Citation: 2013 TCC 118
Date: 20130405
Docket: 2012-2155(IT)I
BETWEEN:
C.P.B.,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
C. Miller J.
[1]
Ms. B., the Appellant,
appeals by way of Informal Procedure the Minister of National Revenue’s (the
"Minister") denial of the Canada Child Tax Benefit ("CCTB")
for her in connection with her daughter for the 2010 base taxation year. This
matter had been dealt with by Chief Justice Rip as it pertains to earlier
years, prior to the new shared-custody parent rules introduced in 2010. Chief
Justice Rip had determined there was shared-custody with respect to the
daughter and, therefore, the CCTB was to be shared as assessed by the Minister.
Ms. B. maintained that circumstances have changed since then and that she is,
for the period in issue, the primary caregiver, and further that the new shared-custody
parent rules do not apply. I disagree.
[2]
It is agreed that the
relevant time period to review for determining who was the primary caregiver of
the daughter is June 2011 to July 2012 (the "Period"). I heard
considerable testimony relating to earlier time periods, which provided some
helpful context, but my determination must focus on the Period itself.
[3]
During the Period the
daughter was 12 and 13 years old. Based on the separation agreement between Ms.
B. and Mr. B. the daughter was to spend alternate weeks with her mother and
father. This she did during the Period. While at each of her parents, she had
her own room and had a safe and secure environment. Ms. B., however, maintains
that while the daughter was residing at her father’s, Ms. B. still saw her most
days and that she would go by her residence after school. I find this was an
exaggeration by Ms. B. of the situation, as during the Period she had a
boyfriend in Montreal, who she regularly visited during the weeks she did not
have custody of her daughter. Ms. B. also testified she would go to some of her
daughter’s extracurricular activities during the week, though it later came out
that the daughter had stopped participating in many such activities during the
Period.
[4]
Ms. B. claimed she
booked all her daughter’s medical appointments, though acknowledged that Mr. B.
also attended such appointments. Ms. B. described her daughter as starting to
make bad choices, sneaking out, inappropriate use of social media, cutting
herself, substance abuse. She tried to get her help through Durham Family
Services and a child youth and family program but her daughter for the most
part refused. Ms. B. described Mr. B.’s attitude as minimizing the problem: as
she put it, he had no approach to deal with the problem, though she
acknowledged calling Mr. B. on occasion for help when things got out of hand at
her residence with her daughter.
[5]
Ms. B. produced several
receipts indicating that she paid for some of her daughter’s clothes and
supplies. She also provided copies of emails reminding Mr. B. of the
daughter’s appointments. Both Mr. B. and Ms. B. were contacts at the school,
depending who had the daughter that particular week.
[6]
Mr. B. testified that
he objected to Ms. B.’s claim of all the CCTB; he believed he was a shared-custody
parent. He acknowledged that while the daughter was identified as autistic, he
always felt she was 100% normal with some socializing issues. He accepted more
readily that his son was autistic.
[7]
Mr. B. testified that
whatever his daughter needed he bought, but he did not keep receipts. As he put
it, what parent keeps receipts after the exchange period has run out? He stated
that the daughter needed permission to go out and that he too knew her friends.
He never recalled her sneaking out of his home. He disagreed with Ms. B.’s
assessment that he was unwilling to go to counselling.
[8]
Mr. B. confirmed that
the daughter was not involved in much extracurricular activity, though he
indicated she appeared to like to go to the cottage with him. He testified he
was called on several occasions by Ms. B. to go and get the daughter from Ms.
B.’s residence and then return her the next morning.
Analysis
[9]
There are some
important definitions to be familiar with, all of which are found in section
122.6 of the Income Tax Act (the "Act"):
…
"eligible individual" in respect of
a qualified dependant at
any time means a person who at
that time
(a) resides with
the qualified dependant,
(b)
is a parent of the qualified dependant who
(i)
is the parent who primarily
fulfils the responsibility for the care and upbringing of the qualified dependant and who is not
a shared-custody parent in
respect of the qualified dependant,
or
(ii) is a shared-custody parent in respect of
the qualified dependant,
(c)
is resident in Canada or, where
the person is
the cohabiting spouse or common-law
partner of a person who is deemed under
subsection 250(1) to be
resident in Canada throughout the taxation year that includes that time, was
resident in Canada in any preceding taxation year,
(d)
is not described in paragraph 149(1)(a) or 149(1)(b), and
(e)
is, or whose cohabiting spouse or common-law partner is,
a Canadian citizen or a person who
(i) is a permanent resident within the meaning of subsection 2(1) of the Immigration and Refugee
Protection Act ,
(ii) is a temporary
resident within the meaning of the Immigration and Refugee Protection Act , who
was resident in Canada throughout the 18 month period preceding that time, or
(iii) is a
protected person within the
meaning of the Immigration and Refugee Protection Act ,
(iv) was determined
before that time to be a member of a class defined in the Humanitarian
Designated Classes Regulations made under the Immigration Act,
and for the purposes of this definition,
(f) where the qualified dependant resides with the
dependant’s female parent, the parent who primarily fulfils the responsibility
for the care and upbringing of the qualified dependant is presumed to be the
female parent,
(g) the presumption
referred to in paragraph 122.6 eligible individual (f) does not apply
in prescribed circumstances,
and
(h) prescribed factors shall be considered in
determining what constitutes care and upbringing;
…
"qualified dependant" at any time means a person who at that time
(a) has not attained the age of 18 years,
(b) is not a person in respect of whom an amount was deducted under paragraph (a) of the description of B in
subsection 118(1) in
computing the tax payable under this Part by the person’s spouse or common-law partner for the base taxation year in relation to the
month that includes that time, and
(c) is not a person in respect of whom a special
allowance under the Children’s Special Allowances Act is payable for the month
that includes that time;
…
"shared-custody parent" in respect of a
qualified dependent at a particular time means, where the presumption referred
to in paragraph (f) of the definition "eligible individual" does not apply in
respect of the qualified dependant,
an individual who is
one of the two parents of the qualified dependant who
(a) are not at that time cohabitating spouses or common-law partners of each other,
(b) reside with the qualified dependant on an equal or near
equal basis, and
(c) primarily fulfil the responsibility for the care and upbringing
of the qualified dependant when
residing with the qualified dependant,
as determined in consideration of prescribed factors.
