Citation: 2013 TCC 165
Date: 20130521
Docket: 2012-1320(IT)I
BETWEEN:
GITA GOLDSTEIN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
The issue to be decided in this
appeal is whether Gita Goldstein was a resident of Canada during the period
from 2000 to 2009.
[2]
In 2008, Ms. Goldstein filed
Canadian tax returns in order to make retroactive applications for child tax benefits and goods and services tax credits
under the Income Tax Act, and child care benefits under the Universal
Child Care Benefit Act. In making the applications, Ms. Goldstein took the
view that she was a resident of Canada. The Minister of National Revenue
disagreed that Ms. Goldstein was a resident of Canada from 2000 to 2009 and the
benefits were denied.
Preliminary matters
[3]
There are two preliminary matters.
First, the appeal under the Universal Child Care Benefit Act should be
quashed because this Court does not have the authority to decide appeals under
this legislation: Fatima v. The Queen, 2012 TCC 49.
[4]
Second, the respondent withdrew a
preliminary objection that the appeal regarding the child tax benefit for the
2009 base taxation year should be quashed on the ground that the appeal was not
properly constituted. Since the objection was withdrawn, I have assumed that
this part of the appeal is validly constituted.
Applicable legal
principles
[5]
The child tax benefit
and the goods and services tax credit each have a requirement that the taxpayer
be a resident of Canada during the base taxation year: sections 122.5 and 122.6
to 122.63 of the Income Tax Act, and in particular subsection 122.5(2)
and the definition of “eligible individual” in section 122.6.
[6]
The term “resident” for these
purposes generally has the meaning described in The Queen v. Laurin,
2008 FCA 58, below.
[2] […] a person is resident in the country where he or
she, in the settled routine of life, regularly, normally or customarily lives,
as opposed to the place where the person unusually, casually or intermittently
stays. […]
Reliability of evidence
[7]
Before setting out the factual
background, I would comment on the reliability of the evidence.
[8]
Ms. Goldstein did not attend the
hearing in either December or January. She was represented by her spouse,
Shmuel Goldstein, and he provided testimony on her behalf.
[9]
In order for Mr. Goldstein’s testimony
to be considered reliable, it should be straightforward, detailed and cogent.
This was not always the case with Mr. Goldstein’s testimony, and I did not
find it to be entirely reliable even making allowances for the normal tendency
of a self-interested witness to accentuate the favourable aspects of a case and
to minimize the negative.
[10]
For example, throughout the
testimony Mr. Goldstein described his ties to Canada in the present tense,
without making it clear one way or the other whether these ties were in place during
the period at issue. The distinction is critical because the Crown submits that
many of the ties were only recently obtained in order to bolster Ms.
Goldstein’s entitlements to these benefits.
[11]
As an example of Mr. Goldstein’s
testimony not being straightforward, I refer to the following excerpt from the
transcript in which I asked him to clarify his prior testimony regarding health
care coverage.
JUSTICE WOODS: Then you were
talking about the OHIP. Tell me about the OHIP.
THE WITNESS: Yes. I had a valid OHIP
card over the entire period.
JUSTICE WOODS: Not your wife?
THE WITNESS: I don’t have my wife’s OHIP
card.
[12]
I have taken these deficiencies into
account in making findings of fact. I turn now to the factual background.
Factual
background
[13]
Ms. Goldstein was 32 years of age
at the time of the hearing. She was born in Canada and attended college in the
State of New York for one year beginning in 1997.
[14]
Around this time, Ms.
Goldstein met her future spouse. Mr. Goldstein was also born in Canada, and when they met Mr. Goldstein was studying at Beth Medrash Govoha College (“BMG”) in Lakewood, New Jersey. They were engaged in 1999 and married early in 2000. A marriage
certificate was issued by the State of New Jersey.
[15]
The Goldsteins had their first
child in 2000 and they currently have seven children.
[16]
Since the marriage, the family has
lived in Lakewood where Mr. Goldstein has been pursuing full-time studies
in Talmudic and biblical law at BMG.
