France Julien v. Minister of National Revenue, [1991] 1 CTC 2391, 91 DTC 586

Tremblay, T.C.J. [Translation]:—This case was heard in the city of Sherbrooke, Québec.

1. Point at Issue

The question is whether the appellant is correct in not including the sum of $5,616 in her income for the 1986 taxation year, and in including it instead in her calculations for the 1984 taxation year.

Following a decision of March 1, 1984 by the Canada Employment and Immigration Commission, the appellant's unemployment insurance benefits were halted. This decision of the Commission was subsequently reversed by a judgment of Judge Jacques Trahan of the Tax Court of Canada. The sum of $5,616 represents, according to the appellant, all the unpaid benefits for 1984. In support of her appeal, the appellant relies on sections 1 and 15 of the Canadian Charter of Rights and Freedoms, as she claims an injustice has been committed. Had the appellant been taxed on this amount in 1984, she would have paid less in taxes.

The respondent, on the other hand, contends that, because this amount of $5,616 was received in 1986, it must be included as income for 1986. The respondent relies [on] subparagraph 56(1)(a)(iv) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the"Act") and sections 1,15 and 52 of the Canadian Charter of Rights and Freedoms. The respondent also contends that the Tax Court of Canada does not have the power to declare subparagraph 56(1)(a)(iv) of the Income Tax Act invalid or of no force and effect.

2. Burden of Proof

The taxpayer has the burden of proving the facts underlying a civil assessment (as opposed to a penalty). In the instant case, the facts are not in dispute and the point at issue is exclusively one of law, so the Court need not concern itself with the burden of proof.

3. Facts

3.01 As noted above, the facts are not in dispute. They are clearly described in the notice of appeal, as follows:

[Translation]

1. The appellant, through her undersigned counsel, appeals a notice of ratification from the Minister issued by the Shawinigan sud Taxation Centre on October 28, 1987, following a notice of objection filed by the appellant within the required time period, to a notice of assessment issued for the 1986 taxation year;

2. in early 1984, the appellant was a recipient of unemployment insurance;

3. on or about March 1, 1984, the Canada Employment and Immigration Commission rendered a decision declaring the appellant's previous jobs uninsurable and immediately stopped the payment of benefits (Exhibit A-1);

4. these decisions of the Canada Employment and Immigration Commission were duly contested;

5. on or about November 11, 1985, Judge Jacques Trahan of the Tax Court of Canada overturned the decisions of the Canada Employment and Immigration Commission;

6. following this judgment, the Canada Employment and Immigration Commission refunded the appellant the sum of $5,616.00 in April 1986, consisting entirely of the 1984 benefits that were unpaid, following the decision of March 1, 1984;

7. if the appellant had received these benefits during the 1984 taxation year, she would have had no taxes, or little taxes to pay on this sum of $5,616.00.

3.02 Had this amount of $5,616 been received in 1984, her income would have totalled $7,186. She would have had no taxes, or very little taxes, to pay. Her 1986 income, including this sum, totalled $13,524 (Exhibits A-3 and A-4). Had this sum not been included, the appellant would have had no taxes to pay, due to personal exemptions of $8,500. She has net federal taxes of $699 to pay because of the inclusion of this sum; but because of the different credits applicable in computing her taxes (such as the provincial tax credit and the credit for dependent children), totalling $521.63, a tax balance of $177.37 remains.

3.03 The appellant had to borrow money in 1984, when she stopped receiving her unemployment insurance benefits. What she received in 1986 was used to repay that loan.

4, Act—Case Law—Analysis

4.01 Act

The legal provisions with which this appeal is concerned are section 3 and subparagraph 56(1)(a)(iv) of the Income Tax Act and sections 1, 15 and 52 of the Canadian Charter of Rights and Freedoms promulgated by the Constitution Act, 1982, U.K. 1982, c. 11 (‘the Charter”). These provisions will be cited where appropriate in the analysis.

