Docket: IMM-3732-11
Citation: 2012 FC 123
Ottawa, Ontario, February
1, 2012
PRESENT: The Honourable Mr. Justice Rennie
BETWEEN:
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SUMAIYA ZAKIRHUSEN MOTALA
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Applicant
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and
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THE MINISTER OF CITIZENSHIP
AND IMMIGRATION
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Respondent
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REASONS FOR JUDGMENT AND
JUDGMENT
[1]
This
decision arises from an application for judicial review of a May 12, 2011
decision by the Immigration Appeal Division (IAD) of the Immigration and
Refugee Board (IRB). In that decision, the IAD dismissed the applicant’s
appeal of a visa officer’s decision refusing the applicant’s request to sponsor
ten other family members. For the reasons that follow, the application is
dismissed. A question is certified under section 74 of the Immigration and
Refugee Protection Act, SC 2001, c 27 (IRPA).
Background
[2]
Under
the regime established by Division 3 of the Immigration and Refugee
Protection Regulations (SOR/2002-227) (Regulations), a Canadian who
wishes to sponsor family members to come to Canada must
establish that they have the financial capacity to support their family members
on arrival into Canada. Section 133(1)(j)(i) addresses this by
requiring evidence of income:
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133. (1) A sponsorship
application shall only be approved by an officer if, on the day on which the
application was filed and from that day until the day a decision is made with
respect to the application, there is evidence that the sponsor
…
(j) if the sponsor resides
(i) in a province other than a
province referred to in paragraph 131(b), has a total income that is
at least equal to the minimum necessary income, …
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133. (1) L’agent n’accorde la
demande de parrainage que sur preuve que, de la date du dépôt de la demande
jusqu’à celle de la décision, le répondant, à la fois :
j) dans le cas où il
réside :
(i) dans une province autre qu’une
province visée à l’alinéa 131b), a eu un revenu total au moins égal à
son revenu vital minimum,…
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[3]
Minimum
necessary income (MNI) is a prescribed term. The amount or threshold,
previously known as the low income cut-off or by its acronym, LICO, is
established by reference to various economic and social indicators and varies
on a regional basis. The MNI is not in issue. What is in issue is how the
applicant’s income is established in order to determine whether the MNI has
been met. In this regard, the Regulations provide, with limited
exception, that the Notice of Assessment is to be determinative:
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134. (1) For the purpose of
subparagraph 133(1)(j)(i), the total income of the sponsor shall be
determined in accordance with the following rules:
(a) the
sponsor's income shall be calculated on the basis of the last notice of
assessment, or an equivalent document, issued by the Minister of National
Revenue in respect of the most recent taxation year preceding the date of
filing of the sponsorship application;
(b) if
the sponsor produces a document referred to in paragraph (a), the
sponsor's income is the income earned as reported in that document less the
amounts referred to in subparagraphs (c)(i) to (v);
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134. (1) Pour l’application du
sous-alinéa 133(1)j)(i), le revenu total du répondant est déterminé
selon les règles suivantes :
a) le calcul du revenu
se fait sur la base du dernier avis de cotisation qui lui a été délivré par
le ministre du Revenu national avant la date de dépôt de la demande de
parrainage, à l’égard de l’année d’imposition la plus récente, ou tout
document équivalent délivré par celui-ci;
b) si le répondant
produit un document visé à l’alinéa a), son revenu équivaut à la
différence entre la somme indiquée sur ce document et les sommes visées aux
sous-alinéas c)(i) à (v);
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[4]
The
Regulations also provide that the period of time used for determining
whether the MNI has been met is the 12-month period preceding the date of the
application. This is known as the “lock in period”. In this case, the
application for sponsorship was in 2005; hence, the section 134 lock in period
was the 2004-2005 taxation year. The applicant’s application failed as her
income ($40,274) as reflected on the Notice of Assessment, fell far short of
the MNI of $63 591.
[5]
Four
years later, however, the applicant’s financial circumstances had apparently changed.
The sponsor’s husband and co-signor on the application now had a much higher
income. They appealed the decision of the visa officer to the IAD, citing a
change in circumstances.
[6]
It
is not disputed that, as of the hearing before the IAD in 2011, the sponsor and
her co-signor husband had submitted Notices of Assessment which established
that, as of 2010, they met the MNI requirement for sponsorship. This combined
income was comprised, in part, of the co-signor’s employment income of $65,000
and the sponsor’s self-employment income of some $17,655.
[7]
The
IAD found, correctly, that as of October 12, 2005, being the date the application
was filed, and the lock in date, the applicant did not meet the MNI requirement
and in consequence sustained the decision of the visa officer. This, however,
did not end the matter, as the IAD also had discretion to grant relief given
the change in circumstances.