[17]
Mr. Goldstein hopes to complete his studies in 2014 and obtain a
teaching position in Canada.
[18]
The Goldsteins have
limited resources. The following sources of funds were mentioned at the
hearing.
(a)
Funding for rental accommodation
in Lakewood was provided by U.S. government assistance.
(b)
Child tax benefits were received from the U.S. government by filing U.S. joint spousal tax returns.
(c)
$1,000 per month was
received by Mr. Goldstein, which he described as part-time income. I am not
aware of the source of this income.
(d)
Ms. Goldstein earned a
relatively modest amount from operating a child play centre at their residence.
[19]
The Goldsteins have close family
and religious ties in Canada and they often visit Canada during Mr. Goldstein’s
school breaks. During these visits, the family stays at the Toronto home of Mr.
Goldstein’s parents.
[20]
Mr. Goldstein testified that the family
has come to Canada for every school break since 2000 (four per year), for an
average stay of two weeks and longer during the one-month summer break. Mr.
Goldstein’s testimony as a whole was not reliable enough for me to be satisfied
that the visits were as regular as this. I do accept, however, that the
Goldsteins have close family and religious ties in Canada and that they often
come to Canada during Mr. Goldstein’s school breaks.
Discussion
[21]
I am not persuaded that Ms.
Goldstein was a resident of Canada during the period at issue. The settled
routine of her life since her marriage has been in the United States and not in Canada.
[22]
The central argument
that Mr. Goldstein made was that he and his spouse have retained strong ties in
Canada and they have not developed strong ties in the United States.
[23]
I do not agree with this
submission. Ms. Goldstein has had very strong ties in the United States since her marriage in 2000. She, her spouse and her children have been settled
into a daily routine of their lives in New Jersey for a long period of time
during which Mr. Goldstein has been pursuing long-term studies.
[24]
The fact that the Goldsteins do
not own many material possessions in the United States is indicative of the
family’s financial condition and does not weaken their residential ties to the United States. It is the settled routine of the Goldsteins, rather than their lack of
possessions, that is the dominant factor in this case.
[25]
Further, the fact that the
Goldsteins hope to move to Canada in 2014 is not a significant factor in light
of the lengthy period of time that they have been in the United States.
[26]
Mr. Goldstein
emphasizes their ties to Canada. The Goldsteins certainly do have many ties to Canada, but these ties do not amount to a settled routine in Canada and are not substantial enough
to establish residence.
[27]
When the Goldsteins are in Canada, the family has accommodation available to them in Toronto at the home of Mr. Goldstein’s
parents. This is not a strong factor in determining Canadian residence in this
case. In my view, these visits are in the nature of holidays, and have the
quality of intermittent stays rather than a settled routine.
[28]
Mr. Goldstein submits that they
never severed ties to Canada, and that their ties were strengthened over the
years. I do not agree. The Goldsteins severed significant ties to Canada when Mr. Goldstein decided to embark on long-term studies in the United States. Their
pre-college ties in Canada have been fundamentally altered by their settled
routine in New Jersey.
[29]
Some of the ties that Mr.
Goldstein mentioned in his testimony are set out below.
(a)
Mr. Goldstein stated that
he has rented one or two bedrooms (two
since 2004) in the basement of his parents’ home for the family’s use and
storage of personal possessions. It was stated that the rooms were rented for
$100 each.
(b)
The Goldsteins both have family
members in Canada.
(c)
During part of the period at
issue, Ms. Goldstein operated a monogramming and matchmaking business in Canada.
(d)
Ms. Goldstein maintained a phone
and fax machine at the Toronto home of Mr. Goldstein’s parents.
(e)
The Goldsteins and their children
are all Canadian citizens. The Goldsteins obtained Canadian passports in 2010
when this was required to cross the border.
(f)
The Goldsteins have religious
affiliations in Toronto.
(g)
Mr. Goldstein has a tentative job
offer in Toronto at the congregation where he and Ms. Goldstein are members.