4.02 Case Law

Counsel cited the following case law:

1. R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295; 18 D.L.R. (4th) 321;

2. Zwarich v. A.-G. Canada, [1987] 3 F.C. 253; 87 C.L.L.C. 14,053 (C.A.);

3. Canada v. Vincer, [1988] 1 F.C. 714; 46 D.L.R. (4th) 165 (C.A.);

4. Canada v. Alli (1988), 51 D.L.R. (4th) 555 (F.C.A.);

5. Tétreault-Gadoury v. Canada Employment and Immigration Commission, F.C.A., No. A-760-86, September 23, 1988;

6. Singh v. Minister of Employment and Immigration, [1985] S.C.R. 178; 17 D.L.R. (4th) 422;

7. R. v. Varga (1985), 15 C.R.R. 122; 18 C.C.C. (3d) 281 (Ont. C.A.);

8. Smith Kline & French Laboratories Ltd. v. A.-G. Canada, [1987] 2 F.C. 362; 34 D.L.R. (4th) 584 (C.A.);

9. Blondin v. Canada (1988), 50 D.L.R. (4th) 764 (C.A.);

10. Mills v. R., [1986] 1 S.C.R. 863; 26 C.C.C. (3d) 481;

11. Gene Keyes v. M.N.R., [1989] 1 C.T.C. 2157; [1989] D.T.C. 91;

12. Re Shewchuk and Ricard (1986), 28 D.L.R. (4th) 429; [1986] 4 W.W.R. 289;

13. Ontario Public Service Employees Union v. National Citizens^ Coalition Inc., [1987] 2 C.T.C. 59; 87 D.T.C. 5270;

14. Mark David Andrews v. The Law Society of British Columbia, [1989] 1 S.C.R. 143; 56 D.L.R. (4th) 1.

4.03 Does the Tax Court of Canada have jurisdiction to declare a section of the Income Tax Act of no force and effect if the said section contravenes the Charter?

4.03.1 Since the respondent contends it does not, it is important to settle this issue at the outset.

Subsection 24(1) of the Charter makes the following reference to remedies in the courts:

24. (1) [Enforcement of guaranteed rights and freedoms] Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

In 1985, in Big M Drug Mart, supra, the Supreme Court stated at 353 (D.L.R. 367) that:

If a court or tribunal finds any statute to be inconsistent with the Constitution, the overriding effect of the Constitution Act, 1982, subsection 52(1), is to give the Court not only the power, but the duty, to regard the inconsistent statute, to the extent of the inconsistency, as being no longer "of force or effect”.

Subsection 52(1), mentioned above, reads as follows:

The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect.

4.03.2 In 1986, in Mills v. R., supra, the Supreme Court ruled that a person who is in possession of a right must have a court before which he or she may seek a remedy, and, if there is no explicit legislation to that effect, the Superior Court of the province is the court of competent jurisdiction.

At pages 952-53 of this same judgment, McIntyre, J. made the following remarks:

To begin with, it must be recognized that the jurisdiction of the various courts of Canada is fixed by the Legislatures of the various provinces and by the Parlia- ment of Canada. It is not for the judge to assign jurisdiction in respect of any matters to one court or another. This is wholly beyond the judicial reach. In fact, the jurisdictional boundaries created by Parliament and the Legislatures are for the very purpose of restraining the courts by confining their actions to their allotted spheres. In s. 24(1) of the Charter the right has been given, upon the alleged infringement or denial of a Charter right, to apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances. The Charter has made no attempt to fix or limit the jurisdiction to hear such applications. It merely gives a right to apply in a court which has jurisdiction. It will be seen as well that it prescribes no remedy but leaves it to the court to find what is appropriate and just in the circumstances.

The questions then arise as to which of the courts are courts of competent jurisdiction within the meaning of subsection 24(1) of the Charter and what is the nature of the remedy or remedies which may be given. In attacking these problems, that of jurisdiction and that of remedy, the courts are embarking on a novel exercise. There is little, if any, assistance to be found in decided cases. The task of the court will simply be to fit the application into the existing jurisdictional scheme of the courts in an effort to provide a direct remedy, as contemplated in s. 24(1). It is important, in my view, that this be borne in mind. The absence of jurisdictional provisions and directions in the Charter confirms the view that the Charter was not intended to turn the Canadian legal system upside down. What is required rather is that it be fitted into the existing scheme of Canadian legal procedure. There is no need for special procedures and rules to give it full and adequate effect.

