Supreme Court of Canada
M.N.R. v. Stickel, [1975] 2 S.C.R. 233
Date: 1974-05-27
The Minister of National Revenue Appellant;
and
Ernest G. Stickel Respondent.
1973: November 8, 9; 1974: May 27.
Present: Judson, Ritchie, Spence, Pigeon and Dickson JJ.
ON APPEAL FROM THE FEDERAL COURT OF APPEAL
Taxation—Income tax—Exemption—American citizen carrying out a contract in Canada—Canada-United States of America Tax Convention, Article VIIIA—Applicability.
APPEAL from a judgment of the Federal Court of Appeal setting aside a decision of the Trial Division of the Federal Court. Appeal dismissed.
N.A. Chalmers, Q.C., and R.G. Pyne, for the appellant.
P.G.C. Ketchum, for the respondent.
The judgment of the Court was delivered by
JUDSON J.—The question to be determined in this appeal is whether the respondent Ernest G. Stickel qualifies for exemption from Canadian income tax on his teaching income earned in Canada beginning July 1, 1967, and ending June 30, 1969. The exemption is claimed under Article VIIIA of the Canada-United States of America Tax Convention, which, by statute, has the force of law in Canada. This particular Article came into force in 1950. It reads as follows:
A Professor or teacher who is a resident of one of the contracting states who temporarily visits the other contracting state for the purpose of teaching, for a period not exceeding two years, at a university, college, school or other educational institution in such other state, shall be exempted by such other state from tax on his remuneration for such teaching for such period.
The respondent was born in the United States and lived and worked there for the whole of his life before entering Canada in July 1967 to
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begin a two-year teaching contract with the University of Alberta. This teaching period ended June 30, 1969, but he did not return to reside in the United States until March 9, 1970. During this period he held two other non-teaching jobs.
I agree with the summary of the evidence made by the Federal Court of Appeal in the following paragraph:
In our view, the balance of probability on the evidence is that the appellant, who was resident in the United States, had given some thought to the possibility of moving to Canada before he obtained an opportunity to take a two-year term appointment at the University of Alberta, that he discussed the project with his family, who were not enthusiastic about the prospect of a permanent move to Canada, and that they reached a joint decision to go to Canada for the two-year appointment only but on the understanding that during that two-year period they might reconsider the possibility of making their permanent home in Canada. On those facts, having regard to the necessity of interpreting the words “temporarily visits” as including visiting for the purpose of teaching for a period as long as two years, we are agreed that the appellant was a person who temporarily visited Canada for the purpose of teaching at a university for a period not exceeding two years.
In the Federal Court the judge of first instance decided that the respondent failed to qualify for exemption under Article VIIIA because his visit to Canada exceeded “a period not exceeding two years”. The Federal Court of Appeal held the contrary opinion, namely, that he did qualify as a person who temporarily visited Canada for the purpose of teaching at a university for a period not exceeding two years. With this view I agree.
The judge of first instance found it unnecessary to determine whether the respondent was at the time he entered Canada a resident of the United States. The Federal Court of Appeal found that he was and that he remained a resident of his native land notwithstanding the fact that he brought his family with him, closed his
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house in the United States and dispersed some of his belongings.
I am not overlooking the fact that the respondent paid no tax in the United States on the income in question here. There is evidence that the United States tax authority has treated him as a non-resident in respect of this income. Although the evidence is scanty, I am prepared to infer that this must have been as a result of some representation made by the respondent to the United States tax authority. Our problem is whether he comes within the treaty giving him exemption for Canadian tax on his Canadian income, and on this issue I agree with the Federal Court of Appeal that he does and on both the grounds given by that Court.
I would dismiss the appeal with costs.
Appeal dismissed with costs.
Solicitor for the appellant: D.S. Thorson, Deputy Attorney General of Canada, Ottawa.
Solicitors for the respondent: Crockett, Hattersley, Ketchum & Niziol, Edmonton.
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