(h)
Mr. Goldstein has retained an Ontario driver’s license and OHIP coverage.
(i)
Ms. Goldstein has held securities
at a Canadian financial institution.
(j)
Mr. Goldstein has had active
Canadian bank accounts and a credit card.
(k)
The Goldsteins are active in the
Conservative Party in Canada and Ms. Goldstein is registered to vote in Canada.
[30]
My assessment of this evidence is
that it does not establish that Ms. Goldstein had a customary mode of
living in Canada.
[31]
As for family and religious connections,
passports and citizenship, these factors establish that the Goldsteins have
strong roots in Canada, but they do not establish a customary mode of living in
this country.
[32]
As for the accommodation in the
parents’ home, this is a weak factor in my view. The use of a parents’ home for
visits is not a strong factor to establish residence.
[33]
As for the purported rent of $100
per room, this is a relatively nominal amount. Further, I am not satisfied by
the evidence that rent was paid throughout the period at issue. Bank statements
were provided which show the withdrawals but these statements were from a later
period. In addition, the rent receipts that were entered into evidence suggest
by their numbering that relatively few receipts were issued.
[34]
As for the monogramming and
matchmaking business, the evidence was simply too vague for me to be satisfied
that this is a significant factor in determining residence. For example, I do
not know how or when the business was conducted and whether family members in Canada were involved with the operation of the business. I note that a business card for
this business gives the telephone number of Ms. Goldstein’s parents.
[35]
Regarding the phone and fax
machine, I am not satisfied as to the circumstances and the timelines in which
this equipment was used, and by whom.
[36]
As for Mr. Goldstein’s Ontario driver’s permit and OHIP coverage, these factors are not strong evidence of a
customary mode of living in Canada. Mr. Goldstein retained these
connections since he first went to college in New Jersey. The retention of
these ties likely was a matter of convenience and benefit to Mr. Goldstein
rather than illustrating a customary mode of living in Canada.
[37]
As for the bank accounts, these
also are not a strong factor in the circumstances. The evidence suggests that
the accounts were relatively inactive and that the bank account for the early
period is a different account from the more recent bank account. The evidence
was simply too vague for the accounts to be considered a significant factor.
[38]
As for the membership in the
Conservative Party and voter registration, I have given these factors very
little weight because I am not satisfied that these ties were obtained prior to
the time that the appellant decided to apply for child benefits and was aware
of the desirability of establishing connections in Canada. I would note, for
example, that when Ms. Goldstein filed Canadian tax returns in 2008 in order to
obtain child tax benefits she checked a box on the returns regarding voter registration.
[39]
Based on the evidence
as a whole, I am satisfied that Ms.
Goldstein has had had a customary mode of living in the United States at least
since her marriage in 2000 and that her ties to Canada are not sufficient to
constitute residence.
[40]
Finally, I would mention a
decision that has some similarity to this case in which it was decided that an
individual pursuing long-term religious studies in Israel continued to be a
resident of Canada for purposes of the child tax benefit: Perlman v. The
Queen, 2011 TCC 658, 2011 D.T.C. 1045.
[41]
As I mentioned in Snow v. The
Queen, 2012 TCC 78, Perlman is of limited assistance because the
Crown had the burden of proof which it failed to discharge. In particular, as
noted by Boyle J., the Crown was not able to point to a point in time in which
there was a change of circumstances material enough to constitute a change in
residence (at para. 32).
[42]
Mr. Goldstein submits that this
reasoning also applies in this case because there is no point in time at which
he and his spouse severed Canadian ties. I disagree with this submission. I am
satisfied that Ms. Goldstein’s residential ties to Canada had been sufficiently
severed by the time of her marriage early in 2000. The evidence was not
sufficiently detailed for me to determine whether Ms. Goldstein’s Canadian
residence was severed earlier, but this is of no assistance to her in this
appeal in which she has the initial burden.
[43]
The appeal with respect to child
tax benefits and the goods and services tax credit will be dismissed.
Signed at Toronto, Ontario this 21st day of May
2013.
“J. M. Woods”
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