Citation: 2013 TCC 39
Date: 20130219
Docket: 2012-626(GST)I
BETWEEN:
ANTOINE BABY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Paris J.
[1]
Mr. Baby is appealing from
an assessment made under the Excise Tax Act, (Act), by
which the Minister of National Revenue denied him the tax rebate for new housing
or substantial renovations.
[2]
The tax rebate is set
out in paragraph 256(2)(a) of the Act. The provision reads as
follows:
Where
(a)
a particular individual constructs or substantially renovates, or engages
another person to construct or substantially renovate for the particular
individual, a residential complex that is a single unit residential complex or
a residential condominium unit for use as the primary place of residence of the
particular
individual
or a relation of the particular individual;
the
Minister shall . . . pay a rebate to the particular individual . . . .
[3]
The expression “substantial
renovation” is defined in subsection 123(1) of the Act as follows:
“substantial
renovation” of a
residential complex means the renovation or alteration of a building to such an
extent that all or substantially all of the building that existed immediately before
the renovation or alteration was begun, other than the foundation, external
walls, interior supporting walls, floors, roof and staircases, has been removed
or replaced where, after completion of the renovation or alteration, the
building is, or forms part of, a residential complex;
Position of the appellant
[4]
Mr. Baby is challenging
the Minister’s interpretation of the expression “substantial renovation” that
appears in paragraph 256(2)(a) of the Act. He claims that the renovations
he had done on his house between July 1, 2006, and December 31, 2007, were
substantial renovations under the Act.
[5]
Furthermore, Mr. Baby argues
that he was misled by the information that he found on the Revenu Québec Internet
site about the conditions that needed to be met in order to obtain the tax
rebate.
Facts
[6]
Mr. Baby’s house has
two floors and a basement; the basement floor was a dirt floor. The area of
each floor is 26 feet by 28 feet.
[7]
Mr. Baby did the
following renovations on his house:
- added an all season, 15 by 20 foot,
solarium that is attached and open to the kitchen. Part of the kitchen’s external
wall was removed;
- transformed the dining room into three
smaller rooms: an office, a bathroom and a powder room. Before the renovations,
there were no bathrooms or powder rooms on the main floor. The walls of each of
those rooms were rebuilt and the bathroom and powder room floors were rebuilt;
- rebuilt the foundation and added a
cement floor to replace the dirt floor in the basement;
- changed the electrical connection
point and the heating system.
[8]
Mr. Baby did not make changes
to the bedroom or living room on the main floor or anything on the second floor.
[9]
Mr. Baby testified that
he did the renovations to place all household services on the main floor
because he had suffered permanent injuries to his right leg in a car accident. Before
starting the renovations, he did research on the Revenu Québec Internet site, where
he found a publication entitled “QST and GST/HST Rebates: New or Substantially
Renovated Housing, New or Substantially Renovated Residential Rental Property”.
The part on substantial renovations starts at page 12 and reads as follows:
You
may be entitled to a rebate, provided all the following conditions are met:
·
The unit must be a single-unit residential
complex* or a residential unit held in co-ownership.
·
You (or a relation) must be the first occupant
of the unit after renovations began.
·
The unit must be your primary place of residence
(or that of a relation).
·
The fair market value of the property must be
under $450,000 for GST purposes and under $225,000 for QST purposes at the time
renovations are substantially completed.
[10]
It was only after the
appellant finished the renovations and was denied his tax rebate request to Revenu
Québec that he was sent the definition of “substantial renovation” in the Act. Even
though the expression is defined in the publication that Mr. Baby found on the Revenu
Québec site, the definition is on page 7, and not noted on page 12, where
the conditions for entitlement to a tax rebate for substantial renovations are
listed.
Analysis
[11]
Therefore, the
remaining issue before me is whether, in light of the wording of the definition
of “substantial renovation”, all or substantially all of Mr. Baby’s building
that existed before the renovation, other than the foundation, external walls,
interior supporting walls, floors, roof and staircases, were removed or
replaced.
[12]
The Minister interprets
“all or substantially all” as being 90% or more of the existing house with the
exception of the elements noted.
[13]
Mr. Baby states that
the renovations in this case were to 90% of the area of the house that was [translation] “actually used” and that
the money he paid is equivalent to well over 90% of the house’s value before
the renovations, according to the municipal assessment.
[14]
In my opinion, neither
of Mr. Baby’s interpretations of “substantial renovation” is based on the language
of the definition. First, the definition talks about “all or substantially all of
the building that existed immediately before the renovation” and not [translation] “the part of the
building actually used immediately before the renovations”. The Court
must not add words to Parliament’s definition. In my opinion, it is clear that
the expression “building that existed” means the whole building. Furthermore, there
is nothing in the definition that suggests that Parliament intended to take renovation
costs into account. In that respect, I refer to the following comments by Justice
O’Connor of this Court in McLean v. The Queen, (at
paragraph 6):
The
definition of substantial renovation is restrictive. Firstly, it has no
reference to the total costs of the renovation in relation to the value of the
home. . . .
[15]
In light of all of the
evidence, it is clear that Mr. Baby did not have all or substantially all of
his house as it existed before the renovations, other than the supporting
walls, floors and staircases, removed or replaced. The whole second floor and a
significant part of the first floor were not renovated. As a result, the renovations
of Mr. Baby’s house were not substantial renovations under the Act.
[16]
Finally, even if I
agree with Mr. Baby that the publication that he found on the Revenu Québec site
can easily be confusing, the fact that he was misled is not a valid reason to
allow his appeal. I am bound to apply the provisions of the Act as written by
Parliament, and not as interpreted by the Minister or his officials. On this
point, Justice Sarchuk of this Court wrote the following in Waldron v. The
Queen,
at paragraph 7:
[7]
The issue of estoppel has been considered in a number of cases and the
principle which generally can be taken therefrom is that no representation
involving an interpretation of law by a servant or officer of the Crown can
bind it. The rationale for that position was admirably set out by Bowman
T.C.C.J. in Goldstein v. The Queen:
It
is sometimes said that estoppel does not lie against the Crown. The statement
is not accurate and seems to stem from a misapplication of the term estoppel.
The principle of estoppel binds the Crown, as do other principles of law.
Estoppel in pais, as it applies to Crown, involves representations of
fact made by officials of the Crown and relied and acted on by the subject to
his or her detriment. The doctrine has no application where a particular
interpretation of a statute has been communicated to a subject by an official
of the government, relied upon by that subject to his or her detriment and then
withdrawn or changed by the government. In such a case a taxpayer sometimes
seeks to invoke the doctrine of estoppel. It is inappropriate to do so not
because such representations give rise to an estoppel that does not bind the
Crown, but rather, because no estoppel can arise where such representations are
not in accordance with the law. Although estoppel is now a principle of
substantive law it had its origins in the law of evidence and as such relates
to representations of fact. It has no role to play where questions of
interpretation of the law are involved, because estoppels cannot override the
law.
[17]
For these reasons, the
appeal must be dismissed.
Signed at Ottawa,
Canada, this 19th day of February 2013.
“B. Paris”
Translation
certified true
on this 3rd day of
April 2013
Janine Anderson,
Translator
Email this Content