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Citation: 2003TCC127
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Date: 20030312
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Docket: 2002-2862(IT)I
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BETWEEN:
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DENIS GAUTRON,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Lamarre, J.T.C.C.
[1] The appellant has appealed from an assessment made by the Minister of National Revenue for the 2000 taxation year in which he was denied the equivalent-to-married credit provided for in paragraph 118(1)(b) of the Income Tax Act (the "Act") for his son Jérôme Gautron.
[2] The respondent relied on subsection 56.1(4), paragraph 118(1)(b) and subsection 118(5) of the Act in disallowing the credit. These provisions read as follows:
456.1(4)3
(4) Definitions. The definitions in this subsection apply in this section and section 56.
"support amount" -"support amount" means an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount, and
(a) the recipient is the spouse or common-law partner or former spouse or common-law partner of the payer, the recipient and payer are living separate and apart because of the breakdown of their marriage or common-law partnership and the amount is receivable under an order of a competent tribunal or under a written agreement; or
(b) the payer is a natural parent of a child of the recipient and the amount is receivable under an order made by a competent tribunal in accordance with the laws of a province.
SECTION 118: Personal credits.
(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,
4118(1)(b)3
(b) Wholly dependent person - 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
(A) a person who is unmarried and who does not live in a common-law partnership, or
(B) a person who is married or in a common-law partnership, who neither supported nor lived with their spouse or common law-partner and who is not supported by that spouse or common-law partner, 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 any 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
(D) except in the case of a parent or grand-parent of the individual, either under 18 years of age or so dependent by reason of mental or physical infirmity,
an amount equal to the total of
(iii) $7,131, and
(iv) the amount determined by the formula
$6,055 - (D - $606)
where
D is the greater of $606 and the dependent person's income for the year,
4118(5)3
(5) Support. 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 common-law partner or former spouse or common-law partner throughout the year because of the breakdown of their marriage or common-law partnership; or
(b) claims a deduction for the year because of section 60 in respect of a support amount paid to the spouse or common-law partner or former spouse or common-law partner.
[3] The appellant does not dispute that during the 2000 taxation year he was required by the divorce decree to pay support to his former spouse for his son, Jérôme, and that during the entire year he lived separate and apart from his former spouse because of the breakdown of their marriage.
[4] He takes the position, however, that the wording of subsection 118(5) of the Act is not in keeping with the new legislative provisions that no longer allow the deduction of child support. If such deductions are no longer possible, his position is that he is entitled to the equivalent-to-married credit for one of his children.
[5] In Bermond Lavoie v. Her Majesty the Queen, [2001] T.C.J. No. 809 (Q.L.), at paragraph 16, I reproduced the editorial comment in the Special Report published by CCH Canadian Limited at page 76, paragraph 25, regarding resolution 5 of the Notice of Ways and Means Motion to Amend the Income Tax Act accompanying the federal budget of March 6, 1996, which concerns the equivalent-to-married tax credit. The editorial comment reads as follows:
[ ¶ 25] Resolution 5: Equivalent-to-married credit
(5) That, for the 1997 and subsequent taxation years, where an individual is required under the terms of a written agreement or court order to make payments in the year in respect of the support of a child, the individual not be entitled to claim any tax credit under section 118 of the Act in respect of the child.
CCH Editorial Comment: Section 118 of the Act provides for certain tax credits in respect of persons supported by the taxpayer, including his or her children. Resolution 5 proposes that for 1997 and subsequent taxation years, any person required to pay in the year an amount for support of a child is not entitled to any tax credit available under section 118. This proposal is related to the revisions to the taxation of child support payment in Resolution 3, in that by prohibiting a person paying child support from taking the section 118 credit, the credit then becomes available to the custodial parent. Under subsection 118(5), the child of any person who paid child support (and who was entitled to a deduction under paragraphs 60(1)(b), (c) or (c.1)) was deemed not to be the child of the person for purposes of section 118. Thus the person could not claim both the deduction for child support and the child tax credit. Under the new rules for the taxation of child support, the payer will not be entitled to a deduction. However, Resolution 5 proposes that the credit will nonetheless be denied to the payer of child support and the present treatment, permitting the recipient of child support to claim the credit, will continue.
[6] It is clear from these comments and from the enactment in subsection 118(5) of the Act that the appellant in the instant case is not entitled to the equivalent-to-married credit, even as a result of the changes to the tax treatment of support. It is not up to this Court to amend the content of an enactment. The role of this Court is to apply the Act as written and, to the extent that the enactment is clear, there is no interpretation to be given other than the one that is clear from the legislation.
[7] This principle has been recognized by the courts on many occasions. Specifically, in Shell Canada Ltd. v. Canada, [1999] 3 S.C.R. 622 ([1999] S.C.J. No. 30 (Q.L.)), the Supreme Court of Canada, in a decision written by Madam Justice McLachlin, stated as follows at paragraphs 40 and 43:
Second, it is well established in this Court's tax jurisprudence that a searching inquiry for either the "economic realities" of a particular transaction or the general object and spirit of the provision at issue can never supplant a court's duty to apply an unambiguous provision of the Act to a taxpayer's transaction. Where the provision at issue is clear and unambiguous, its terms must simply be applied: Continental Bank, supra, at para. 51, per Bastarache J.; Tennant, supra, at para. 16, per Iacobucci J.; Canada v. Antosko, [1994] 2 S.C.R. 312, at pp. 326-27 and 330, per Iacobucci J.; Friesen v. Canada, [1995] 3 S.C.R. 103, at para. 11, per Major J.; Alberta(Treasury Branches) v. M.N.R., [1996] 1 S.C.R. 963, at para. 15, per Cory J.
...
Second, it is my respectful view that the Federal Court of Appeal's misplaced reliance on "economic realities" caused it to stray from the express terms of s. 20(1)(c)(i) and supplement the provision with extraneous policy concerns that were said to form part of its purpose. The Act is a complex statute through which Parliament seeks to balance a myriad of principles. This Court has consistently held that courts must therefore be cautious before finding within the clear provisions of the Act an unexpressed legislative intention: Canderel Ltd. v. Canada, [1998] 1 S.C.R. 147, at para. 41, per Iacobucci J.; Royal Bank of Canada v. Sparrow Electric Corp., [1997] 1 S.C.R. 411, at para. 112, per Iacobucci J.; Antosko, supra, at p. 328, per Iacobucci J. Finding unexpressed legislative intentions under the guise of purposive interpretation runs the risk of upsetting the balance Parliament has attempted to strike in the Act.
[8] For these reasons, therefore, the appeal is dismissed.
Signed at Ottawa, Canada, this 12th day of March 2003.
J.T.C.C.
Translation certified true
on this 19th day of April 2004.
Sophie Debbané, Revisor
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