1998 taxation year is dismissed in accordance
with the attached Reasons for Judgment.
Signed at Ottawa,
Canada, this 8th day of August 2006.
Paul Bédard
Citation: 2006TCC353
Date: 20060808
Docket: 2005-2913(IT)I
BETWEEN:
DENIS RENAUD,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2005-2936(IT)I
BRUNO BEAUPRÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2005-2934(IT)I
ESTATE OF ALAIN BEAUPRÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
2005-2927(IT)I,
LOUIS VALOIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2005-2926(IT)I
RÉNALD BEAUMONT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2005-2921(IT)I
YVON ROBERT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2005-2920(IT)I
GARY MCCLEAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
and
Docket: 2005-2915(IT)I
HUGUES GUIMONT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Bédard J.
[1] These appeals,
filed under the informal procedure, were heard on common evidence at Québec,
Quebec, on June 1, 2006.
[2] In reassessments
dated September 2, 2004, the Minister of National Revenue (the “Minister”)
added to the Appellants’ incomes the following amounts for the taxation years
from 1998 to 2003 as employment income. The Minister also imposed the following
penalties under subsection 163(2) of the Income Tax Act (the
“Act”):
|
|
1998
|
1999
|
2000
|
2001
|
2002
|
2003
|
|
Denis
Renaud
|
I $4,785
P $607.84
|
I
$7,146
P
$951.66
|
I
$10,503
P
$1,231.36
|
I
$8,880
P
$842.27
|
I
$2,788
P
$256.55
|
I
$159
P
$100
|
|
Bruno
Beaupré
|
|
I
$9,848
P
$137.58
|
I
$4,911
P
$680.45
|
I
$3,145
P
$367.64
|
I
$1,251
P
$146.52
|
I
$3,396
P
$323.50
|
|
Estate
of Alain Beaupré
|
|
|
I
$1,646
P
$192.38
|
I
$5,495
P
$71.46
|
I
$283
P
$100
|
I
$220
P
$100
|
|
Louis
Valois
|
I
$610
P
$100
|
I
$69
P
$100
|
|
I
$1,524
P
$140.04
|
I
$2,009
P
$185.02
|
I
$347
P
$100
|
|
Renald
Beaumont
|
I
$2784
P
$342.97
|
I
$1,994
P
$239.65
|
I
$8,827
P
$1,079.33
|
I
$6,472
P
$508.18
|
I
$30
P
$100
|
|
|
Yvon
Robert
|
|
I
$188
P
$100
|
I
$4,061
P
$465.51
|
I
$3,172
P
$331.06
|
I
$4,050
P
$504.21
|
I
$728
P
$100
|
|
Gary
McClean
|
|
|
|
I
$338
P
$100
|
I
$1,152
P
$207.57
|
I
$4,559
P
$434.20
|
|
Hugues
Guimont
|
I
$124.36
P
$1,590.23
|
|
|
|
|
|
Preliminary Remarks
[3] It should be
pointed out that the Appellants did not testify. On the other hand Frédérik
Huard and Jeannôt Roy, investigators for the Canada Customs and Revenue Agency
(the “Agency”) testified in favour of the Respondent’s position. The Appellants
were represented by Michel Martel, an accountant.
[4] Given the admission
by the Agent for the Appellants that the Appellants had knowingly failed to
report their employment income concerned in these reassessments, except with
regard to the first taxation year for which they were assessed, the issues
consist in determining whether:
(i)
the Minister was justified in making a reassessment after
the normal period for reassessment pursuant to subparagraph 152(4)(a)(i)
of the Act, with regard to Mr. Renaud for his 1998 taxation year, Mr. Beaupré
for his 1999 taxation year, the estate of Alain Beaupré for its 2000 taxation
year, Mr. Valois for his 1998 taxation year, Mr. Beaumont for his 1998
taxation year, Mr. Robert for his 1999 taxation year and Mr. Guimont for
his 1998 taxation year;
(ii) the
Minister was justified in assessing the following penalties against the
Appellants pursuant to subsection 163(2) of the Act:
Penalties
Year
Denis Renaud
$607.84 1998
Bruno Beaupré
$137.58 1999
Estate of Alain Beaupré
$192.38 2000
Louis Valois
$100.00 1998
Rénald Beaumont
$342.97 1998
Yvon Robert
$100.00 1999
Gary McClean
$100.00 2001
Hugues Guimont $1,590.23
1998
Respondent’s evidence
[5] Mr. Huard, auditor
at the Agency, testified that following the Agency’s investigation of Société
Quincaillerie Durand Inc., the Minster executed search warrants at the premises
of S.M. Construction Inc., Pagui Inc. and Tardif Metal Inc., and at the
residence of Serge Tardif, controlling shareholder and president of these
companies, active in the construction sector. The investigation concerned the
benefits paid to the employees of these companies. During these searches, the
Minister seized the computer files of these companies. The computer files
revealed that the companies had developed a scheme that consisted in keeping
the employees’ salary information in more than one payroll record. There were
payroll records for each of the companies, where the data corresponding to the
T4 “Statement of Remuneration Paid” slips and the T4-A “Summary” slips were
recorded. Furthermore, there was a system parallel to the payroll record. This
was a time bank system used to record part of the employees’ overtime hours as
well as the means of payment for these hours. The benefits paid to the employees through this system were
not indicated on the employees’ T4 slips; therefore no tax was collected on
these amounts. This scheme enabled 148 employees of these companies to avoid
paying taxes. The computer files seized made it possible to identify all of the
beneficiaries of this scheme and to find out all of the amounts that they had
received as employment benefits and the details of those benefits for each of
the beneficiaries. Their compensation included personal goods purchased from
suppliers of these companies, living allowances that the employees were not
entitled to and the supply of fuel for personal use. These companies, as well
as Serge Tardif, plead guilty to tax evasion charges for the 1998 to 2001
taxation years and paid fines totalling more than $148,000. These companies
paid the employees benefits totalling close to one million dollars for the
taxation years from 1998 to 2001 and no tax was deducted at source on these
amounts.