[8]
In
assessing the change in circumstances, and whether it ought to grant
discretionary relief, the IAD had concerns as to whether the applicant’s income
from self-employment as reported in the 2010 Notice of Assessment was genuine. It
found that the applicant’s self-earned income could have been
over-reported in 2010 for the purposes of the sponsorship application and
therefore deducted the income from self-employment from the total. Thus, when $17,655
was deducted from the claimed combined income of $79,398, the applicant fell
below the MNI to support ten people.
[9]
The
IAD also noted that the income levels reported were inconsistent with the fact
that the applicant and her husband lived in subsidized housing. It also noted
that the applicant had failed to produce income and expense reports in support
of her baby-sitting business, even though twice requested.
Why this
finding mattered
[10]
The
factual foundation on which the IAD assessed the case -specifically, its
finding that the applicant’s income fell below the MNI - was critical as it determined
whether, in the exercise of its discretion, the more stringent test for humanitarian
and compassionate relief or the more lenient test expressed in the IAD decision
of Jugpall
v Canada (Minister of Citizenship and Immigration), [1999] IADD No 600 would apply to the applicant.
[11]
Under
this more lenient test, if the applicant’s income in 2011 exceeded the MNI, the
IAD would consider whether there were positive factors, independent of
financial circumstances, to warrant “special relief” and which would support
the conclusion that it would be unfair to require the applicant to recommence
the entire sponsorship application process from the beginning. If however, the
applicant did not meet the MNI in 2011, then the more stringent test applicable
to humanitarian and compassionate consideration - whether there was undeserved
or disproportionate hardship - would apply. This fork in the road, as it may
be described, does not arise from any legislative requirement, but rather as a
consequence of the IAD jurisprudence; Jugpall; Chirwa v Canada
(Minister of Citizenship and Immigration), [1970] IABD No 1.
Summary of
Positions
[12]
The
argument is clearly joined - the applicant contends that the IAD had no
jurisdiction to go behind the Notice of Assessment in considering which of the
two tests should be applied. The applicant contends that the regulatory scheme
supports this argument. By virtue of section 134 of the Regulations,
the Notices of Assessment are “deemed to be income” for the purposes of the
initial determination, and, hence, there should be symmetry between the two
stages of the process. Whatever the scope of the IAD jurisdiction, it does not
extend to disregarding the Notice of Assessment as proof of income, and the IAD
was bound by the express language of the Regulations, which made the
Notice of Assessment dispositive, to apply the more lenient test.
[13]
The
respondent advances a policy-based argument, noting the mischief that might
befall the sponsorship system if the IAD were, as the respondent characterized
it, to “blindly accept” the Notice of Assessment as proof of income. Income
generated through self-employment can be inflated by deferring expenses and
income from one year to another. I note, however, that the Regulations “blindly
accept”, again, to use the respondent’s language, the Notice of Assessment on
the initial application and make no distinction between income generated
through employment or self-employment. I also note that the mischief cited by
the respondent would be equally at issue on the initial application. The
respondent contended that the application forms, required by the respondent to
be completed, draw a distinction between the two forms of income. However,
forms developed by the government in the administration of the Act do
not constitute a legally acceptable basis for interpreting the Regulations.
[14]
Blind
acceptance or not, the primacy accorded to Notices of Assessment was a
considered policy choice of the Minister and Governor in Council in enacting
the Regulations in question. It is thus difficult to impugn the use of
the Notice of Assessment for the determination of “the income earned” in
section 134(1)(c) which provides:
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134. (1) For the purpose of
subparagraph 133(1)(j)(i), the total income of the sponsor shall be
determined in accordance with the following rules:
…
(c) if
the sponsor does not produce a document referred to in paragraph (a),
or if the sponsor's income as calculated under paragraph (b) is less
than their minimum necessary income, the sponsor's Canadian income for the
12-month period preceding the date of filing of the sponsorship application
is the income earned by the sponsor not including…
[Emphasis added]
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134. (1) Pour l’application du
sous-alinéa 133(1)j)(i), le revenu total du répondant est déterminé
selon les règles suivantes :
…
c) si le répondant ne
produit pas de document visé à l’alinéa a) ou si son revenu calculé
conformément à l’alinéa b) est inférieur à son revenu vital minimum,
son revenu correspond à l’ensemble de ses revenus canadiens gagnés au
cours des douze mois précédant la date du dépôt de la demande de parrainage,
exclusion faite de ce qui suit : …
[Notre soulignement]
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[15]
There
is a real and legitimate concern that self-employment income can be over
reported though tax planning, with the result that, at the time of the hearing
before the IAD, a Notice of Assessment that exceeds the threshold can be
generated. It is for that reason that the IAD in Jugpall, noted,
that in considering “the test for financial solvency under the amended
Regulations” it expressed a need for a track record of meeting the MNI. In
other words, the concern is mitigated by the requirement that the applicant
demonstrate a pattern of meeting the MNI year over year since the lock in date.
