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Citation: 2003TCC23
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Date: 20030205
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Docket: 2002-1805(IT)I
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BETWEEN:
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HUIQING H.G. GUO,
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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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____________________________________________________________________
For the
Appellant:
The Appellant herself
Counsel for the
Respondent:
Anne Jinnouchi
____________________________________________________________________
REASONS FOR JUDGMENT
(Delivered orally from the Bench at
Saskatoon, Saskatchewan,
on Tuesday, November 5, 2002 and revised
as to style and syntax at
Ottawa, Canada on February 5, 2003)
Margeson, J.T.C.C.
[1] The matter before the Court for
decision at this time is that of Huiqing H.G. Guo and
Her Majesty The Queen. The sole issue before the Court is whether
or not the Appellant was an ordinary resident of Canada for the
period from June 1, 1999 to July 19, 2000 under the provisions of
the Income Tax Act ("Act"). The evidence
is quite clear in this case. There is no real dispute about the
facts.
[2] If one looks at the Reply to the
Notice of Appeal ("Reply"), page 4 at paragraph 12, the
Appellant has admitted all of the allegations with the exception
of subparagraph 12(f), which was an allegation that in February
of 1999 the Appellant applied for the position of a post-doctoral
research job at the University of Minnesota as an exchange
visitor research scholar. She said that was not quite correct.
The date could have been December 19, 1998 or January 1999 as
well as February 1999, but that does not change the situation any
as far as the Court is concerned.
[3] She disputed paragraph (q)(I)
where the Minister of National Revenue ("Minister")
alleged that she had a dwelling place in Canada where her spouse,
child and mother resided. She did not agree with that. Counsel
for the Respondent argued that she did. She also disagreed with
paragraph (q)(V) which said that a further tie was her
eligibility for provincial hospitalization and medical coverage.
It was her position that she did not have provincial coverage in
Canada when she was in the United States. She did not believe
that if she presented her card in the United States that she
would be covered.
[4] The issue was whether or not she
had provincial coverage in Saskatchewan or in other parts of
Canada. That is what the Court has to decide. She said that she
did not. She also disagreed with paragraph (r). She said that
that applied until June 1999 and not after. She agreed with the
remainder of the presumptions.
[5] There was no real dispute with
respect to the evidence. Counsel for the Respondent discussed the
evidence in detail and made her arguments thereon. She said that
the real issue was whether or not the Appellant was an ordinary
resident of Canada between June 1, 1999 and June 19, 2000 under
the Act. Alternatively, under the provisions of
subparagraph 110(1)(f)(i) of the Act, the Appellant
was subject to taxation in Canada because she was not subject to
taxation in the United States. Therefore, even if she was not an
ordinary resident in Canada, since she was not taxed in the
United States, she was taxable in Canada.
[6] Counsel referred to the Act
with respect to the meaning of "ordinary resident".
Subsection 2(1) says that:
An income tax shall be paid, as required by this
Act, on the taxable income for each taxation year of every person
resident in Canada at any time in the year.
[7] Then we have to go to subsection
250(1) of the Act with respect to "person deemed
resident" and subsection 250(3) with respect to
"ordinarily resident".
[8] Counsel quite properly referred to
the leading case in Canada on this issue as to whether a person
is ordinarily resident in Canada or is an ordinary resident in
Canada. In Thomson v. M.N.R., 2 DTC 812, at page 815, Rand
J., said:
For the purpose of income tax legislation, it
must be assumed that every person has at all times a residence.
It is not necessary to this that he should have a home or a
particular place of abode or even a shelter. He may sleep in the
open. It is important only to ascertain the spatial bounds within
which he spends his life or to which his ordered or customary
living is related. Ordinary residence can best be appreciated by
considering its antithesis, occasional or casual or deviatory
residence. The latter would seem clearly to be not only temporary
in time and exceptional in circumstance, but also accompanied by
a sense of transitoriness and of return.
[9] Those are the considerations when
one is trying to determine whether a person is an ordinary
resident or they are not an ordinary resident.