4.03.3 In Keyes v. M.N.R., supra, the Tax Court of Canada had to rule on the same issue of jurisdiction with respect to section 15 of the Charter. After referring to section 12 of the Tax Court of Canada Act, which provides that the Court will ”. . . hear and determine appeals to the Court on matters arising under the Income Tax Act. . .”, Bonner, J. cited subsection 171(1) of the Act at page 2161 (D.T.C. 94):

171. (1) Disposal of appeal.—The Tax Court of Canada may dispose of an appeal by

(a) dismissing it; or

(b) allowing it and

(i) vacating the assessment

(ii) varying the assessment, or

(iii) referring the assessment back to the Minister for reconsideration and reassessment.

4.03.4 The decision in Re Shewchuk and Ricard, supra, is of some interest. At pages 439-40, MacFarlane, J.A. of the British Columbia Court of Appeal stated:

It is clear that the power to make general declarations that enactments of Parliament or of the Legislature are invalid is a high constitutional power which flows from the inherent jurisdiction of the superior courts.

But it is equally clear that if a person is before a court upon a charge, complaint, or other proceeding properly within the jurisdiction of that court then the court is competent to decide that the law upon which the charge, complaint or proceeding is based is of no force and effect by reason of the provisions of the Canadian Charter of Rights and Freedoms, and to dismiss the charge, complaint or proceeding. The making of a declaration that the law in question is of no force and effect, in that context, is nothing more than a decision of a legal question properly before the court. It does not trench upon the exclusive right of the superior courts to grant prerogative relief, including general declarations.

In Zwarich, supra, Pratte, J.A. of the Federal Court of Appeal referred at 255 to the text quoted above from Re Shewchuk and Ricard, supra, in rendering a decision of essentially the same purport:

However, like all tribunals, an umpire and a board of referees must apply the law. They must, therefore, determine what the law is. And this implies that they must not only construe the relevant statutes and regulations but also find whether they have been validly enacted. If they reach the conclusion that a relevant statutory provision violates the Charter, they must decide the case that is before them as if that provision had never been enacted.

Finally, in Tétreault-Gadoury, a more recent judgment, rendered on September 23, 1988 (4.02(5)), the Federal Court of Appeal considered the application of section 15 to a decision of the board of referees concerning section 31 of the Unemployment Insurance Act, 1971, stating inter alia at 10:

Similarly, if an administrative tribunal has jurisdiction under its enabling Act to rule on a question of law, it does not lose that jurisdiction because the question of law to be decided involves considerations which call for applying a provision of the Charter. Deciding that a provision of the Act is of no force or effect because it is inconsistent with the Charter is a question of law like any other which boards of referees have to decide, even though their members do not have to possess legal training as such.

4.03.5 In accordance with all these principles set out in these judgments, I reach the same conclusion as Judge Bonner, that in exercising its jurisdiction to rule on an appeal the Tax Court of Canada has not only a right, but also a duty, to consider the constitutional validity of the relevant statutes in resolving the point at issue.

4.03.6 I feel, however, that if I conclude that subparagraph 56(1)(a)(iv) of the Act infringes section 15 of the Charter, I am not empowered to determine if the amount of $5,616 should be included in 1984 income, only to quash the notice of assessment for 1986 by subtracting the sum of $5,616 from the income computation. In short, I may only decide if subparagraph 56(1)(a)(iv) is of no force or effect with respect to the appellant in 1986. This is because section 24 of the Charter does not confer jurisdiction.

In Varga, supra, the Ontario Court of Appeal held that the trial judge exceeded his jurisdiction in reducing the Crown's jury member objections from 48 to 12, so as to put the Crown on an equal footing with the defence, which is only entitled to 12 such objections. The judge had done so in order to correct what in his opinion was a flagrant injustice in the jury selection process, and he cited subsection 24(1) of the Charter. According to the Court of Appeal (page 125), subsection 24(1) ” . . . was [not] intended to grant to a court the power to amend legislation or introduce new legislation at its discretion and, in effect, re-write the section. That is still, surely, Parliament's function”.