Analysis
[16]
It
is in this context that the narrow question arises as to whether the IAD erred
in law when it rejected the applicant’s self-reported income as it appeared on
the 2010 Notice of Assessment. The applicant contends that the IAD erred by
importing additional requirements into the income calculation, over and above
those required by section 134(1) of the Regulations and, in effect,
going behind the Notice of Assessment and discounting the reported amounts. If
the MNI was surpassed, the application would be assessed under more favourable criteria.
Hardship, as defined in the jurisprudence, need not be established when the
ground of inadmissibility had been overcome.
[17]
The
Regulations do not prescribe different criteria for the assessment of MNI
at different stages of the process. As Justice Robert Barnes observed in Chahal
v Canada (Citizenship
and Immigration), 2007 FC 953, at paras 5 and 11:
Although the income calculation rules
require the decision-maker to rely initially upon a sponsor's last Notice of
Assessment (or equivalent document) for the most recent taxation year, that is
not the case where such a document is not produced or where the document
discloses insufficient income to meet the minimum threshold. In such
circumstances, the decision-maker is directed to calculate "the sponsor’s
Canadian income for the 12-month period preceding the date of filing of the
sponsorship application". This contemplates an assessment of
actual income earned where the period in question spans a portion of two tax
years. It is at least implicit in this statutory language that such a
calculation can be performed using any reliable financial information produced
by the sponsor. This could, of course, include Notices of Assessment or
their equivalent but it need not be limited to such evidence. Any other
interpretation would defeat the drafter’s stated intention of providing for
situations where Notices of Assessment are not available or produced. This
might also include evidence showing that income was not evenly earned in a
given tax year.
The applicable legislation does not
dictate how such a calculation ought to be performed. Given the stated
preference in section 134(1) of the Regulations for using Notices of Assessment
(or their equivalent) from the Canada Revenue Agency (CRA) to calculate the
minimum income level of a sponsor, it is not necessarily unreasonable to carry
out the calculation solely from those source documents.
[Emphasis added]
[18]
I
adopt Justice Barnes’ position. Section 134(1) neither prescribes nor
prohibits an inquiry into the veracity of the data in the documents supplied
pursuant to section 134(1). In my view however, the authority to do so arises
from the basic jurisdiction of the IAD to grant special or discretionary
relief.
[19]
The
jurisdiction of the IAD is provided for by section 67(2) of the IRPA:
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67. (1) To allow an appeal, the
Immigration Appeal Division must be satisfied that, at the time that the
appeal is disposed of,
….
(2) If the Immigration Appeal Division allows the
appeal, it shall set aside the original decision and substitute a
determination that, in its opinion, should have been made, including the
making of a removal order, or refer the matter to the appropriate
decision-maker for reconsideration.
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67. (1) Il est fait droit à
l’appel sur preuve qu’au moment où il en est disposé :
....
(2) La décision attaquée est cassée; y est substituée
celle, accompagnée, le cas échéant, d’une mesure de renvoi, qui aurait dû
être rendue, ou l’affaire est renvoyée devant l’instance compétente.
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[20]
The
IAD is conducting a de novo appeal from the visa officer’s decision, and
to the extent that it exercises a discretion to grant special relief from the
consequences of the visa officer’s decision that the applicant has failed to
meet the MNI, it has the jurisdiction to require proof and consider all the
issues and subject areas materially relevant to the exercise of that discretion:
see, for example, albeit in a different context, Canada (Citizenship and
Immigration) v Peirovdinnabi, 2010 FCA
267.
