Canada (Human Rights Commission) v. Canada (Minister of National Revenue), 2003 FC 1280

Date: 20021104

Docket: T-1200-01

Citation: 2003 FC 1280

Ottawa, Ontario, this 4^th day of November, 2003

Present:           THE HONOURABLE MR. JUSTICE O'REILLY                          

BETWEEN:

                                       CANADIAN HUMAN RIGHTS COMMISSION

                                                                                                                                                       Applicant

                                                                              - and -

                                               MINISTER OF NATIONAL REVENUE

                                                                                                                                                   Respondent

                                                                              - and -

                                                                 SCOTT WIGNALL

                                                                                                                                                   Respondent

                                                                              - and -

                                    COUNCIL OF CANADIANS WITH DISABILITIES

                                                                                                                                                     Intervener

                                      REASONS FOR JUDGMENT AND JUDGMENT

[1]                 The Canadian Human Rights Commission has asked me to set aside a decision of the Canadian Human Rights Tribunal. The Tribunal had dismissed Mr. Scott Wignall's complaint of discrimination under s. 5 of theCanadian Human Rights Act, R.S.C. 1985, c. H-6 (relevant enactments are set out in the attached Annex).

[2]                 Mr. Wignall is permanently deaf. While a student at the University of Manitoba, he required sign language interpretation to assist him with his studies. Those services are expensive - about $12,000 per term. The University agreed to provide him the services he required in keeping with the spirit of the Supreme Court of Canada's decision in Eldridge v. British Columbia (Attorney General), [1997] 3 S.C.R. 624. However, in an effort to recover some of its costs, the University asked Mr. Wignall to try to find outside sources of funding. In due course, he obtained a Special Opportunities Grant for Students with Permanent Disabilities from the Government of Canada in the amount of $3,000. He passed the entire amount of his grant along to the University, as it had requested.

[3]                 The Department of National Revenue required Mr. Wignall to add $2,500 to his taxable income for the year 1995 to reflect the amount of the grant (exempting the first $500 of it). The Department classified the grant as income, relying on s. 56(1)(n) of the Income Tax Act, R.S.C. 1985, c. 1 (5^th Supp.) and its own Interpretation Bulletin (IT75R3). While Mr. Wignall was not liable to pay income tax that year, when he included the extra $2500 in his income, it reduced his refundable provincial tax credit by $25.

[4]                 Mr. Wignall, assisted by the Commission, argued that the tax treatment of his grant, to the extent it had an adverse financial impact on him, amounted to discrimination on the basis of disability. The Tribunal dismissed his complaint. The Commission, joined by the intervener, the Council of Canadians with Disabilities, now argues that the Tribunal made errors in its analysis of Mr. Wignall's complaint. It asks me to overturn the Tribunal's decision and order a new hearing.

[5]                 I agree with the Commission that the Tribunal made an error. Nevertheless, that error did not affect the outcome. Further, the Tribunal's conclusion was reasonable. Therefore, I must deny the Commission's application for judicial review.

I. Issues

1.          Did the Tribunal err in its analysis of the meaning of "discrimination" under the Canadian Human Rights Act?

2.          Did the Tribunal err in its finding that the Department of National Revenue did not discriminate against Mr. Wignall?

1. Did the Tribunal err in its analysis of the meaning of "discrimination" under the Canadian Human Rights Act?

[6]                 The Commission argues that the Tribunal confused the test for discrimination under s. 15(1) of the Canadian Charter of Rights and Freedoms with the proper test under the Canadian Human Rights Act. The former is a harder standard to meet as it involves three distinct elements, according to the Supreme Court of Canada's decision in Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497 (QL). By contrast, the Commission contends, the test under the Canadian Human Rights Act merely requires a complainant to prove that the respondent made a distinction on a prohibited ground. It relies on Ontario (Human Rights Commission) v. Simpson-Sears Limited, [1985] 2 S.C.R. 536 (QL), commonly referred to as the O'Malley case.

[7]                 The Tribunal clearly discussed and applied the test from the Law case. Indeed, the Commission urged it to do so. The Commission now resiles from its earlier position and argues that the Tribunal made a legal error.

(a) The proper approach under human rights legislation

[8]                 The definition of "discrimination" under s. 15(1) of the Charter, and outlined in the Law case, does not apply to human rights legislation. The Supreme Court of Canada was clearly concerned in Law with the meaning to be given to the constitutional standard of equality set out in the Charter. It gave no indication that its approach should apply more broadly to human rights codes or statutes, whether in provincial or federal law.