4.04 Arguments of Counsel for the Appellant

4.04.1 Counsel for the appellant began by citing subparagraph 56(1)(a)(iv) of the Act, which is at the centre of the debate. It reads as follows:

56. (1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,

In accordance with S.R.Q. : s. 309

(a) Pension benefits, unemployment insurance benefits, etc.—any amount received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of,

(iv) a benefit under the Unemployment Insurance Act, 1971,

As this provision does not limit the generality of section 3, counsel maintained that the latter permits a taxpayer to include in 1984 an amount received in 1986. The portion of section 3 cited reads as follows:

The income of a taxpayer for a taxation year for the purposes of this Part is his income for the year determined by the following rules:

(a) determine the aggregate of amounts each of which is the taxpayer's income for the year. . .

The $5,616 received in 1986 "constitutes", he contended, "income of the taxpayer for the year" 1984, since the said amount was payable for certain weeks of 1984. Counsel for the appellant added that:

I would like to point out that in 3(b) et seq., they are speaking of a possibility which exists, but for other taxpayers who—it is not my client who is covered by this measure—but reference is made to portions of income that may be attributed to a particular fiscal year.

Counsel also cited subsection 49(4) of the Act, which deals with the case in which an option (for the purchase of a principal residence, shares, etc.) given by a taxpayer in one taxation year (called “the initial year”) is exercised in a subsequent year. In such circumstances, the taxpayer is allowed to amend the return filed in the initial year.

There are thus cases in which the Act permits the amendment of returns for prior years. Consequently, counsel for the appellant submitted, were it not for subparagraph 56(1)(a)(iv) of the Act the appellant could through an amended 1984 return include the said sum in income for 1984.

4.04.2 It remains to be determined if subparagraph 56(1)(a)(iv) of the Act contravenes section 15 of the Charter, which reads as follows:

Equality Rights

15. (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

(2) Subsection (1) does not preclude any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race, national or ethnic origin, sex, age or mental or physical disability.

4.04.2(1) Counsel for the appellant first argued that, even if the error in the decision of the Department and of the Canada Employment and Immigration Commission was made in good faith, the appellant nevertheless suffered a detriment. Her obligation to defend herself, and the usual delays involved, meant that the amount of $5,616 was not received until 1986, thus giving rise to the application of subparagraph 56(1)(a)(iv) of the Act and the payment of about $175 more in taxes than if the $5,616 had been included in income for 1984.

4.04.2(2) In addition counsel for the appellant, after distinguishing between the three approaches to dealing with discrimination, noted that two of these, specifically the pejorative approach and the Ontario approach, share certain points in common.

For example, in order for there to have been discrimination the latter must, in its essence and in its effects, involve something negative or pejorative.

4.04.3 Counsel for the appellant relied in particular on Andrews v. Law Society of British Columbia, supra. As counsel for the respondent has also largely based his own arguments on this ruling, and because the Supreme Court was interpreting section 15 of the Charter, it merits special attention.

4.04.3(1) Andrews

The point at issue was summarized by McIntyre, J. as follows (at 159 (D.L.R. 6-7)):

The respondent, Andrews, was a British subject permanently resident in Canada at the time these proceedings were commenced. He had taken law degrees at Oxford and had fulfilled all the requirements for admission to the practice of law in British Columbia, except that of Canadian citizenship. He commenced proceedings for a declaration that s. 42 of the Act violates the Charter. He also sought an order in the nature of mandamus requiring the benchers of the Law Society of British Columbia to consider his application for call to the bar and admission as a solicitor. His action was dismissed at trial before Taylor J. in the Supreme Court of British Columbia in a judgment reported at 22 D.L.R. (4th) 9, 66 B.C.L.R. 363, [1986] 1 W.W.R. 252, 20 C.R.R. 224. An appeal was allowed in the Court of Appeal (Hinkson, Craig and McLachlin JJ.A., at 27 D.L.R. (4th) 600, 2 B.C.L.R. (2d) 305, [1986] 4 W.W.R. 242, 23 C.R.R. 273), and this appeal is taken by the Law Society of British Columbia, by leave granted November 27, 1986. Pursuant to an order of this court on January 28, 1987, Gorel Elizabeth Kinersly, an American citizen who was at the time a permanent resident of Canada articling in the Province of British Columbia, was added as a co-respondent in this appeal. On January 28, 1987, the Chief Justice stated the constitutional questions in the following terms:

(1) Does the Canadian citizenship requirement to be a lawyer in the province of British Columbia as set out in s. 42 of the Barristers and Solicitors Act, R.S.B.C. 1979, c. 26 infringe or deny the rights guaranteed by s. 15(1) of the Canadian Charter of Rights and Freedoms^.