[6] Following that, the
Respondent filed as evidence an excerpt from the computer file seized at the
headquarters of Pagui Inc., the Appellants’
employer (Exhibit I-3). Exhibit I-3 clearly shows the number of overtime hours
that had been recorded in the parallel time bank system for each of the
Appellants and for each of the taxation years in question. Also indicated are
the benefits paid to the Appellants through this system that had not been
included in the T4 slips and on which no tax had been collected. These benefits
consisted of personal goods purchased from suppliers of Pagui Inc., in
particular from Quincaillerie Durand Inc., of living or transportation
allowances that the Appellants were not entitled to under their collective agreement
and the supply of fuel for personal use.
[7] Mr. Huard explained
that the Appellants and their employer had received the following benefits from
this scheme:
(i) the
employer paid the Appellants for overtime hours worked at a lower hourly rate prescribed
in the collective agreements in effect in the construction sector;
(ii) the
employees paid no tax on the compensation received for their overtime hours.
[8] The agent for the
Appellants alleged in his submissions that the employees had no choice choice
but to accept the scheme set up by their employer, who only hired employees who
accepted this method of compensation for overtime. He also argued, without
proving it however, that the Appellants only realized from the second taxation
year at issue that the compensation for their overtime hours did not appear on
their T4 slips.
Conclusion
[9] With regard to the
justification put forward by the agent for the Appellants to the effect that
his clients had to agree to their employer’s scheme if they wanted to earn
their living, I would simply say that honesty and respect for the law are not
optional, but compulsory, regardless of the circumstances. As for the argument
raised by the agent for the Appellants to the effect that the Appellants didn’t
realize until the second of their taxation years at issue that their overtime
hours did not appear on their T4 slips, I am of the opinion that it is not only
implausible, but also absurd. I will also recall that no evidence was submitted
in support of this argument. The Appellants could have at least testified to
give their version of the facts.
[10] In my opinion, the
Minister has met the burden of proof incumbent upon him with regard to the
penalties that he had imposed on the Appellants for the first of their taxation
years at issue. Indeed, the Minister demonstrated, on the balance of
probabilities, that the Appellants had knowingly made omissions in their income
tax returns for the first of the taxation years at issue. The Minister clearly
demonstrated that the Appellants had knowingly agreed to and participated in
the scheme set up to avoid paying tax. Their participation was an essential
link in the execution of the scheme and they benefited from it. It takes two to
tango. It is simply impossible for me to come to another conclusion. Since the
Minister met his burden of proof with regard to the penalty, he was justified
in making reassessments after the normal period for reassessments.
[11] For these reasons,
the appeals are dismissed.
Signed at Ottawa, Canada, this 8th day of August 2006.
Paul Bédard
on this 30th day of April 2007.
CITATION: 2006TCC353
COURT FILE NO.: Dockets 2005-2913(IT)I, 2005-2936(IT)I, 2005-2934(IT)I,
2005-2927(IT)I, 2005‑2926(IT)I, 2005-2921(IT)I,
2005-2920(IT)I,
2005-2915(IT)I
STYLE OF CAUSE: Denis Renaud, Bruno Beaupré, Estate of Alain Beaupré, Louis
Vidal, Rénald Beaumont, Yvon Robert, Gary McClean, Hughes Guimont and Her
Majesty the Queen
PLACE OF HEARING: Québec, Quebec
DATE OF HEARING: June 1, 2006
REASONS FOR
JUDGMENT BY: The Honourable Justice Paul Bédard
DATE OF JUDGMENT: August 8, 2006
APPEARANCES:
|
Agent for the
Appellants:
|
Michel Martel
|
|
Counsel for the Respondent:
|
Claude Lamoureux
|
COUNSEL OF RECORD:
For the
Appellants:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa,
Canada
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