[9]                 In Law, the Supreme Court set out the "proper approach to analyzing a claim of discrimination under s. 15(1) of the Charter" (at p. 523). Iacobucci J., for a unanimous Court, outlined the three inquiries that should be made under that provision:

First, does the impugned law (a) draw a formal distinction between the claimant and others on the basis of one or more personal characteristics, or (b) fail to take into account the claimant's already disadvantaged position within Canadian society resulting in substantively differential treatment between the claimant and others on the basis of one or more personal characteristics? If so, there is differential treatment for the purpose of s. 15(1).

Second, was the claimant subject to differential treatment on the basis of one or more of the enumerated and analogous grounds?

And third, does the differential treatment discriminate in a substantive sense, bringing into play the purpose of s. 15(1) of the Charter in remedying such ills as prejudice, stereotyping, and historical disadvantage? (at p. 524)

[10]            In my view, for a number of reasons, it is very clear that the Court was dealing solely with the various elements of the constitutional guarantee of equality under the Charter, and not espousing a definition of discrimination for all purposes. First, the Court was talking about discriminatory distinctions that are set out in statutes, not the full breadth of discriminatory acts that are addressed by human rights codes. Further, the Court makes repeated reference to the purpose of s. 15(1) as a guide to its interpretation. Obviously, the purpose of s. 15(1) is not directly relevant to the interpretation of provisions in other human rights instruments. Finally, after setting out the above three-part test, Iacobucci J. says that "[t]he second and third inquiries are concerned with whether the differential treatment constitutes discrimination in the substantive sense intended by s. 15(1)" (at p. 524). Again, he is talking specifically and exclusively about constitutionally impermissible discrimination - not discrimination in the wider sense of the term.

[11]            I would also note that in the seminal equality case of Andrews, McIntyre J. explicitly distinguished between human rights codes and s. 15(1) of the Charter: Law Society of British Columbia v. Andrews, [1989] 1 S.C.R. 143 (QL), at pp. 175-6. He found that the two contexts were similar, but concluded that s. 15(1) required a special approach.

[12]            Indeed, the Supreme Court's recent decisions dealing with statutory human rights codes do not display any desire to incorporate the principles developed under s. 15(1) of the Charter into human rights statutes: British Columbia (Public Service Employee Relations Commission) v. British Columbia Government and Service Employees' Union (B.C.G.S.E.U.), [1999] 3 S.C.R. 3 (QL); British Columbia (Superintendent of Motor Vehicles) v. British Columbia (Council of Human Rights), [1999] 3. S.C.R. 868 (QL).

[13]            Turning to the meaning of "discrimination" under human rights legislation, McIntyre J. stated in O'Malley, above, that the burden of proving discrimination lies on the complainant. The complainant must make out a prima facie case, which is one that "covers the allegations made and which, if they are believed, is complete and sufficient to justify a verdict in the complainant's favour in the absence of an answer from the respondent" (at p. 558). While this passage is widely cited as a definition of discrimination, it is really a rule of evidence and procedure. It does not actually state what discrimination is.

[14]            However, a general definition of discrimination appears in the judgment of McIntyre J. in the Andrews case, above. He said that "discrimination may be described as a distinction . . . which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed upon others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society", at p. 174. The Court affirmed this definition in Battlefords and District Co-operative Ltd. v. Gibbs, [1996] 3 S.C.R. 566 (QL).

[15]            In fact, decision-makers under human rights statutes do not generally invoke any elaborate definition of discrimination. They accept that complainants merely have to show that they have been treated differentially on the basis of a prohibited ground of discrimination. For example, the Supreme Court of Canada held that a complainant had proved discrimination when she showed that an aerobic fitness standard applicable to all prospective firefighters had an adverse effect on female candidates because it was harder for women to meet that standard: British Columbia (Public Service Employee Relations Commission) v. British Columbia Government and Service Employees' Union (B.C.G.S.E.U.), above, at p. 39. Similarly, it found that a complainant had proved discrimination when he established that he was denied a driver's license because of his physical disability: British Columbia (Superintendent of Motor Vehicles) v. British Columbia (Council of Human Rights), above, at p. 883.

[16]            In these cases, decided in the same year as Law, the Supreme Court did not rely on or even refer to the definition of discrimination it had developed for purposes of s. 15(1). Nor did it cite any other constitutional jurisprudence. In my view, tribunals that conclude that the Law analysis should be confined to its constitutional setting are correct: Barrett v. Cominco Ltd. (2001), 41 C.H.R.R. D/367; Nixon v. Vancouver Rape Relief Society (No. 2) (2002), 42 C.H.R.R. D/20 and Dame v. South Fraser Health Region (2002), 43 C.H.R.R. D/251. Accordingly, I agree with the Commission that complainants will satisfy the burden of proof under the Canadian Human Rights Act if they establish that they have been subjected to adverse treatment on a prohibited ground for which the respondent is responsible. They need not meet all of the requirements set out in the Law case.

