Citation: 2007TCC218
Date: 20070420
Docket: 2006-1183(OAS)
BETWEEN:
SALVATORE GRAMAGLIA,
Applicant,
and
CANADA
(MINISTER OF HUMAN
RESOURCES AND SOCIAL DEVELOPMENT),
Respondent.
REASONS FOR JUDGMENT
(Delivered orally from the bench on March 6, 2007 at Calgary, Alberta.)
Beaubier, J.
[1] This is a reference
under section 18 of the Old Age Security Act by the Commissioner of
Review Tribunals relating to the determination of income of the Appellant
pursuant to subsection 28(2) of the Old Age Security Act. The Appellant
was the only witness.
[2] Three matters were
raised in the course of the hearing for rulings by the Court:
1. The Charter – However, the
Appellant had not served the necessary notices on third parties to proceed with
the Charter argument and, therefore, the Court denied an argument on that
matter.
2. The fact that the Reply
was filed in Court on February 27, 2007, and served on the Appellant in the
period February 27 to March 2. The Rules set no time limit in which to file or
serve the Reply in this case. The Court offered the Appellant an adjournment
of 24 hours respecting his objection because the issues and legal implications respecting
this matter had been canvassed thoroughly before by the Appellant by the time
of this objection. The Appellant elected to proceed.
3. The fact that this is a
referral from the Tribunal and that the Appellant had not had a hearing before
the Tribunal prior to this hearing. That objection was denied on the basis that
the reference has proceeded according to the statutory authority and direction.
[3] Paragraphs 15 and
16 of the Reply read as follows:
Assumptions Relied On
15. In calculating the Appellant’s GIS benefit,
the Minister relied on the following assumptions of fact:
a) The Appellant is a resident of Canada;
b) The Appellant is a single person;
c) When applying in 2005 for his Guaranteed
Income Supplement, the Appellant:
i) declared his 2004 income to be $1,716.00,
an amount received from his German disability pension; and
ii) failed to declare the amount of $800 with
respect to his RRSP income (Home Buyers’ Plan);
d) The Appellant’s 2004 income under the Income
Tax Act was $2,516.00, including:
i) $1,716.00 from his German disability
pension pursuant to subparagraph 56(1)(a)(i) of the Income Tax Act; and
ii) $800.00 in RRSP income (Home Buyer’s
Plan) pursuant to subsection 146.01(4) and paragraph 56(1)(h.1) of the Income
Tax Act;
e) With respect to the Appellant’s RRSP
income (Home Buyer’s Plan):
i) On May 10, 1993 the Appellant borrowed
$12,000.00 from his RRSP under the ‘Home Buyers’ Plan’ for the purchase of a
home;
ii) Under the Home Buyers’ Plan, the
Appellant was required to pay back into his RRSP $800 per year for 15 years;
and
iii) In 2004 the Appellant failed to pay
$800, or any amount, into his RRSP as required.
f) Based on the Appellant’s actual income of
$2,516.00 for 2004, the Appellant was entitled to a GIS amount of $489.97 per
month as outlined in Schedules A and B attached hereto to this Reply; and
g) The Appellant’s GIS entitlement is based
on amounts for a single person.
B. ISSUES TO BE DECIDED
16. The issues are:
a) Whether the Tax Court of Canada received
from the Review Tribunal, and accepted, a referral of the Appellant’s appeal of
the Minister’s decision dated June 9, 2006 pursuant to subsection 28(2) of the OAS
Act; and
b) Whether the Minister correctly determined
the Appellant’s income for the purpose of calculating his GIS entitlement for
the Payment Period, and specifically, whether the Minister was correct in
including as income for the purposes of calculating the GIS:
i) the Appellant’s German disability pension
in the amount of $1,716.00, and
ii) Subject to the determination of issue (a)
above, the income from the RRSP Home Buyers’ Plan in the amount of $800.00.
[4] Subparagraphs
15(a), (c), (d), (e) and (f) were established in evidence. Subparagraphs 15(b)
and (g) were not disputed by the Appellant.
[5] The Court received
the referral of this appeal from the Minister’s decision of June 9, 2006, and
the parties were so informed by the Court. The Appellant filed documents
respecting that appeal for this hearing, as had the Respondent.
[6] With respect to the
Appellant’s appeal of the inclusion of his German disability pension in his
“income” for the purposes of calculating his Guaranteed Income Supplement and
Old Age Security under the Old Age Security Act:
1. That amount is included in
the Appellant’s “income” for that purpose pursuant to section 2 of the Old
Age Security Act and by paragraph 56(1)(a) of the Income Tax Act,
all as determined by the Federal Court of Appeal and the Supreme Court of
Canada in Swantje v. Canada [1994] 2 C.T.C. 382 and 1996 1 C.T.C.
355, which is directly applicable to this case.
2. Therefore, the appeal is
dismissed on this issue.
[7] The sum of $800,
which the Appellant was required to pay into his RRSP in 2004 and which he did
not pay, is also to be included in his income by virtue of the directed
calculations contained in subsection 146.01(4) of the Income Tax Act.
Simply described, the principle of this subsection is that the Appellant was
able to reduce his taxable income when he contributed to his RRSP. He was not
taxed when he withdrew proceeds from his RRSP to purchase a home. Therefore,
he must be taxed on those proceeds at some time. If he failed to repay the
withdrawn proceeds into his RRSP, he is taxed on the amount of proceeds that he
was required to pay in 2004 as so determined.
[8] As a result, the
appeal is dismissed in its entirety.
Signed at Vancouver, British Columbia this 20th day
of April, 2007.
"D.W. Beaubier"
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