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Citation: 2003TCC123
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Date: 20030311
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Docket: 2001-1205(OAS)
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BETWEEN:
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JOHN RYSDYK,
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Appellant,
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and
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THE MINISTER OF HUMAN RESOURCES DEVELOPMENT CANADA,
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Respondent.
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REASONS FOR JUDGMENT
Mogan J.
[1] This
appeal arises under the provisions of the Old Age Security Act, R.S.C.
1985, chapter 0-9 as amended ("OAS Act"). At the hearing in
Calgary, the Appellant attended in person and represented himself. The
Appellant testified briefly, and many facts alleged in the Respondent's Reply
were not challenged by the Appellant.
[2] The
Appellant came to Canada from the Netherlands in 1986. He has resided and
worked here ever since. He was born on August 9, 1926 and so reached his 65th
birthday in August 1991. Upon turning 65, the Appellant applied for and was
granted an Old Age Security ("OAS") pension effective September 1991.
He also applied for and was granted a Guaranteed Income Supplement
("GIS") under sections 11-14 of the OAS Act. He concluded that
he was entitled to some kind of "senior citizen" pension from the
Government of the Netherlands. In 1994, he applied, apparently through Health
& Welfare Canada, to the Netherlands Government for his pension as a
long-time resident of that country. Sometime in 1994-1995, the Appellant
started to receive from the Government of the Netherlands a monthly pension
(referred to herein as the "Netherlands Pension").
[3] During
1999, Human Resources Development Canada ("HRDC"), which administers
the income security programs, reviewed the Appellant's file because he was
receiving the GIS. HRDC concluded that the Appellant had not included his
Netherlands Pension in his statement of income when he applied for the GIS. By
letter dated December 2, 1999, HRDC informed the Appellant that (i) they had
recalculated his entitlement to the GIS; (ii) they had determined that the
monthly GIS payment he had been receiving was greater than the amount he was
entitled to; and (iii) he had received an "overpayment" of $2,925 for
the period April 1998 to June 1999.
[4] By
letter dated February 28, 2000, HRDC informed the Appellant that they had done
a further and more extensive review of his account. HRDC determined that the
Appellant had received an "overpayment" in the aggregate amount of
$9,641 for the period April 1996 to February 2000. After allowing $75 for an
amount recovered (i.e. deducted) from an OAS pension payment, the net
overpayment as at February 28, 2000 was $9,566. By letter dated March 22, 2000
to HRDC, the Appellant objected to the claim for overpayment and asked that the
matter be reconsidered. By letter dated September 22, 2000, HRDC confirmed
their earlier decision of February 28, 2000 and stated that the Appellant could
appeal to a Review Tribunal.
[5] On
October 24, 2000, the Appellant's Notice of Appeal was received at the Office
of the Commissioner of Review Tribunals. After subsequent correspondence
attempting to clarify the Appellant's grounds for appeal, the Commissioner for
Review Tribunals wrote to the Registrar of this Court on March 30, 2001
referring the appeal to this Court pursuant to subsection 28(2) of the OAS
Act because the ground for appeal related to the determination of income
under section 2 of the OAS Act. This Court forwarded a copy of the Appellant's
Notice of Appeal to the Respondent in April 2001 and the Respondent's Reply was
filed on October 15, 2001.
[6] The
GIS is provided in Part II (sections 10 to 18) of the OAS Act. The
amount of the GIS is determined under section 12, and the pensioner's
"monthly base income" is an important factor in that determination.
In subsection 12(6), "monthly base income" of a person is defined
with respect to one-twelfth of the income of that person for the base calendar
year. The amount of the GIS which any particular individual is entitled to
depends, in part, directly or indirectly, upon that individual's income for a
"base calendar year". Set out below are what I regard as the most
relevant provisions of the OAS Act.
2 In this Act,
"income" of a person for
a calendar year means the person's income for the year, computed in accordance
with the Income Tax Act, except that
(a) …
13 For the purposes of determining
the amount of supplement that may be paid to a pensioner for a month before
July 1, 1999, the income for a calendar year of a person or an applicant is the
income of that person or applicant for that year computed in accordance with
the Income Tax Act , except that
(a) …
28(2) Where, on an appeal to
a Review Tribunal, it is a ground of the appeal that the decision made by the
Minister as to the income or income from a particular source or sources of an
applicant or beneficiary or of the spouse or common-law partner of the
applicant or beneficiary was incorrectly made, the appeal on that ground shall,
in accordance with the regulations, be referred for decision to the Tax Court
of Canada, whose decision, subject only to variation by that Court in
accordance with any decision on an appeal under the Tax Court of Canada Act
relevant to the appeal to the Review Tribunal, is final and binding for all
purposes of the appeal to the Review Tribunal except in accordance with the Federal
Court Act.