(b) The approach taken by the Tribunal in this case

[17]            The Tribunal began with the O'Malley approach, stating that the burden "falls firstly on the Complainant to establish a prima facie case that he has been discriminated against". It then stated that there had been a "convergence" between that standard and the requirements of s. 15(1) of the Charter, according to recent constitutional jurisprudence. After summarizing some of the case law, including the Law case, the Tribunal asked itself whether "the application of this particular tax policy creates a distinction, on the basis of one or more personal characteristics, between the Complainant and some other person or group of persons, resulting in unequal treatment or discrimination". Alternatively, if the complainant was treated the same as others, the Tribunal asked if that treatment had "the effect of imposing a burden upon the Complainant or withholding a benefit available to others in society". Finally, the Tribunal asked: "In other words, has the Complainant established a prima facie case of discrimination?"

[18]            It is clear to me that the Tribunal erred when it said that there has been a convergence in the approaches under human rights statutes and s. 15(1) of the Charter. As discussed above, there is no evidence of convergence.

[19]            Nevertheless, based on the passages from the Tribunal's decision quoted above, it appears that the Tribunal asked itself the right questions. It certainly began with the proper approach.

[20]            The Commission argues, however, that the Tribunal got off track later in its reasons when it analyzed all three branches of the test in Law. For its part, the respondent suggests that even though the Tribunal may have erred when it applied the Law case, it still found that Mr. Wignall had failed to establish discrimination in the relevant sense of the term. Therefore, its error was harmless. The respondent notes that the Tribunal stated that it was "unable to conclude that the Complainant has established a prima facie case that he has been discriminated against by Revenue Canada on account of his disability". In other words, in the end, the Tribunal applied the correct test.

[21]            In my view, when the Tribunal embarked on the first of the three inquiries under the Law test, it engaged in exactly the same analysis that decision-makers must undertake under human rights statutes. The Tribunal asked whether the respondent's tax treatment of Mr. Wignall's grant drew a formal distinction between him and others on the basis of a personal characteristic, resulting in unequal treatment. This is no different, at least in the circumstances of this case, from determining whether the respondent imposed a burden on the complainant, not demanded of others, on a prohibited ground (to paraphrase McIntyre J.'s definition of discrimination in Andrews).

[22]            True, the Tribunal did go on to consider the other elements of the Law test. It was wrong to do so, as explained above. However, I see nothing in the Tribunal's reasons indicating that its analysis in those areas contaminated its overall conclusion. The Commission argued that the Tribunal's discussion of a "comparator group", which derives from jurisprudence under s. 15(1) of the Charter, was inappropriate and affected the Tribunal's conclusion. In my view, this discussion was completely innocuous. A court or tribunal cannot decide whether a person has been discriminated against without making comparisons to the treatment of other persons. Comparisons are inevitable.

[23]            Therefore, while the Tribunal made an error when it analyzed Mr. Wignall's complaint according to the full terms of the Law decision, it did address the essential legal question that arose in the case: whether the respondent had discriminated against Mr. Wignall by imposing on him a burden, in the form of a financial penalty, because of his disability. The Tribunal said no. The next issue, then, is whether that conclusion was reasonable.

2. Did the Tribunal err in its finding that the Department of National Revenue did not discriminate against Mr. Wignall?

[24]            Because this issue involves the application of facts to a legal test, the standard of review of the Tribunal's decision is reasonableness. In other words, I may only intervene if I find that its conclusion was unreasonable: International Longshore & Warehouse Union (Marine Section), Local 400 v. Oster 2001 FCT 1115, [2001] F.C.J. No. 1533 (QL) (T.D.).

[25]            The Tribunal held that the respondent taxed Mr. Wignall's grant in the same way as it would have taxed any other revenue from any source. Grants are given to students for various reasons - financial need, achievement, background, age, etc. - and all are taxed in the same way. Mr. Wignall was not treated differently from other grant recipients or, indeed, other taxpayers. Further, the tax consequences flowing from the grant had nothing to do with his disability. The same conclusion was reached by the Tax Court of Canada in Simser v. Canada, [2003] T.C.J. No. 310, 2003 TCC 366 (QL) (T.C.C.). I see nothing unreasonable about the Tribunal's conclusions on these points.

[26]            The Tribunal also acknowledged that the ultimate effect of the Respondent's tax treatment of the grant - a grant awarded on the basis of physical disability - was a financial penalty to Mr. Wignall. In other words, Mr. Wignall paid a price that others did not have to pay and the only reason he had to pay it was because he is deaf. Does this mean that the respondent discriminated against him? The Tribunal said no, and I cannot find that its conclusion was unreasonable.