(2) If the Canadian citizenship requirement to be a lawyer in the province of British Columbia as set out in s. 42 of the Barristers and Solicitors Act, R.S.B.C. 1979, c. 26 infringes or denies the rights guaranteed by s. 15(1) of the Canadian Charter of Rights arid Freedoms, is it justified by section 1 of the Canadian Charter of Rights and Freedoms!

4.04.3(2) The judgment on the first point, that is, whether there was an infringement of subsection 15(1) of the Charter, was in the affirmative, all concurring essentially with McIntyre, J.'s reasons.

On the second point, namely whether there was an infringement of sections 1 and 4, the judges ruled there was not.

The final result was that Mr. Andrews was allowed to become a member of the Bar of British Columbia.

4.04.3(3) In his analysis of subsection 15(1), McIntyre, J. examined the concepts of equality and of discrimination.

On the concept of equality, McIntyre, J. wrote at 163-64 (D.L.R. 9-11):

Subsection 15(1) of the Charter provides for every individual a guarantee of equality before and under the law, as well as the equal protection and equal benefit of the law without discrimination. This is not a general guarantee of equality; it does not provide for equality between individuals or groups within society in a general or abstract sense, nor does it impose on individuals or groups an obligation to accord equal treatment to others.

The concept of equality has long been a feature of Western thought.

It is a comparative concept, the condition of which may only be attained or discerned by comparison with the condition of others in the social and political setting in which the question arises. It must be recognized at once, however, that every difference in treatment between individuals under the law will not necessarily result in inequality and, as well, that identical treatment may frequently pro uce serious inequality. This proposition had found frequent expression in the iterature on the subject but, as I have noted on a previous occasion, nowhere more aptly than in the well-known words of Frankfurter J. in Dennis v. United States, 339 U.S. 162 at p. 184, 94 L. Ed. 736 (1950):

It was a wise man who said that there is no greater inequality than the equal treatment of unequals.

The same thought has been expressed in this court in the context of s. 2(b) of the Charter in R. v. Big M Drug Mart Ltd. (1985), 18 D.L.R. (4th) 321 at p. 362, 18 C.C.C.

(3d) 385, [1985] 1 S.C.R. 295 at p. 347, where Dickson C.J. said:

The equality necessary to support religious freedom does not require identical treatment of all religions. In fact, the interests of true equality may well require differentiation in treatment.

In simple terms, then, it may be said that a law which treats all identically and which provides equality of treatment between "A" and "B" might well cause inequality for"C", depending on differences in personal characteristics and situations. To approach the ideal of full equality before and under the law—and in human affairs an approach is all that can be expected—the main consideration must be the impact of the law on the individual or the group concerned. Recognizing that there will always be an infinite variety of personal characteristics, capacities, entitlement and merits among those subject to a law, there must be accorded, as nearly as may be possible, an equality of benefit and protection and no more of the restrictions, penalties or burdens imposed upon one than another. In other words, the admittedly unattainable ideal should be that a law expressed to bind all should not because of irrelevant personal differences have a more burdensome or less beneficial impact on one than another.

4.04.3(4) McIntyre, J. then referred at 165 (D.L.R. 11) to the judgment of the British Columbia Court of Appeal in Andrews, which was being appealed.

McLachlin J.A. in the Court of Appeal expressed the view, at p. 605, that:

. . . the essential meaning of the constitutional requirement of equal protection and equal benefit is that persons who are " similarly situated be similarly treated" and conversely, that persons who are "differently situated be differently treated". . .

At 167 (D.L.R. 12), McIntyre, J. disagreed with this interpretation:

This approach was rejected in this court by Ritchie J. in R. v. Drybones (1969), 9 D.L.R. (3d) 473, [1970] 3 C.C.C. 355, [1970] S.C.R. 282, in a similar case involving a provision of the Indian Act making it an offence for an Indian to be intoxicated off a reserve. He said, at p. 484 D.L.R., p. 297 S.C.R.:

. . . I cannot agree with this interpretation pursuant to which it seems to me that the most glaring discriminatory legislation against a racial group would have to be construed as recognizing the right of each of its individual members "to equality before the law”, so long as all the other members are being discriminated against in the same way.