[7] The
Appellant claims that, when he applied for the Netherlands Pension in 1994 –
and made his application through Health & Welfare Canada – no person told
him that his Netherlands Pension could or would reduce the amount of any GIS
which he might otherwise be entitled to. HRDC denies that claim and states that
the Appellant did not disclose the Netherlands Pension when he applied for the
GIS. In my view, it is not relevant what the Appellant was told or not told
when he applied for his Netherlands Pension. Also, he may not yet have applied
for his Netherlands Pension when he applied for the GIS. As I understand this
appeal, the only issue is whether the Netherlands Pension is required to be
included in computing the Appellant's income (in accordance with the Income
Tax Act) for the purpose of determining the amount of GIS payable to the
Appellant.
[8] Counsel
for the Respondent attached two schedules to his Reply showing, in Schedule
"B", the amounts of GIS actually paid to the Appellant from
April 1996 to February 2000 and, in Schedule "A", the amounts of
GIS which would have been payable to the Appellant from April 1996 to February
2000 if his Netherlands Pension had been taken into account. According to those
schedules, the aggregate of amounts actually paid was $14,207.20 and the
aggregate of amounts that would have been payable (if the Netherlands Pension had
been taken into account) is $4,566.20. The difference is $9,641.
[9] According
to certain facts assumed by the Minister of Human Resources Development when
determining the Appellant's entitlement to, and fixing the amount of, the GIS
for the period April 1996 to February 2000 (see paragraph 12 of the
Reply), the Appellant received at all relevant times after 1995 monthly
payments from the Kingdom of the Netherlands, and such payments were made under
the "General Old Age Pensions" laws of the Netherlands. Those
payments are referred to herein as the Netherlands Pension. Section 56 of the Income
Tax Act contains the following provision:
56(1) Without
restricting the generality of section 3, there shall be included in computing
the income of a taxpayer for a taxation year,
(a) any
amount received by the taxpayer in the year as, on account or in lieu of
payment of, or in satisfaction of,
(i) a
superannuation or pension benefit including, without limiting the generality of
the foregoing,
(A) …
(C.1) the amount of
any payment out of or under a foreign retirement arrangement established under
the laws of a country, except to the extent that the amount would not, if the
taxpayer were resident in the country, be subject to income taxation in the
country,
In my opinion, the Netherlands Pension falls within the broad meaning of
clause 56(1)(a)(i)(C.1) or subparagraph 56(1)(a)(i). There is no
evidence that the Netherlands Pension would not be subject to income taxation
in the Netherlands if received by a resident of that country.
[10] Under subsection 2(1) and section 3 of the Income Tax Act, the
Appellant as a resident of Canada after 1986 is taxable on his world income;
and for greater certainty, his income would include a superannuation or pension
benefit under subparagraph 56(1)(a)(i). If the Netherlands Pension is
not taxable in Canada because of a provision in the tax convention between
Canada and the Netherlands, the Netherlands Pension would still be included in
the Appellant's "income" under section 56 of the Income Tax Act;
but it would be deductible in computing "taxable income" under
subparagraph 110(1)(f)(i). The inclusion of the Netherlands Pension in
the Appellant's "income" under the Income Tax Act may very
well affect the amount of the GIS which the Appellant is entitled to under the OAS
Act even if the Netherlands Pension were later deductible in computing
"taxable income". It appears, however, from Article 18, section 1 of
the Canada-Netherlands Tax Convention (1986) plus amending protocols, that any
pension arising in the Netherlands and paid to a resident of Canada may be
taxed in Canada.
[11] I am satisfied that the Appellant's Netherlands Pension must be
included in computing his income in accordance with the Income Tax Act. Accordingly, the Netherlands Pension is
part of the Appellant's "income for a calendar year" within the
meaning of section 13 of the OAS Act. The appeal
is dismissed.
Signed at Ottawa, Canada, this 11th day of
March, 2003.
J.T.C.C.
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