[10] In paragraph 50 of the same case, the
Court held:
But in the different situation of so-called
"permanent residence," "temporary residence,"
"ordinary residence," "principal residence"
and the like, the adjectives do not affect the fact that there is
in all cases residence; and that quality is chiefly a matter of
the degree to which a person in mind and fact settles into or
maintains or centralizes his ordinary mode of living with its
accessories in social relations, interests and conveniences at or
in the place in question. It may be limited in time from the
outset, or it may be indefinite, or so far as it is thought of,
unlimited. On the lower level, the expression involving residence
should be distinguished, as I think they are in ordinary speech,
from the field of "stay" or "visit".
[11] Counsel also referred to the
Immigration Act, particularly subsection 25(2) which
reads:
- Possession by a person of a valid returning resident permit
issued to that person pursuant to the regulations is, in the
absence of evidence to the contrary, proof that the person did
not leave or remain outside Canada with the intention of
abandoning Canada as his place of permanent residence.
[12] Here, the Appellant made application
for a returning resident permit and there was no evidence before
the Court which would lead the Court to conclude that she
abandoned it. On the basis of her own evidence it is quite clear
that she did not give any indication at all that she was
abandoning Canada.
[13] It could be safely concluded from her
own evidence that Canada would only have been abandoned if she
had been able to satisfy her preconditions of becoming a resident
in the United States; that is, that herself, her husband, her
daughter and her mother would be able to go to the United States.
If that did not happen, the Court is completely satisfied that
she would not have and did not have any intention of ever
abandoning her right to return to Canada. Neither did she abandon
her rights under the permanent resident permit. She never said
that she was not interested in keeping it, irregardless of the
fact that in her own mind she thought that she might have some
difficulties getting back into Canada at some time. These fears
were never realized.
[14] Counsel also referred to Qing Gang
K. Li v. Canada, 94 DTC 6059, where the Court dealt with
Article 19 of the Canada-China Income Tax Agreement, the
avoidance of double taxation provision of the taxation agreement
between Canada and China, and said:
... Here, the applicant was a visitor and as such he was
entitled the benefit of Article 19 while he retained that status
in Canada. However, he chose to make application to become a
landed immigrant, thus evidencing an intention to remain in
Canada permanently. This intention was actualized when he was
granted landed immigrant status on July 13, 1990. In such
circumstances, the applicant could not properly invoke Article 19
for his benefit.
[15] In Lee v. M.N.R., 90 DTC 1014,
Teskey J., referred to the various factors that the Court should
consider in deciding on a question of fact whether a person is an
ordinary resident in a place or not. He said:
The question of residency is one of fact and
depends on the specific facts of each case. The following is a
list of some of the indicia relevant in determining whether an
individual is resident in Canada for Canadian income tax
purposes. It should be noted that no one or any group of two or
three items will in themselves establish that the individual is
resident in Canada. However, a number of factors considered
together could establish that the individual is a resident of
Canada for Canadian income tax purposes:
[16] Included in this list were many of the
factors that have been referred to by counsel here today and also
have been touched upon by the Appellant in her argument.
[17] Counsel further referred to other
cases. She referred to the case of Ayodeji Harris-Eze v.
The Queen, Docket: 2001-972(IT)I, which is a decision of this
Court where many of the same issues came up, but where the
factual situation was quite different from the factual situation
in the present case. In that case the Court decided that Mr.
Harriz-Eze was not a resident of Canada in fact. It had to
consider the tie-breaking rules, it had to consider the Article
IV of the Canada-U.S. Income Tax Convention (1980). There were
competing residences as well. The factors which the Court found
favourable to the Appellant's position in that case do not
appear here. Where the factors were the same as here, this Court
concludes that they speak unfavourably in respect to the
Appellant's position.
[18] In that case the Court said:
At the outset the Court must make a comment about
the evidence of the Appellant. In a case of this nature the
evidence of the Appellant is paramount. However, it is not only
the avowed intention of the Appellant which is significant but
more importantly the actions of the Appellant in spite of what
his avowed intention was. Even though significant, the question
of intention in this matter is not determinative. The Court must
weigh and consider all of the facts as well as take into account
the avowed intention of the Appellant as indicated in his
evidence.
[19] Here, when the Court breaks down the
evidence of the Appellant and considers everything that she said
it has no difficulty whatsoever in concluding at the end of the
day that this Appellant made it quite clear that she always
intended to come back to Canada. That was her intention. She
always intended to come back and make Canada her permanent home.
