Lamarre
Proulx,
J.T.C.C.:—This
appeal
concerns
the
taxation
of
a
pension
received
by
the
appellant
from
his
employer's
retirement
fund
during
the
1987,
1988
and
1989
taxation
years.
In
order
to
make
the
assessments
for
the
years
in
issue,
the
Minister
of
National
Revenue
(the
"Minister")
relied
on
the
presumptions
of
fact
described
at
paragraph
6
of
the
reply
to
the
notice
of
appeal,
as
follows:
(a)
the
appellant
was
employed
by
a
U.S.
employer
from
1964
to
1982
(International
Brotherhood
of
Electrical
Workers);
(b)
the
appellant
has
always
been
a
resident
of
Quebec,
and
he
has
filed
federal
income
tax
returns
accordingly;
(c)
during
this
entire
period,
the
appellant
paid
five
per
cent
of
his
gross
salary
as
a
contribution
to
his
employer's
retirement
fund;
(d)
the
said
pension
fund
was
not
registered
under
the
Income
Tax
Act;
(e)
the
trustee
of
the
said
plan
was
the
Security
Trust
Company,
a
U.S.
company;
(f)
the
appellant
retired
in
1982;
(g)
the
said
contribution
were
not
deducted
from
the
appellant's
income;
(h)
the
appellant
received
the
amounts
of
$22,357.68,
$20,588.05
and
$20,067.67
in
retirement
benefits
from
the
Security
Trust
Company
(U.S.A.)
during
1987,
1988
and
1989
respectively;
(i)
in
filing
his
returns
for
the
said
years,
the
appellant
failed
to
declare
the
said
income;
(j)
the
said
payments
received
through
a
foreign
retirement
mechanism
must
be
included
in
computing
the
appellant’s
income.
[Translation.]
The
parties
did
not
dispute
that
this
was
an
employee
benefit
plan
within
the
meaning
of
subsection
248(1)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the"Act")
(the"Act"):
"Employee
benefit
plan”
means
an
arrangement
under
which
contributions
are
made
by
an
employer
or
by
any
person
with
whom
the
employer
does
not
deal
at
arm's
length
to
another
person
(in
this
Act
referred
to
as
the
"custodian"
of
an
employee
benefit
plan)
and
under
which
one
or
more
payments
are
to
be
made
to
or
for
the
benefit
of
employees
or
former
employees
of
the
employer
or
persons
who
do
not
deal
at
arm's
length
with
any
such
employee
or
former
employee
(other
than
a
payment
that,
if
section
6
were
read
without
reference
to
subparagraph
(1)(a)(ii)
and
paragraph
(1)(g)
thereof,
would
not
be
required
to
be
included
in
computing
the
income
of
the
recipient),
but
does
not
include
(a)
a
fund
or
plan
referred
to
in
subparagraph
6(1)(a)(i)
or
paragraph
6(1)(d)
or
(f),
(b)
a
trust
described
in
paragraph
149(1)(y),
(c)
an
employee
trust,
(c.1)
a
salary
deferral
arrangement,
in
respect
of
a
taxpayer,
under
which
deferred
amounts
are
required
to
be
included
as
benefits
under
paragraph
6(1)(a)
in
computing
his
income,
(c.2)
a
retirement
compensation
arrangement,
(d)
an
arrangement
the
sole
purpose
of
which
is
to
provide
education
or
training
for
employees
of
the
employer
to
improve
their
work
or
work-related
skills
and
abilities,
or
(e)
a
prescribed
fund
or
plan
.
.
.
.
In
computing
his
income,
a
taxpayer
must
include
all
sums
received
by
him
from
an
employee
benefit
plan,
except
the
part
of
those
sums
that
represents
a
return
of
the
amounts
contributed
to
the
plan
by
him,
as
provided
by
paragraph
6(1)(g)
of
the
Act,
which
reads
as
follows:
6
(1)(g)
the
aggregate
of
all
amounts
each
of
which
is
an
amount
received
by
him
in
the
year
out
of
or
under
an
employee
benefit
plan
or
from
the
disposition
of
any
interest
in
any
such
plan,
other
than
the
portion
thereof
that
is
(i)
a
death
benefit
or
an
amount
that
would,
but
for
the
deduction
provided
in
the
definition
of
that
term
in
subsection
248(1),
be
a
death
benefit,
(ii)
a
return
of
amounts
contributed
to
the
plan
by
him
or
a
deceased
employee
of
whom
he
is
an
heir
or
legal
representative,
or
(iii)
a
superannuation
or
pension
benefit
attributable
to
services
rendered
by
a
person
in
a
period
throughout
which
the
person
was
not
resident
in
Canada
....
Subparagraph
6(1)(g)(ii)
above
allows
to
avoid
double
taxation
of
the
same
amount.
A
taxpayer
who
has
already
been
taxed
on
his
contributions
to
his
employer's
plan,
these
contributions
being
part
of
his
salary,
does
not
have
to
include
in
his
income
the
returns
of
the
amounts
contributed
to
the
plan
by
him.
The
appellant
asked
his
employer
to
determine
the
amount
of
his
contributions
to
the
plan
with
respect
to
the
pension
amounts
received.
The
appellant
filed
a
letter
from
the
plan
administrator
indicating
that
the
appellant
contributed
the
sum
of
$25,230.16
from
July
20,
1964
to
August
31,
1982.
Furthermore,
it
was
adduced
in
evidence
that
the
appellant
had
been
a
beneficiary
of
the
plan
since
1982
and
had
received
a
pension
of
approximately
$20,000
each
year.
He
had
not
been
taxed
on
those
amounts
because
the
appellant
apparently
did
not
include
them
in
computing
his
income,
and
he
was
not
reassessed
for
those
years.
The
appellant
thus
received
nearly
five
times
what
he
contributed.
The
appellant
apparently
also
wanted
to
obtain
a
refund
of
the
income
tax
paid
on
the
amounts
deducted
by
his
employer
as
contributions
to
the
pension
fund.
On
this
point,
he
referred
to
the
judgment
of
this
Court
in
Fairey
v.
M.N.R.,
[1987]
2
C.T.C.
2204,
87
D.T.C.
534
(T.C.C.),
in
which
it
was
determined
that
amounts
of
this
nature
were
not
salary.
Although
the
time
limits
for
appeal
for
those
years
have
long
since
elapsed,
I
will
say
a
few
words
on
this
subject.
The
judgment
to
which
the
appellant
referred
was
reversed
by
the
Federal
Court
in
Fairey
v.
M.N.R.,
[1991]
1
C.T.C.
371,
91
D.T.C.
5230
(F.C.T.D.).
It
was
clearly
determined
in
that
judgment
that
these
amounts
are
part
of
salary.
The
appeal
is
dismissed,
without
costs.
Appeal
dismissed.
Email this Content