REASONS
FOR JUDGMENT
Delivered
orally from the bench on May 16, 2014
V.A. Miller J.
[1]
The issue in this appeal is whether the
Appellant is entitled to deduct child care expenses of $12,795 and $13,000 in
her 2007 and 2008 taxation years respectively.
[2]
The Appellant did not appear at the hearing of
her appeal as she had to care for her newborn child. However, her spouse,
Kenneth Amyan, appeared and testified on her behalf.
[3]
During the relevant period, the Appellant had
two children – M who was born in September 2004 and H who was born in April
2006. Mr. Amyan testified that, in 2007 and 2008, he paid $260 in cash every
two weeks to the person who was babysitting his children. (I note that the
maximum this would have been was $6, 760.) According to Mr. Amyan, the
babysitter was either his mother or his mother-in-law or his sister, depending
on who was available. However, none of these individuals came to Court to
corroborate Mr. Amyan’s testimony.
[4]
Mr. Amyan stated that he had no receipts to show
that he paid any amount for child care because it was only when he was having
his income tax returns prepared that he learned that he could deduct child care
expenses.
[5]
When Mr. Amyan was being audited with respect to
the child care expenses, he returned to his tax preparer, Nathan Vaira, to ask
for assistance. According to Mr. Amyan, Mr. Vaira prepared a letter in which
Thadshayini S. attested that she had babysat for the Appellant in 2008 for
$6,500. Mr. Amyan paid $800 for this letter and he gave it to the auditor from
the Canada Revenue Agency (“CRA”) to support his claim for child care expenses.
[6]
Mr. Amyan’s story started to unravel even
further after he admitted that he had bought the letter from Thadshayini S. He
stated that he and the Appellant would not have required a babysitter for the
entire of 2007 or the entire of 2008. The Appellant was on maternity leave for
part of 2007 – there was no evidence with respect to the number of months she
would have been on leave – and Mr. Amyan did not work for 4 or 5 months in 2008
as he was unemployed and received employment insurance benefits. He admitted
that he did not pay $12,795 in 2007 and $13,000 in 2008 for child care. He was not
sure how much he paid for child care but he did pay some amount as he had two
small children during this time.
[7]
I agree with Mr. Amyan that he would have needed
someone to care for his two small children in 2007 and 2008 when both he and
the Appellant were working. However, he was not able to give me any evidence to
prove that he had in fact paid for child care or the amount that he paid in
2007 and 2008. He already admitted that the amounts he claimed in each year
were incorrect but he did not even suggest what the correct amounts ought to
have been. I cannot just guess at an amount. He did not have his mother or
mother-in-law or sister attend the hearing to give evidence on the Appellant’s
behalf. He stated that he did not ask them to attend because he did not want to
get them in trouble.
[8]
This is not a case where the Appellant had given
insufficient evidence to prove her claim as in Bijai v Canada, [1998] TCJ No.1051. The Appellant has given no evidence to establish her claim
for child care expenses.
[9]
Counsel for the Respondent made arguments with
respect to the fact that the Appellant did not have receipts to support her
claim for child care expenses and whether this was a mandatory condition of
subsection 63(1) of the Income Tax Act. However, based on the admissions
made by Mr. Amyan, I do not have to address this issue.
[10]
The Respondent has requested costs of $1,000 in
this appeal on the basis that there was an abuse of process because the
Appellant was not honest in her pleadings and this hearing was a waste of the Court’s
time.
[11]
Mr. Amyan stated that he had helped the
Appellant to prepare the Notice of Appeal. He admitted that several of the
statements made in it were not true. Those statements related to (1) receipts
for child care expenses for 2007 and 2008 which the Appellant alleged she gave
to the accountant and (2) the letter from Thadshayini S. who the Appellant
alleged was her baby sitter.
[12]
It is my view that the false statements in the
Notice of Appeal constituted an abuse of this Court’s process. In accordance
with section 11 of the Tax Court or Canada Rules (Informal Procedure),
the Respondent is awarded costs of $625.
[13]
The appeal is dismissed with costs of $625 to
the Respondent.
Signed at Ottawa, Canada, this 26th day of May, 2014.
“V.A. Miller”
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