The only way that she was not going to come back to Canada was if
she could have fulfilled the conditions precedent to her
remaining in the United States; that is, if her mother, her
husband and her daughter could go there and if she were able to
find work there. None of these conditions had been fulfilled when
she came back to Canada and consequently there was nothing to
indicate that she had changed her intention, which was obviously
there from the beginning, to be an ordinary resident in
Canada.
[20] She was trying to take advantage of her
right to come to Canada, she did not want to give up that right
and she was not going to give it up until some of the United
States conditions had been fulfilled. The Court is satisfied that
at no time were these United States conditions ever fulfilled nor
was there any indication that they ever really would be
fulfilled. When the Court looks at her intention as evidenced by
her evidence in Court, it is quite clear that she always intended
to come back to Canada and she wanted to protect her right to do
so.
[21] Counsel for the Respondent said that
the Appellant maintained her primary ties with Canada. Her
husband was here, her daughter was here and her mother was here.
Her mother, daughter and husband were living here, they had a
place of abode in Saskatchewan. Her husband was obviously a
student and was studying. It may be true that she believed that
she had to support him, but that does not take anything away from
the fact that this was evidence of an important tie to Canada.
The ties between the Appellant, her husband and her family were
maintained. She was sending money to Canada from the
United States, which was the money she earned in the United
States. That is some indicia as to what her intention was and as
to what her ordinary residence was.
[22] The dwelling was available to her and
was occupied by her husband, daughter and mother and was occupied
by her when she came back to Canada on July 22nd for a visit. She
said that she visited them approximately every three months. She
did not think that that was much of a visit, and suggested that
it was more of a temporary visit and did not suggest permanency.
The Court does not accept that argument. These visits that she
made were much more than that. On all occasions that she came to
Canada, she used the residence. She was never stopped at the
border. She may have had some difficulty, but she was always
admitted.
[23] Counsel referred to Exhibit R-1
in which the Appellant herself admitted in April of 2000 that she
was a permanent resident of Canada and had to come back to Canada
and find a job before 2001. The Court cannot overlook that. There
were other factors as well. She had a vehicle registered in
Saskatchewan. She tried to explain that by saying that her
husband needed a vehicle and she was not just going to take it
and sell it, it was not worth enough. But the fact is, it was a
vehicle registered in her name, which was in Canada, which was
being used by her husband and presumably could be used by her
when she was in Canada. Those are the facts.
[24] She was a member of a society in
Canada. She was a member of a society in the United States. One
might argue that one cancels out the other because the Court
understands that it was the same society, but in any event, that
has to be considered. She did partake in some of the school
activities as a parent with respect to her daughter in Canada.
She went to a home and school meeting in Canada.
[25] She attended celebrations for the
Chinese New Year in Canada. She did have some social relations in
Canada. They were not extensive but they existed. When she lived
in the apartment in Canada she associated with at least one of
the families, and her daughter went to school with one of the
children of one of the families. There was some social
interchange of a personal nature there, which the Court must
consider.
[26] With respect to economic ties, the
Court is satisfied that she had a bank account in Canada, which
she had when she was here and she continued to have it after she
went to the United States. It is true that it was shared, but
nonetheless it was a bank account to which she had access, and
she put money into it and bills were paid out, presumably on her
own behalf and certainly on behalf of her husband and
daughter.
[27] She made application for the Child Tax
Benefit credit. She considered that she was entitled to the Child
Tax Benefit credit. Her explanation was that she had not changed
the information that she had given to the Minister before she
went to the United States, but her husband was now the caregiver
for her child. The fact remains that she received the Child Tax
Benefit credit.
[28] She also had a provincial health card.
There is nothing in the evidence which would indicate to the
Court that she was not entitled to use that provincial card if
she came back into Canada. She obviously could not use it in the
United States but there is no reason why she could not have
used it in Saskatchewan if she came back and she must have
retained it for that same reason.
[29] There was some evidence that she had a
mailing address in Saskatchewan. It is true that she had a
mailing address in the United States as well, but one address in
the United States was given merely for the purpose of allowing
her to receive the travel expenses, which she claimed. For income
tax purposes, she did indicate on her returns, at least on one of
them that her address was a Saskatchewan address. The Court
cannot just overlook that, that is the way it was. She filed
income tax returns in Canada using the Canadian address.