[21]
This
discretion in the IAD must be exercised in accordance with legally relevant
considerations. In this context, requiring proof of actual income would be
consistent with the object and purpose of the Regulations in question. In
Dang v Canada (Minister of Citizenship and Immigration) [2000] FCJ
No 1187 at para
61 Justice Eleanor Dawson (now of the Court of Appeal) observed that, in the
exercise of its discretion it was appropriate for the IAD to look at the
factors which underlay the claim of changed circumstances. Of the 17 factors
listed, four are apposite here:
[…]
(ii) The exercise of the Appeal
Division's statutory discretion was a function of the context created by the
determination of inadmissibility;
[…]
(vi) Changed circumstances are
relevant to an appeal under paragraph 77(3)(b) of the Act, and in the Appeal
Division's view it was all the more important to be able to look at changed
circumstances when exercising its equitable jurisdiction in cases where
consideration of those changed circumstances was prohibited when determining
the legal validity of a visa officer's refusal;
(vii) Changed financial
circumstances must be assessed in a manner consistent with the amendments to
the Regulations and could not serve to undermine those amendments;
[…]
(xv) The Appeal Division stressed
that the fact that an appellant might achieve the required degree of solvency
by the time the case reached the appeal stage did not automatically entitle the
appellant to success before the Appeal Division;
[…]
[22]
To
conclude, the IAD has, as a consequence of its discretionary power to consider
whether the grounds of inadmissibility had been overcome and hence whether special
relief should be granted, the authority to require evidence corroborative of
the income reported in the Notice of Assessment. The IAD is permitted to
question the accuracy and veracity of certain financial documents submitted in
support of sponsorship applications and to assign relative and proportionate
evidentiary weight to them. I would observe, in closing, that this
interpretation of the scope of the IAD jurisdiction is consistent with the
objective of the Regulations as a whole, which are designed to ensure that
those sponsored to come to Canada can in fact be provided for, and that the
integrity of the sponsorship provisions of the IRPA is not eroded
through inaccurate statements of income, whether deliberate or accidental.
Second ground
of review – error in the exercise of discretion
[23]
In
respect of the second issue, the applicant argues that the IAD erred in its application
of the Jugpall
test in determining whether humanitarian and compassionate grounds warranted
special relief. In Jugpall, the IAD held as follows at paragraph 43:
1. Do the current circumstances of the
appellant indicate that the test for financial solvency under the amended
Regulations is met as of the date of the hearing? This includes determining
whether the appellant has a track record of meeting the Low Income Cut-Off
criteria in the 12 months preceding the date of hearing.
2. If the answer to the first question
is in the affirmative, are there any other positive factors which warrant the
granting of special relief? Are there negative factors which weigh against the
granting of special relief? A lesser standard than that required by Chirwa may
be sufficient to justify granting special relief.
3. If the answer to the first question
is negative, are there nonetheless sufficient compassionate or humanitarian
considerations to warrant the granting of special relief, in accordance with
the test in Chirwa, given that the appellant can not in substance meet the
requirements of the Act? The number and nature of those factors will vary, depending
upon the extent to which the appellant fails to meet the requirements of the
Act.
[24]
The
applicant argues that where the current circumstances reveal that the obstacle
to admissibility has now been overcome, the application of the more stringent
criteria of humanitarian and compassionate relief is unreasonable. The
applicant submits that the evidence demonstrated that the applicant now met the
MNI, and thus the obstacle to admissibility had been overcome.
[25]
This
submission is contingent on the argument that the IAD erred in its application
of section 134(1) of the Regulations and had no jurisdiction to discount
the income amount reported on the 2010 Notice of Assessment, an argument which
I have already rejected. Second, it presupposes that the applicant did indeed
overcome the obstacle to inadmissibility, a presupposition which also falls away
based on the conclusion that the IAD did not err in requiring evidence in
support of the substance of the applicant’s financial position.
[26]
Counsel
for the respondent proposed a question for certification. Following receipt of
submissions on the issue, I certify the following question pursuant to section
74 of the IRPA:
Is the Appeal Division of the Immigration
and Refugee Board of Canada, in hearing an appeal from a decision of a Visa
Officer dismissing an application to sponsor family members, bound to accept as
conclusive the income as reported in the applicant’s Notice of Assessment, by
Regulation 134 of the Immigration
and Refugee Protection Regulations (SOR/2002-227)?
[27]
The
proposed question arises from the issues in the case, and not by virtue of the
reasons: Varela v Canada (Minister of
Citizenship and Immigration), 2009 FCA 145, [2010] 1 FCR 129.
Secondly, the question is of general importance and the answer would be
dispositive of the appeal.
[28]
The
application for judicial review is dismissed.
JUDGMENT
[29]
THIS
COURT’S JUDGMENT is that the application for
judicial review be and is hereby dismissed. Counsel have proposed a question
for certification and I certify the following question pursuant to section 74
of the IRPA:
Is the Appeal Division of the Immigration
and Refugee Board of Canada, in hearing an appeal from a decision of a Visa
Officer dismissing an application to sponsor family members, bound to accept as
conclusive the income as reported in the applicant’s Notice of Assessment, by
Regulation 134 of the Immigration
and Refugee Protection Regulations (SOR/2002-227)?
"Donald
J. Rennie"
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