Rousseau – Court of Quebec finds that no penalty was payable by a Quebec individual with Alberta work and a Quebec home for not filing in Quebec

An individual (Mr. Rousseau) who had worked in Quebec as a heavy machinery operator, started working in Alberta in 1999 but, in addition to renting a room in Edmonton, he kept his house in Quebec, where his wife and children stayed and where he stayed as well on vacation or longer leave periods. In finding that Mr. Rousseau continued to reside in Quebec for the taxation years in issue (2003 to 2011), Allen JCQ stated:

The entirety of the evidence demonstrates that Mr. Rousseau left Quebec solely for work purposes and that he never had the intention to sever his connections with Quebec, which was the place with which he maintained his strongest links between 2003 and 2011.

However, in finding that Mr. Rousseau had made out a due diligence defence to the imposition of penalties under the Quebec equivalent of ITA s. 162(1) for failure to file Quebec income tax returns for those years, Allen JCQ stated that Mr. Rousseau “relying on the independent opinion provided by his accountant, believed sincerely and in good faith that he was resident in Alberta.”

The taxpayer was assessed for the 2003 to 2011 taxation years by the ARQ on October 24, 2013. They were not statute-barred as he had not filed Quebec returns for them until returns were demanded by the ARQ. The reasons of Allen JCQ do not disclose whether the taxpayer applied for reassessments of the earlier years to vacate the Alberta tax within the 10-year time period described federally in s. 152(4.2).

After noting that he lacked jurisdiction to do anything more than this respecting the Alberta taxes, Allen JCQ stated:

[T]he Court is of the view the Minister should, in all equity, take steps under the agreements between the federal government and the other provinces, including Alberta so as to avoid this double taxation.

Neal Armstrong, Summaries of Rousseau v. Agence du revenu du Québec, 2018 QCCQ 7340 under s. 2(1), s. 162(1) and s. 152(4.2).