”_ If it were to be applied literally”, remarked McIntyre, J., (at D.L.R. 11-12) “it could be used to justify the Nuremberg laws of Adolf Hitler."

4.04.3(5) Further, at 167, it is clearly established that the grounds for discrimination listed in subsection 15(1) are not exhaustive. Grounds similar to those specified are also covered.

4.04.3(6) At 168-69 (D.L.R. 13-14), the judge dealt with distinctions and differences in treatment which infringe upon guarantees of equality:

It is not every distinction or differentiation in treatment at law which will transgress the equality guarantees of s. 15 of the Charter. It is, of course, obvious, that legislatures may—and to govern effectively—must treat different individuals and groups in different ways. Indeed, such distinctions are one of the main preoccupations of legislatures. The classifying of individuals and groups, the making of different provisions respecting such groups, the application of different rules, regulations, requirements and qualifications to different persons is necessary for the governance of modern society. As noted above, for the accommodation of differences, which is the essence of true equality, it will frequently be necessary to make distinctions.

What kinds of distinctions will be acceptable under s. 15(1) and what kinds will violate its provisions?

In seeking an answer to these questions, the provisions of the Charter must have their full effect. In R, v. Big M Drug Mart Ltd., supra, this court emphasized this point at pp. 359-60 D.L.R., p. 344 S.C.R., where Dickson C.J. stated:

This court has already, in some measure, set out the basic approach to be taken in interpreting the Charter. In Hunter et al. v. Southam Inc. (decision rendered September 17, 1984) [since reported 14 C.C.C. (3d) 97, 11 D.L.R. (4th) 641, [1984] 2 S.C.R. 145] this court expressed the view that the proper approach to the definition of the rights and freedoms guaranteed by the Charter was a purposive one. The meaning of a right or freedom guaranteed by the Charter was to be ascertained by an analysis of the purpose of such a guarantee; it was to be understood, in other words, in the light of the interests it was meant to protect.

In my view this analysis is to be undertaken, and the purpose of the right or freedom in question is to be sought by reference to the character and the larger objects of the Charter itself; to the language chosen to articulate the specific right or freedom, to the historical origins of the concepts enshrined, and where applicable, to the meaning and purpose of the other specific rights and freedoms with which it is associated within the text of the Charter. The interpretation should be, as the judgment in Southam emphasizes, a generous rather than a legalistic one, aimed at fulfilling the purpose of the guarantee and securing for individuals the full benefit of the Charter's protection. At the same time it is important not to overshoot the actual purpose of the right or freedom in question, but to recall that the Charter was not enacted in a vacuum, and must therefore, as this court's decision in Law Society of Upper Canada v. Skapinker (1984), 11 C.C.C. (3d) 481, 9 D.L.R. (4th) 161, [1984] 1 S.C.R. 357, illustrates, be placed in its proper linguistic, philosophic and historical contexts.

At 171 (D.L.R. 15-16):

It must be recognized, however, as well that the promotion of equality under s. 15 has a much more specific goal than the mere elimination of distinctions. If the Charter were intended to eliminate all distinctions, then there would be no place for sections such as s. 27 (multicultural heritage); s. 2(a) (freedom of conscience and religion); s. 25 (aboriginal rights and freedoms); and other such provisions designed to safeguard certain distinctions. Moreover, the fact that identical treatment may frequently produce serious inequality is recognized in s. 15(2), which states that the equality rights in s. 15(1) do "not preclude any law, program or activity that has as its object the amelioration of conditions of disadvantaged individuals or groups . . .”.

4.04.3(7) After indicating his approval of the basic principles set out by McIntyre, J., Laforest, J. said, at 194 (D.L.R. 38):

That having been said, I am convinced that it was never intended in enacting s. 15 that it become a tool for the wholesale subjection to judicial scrutiny of variegated legislative choices in no way infringing on values fundamental to a free and democratic society. Like my colleague, I am not prepared to accept that all legislative classifications must be rationally supportable before the courts. Much economic and social policy-making is simply beyond the institutional competence of the courts: their role is to protect against incurs ions on fundamental values, not to second-guess policy decisions.