[27]            In general terms, our tax system is based on the idea that most sources of revenue are treated as income. In principle, all taxpayers are treated the same in the sense that the same rules apply to everyone. The practical consequence of this is that the spending power of taxpayers equals the amount of their income, less the amount of tax they owe. In addition, some measures designed to provide tax relief, or advance particular social policies, often form part of the overall tax calculation and take the taxpayer's income into account in order to ensure that the benefit goes to those who are most in need of it. That was the situation here: Mr. Wignall's tax credit was reduced by $25 as a result of the grant he had received. Because of the tax consequences of the grant, he was really left with only $2975 to spend on sign language interpretation, not the full $3000 of the grant.

[28]            But, to this point, I fail to see an adverse financial consequence to Mr. Wignall. He was still $2975 ahead of where he was before receiving the grant. It seems to me that the financial cost to Mr. Wignall was a product of the University of Manitoba's request that he turn over the full amount of his grant. In effect, Mr. Wignall ended up paying the University $25 more than he had actually been given to spend on sign language interpretation. To its credit, of course, the University had voluntarily provided the services Mr. Wignall required and was probably unaware of the tax treatment of the grant.

[29]            I would also note, in support of the conclusion that the respondent did not discriminate against Mr. Wignall, that he had been allowed a tax exemption for the first $500 of the grant. Presumably, that margin of forgiveness was motivated, at least in part, by a desire to alleviate the tax consequences of treating grants as income. This type of grant now amounts to $5,000, of which $3,000 is exempted from taxation.

[30]            Finally, Mr. Wignall's complaint was based on the respondent's conduct when it characterized his grant as income. He did not mount a direct attack on s. 56(1)(n) of the Income Tax Act, which specifically requires that scholarships, fellowships and bursaries be included in the calculation of a taxpayer's income. In my view, the respondent's conduct resulted from a reasonable interpretation of that provision. Accordingly, only a constitutional challenge to the Act could yield the remedy Mr. Wignall sought. Such a challenge failed in Simser, above. Alternatively, of course, the Act could be amended to exempt completely these kinds of grants from income, as recommended by the Federal Task Force on Disability Issues in its report: Equal Citizenship for Canadians with Disabilities (1996).

[31]            In conclusion, there is no doubt that the Tribunal carefully considered the evidence before it, weighed the relevant factors, and arrived at a reasonable conclusion. I find no basis on which to intervene in its decision.

                                                                        JUDGMENT

THE COURT'S JUDGMENT is that:

1.          The application for judicial review is dismissed with costs to the respondent.

                                                                                                                                      "James W. O'Reilly"          

                                                                                                                                                               Judge                   

                                                                              Annex

                                                                                              FEDERAL COURT

                                                    NAMES OF SOLICITORS AND SOLICITORS OF RECORD

DOCKET:                                                                T-1200-01

STYLE OF CAUSE:                                              CANADIAN HUMAN RIGHTS COMMISSION v.MINISTER OF NATIONAL REVENUE and SCOTT WIGNALL

PLACE OF HEARING:                                        OTTAWA, ONTARIO

DATE OF HEARING:                                           JUNE 2, 2003

REASONS FOR JUDGMENT

AND JUDGMENT BY:                                      THE HONOURABLE MR. JUSTICE O'REILLY

DATED:                                                                     November 4, 2003

APPEARANCES:

Ms. Leslie Reaume                                                 FOR THE APPLICANT

Ms. Tracy Telford                                                  FOR THE RESPONDENT - MINISTER OF NATIONAL REVENUE

Mr. Scott Wignall                                                  FOR THE RESPONDENT - SELF REPRESENTED

Mr. William Holder                                                FOR THE INTERVENER - COUNCIL OF CANADIANS WITH DISABILITIES

SOLICITORS OF RECORD:

Ms. Leslie Reaume                                                 FOR THE APPLICANT

Canadian Human Rights Commission

Canada Building, 9^th Floor

344 Slater St.

Ottawa, ON K1A 1E1

Tel.: (613) 943-9162

Ms. Tracy Telford                                                 FOR THE RESPONDENT - MINISTER OF

Department of Justice                                           NATIONAL REVENUE

Winnipeg Regional Office

301-310 Broadway

Winnipeg, Manitoba R3C 0S6

Tel.: (204) 984-2231                                               

Mr. Scott Wignall                                                  FOR THE RESPONDENT - SCOTT WIGNALL

30 Mayfield Crescent

Winnipeg, Manitoba R3R 3A9

Tel.: (204) 831-6731

Mr. William Holder                                                FOR THE INTERVENER - COUNCIL OF

ARCH                                                                        CANADIANS WITH DISABILITIES

Council of Canadians with Disabilities

425 Bloor Street East, Suite 110

Toronto, ON M4W 3R5

Tel.: (416) 482-8255