Date: 20010502
Docket: 2000-4404-IT-I
BETWEEN:
KRYSTYNA JANKOWSKA-KAMAC,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Hershfield, J.T.C.C.
[1]
This is an appeal under the Informal Procedure from a Notice of
Reassessment respecting the Appellant's 1997 taxation year
denying an equivalent to spouse credit claimed by the Appellant
in respect of her son, Jakub Kamac.
[2]
The facts in this matter are not in dispute. The Appellant
immigrated to Canada from Poland prior to 1997 and resided in an
apartment in North Vancouver, British Columbia throughout the
1997 year (the Appellant's residence). Due to immigration
circumstances beyond her control, the Appellant was forced to
leave her only child, Jakub, behind, at the age of 9 years. After
the Appellant's departure from Poland, Jakub stayed with his
aunt, the Appellant's sister, until his immigration
arrangements were completed in 1998. Even though Jakub lived with
his aunt in Poland, Jakub was dependent for his support, both
financial and emotional, on his mother throughout the period of
their separation in 1997. The Appellant sent money on a regular
basis to her sister to ensure her son's financial support and
spoke to her son on a regular basis at least several times a week
if not daily at certain times. The Appellant was the sole
guardian of Jakub and maintained a close parental relationship
with him. During his immigration hiatus, Jakub had no other means
of financial support. The Appellant's sister had power of
attorney in respect of paper work required to be completed in
Poland but it was conceded by the Respondent that Jakub was
dependent for support on his mother, the Appellant, who had a
caring and attentive relationship with Jakub at all relevant
times.
[3]
The Appellant acknowledged that at no time in the 1997 year was
her son ever physically present in Canada and, accordingly, never
lived with the Appellant at the Appellant's residence at any
time in the 1997 year.
[4]
The issue then comes down to the statutory requirements for the
Appellant to claim the equivalent to spouse credit in respect of
her son. The statutory provision setting out the conditions
precedent to obtaining such credit are in paragraph
118(1)(b) of the Income Tax Act. Respondent's
counsel admitted to all facts relied upon by the Appellant in
respect of the application of that paragraph except one. It was
the Respondent's position that subparagraph (b)(ii)
required that at some point in the year Jakub actually live in
the Appellant's residence (that is, in the domestic
establishment maintained by the Appellant and in which she lived
at some point in that year) and that that requirement was not met
in this case. The requirements of the Act as set out in
subparagraph 118(1)(b)(ii) are as follows:
(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,
...
(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 that time, is
(A) except
in the case of a child or 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 grandparent of the individual, either
under 18 years of age or so dependent by reason of mental or
physical infirmity, ...
[5]
Subsection 248(1) defines "self-contained domestic
establishment" as follows:
"self-contained domestic establishment" means a
dwelling house, apartment or other similar place of residence in
which place a person as a general rule sleeps and eats;
[6]
The Respondent’s counsel argues that the definition of
“self-contained domestic establishment” requires that
a dependant child actually live in the Appellant’s
residence. Alternatively, he argues that the requirement in
subparagraph (b)(ii) that the supporting individual
(the Appellant in this case) provide the support “in that
establishment” requires that the dependant child actually
live in that establishment (the Appellant’s residence).
[7]
By definition, the Appellant’s residence is a
self-contained domestic establishment if anyone lives in
it (that is, eats and sleeps there) and
subparagraph (b)(ii) only requires, by additional
express language, that the supporting individual
live there. The words “in which the individual lives”
added parenthetically in subparagraph (b)(ii) underlines
that it is the supporting individual that must "live"
in the subject establishment. That the provisions in question
contain no such express language in respect of the supported
child might even suggest that there is no requirement that the
supported child live in (eat or sleep in) the subject
establishment at any time in the year. Subparagraph
(b)(ii) goes further however.
[8]
Subparagraph (b)(ii) goes on to require not only that the
supporting individual live in the establishment (at any time in
the year) but that the support be provided there, “in that
establishment”, (at any time in the year). Can support for
someone be provided “in” a place without that someone
ever being present “in” that place? The Respondent
says not and this is the principle issue in this appeal.
[9]
The Appellant seeks a liberal construction of the subject
provisions of the Act. She argues that administrative
practice permits the credit to a parent supporting a child living
away from home while attending school (IT-513R) and that any
reading of the Act that permits this accommodation should
prevail to permit the credit in this case as well.
[10] Contrary
to the Appellant's submission, Interpretation Bulletin
IT-513R does not seem to entirely abandon a requirement that the
supported child away at school have a live-in connection to the
supporting parent's residence. At paragraph 16, the Bulletin
requires the student to "ordinarily" live with the
supporting parent when not at school. While the Bulletin makes
the connection between the student and the supporting
parent's residence, the notion of where one
"ordinarily" lives is laden with interpretative
difficulties and goes beyond the language of the section. As
such, the Bulletin is not a useful interpretative aid in this
case and cannot, in any event, modify the statute.
