Ward v. The Queen, 2003 TCC 725 (Informal Procedure)

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Appeal heard on September 23, 2003, at Halifax, Nova Scotia

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JUDGMENT

          The appeal from the assessment of tax made under the Income Tax Act for the 2000 taxation year is dismissed.

Signed at Ottawa, Canada, this 15th day of October, 2003.

Bowie J.

REASONS FOR JUDGMENT

Bowie J.

[1]      Mr. Ward is a mechanic who works in the oilfields. When he filed his income tax return for the 2000 taxation year, he claimed what is commonly referred to as the overseas employment tax credit under subsection 122.3(1) of the Income Tax Act (the Act). He was denied the credit by the assessor, and at the objection stage as well. He brings this appeal from those decisions. It was heard under the Court's informal procedure.

[2]      The relevant part of subsection 122.3(1) reads as follows:

122.3(1)            Where an individual is resident in Canada in a taxation year and, throughout any period of more than 6 consecutive months that commenced before the end of the year and included any part of the year (in this subsection referred to as the "qualifying period")

...

there may be deducted, from the amount that would, but for this section, be the individual's tax payable under this Part for the year, an amount equal to that proportion of the tax otherwise payable under this Part for the year by the individual that the lesser of ...

The formula by which the amount deductible is to be computed need not be reproduced, as there is no dispute about the quantum claimed by the Appellant, but only about his eligibility.

[3]      The Minister of National Revenue (the Minister) accepts that Mr. Ward's employment in 2000 meets all the requirements of subsection 122.3(1), other than that to qualify, the employment must be "... throughout any period of more than six consecutive months that commenced before the end of the year ...".

[4]      In the year 1999, Mr. Ward worked in Argentina, beginning on July 8 and ending before the beginning of December. In the month of December he was at home in Canada and not working. He was between jobs. He began his next job on January 8, 2000, in Venezuela, and it ended on April 26. Again he returned to Canada and did not work until he went to Mexico, where he began to work for the same contractor that he had worked for in Venezuela. This job began on August 8, 2000, and went until December 16 the same year. Again he returned to Canada and did not work. During December 1999, the period between April and August 2000, and January 2001, Mr. Ward was not enjoying a paid vacation from his previous employment; he simply took time off between jobs, none of which provided him with a paid vacation.

[5]      It is apparent from these dates that in the year 2000, Mr. Ward never did work throughout a period of six consecutive months commencing in 2000. His employer in the later months of the year 2000 was the same company that had employed him in the first part of the year. However, he worked on a different contract in a different country. In fact, he did not know when he finished work in May whether he would be returning to Venezuela, or going to work in Mexico. Mr. Ward argues that before each job overseas he is required to spend time getting a passport, visa and airline tickets for the country he will go to. He also argues that at least the month of January 2001 should be credited towards the period that began on August 8; and that because he usually worked almost every day of the month he should get extra credit for that in the computation as well. Unfortunately, the language of subsection 122.3(1) is clear. What it requires is not a particular number of hours, but a period of more than six consecutive months. And in January 2001, he was not employed by a specific employer, or at all. He was, in his own words, not on vacation but on time off. His employment that began the previous August had ended on December 16. Even though he received his December pay on January 10, and even though it included a bonus, he was not employed after December 16 until he began a new period of employment after the end of January 2001. The facts of this case simply do not satisfy the requirement that Parliament has enacted to qualify for the tax credit, nor can I alter them so that they do.

[6]      The appeal must be dismissed.

Signed at Ottawa, Canada, this 15th day of October, 2003.

Bowie J.