Citation: 2013 TCC 102
Date: 20130409
Docket: 2012-2219(IT)I
2012-2220(GST)I
BETWEEN:
OLIVE N. BURCHELL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
C. Miller J.
[1]
This is an unfortunate
tale of mother-in-law, the Appellant, Ms. Burchell, pitted against her
daughter-in-law, Ms. Marchbank. Both of them claim entitlement to the Canada
Child Tax Benefit ("CCTB") pursuant to section 122.61 of the Income
Tax Act (the "Act") and the Goods and Service Tax Credit
("GSTC") pursuant to subsection 122.5(1) of the Act, on the
basis that each of them was the eligible individual in relation to the
qualified dependent, S, Ms. Marchbank’s daughter and Ms. Burchell’s
granddaughter. Ms. Burchell had also brought an Appeal under the Excise Tax
Act ("ETA"), not appreciating that the GSTC is covered
under the Act. The Appeal under the ETA is therefore quashed.
[2]
The benefit period in
issue is July 2008 to July 2011 for the 2007, 2008 and 2009 base taxation
years. Pursuant to a Temporary Order of the Ontario Court of Justice dated
October 18, 2007, S was placed in the temporary care of the Appellant, her
grandmother. A further Order, however, was issued by the Ontario Court of
Justice on January 23, 2008, restoring custody to the mother, Ms. Marchbank
and S’s father, with the proviso that they permit a worker from Native
Child and Family Services of Toronto to conduct announced and unannounced home
visits. Ms. Burchell claims never to have seen this January 23, 2008 Order
until the week before trial. I find it not credible that for the last several
years she would not have known S has been legally returned to her mother’s
custody.
[3]
The crux of the
differing views of Ms. Burchell and Ms. Marchbank for the period from
January 2008 to the summer of 2009 is whether the child in fact was returned to
reside with her mother in Toronto in January 2008, in accordance with the
Order, or remained with her grandmother in Barrie. I heard two diametrically
opposed stories in this regard. With respect to the period from the summer of
2009 until the summer of 2011, the crux of the differing views of Ms. Burchell
and Ms. Marchbank is that each of them claimed she was the one who had
been primarily responsible for the care and upbringing of S, while all under
the same roof in Barrie.
[4]
Ms. Burchell testified
that during the first period, January 2008 to the summer of 2009, S was living
with her in Barrie and that she would drive S to Toronto to spend a week at a
time, once a month, with her mother and father, being Ms. Burchell’s son. Ms.
Marchbank testified that her daughter lived with her in Toronto throughout this
period. Ms. Burchell said that during this time while S was residing with her
in Barrie she simply took care of her granddaughter in every respect, as she
felt she was primarily responsible for her. Someone is lying.
[5]
Ms. Marchbank claims
that her daughter was always within her custody from January 2008 onwards. She
provided a copy of a lease dated May 2007 for her accommodation in Toronto, which shows her daughter as one of the tenants. This was, however, before the
daughter was removed in the fall and placed in Ms. Burchell’s custody. It
does not show what happened in January 2008 when Ms. Marchbank legally got
custody of her daughter back.
[6]
Ms. Marchbank testified
that the social worker rarely visited after January 2008. Neither side
called the social worker to corroborate their stories, though the Respondent
provided a letter from Native Child and Family Services, dated March 1,
2013, indicating their records show the daughter was returned to her mother in
January 2008. The Respondent also introduced a letter dated September 23,
2010, from the Children Service Worker, Ms. Lawrence, confirming that the child
had been in the care of her mother from January 23, 2008 to the date of the
letter. Finally, there were two letters from Dr. Susan M. Shepherd,
a Toronto doctor, dated January 26, 2011 and February 11, 2013, confirming
that S had been in her mother’s care since 2008. While I had concerns with
respect to the admissibility of these letters, given my greater concern as to
who was telling the truth and with little else to rely upon, I accept them
as some corroborating evidence of Ms. Marchbank’s version of the residence
of her daughter.
[7]
Ms. Marchbank claims
that her mother would often look after S during this first period and that she
and her daughter lived with her mother in Toronto for a few weeks in the summer
of 2009, before they (Ms. Marchbank, S and S’s father) moved to Barrie. She also stated that S had the bedroom while she would sleep on a sofa bed in
their Toronto home.
[8]
Ms. Marchbank’s mother
testified, though seemed too nervous to be very clear on much, though she did
say she saw S Monday to Friday after January 2008 and that she thought they
stayed with her for a couple months in 2008. I suspect she meant 2009. I have
doubts about the truthfulness of both Ms. Burchell’s and Ms. Marchbank’s
testimony, though on balance I conclude the child resided with her mother, Ms.
Marchbank, for the period of January 23, 2008 to the late summer of 2009.
[9]
I turn now to the
period from the late summer of 2009 to July 2011 (the "Second
Period"). In the late summer of 2009, Ms. Marchbank moved in with
Ms. Burchell in Barrie to allow Ms. Marchbank to complete her schooling.
She rented a room from Ms. Burchell at $500 a month, though in
August 2011 when a tenant of Ms. Burchell’s left and a second room became
available, Ms. Marchbank paid an additional $150 a month to Ms. Burchell for
that separate room for S.