[10]
The shared-custody
parent definition was only added in 2010, along with the addition of section
122.61(1.1) of the Act. Prior to that, the Act only permitted one
parent to be the eligible individual for purposes of claiming the CCTB. Courts
struggled with this limitation and often alternated months between parents
sharing custody to effectively split the credit. The new rules now allow for a
simple splitting of the credit in the appropriate circumstances.
[11]
The new rules do not
apply when the presumption in favour of the mother, found in subsection (f)
of the definition of the "eligible individual", is in play. Regulation
63.01 of the Income Tax Regulations stipulates that the presumption is
not applicable in certain circumstances, one of those circumstances being if
more than one notice is filed with the Minister under section 122.62(1) of the Act,
in other words, if both parents have claimed to be the eligible individual. Mr.
B. testified that he made such a claim and, therefore, the presumption of
subsection (f) is not applicable and the shared-custody parent
rules should therefore apply. But, no says the Appellant, I must ignore that
critical bit of evidence and decide the case on the basis that the shared-custody
parent rules are not in play, because it was not pleaded by the Respondent.
[12]
It is not open to the
Appellant to have it both ways. The Appellant cannot leave a notice of appeal
vague, so that the Respondent is not sure how to plead and then hang the Respondent
on its pleadings because the Respondent did not specifically cover what
ultimately was in issue. The Appellant argues that the Reply omits any
assumptions or allegations of fact to substantiate that Mr. B. filed a claim,
and as a consequence the Respondent can lead no evidence to that effect or advance
an argument that the shared-custody parent rules should apply. This makes
little sense to me on a number of fronts:
a) The assessment was
based on the shared-custody parent rules applying: that is what is at issue in
this case and both sides knew it;
b) The Notice of Appeal
was incomplete and gave no indication on what basis the Appeal was launched
other than disagreeing with the assessment.
c) This is an Informal
Procedure case and, often, each side hears testimony not previously heard. Am I
to turn a blind eye to a witness’ evidence, every time he or she may tell me
something not specifically mentioned in the Reply? The Appellant relies on the
Informal Procedure case of Fraser v R where Justice Woods did not allow the Respondent
to raise an alternative argument at trial because it was not pleaded in the
reply. Justice Woods did not deal with the option of a request for an amendment
to the pleadings. Indeed, the Respondent’s counsel before me suggested this,
which I found unnecessary. In Fraser, the Appellant made it clear in the
appeal the issue was who was the primary caregiver, yet the Reply evidently
only addressed the issue of residence, and made no assumptions on the caregiver
issue. The situation before me is not as blatant, and in the interests of
justice, I allow Mr. B.’s evidence that he filed a claim; and
d) The Reply does
specifically raise the issue that the shared-custody parent rules apply, which
implies the mother’s presumption in the definition of eligible individual does
not.
[13]
In my view the shared-custody
parent rules are designed to cover this very situation, rather than leaving the
courts, as we have so often in the past, having to manipulate the provisions to
divide eligibility for the credit on a month-by-month basis.
[14]
So, as the
shared-custody-parent rules apply, how do they apply to Mr. B.’s and Ms. B’s
circumstances? This comes down to a consideration of whether each of them
primarily fulfilled the responsibility for the care and upbringing of their
daughter when the daughter was residing with each of them. Did Mr. B.
primarily fulfill that responsibility when the daughter resided with him; did
Ms. B. primarily fulfill that responsibility when the daughter resided with
her? The answers are yes and yes. In reviewing the prescribed factors in Regulation
6302 as to what constitutes care and upbringing, it is clear that Mr. B.
provided that while the daughter resided with him, while Ms. B. did so, while
the daughter resided with her. I find that each provided:
a) supervision of daily activities;
b) maintenance of a secure
environment;
c) arrangement of and
transportation to medical care. In this regard, I note Ms. B. sent
reminders to Mr. B. of the appointments and may have arranged more
appointments. But this pales in comparison to the actual attendance. Also, it
is clear Mr. B. held different views in the necessity of all such appointments.
This goes to parenting styles as opposed to who primarily fulfills
responsibility for care and upbringing;
d) access to
extracurricular activities;
e) attendance to need
when ill;
f) attendance to
hygienic needs; and
g) guidance and
companionship.
[15]
Finally, there was a court
order ordering the shared-custody arrangement. No, Ms. B. has not satisfied me
that, while the daughter resided with Mr. B., she remained primarily
responsible for the daughter’s care. She did not. The shared‑custody
parent rules apply and Ms. B.’s case must therefore be dismissed.
[16]
At the request of the
Parties the Court file is to be sealed with access restricted to the Parties,
their designated representatives and judges and registry officers of the Tax
Court of Canada.
Signed at Ottawa, Canada, this 5th day of April 2013.
"Campbell J. Miller"
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