I realize that it is no easy task to distinguish between what is fundamental and what is not and that in this context this may demand consideration of abstruse theories of equality. For example, there may well be legislative or governmental differentiation between individuals or groups that is so grossly unfair to any individual or group and so devoid of any rational relationship to a legitimate state purpose as to offend against the principle of equality before and under the law as to merit intervention pursuant to s. 15.

4.04.3(8) Discrimination

At 172 (D.L.R. 16) McIntyre, J. introduced discussion of the concept of discrimination as follows:

The right to equality before and under the law, and the rights to the equal protection and benefit of the law contained in s. 15, are granted with the direction contained in s. 15 itself that they be without discrimination. Discrimination is unacceptable in a democratic society because it epitomizes the worst effects of the denial of equality, and discrimination reinforced by law is particularly repugnant. The worst oppression will result from discriminatory measures having the force of law. It is against this evil that s. 15 provides a guarantee.

At 173 (D.L.R. 16-17):

What does discrimination mean? The question has arisen most commonly in a consideration of Human Rights Acts and the general concept of discrimination under those enactments has been fairly well settled. There is little difficulty, drawing upon the cases of this court, in isolating an acceptable definition. In Re Ontario Human Rights Com'n and Simpsons-Sears Ltd. (1985), 23 D.L.R. (4th) 321 at p. 332, [1985] 2 S.C.R. 536 at p. 551, 9 C.C.E.L. 185, discrimination (in that case adverse effect discrimination) was described in these terms:

It arises where an employer . . . adopts a rule or standard . . . which has a discriminatory effect upon a prohibited ground on one employee or group of employees in that it imposes, because of some special characteristic of the employee or group, obligations, penalties, or restrictive conditions not imposed on other members of the work force.

It was held in that case, as well, that no intent was required as an element of discrimination, for it is in essence the impact of the discriminatory act or provision upon the person affected which is decisive in considering any complaint. At p. 329 D.L.R., p. 547 S.C.R., this proposition was expressed in these terms:

The Code aims at the removal of discrimination. This is to state the obvious. Its main approach, however, is not to punish the discriminator, but rather to provide relief for the victims of discrimination. It is the result or the effect of the action complained of which is significant. If it does, in fact, cause discrimination; if its effect is to impose on one person or group of persons obligations, penalties, or restrictive conditions not imposed on other members of the community, it is discriminatory.

At 174-75 (D.L.R. 18-19):

There are many other statements which have aimed at a short definition of the term discrimination. In general, they are in accord with the statements referred to

above. I would say then that discrimination may be described as a distinction, whether intentional or not but based on grounds relating to personal characteristics of the individual or group, which has the effect of imposing burdens, obligations, or disadvantages on such individual or group not imposed on others, or which withholds or limits access to opportunities, benefits, and advantages available to other members of society. Distinctions based on personal characteristics attributed to an individual solely on the basis of association with a group will rarely escape the charge of discrimination while those based on an individual's merits and capacities will rarely be so classed.

The court in the case at bar must address the issue of discrimination as the term is used in s. 15(1) of the Charter. In general, it may be said that the principles which have been applied under the Human Rights Acts are equally applicable in considering questions of discrimination under s. 15(1). Certain differences arising from the differences between the Charter and the Human Rights Acts must, however, be considered. To begin with, discrimination in s. 15(1) is limited to discrimination caused by the application or operation of law, whereas the Human Rights Acts apply also to private activities. Furthermore, and this is a distinction of more importance, all the Human Rights Acts passed in Canada specifically designate a certain limited number of grounds upon which discrimination is forbidden. Section 15(1) of the Charter is not so limited. The enumerated grounds in s. 15(1) are not exclusive and the limits, if any, on grounds for discrimination which may be established in future cases await definition. The enumerated grounds do, however, reflect the most common and probably the most socially destructive and historically practised bases of discrimination and must, in the words of s. 15(1), receive particular attention. Both the enumerated grounds themselves and other possible grounds of discrimination recognized under s. 15(1) must be interpreted in a broad and generous manner, reflecting the fact that they are constitutional provisions not easily repealed or amended but intended to provide a“ continuing framework for the legitimate exercise of governmental power" and, at the same time, for "the unremitting protection" of equality rights: see Hunter v. Southam Inc. (1984), 11 D.L.R. (4th) 641 at p. 649, 14 C.C.C. (3d) 97, [1984] 2 S.C.R. 145 at p. 155. 4.05 Decision on Section 15