[10]
During the Second Period,
Ms. Burchell claims that S slept in her room. Ms. Marchbank went to school
so Ms. Burchell looked after S, though she acknowledged that S went to daycare
for a while. She claims that Ms. Marchbank never took care of S, though
did agree that Ms. Marchbank would take S to appointments. Ms. Burchell said
that she bought everything for S and, Ms. Marchbank, apart for some
groceries, bought nothing. If S was sick it was Ms. Burchell who claimed
she looked after her. According to Ms. Burchell, she did all the cooking.
[11]
Ms. Marchbank’s version
of life in Barrie living with Ms. Burchell is, not surprisingly, somewhat
different. It was Ms. Marchbank who bought the groceries and fed S. She did
agree that S did sleep in Ms. Burchell’s room as she had a toddler bed in her
room, but later in 2011 when S got her own room she would sleep there. Ms.
Marchbank testified that she kept all of S’s "stuff" in her room. She
claimed she took S to and from daycare.
[12]
There was considerably
more evidence regarding Ms. Marchbank’s activities during this Second Period,
including going to school and attending a young parent program for example.
However, I conclude that both mother and grandmother were involved in the care
and upbringing of S. How then does the law with respect to the CCTB and GSTC
apply to such a finding?
[13]
For purposes of the
CCTB, the individual claiming the credit must be an eligible individual as
defined in section 122.6. It reads:
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;
[14]
Note that paragraph (f)
in that definition is a presumption in favour of Ms. Marchbank, if the
child resides with her, which I find she did. This applies unless precluded by Regulation
6301 of the Income Tax Regulations which reads:
(1) For the purposes
of paragraph (g) of the definition "eligible individual" in section 122.6 of the Act, the presumption
referred to in paragraph (f) of that definition does not apply in the
circumstances where
(a) the female parent
of the qualified dependant declares in writing to the Minister that the male
parent, with whom she resides, is the parent of the qualified dependant who
primarily fulfils the responsibility for the care and upbringing of each of the
qualified dependants who reside with both parents;
(b) the female parent
is a qualified dependant of an eligible individual and each of them files a
notice with the Minister under subsection 122.62(1) of the Act in respect of the
same qualified dependant;
(c) there is more
than one female parent of the qualified dependant who resides with the
qualified dependant and each female parent files a notice with the Minister
under subsection 122.62(1) of the
Act in respect of the qualified dependant; or
(d) more than one
notice is filed with the Minister under subsection 122.62(1) of the Act in respect of the
same qualified dependant who resides with each of the persons filing the
notices if such persons live at different locations.
(2) For greater
certainty, a person who files a notice referred to in paragraph (1)(b), (c) or (d) includes a person who is not required
under subsection 122.62(3) of the
Act to file such a notice.
[15]
None of the exemptions
in Regulation 6301 apply, as Ms. Marchbank was over the age of 18 during the
second period. She is therefore presumed to be the eligible individual. Has Ms.
Burchell rebutted that presumption? I find that she has not. As I have
indicated, there were shared responsibilities, but Ms. Burchell has not
convinced me that she primarily fulfilled the care and upbringing of S. She
served in many respects as babysitter while Ms. Marchbank attended school
during the day. I have not gone into great detail on the facts which might
support either Ms. Burchell’s or Ms. Marchbank’s claim, as frankly I find
both of their testimony sketchy, and it is enough for me to simply find the
child resided with her mother and nothing Ms. Burchell stated suggested she had
any greater care and upbringing of S than Ms. Marchbank.
[16]
In summary on the CCTB,
I find that during the first period (January 2008 – August 2009) that S resided
with Ms. Marchbank and not with Ms. Burchell, and therefore Ms. Burchell was
not the eligible individual. For the Second Period, I find nothing has
overturned the mother’s presumption of being primarily responsible for S’s care
and upbringing. Ms. Burchell’s Appeals of the CCTB issue are therefore
dismissed.
[17]
With respect to the
GSTC, the considerations are similar. To be a qualified dependent of an
eligible individual, as the term is defined in subsection 122.5(1) of the ETA,
requires that S reside with Ms. Burchell. I have concluded that she
did not reside with Ms. Burchell for the first period of January 2008 to August
2009. With respect to the Second Period, the facts, as I have concluded,
suggest that S could be the qualified dependent of both Ms. Marchbank and Ms.
Burchell. In that case, subsection 122.5(6) of the Act applies:
If a person would, if this Act were read
without reference to this subsection, be the qualified dependant of two or more
individuals, in relation to a month specified for a taxation year,
(a) the person is deemed
to be a qualified dependant, in relation to that month, of the one of those
individuals on whom those individuals agree;
(b) in the absence of
an agreement referred to in paragraph (a),
the person is deemed to be, in relation to that month, a qualified dependant of
the individuals, if any, who are, at the beginning of that month, eligible
individuals (within the meaning assigned by section 122.6, but with the words “qualified dependant” in that section having the meaning
assigned by subsection (1)) in respect of that person; and
(c) in
any other case, the person is deemed to be, in relation to that month, a
qualified dependant only of the individual that the Minister designates.
[18]
This references the
CCTB definition of eligible individual, which brings into play the mother’s
presumption. Similar reasoning as applied to the CCTB would therefore apply
with respect to the GSTC. Ms. Burchell’s Appeals for the GSTC are also
therefore dismissed.
[19]
In summary, the Appeal
pursuant to the ETA is quashed and the Appeals with respect to the Act
are dismissed.
Signed at Ottawa, Canada, this 9th day of April 2013.
"Campbell J. Miller"
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