Thomas Richard Copeland v. Her Majesty the Queen (Informal Procedure), [1993] 2 CTC 3046

Bowman, T.C.C.J.:— This appeal is from an assessment made under the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act") for the appellant's 1991 taxation year. At issue is the deductibility by the appellant in that year of child care expenses of $1,448. The appellant contends that section 63 of the Income Tax Act insofar as it denies him the deduction contravenes section 15 of the Canadian Charter of Rights and Freedoms. [1]

Mr. Copeland argued his own case, and, although not trained as a lawyer, he did so with skill and thoroughness.

In 1991, Mr. Copeland was married and living with his spouse. Mr. Copeland was employed but his wife was not and she had no income. Their infant daughter attended the Montessori Learning Centre in Ajax, Ontario and Mr. Copeland paid $1,448 to that institution. The daughter was of course an eligible child within the meaning of paragraph 63(3)(c). Moreover, each of both Mr. Copeland and his wife were "supporting persons" of the child within the meaning of paragraph 63(3)(d).

The scheme of section 63, as I understand it, is to permit a deduction of child care expenses either to a single parent or, in a two parent family, to the parent with the lower income. In Fiset v. M.N.R., [1988] 1 C.T.C. 2335, 88 D.T.C. 1226, the situation was virtually identical to that which prevails here: one parent had income and the other had none. Couture, C.J.T.C. held that a complete lack of income could not constitute "income" for the purposes of section 63 and that accordingly the parent with income could claim the deduction for child care expenses. His judgment was followed in McLaren v. M.N.R., [1988] 1 C.T.C. 2371, 88 D.T.C. 1259 (T.C.C.); aff'd [1990] 2 C.T.C. 429, 90 D.T.C. 6566 (F.C.T.D.). As a result paragraph 3(f) was enacted to provide in effect that nil income was nonetheless “income for the year in an amount equal to zero", thereby effectively overruling by statute the Fiset decision: see Fromstein v. Canada, [1993] 2 C.T.C. 2214, 93 D.T.C. 726 (T.C.C.).

The result therefore is that section 63 provides no deduction for child care expenses where a child has two parents who are “supporting persons" only one of whom has income, unless of course the supporting person with no income happens to meet the criteria in subparagraph 63(2)(a)(iii), (iv), (v) or (vi) which require that such a person be in full time attendance at a designated educational institution, confined to prison, mentally or physically infirm and incapable of caring for children, or living apart from the other supporting person by reason of a breakdown of the marriage. None of these apply here.

I have some sympathy for Mr. Copeland's view. To him it must seem that the system is unfair, arbitrary and irrational and can lead to anomalous results. It may be a rather imperfect vehicle for achieving what Parliament evidently conceives to be a desirable social objective, that of permitting a child care expense deduction for single parents, or for families with two incomes. In that it denies a deduction for child care expenses to a two parent family, only one of whom is earning income, it may be seen as discriminatory. It may well appear to Mr. Copeland, or persons in his position, that Parliament ought to have given a similar deduction to him. As he points out, his wife has chosen not to work outside the house. If she had not made that choice the child care deduction would have been available to one or other of them. The marital exemption would, however, not have been available and so the system balances itself, although perhaps not perfectly.

In Hover v. M.N.R., [1993] 1 C.T.C. 2585, 93 D.T.C. 98 this Court stated at page 2588 (D.T.C. 99-100):

It must be recognized that taxing statutes have economic and social objectives that far transcend the mere raising of money and it is difficult to conceive of any way in which a modern industrialized state such as Canada could avoid making such distinctions in its fiscal legislation. Such distinctions may appear superficially to be arbitrary and possibly unfair and the appellant has raised squarely whether the category to which the Minister’s assessment under section 31 relegates him in the fiscal scheme of things infringes upon his right of equality under the Charter.

As stated by McIntyre, J. in Andrews v. Law Society (B.C.), [1989] 1 S.C.R. 143, 56 D.L.R. (4th) 1 at page 168 (D.L.R. 13):

It is not every distinction or differentiation in treatment at law which will transgress the equality guarantees of section 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.