4.05.1 Following the review of these general principles set out in Andrews, supra, we shall consider how they apply in the instant case, with respect to section 15.

As was previously noted (4.04.3(7)), the fundamental aim of section 15 of the Charter is”. . . to protect against incursions on fundamental values”.

Furthermore, is not the basic purpose of the Charter to preserve the dignity of human beings by recognizing their fundamental rights, such as freedom of expression and of religion, protection against abusive searches and so on?

4.05.2 As was previously emphasized, consideration must first be given to the impact of the law on the individual (4.04.3(3)), or in other words, what is its intended purpose (4.04.3(4))? In the instant case, does subparagraph 56(1)(a)(iv) of the Income Tax Act, in determining that unemployment insurance benefits are included in a taxpayer's income at the time they were received in 1986 and not at the time they were due in 1984, infringe a fundamental right of the appellant, because she had to pay about $175 in additional taxes?

4.05.3 Type of discrimination

The kind of discrimination at issue in the case at bar is certainly not related to race, national or ethnic origin, colour, religion, sex or mental or physical disabilities, in accordance with the list provided in section 15 of the Charter, rights which are of course fundamental. Is it discrimination based on a ground analogous to those cited above?

The answer is clearly in the negative. The fact that unemployment insurance benefits are included in income at the time they are received corresponds, to a certain degree, with the general application to salaried workers of the accounting principle known as the "cash receipts" system, as opposed to the "accounts receivable” principle associated with the fiscal year accounting system applying to companies. For that matter, the appellant could easily have had a basic income for 1986 which was lower than that for 1984. The legislature, in deciding to apply the cash receipt principle to unemployment insurance benefits, found in my opinion the most practical administrative solution, and also the fairest one. Would it have been more practical to tax the taxpayer in 1984, when it was not even known that the amount of $5,616 was payable, because the very question of whether this amount was due was in dispute?— and more fair, since she did not receive it?

As Laforest, J. emphasized : ” . . . it was never intended in enacting section 15 that it become a tool for the wholesale subjection to judicial scrutiny of variegated legislative choices in no way infringing on values fundamental to a free and democratic society" (4.04.3(7)).

4.05.4 In Ontario Public Service Employees Union et al., supra, the taxpayer alleged a discrimination under subsection 15(1) of the Charter because of the fact that he was not able, as an employee, to make certain deductions in computing his income, although these deductions were allowed for businesses. To begin with, it is clear that the principle of expenditures made in order to earn income does not apply to salaried workers, which the Court did not even mention, simply stating that the incomes of certain taxpayers were entitled to deductions, while the incomes of others were not. All of this is true for a multitude of reasons that can be economic as well as social in nature.

The Charter exists to protect fundamental values, and not to be used ” . . . to get into the weighing and balancing of the nuts and bolts of taxing statutes”, as the Court concluded.

It is quite obvious that, even if the Charter does not apply to the instant case, the principle of equity would not suffer if, in such cases, the Income Tax Act gave taxpayers a choice between being taxed on benefits paid either in the year in which they were received or in the year in which they should have been received, whichever is more advantageous to the taxpayer. This choice could compensate for problems stemming from the respondent's decision to deny benefits: objection, legal proceedings, court appearances and so on.

4.05.5 Section 1 of the Charter

In Andrews, supra, once the judges concluded there had been discrimination within the meaning of section 15 of the Charter, they had to determine if, in light of section 1 of the Charter, they were entitled to quash the rights protected by section 15.

In the instant case, since I have determined that section 15 does not protect the right relied on by the appellant, there is no need to examine the criteria set out in section 1.

5 . Conclusion

The appeal is dismissed for the foregoing reasons for judgment.

Appeal dismissed.