[11] The
Appellant argues that clause (A) of the subject provision
suggests a construction of the Act that would not require,
at least in the case of the supported person being a child of the
supporting person, the physical presence of the supported person
in the supporting person’s establishment since that clause
permits a supported child to be a non-resident. This argument
assumes that clause (A) is directed to a particular fact
situation, namely, the case of the supporting individual living
in an establishment in Canada and the supported child living
outside Canada as a non-resident. If that were the particular
fact situation to which Clause A was directed, it might well
support a construction of the subject provision that would not
take the requirement, that the support occur "in" the
establishment, to be a requirement that the supported child
"live in" the establishment. However, there is no basis
to believe that this is the fact situation contemplated by this
clause.
[12] The
non-resident exception in clause (A) might ensure the credit
where the non-resident child does, in fact, live with a parent at
some point in the year. The supported child living away might be
a resident in another jurisdiction (say as a student) and still
stay in the supporting parent's domestic establishment in
Canada for some part of the year without attracting Canadian
residence. Clause (A) ensures the credit in such case so its
presence in the Act need not be taken to necessarily
support a construction of it that allows that support can occur
“in” an establishment in Canada without the supported
child living there.
[13] The
reason for the exception in clause (A) has in fact been
attributed to yet another example. That example deals with the
case where the domestic establishment is maintained outside of
Canada by a supporting individual who lives in that
establishment, who is still a resident of Canada by virtue of the
expanded definition of "residence" in
subsection 250(1) of the Act, but who has a dependant
non-resident child living in that establishment. Clause (A)
ensures the supporting parent the credit in this example and has
been found as providing a sufficient explanation for the addition
of clause (A) to quash any suggestion that it supports a
construction of subparagraph (b)(ii) that does not
require a supported child to live with the supporting parent for
the parent to get the credit.[1]
[14] The
Appellant has argued that the provisions of the Act should
be read in harmony with immigration realities. We are, after all,
an enlightened nation whose past, present and future growth is
dependent on enlightened immigration practices and enlightened
taxation provisions should not penalize families in the process
of immigrating. If the policy of the equivalent to spouse credit
is to permit a single mother to claim the credit in respect of a
wholly dependent child who is actually supported by that parent
and who is unequivocally dependent on that parent in virtually
every meaningful way, then a temporary immigration barrier should
not create a technical hurdle for permitting that credit to the
supporting parent. The argument, from a policy point of view, has
merit. However, while a liberal construction of the subject
credit provision might be equitable in the circumstances of this
case, the plain wording of the provision and the consistent
judicial findings in respect of such meaning cannot be ignored.
Further, the argument relies on acceptance of the notion that a
person can be "wholly dependent" within the meaning of
paragraph 118(1)(b) and not live with the supporting
person. Support can, after all, be provided "from" a
place. While that is an arguable premise, it is not reflected in
jurisprudence dealing with this paragraph. In Narsing v. The
Queen, 98 DTC 6176 the Federal Court of Appeal found that the
requirement was clear. To be "wholly dependent" on a
supporting taxpayer, the supported person and the supporting
person both must live in the same establishment.
[15] While I
am not certain why the notion of support need be localized to a
particular place, Parliament has provided the subject credit only
in the case where, in fact, the support is provided
"in" the place where the supporting person resides.
Examining the intent of the legislation is not, in this case,
helpful in my view. The language of this section is not ambiguous
and the courts have been consistent in applying the section as it
is written.
[16]
Accordingly, the appeal must fail. Any inequity in respect of
this finding is a matter for Parliament. As found by Cattanach J.
in The Queen v. Scheller, in the context of a case not
unlike the one at hand, when the meaning of the provisions in a
statute are clear, the courts have nothing to do with their
policy or their justice or injustice. The function of the judge
is to apply the law as it reads, as to do otherwise would be to
abandon the office of judge and assume the office of the
legislative branch of government. It mattered not in that case
(Scheller) that the Appellant's daughter, being
supported by the Appellant, lived apart (in Estonia) from the
Appellant by virtue of circumstances beyond his control and
through no choice of his. The credit in paragraph
118(1)(b) was denied for the reason that the daughter in
that case did not live with the Appellant at any time in the year
as required by that provision of the Act. I would regard
the remarks of Cattanach J. concerning the role of the
courts versus the role of the legislative branch of government to
be an invitation to Parliament, made in 1975, to reconsider its
policies in situations like those of the Scheller case
(i.e. like those of the instant appeal). That invitation has not
been taken up by Parliament.
Signed at Ottawa, Canada, this 2nd day of May 2001.
"J.E. Hershfield"
J.T.C.C.
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