[30] When the Court compares the indicia of
ordinary residence in Canada with ordinary residence in the
United States, there is no real contest. When one adds up all of
the factors, which indicate that she was an ordinary resident of
Canada, compares them with those factors, which indicate that she
was an ordinary resident in the United States, including her own
evidence and her own statements, her own application that she
filled out, her own income tax returns, it is quite clear that
there is no contest. The contacts that she had with Canada far
outnumbered not only in quantity, but also in quality those
contacts with the United States.
[31] Additionally, when she was in the
United States she did not pay any income tax there. She was
described as a non-resident of the United States. If she was
intending to remain permanently in the United States one would
not have been so designated and she would have made it quite
clear that she was seeking permanent employment in the United
States and she was relinquishing any intention of coming back to
Canada. This, obviously was not the case. All indicia were to the
effect that she intended to go back to Canada and continue to be
a permanent resident of Canada.
[32] The visits that she made to Canada were
significant enough. They were made every three months and were
not just passing visits. She went to Toronto and made visits
every three months to Saskatchewan to visit her mother, her
husband and her daughter.
[33] She was invited to go to Toronto by the
Prairie Swine Centre, which was a place where she had worked
previously in Canada. This was an indicia of the contact that
continued to exist between her and the people in Saskatchewan.
This was a further indication of her intention to remain a
permanent resident of Canada. Her immigration status is not
conclusive of what her intention was nor is it conclusive of
whether a person is an ordinary resident of one country or the
other, but it is of some significance in light of the evidence
that she made an application for permanent resident status, that
she received her returning resident's permit, that she made
certain that she was going to keep it and that she did not do
anything to cancel it. All these actions were indications that
she intended to remain a permanent resident of Canada.
[34] Counsel also referred to subsection
25(1) of the Act regarding the presumption. That has to be
considered.
[35] The Court agrees with counsel for the
Respondent that at the end of the day all of these factors add up
to an intention on the part of the Appellant to be a permanent
resident of Canada, and that is what she was. She was not a
resident of the United States. This was a conditional position on
her behalf dependent upon unfulfilled conditions.
[36] Counsel said that alternatively, under
subparagraph 110(1)(f)(i) of the Act she was not
exempt because she was not subject to taxation in the United
States. The Canada/U.S. Treaty does not apply as far as she was
concerned. There was no issue of double taxation. The tie-breaker
rules do not apply.
[37] The Court has listened carefully to the
Appellant's arguments. The evidence was not always consistent
and the Court is satisfied that where there is any conflict
between her evidence and what the documents indicate, then the
Court accepts that other evidence as being preferable to
hers.
[38] She said that she was only authorized
to work at the Prairie Swine Centre and that if she did not have
that job she would not be entitled to come back to Canada and
that when she went out of Canada she could not get back in during
a certain period of time. Yet the evidence is quite to the
contrary. She came down to Toronto and was admitted without any
problems. She came to Saskatchewan. She was admitted because
there was evidence in their computers that she and her husband
were going to be granted landed immigrant status. Consequently,
she had no difficulty being admitted.
[39] In any event, the Court is satisfied
that there was no evidence before it, which would lead it to
conclude that the Appellant was prohibited from coming back into
Canada and that she could not return to her home. There was no
evidence to indicate that that was the case at all, and indeed,
every time that she tried to get in she got back in for one
reason or another.
[40] Her position was that Canada did not
have to take her in. The Court is not satisfied that that
argument was made out on the balance of probabilities. All of the
evidence that was introduced indicated that she was entitled to
get in, that she always intended to be a permanent resident and
that is what she was.
[41] The Appellant referred to the case of
Shih v. Canada, [2000] T.C.J. No. 196
(Q.L.), particularly at paragraph 15, but that case does not help
her cause. That case refers to the case of Thomson, supra,
and has to do with the difference between a visit and a stay.
[42] In the case at bar the Court is
satisfied that what the Appellant had in the United States was a
stay. She went down to the United States with the intention of
working, but at all times she intended to come back to Canada.
She did not intend to work permanently in the United States. She
intended to remain an ordinary resident of Canada and that is
what she did.
[43] Unfortunately for the Appellant, on the
basis of the evidence given and considering the credibility of
the evidence that she gave, her own evidence supported the
Crown's position that she was an ordinary resident of Canada
in the years in question and the Court must so find.
[44] The appeal is dismissed and the
Minister's assessment is confirmed.
Signed at Ottawa, Canada, this 5th day of
February 2003.
J.T.C.C.
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