Estate of Roger Lemaire v. Minister of National Revenue, [1995] 1 CTC 2844, 95 DTC 666

Tremblay J.T.C.C.:—This appeal was heard in Montréal, Quebec on May 9, 1994.

1. Point at issue

The point at issue is whether the appellant, a teacher at a Canadian Armed Forces school outside the country, is entitled to claim a refund of Quebec provincial tax deducted at source during the 1985 taxation year.

2. Notice of appeal

The facts alleged by the appellant are as follows:

1. I was an employee of the Department of National Defence overseas during that year (1985);

2. Revenue Canada-Taxation refused to recognize me as being "deemed to have been resident in Canada", pursuant to paragraph 250(1 )(d.l) of the federal Act.

3. My status as "deemed to have been resident in Canada" was recognized by the Tax Court of Canada judgment of August 4, 1988 [86-1758] (Patricia Crossley v. M.N.R., (unreported)), which concluded:

Consequently, the appellant must be taxed under paragraph 250(1 )(d.l) and section 120 of the federal Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act");

4. Revenue Canada-Taxation did not institute an appeal from that judgment;

5. In order to avoid taxing us twice, Revenue Canada-Taxation issued an order that this additional 47 per cent tax "in lieu of provincial tax" be returned;

Which to all intents and purposes removes this status of "deemed to have been resident in Canada" without any province in particular;

Which thereby nullifies the judgment previously delivered by the Tax Court of Canada;

6. Section 250 of the Income Tax Act was revised in 1980 precisely to prevent the annual application of such an order in our case;

7. Parliament has clearly included us with the military personnel whom we serve on NATO bases overseas;

8. The result of the application of this section 250 would result in double taxation;

9. Military personnel are exempted from provincial tax in order to correct this anomaly;

10. Pursuant to Parliament’s intention and judgment 86-1758 of the Tax Court of Canada, I request identical treatment in the application of section 250 and section 120 of the federal Income Tax Act.

[Translation.]

3. Facts assumed by the respondent

The facts assumed by the respondent are as follows:

(a) the appellant is a teacher;

(b) during the 1985 taxation year, the appellant taught in a Canadian Armed Forces school outside Canada;

(c) during the said year, the appellant was remunerated by a school board established in the province of Quebec;

(d) in remunerating the appellant, the said school board withheld certain amounts of Quebec provincial tax.

[Translation.]

4. The T7W-C (Rev. 85) form issued by the respondent with the notice of assessment reads as follows:

STAT Total income previously subject to assessment: $43,600

Less'.	Less:
	Deductions from total income (no change): $3,821
	Net income (no change)$39,779
Less'.	Less:
	Deductions from net income (no change): $10,158
	Taxable income (no change): $29,621
	Note
	The reassessment is issued pursuant to section 120 and paragraph 250(1 )(d)
	of the Income Tax Act. The tax deductions made for and on behalf of
	Revenue Quebec may not be applied against federal income tax payable,
	but must be claimed directly from Revenue Quebec.

[Translation.]

5. Analysis

5.01 Absence of jurisdiction

A number of judgments have been rendered concerning these teachers who have gone to teach the children of Canadian soldiers in Germany.

All these appellants, residents of Quebec, have claimed the same treatment, that is to be treated pursuant to section 120 of the federal Income Tax Act and to be exempted from Quebec provincial income tax.

All the judgments have been to the same effect, that is to say that the Tax Court of Canada has no jurisdiction either to exempt the appellant from Quebec income tax or to require Revenue Canada to refund to the appellant the income tax paid to Quebec by him, or to grant an income tax credit equal to that paid by the appellant to Quebec.

5.02 Furthermore, it appears from the record that the appellant’s request to be assessed pursuant to section 120 as in Crossley was granted, which resulted in an additional tax of 47 per cent.

To prevent this kind of double taxation, the respondent has issued a refund order, as appears at allegation 5 of the notice of appeal (para. 2).

Allowing the appellant’s appeal would at most mean reassessing this surtax, which the Court does not even have the jurisdiction to do. It would be imposing a heavier burden on the taxpayer than that already imposed by the assessment.

6. Conclusion

The appeal must be dismissed for the above reasons.

Appeal dismissed.