The same observation might be made here. Section 63 is only one facet of a complex regime under which Parliament has endeavoured to achieve a particular social goal relating to the support of spouses, dependants and children. Mr. Copeland's view is that it did not go far enough. It is however, inherent in the very nature of fiscal legislation that distinctions be made between groups of taxpayers in the manner in which items of revenue are recognized or in which expenditures are allowed as deductions. Such considerations may well be relevant if I were called upon to determine whether a distinction that amounted to discrimination of the type contemplated by section 15 of the Charter was nonetheless justifiable under section 1 of the Charter. The nature of the legislation, and the place of the impugned provision in the overall legislative regime are, however, equally relevant in determining whether the distinction of which the taxpayer complains meets the minimal test of section 15.

I cannot grant Mr. Copeland the relief he seeks without in effect rewriting section 63. This would necessitate tinkering with the other sections of the Act that are related within the overall legislative scheme. This is the prerogative of Parliament. It is not an endeavour upon which this court should embark merely because one group of Canadians is permitted a deduction and another is not. While I tend to agree with Mr. Copeland that section 63 can lead to anomalies and may well be unfair, it is not the function of the Charter or the business of the courts to remove those anomalies or to correct a perceived unfairness unless they can be attributed to the types of discrimination envisaged by section 15 of the Charter. [2] Although I unequivocally reject the suggestion that the Income Tax Act is in some way immune to scrutiny under the Charter on the basis that to consider whether the provisions of Canada's most important piece of fiscal legislation are in accordance with the supreme law of Canada somehow "trivializes" the latter, nonetheless the purpose of the Charter must be kept in perspective. That purpose is, among others, to prevent discrimination against "discrete and insular minorities" based on the grounds set out in section 15, or grounds analogous thereto. Mr. Copeland’s contention is that the “discrete and insular minority" to which he belongs is a group consisting of two parent families in which one parent has voluntarily chosen to stay at home and not earn income. Such a choice is a responsible and difficult one and it frequently, as Mr. Copeland points out, involves a financial sacrifice. To suggest that the work of a parent who stays at home for the sake of his or her children is any less onerous or important than that of one who chooses to join the workforce would be to belittle one of society's most sacred institutions.

The choice, commendable as it may be, is, however, a voluntary one and it carries with it benefits and burdens — fiscal, financial and social. Persons who make such a choice, as did Mr. and Mrs. Copeland, do not belong to the type of minority that it is the function of the Charter to protect. The treatment of such persons in a manner that differs from the treatment of persons who make a different choice is not discriminatory. [3]

As stated in Hover at pages 2588-89 (D.T.C. 100):

There is a world of difference between persons who are accorded unequal treatment under the law because of personal characteristics over which they have no control such as race, colour, sex, age, citizenship or mental or physical disability and persons who voluntarily choose a form of economic activity which carries with it a mix of fiscal advantages and disadvantages. The latter do not, in my view, form a discrete or insular minority in the sense in which the expression has been used in Andrews. It is not open to such persons to invoke the Charter to enable them to avoid the fiscal burdens of the economic endeavour that they have chosen and yet retain the benefits. To give effect to such a contention would be to distort the purpose of the Charter.

I have therefore concluded, notwithstanding Mr. Copeland's able argument, that his rights of equality under section 15 of the Charter have not been infringed by the Minister's denial of a deduction under section 63.

In light of this conclusion, it is not necessary for me to consider Ms. Sheppard's contention that the cost of sending Mr. Copeland's daughter to the Montessori Learning Centre is in any event not a child care expense on the basis that the amount was paid for education within the meaning of subparagraph 3(a)(iv).

At the opening of trial Ms. Sheppard asked that if I decided that there was discrimination within the meaning of section 15 of the Charter, I permit her to call evidence and present argument that would justify such discrimination under section 1. Since I have concluded that there is no discrimination of the type contemplated by section 15 it is unnecessary that the parties be recalled to argue the effect of section 1.

The appeal is therefore dismissed.

Appeal dismissed.