Y. André Lord v. Minister of National Revenue, [1991] 2 CTC 2499

Lamarre Proulx, T.C.J. [Translation]:—This is an appeal from an assessment for benefit repayment under Part VII of the Unemployment Insurance Act, R.S.C. 1985, c. U-1 (the "Act") that, more specifically, concerns the application of section 123 of that Act.

That section, which concerns the obligation to repay unemployment insurance benefit overpayments, reads as follows:

123. Where the income of a claimant, in this Part referred to as the "claimant's income”, for a taxation year exceeds an amount that is one and one-half times the maximum yearly insurable earnings, the claimant shall, on or before April 30 in the next year, pay to the Receiver General an amount that is thirty per cent of the lesser of

(a) the total benefits paid to the claimant in the year, and

(b) the amount by which the claimant's income for the year exceeds an amount that is one and one-half times the maximum yearly insurable earnings. 1970-71-72, c. 48, s. 142; 1976-77, c. 54, s. 66; 1978-79, c. 7, s. 14.

[Emphasis added.]

The word "income" is defined as follows in section 122 of the Act:

"income" means income as determined pursuant to the Income Tax Act. . . 1970-71-72, c. 48, s. 141; 1976-77, c. 54, s. 66; 1978-79, c. 7, s. 14.

In order to understand this Court's jurisdiction in the present case, I will also quote sections 124 and 126 of the same Act:

124. Where a claimant is reguired to pay a benefit repayment for a taxation year, a return in a form, and containing information, prescribed by order of the Minister shall, without notice or demand therefor, be filed with the Minister as part of the claimant's return of income under Part I of the Income Tax Act,

(a) in the case of a claimant who has died without filing the return, by his legal representative, within six months from the day of death;

(b) in the case of any other claimant, on or before April 30 in the next year, by that claimant or, if for any reason he is unable to file the return, by his legal guardian, curator, tutor, committee or other legal representative; or

(c) in a case where the claimant or his legal representative has not filed the return, by such person as is reguired by notice in writing from the Minister to file the return, within such reasonable time as the notice specifies. 1970-71-72,

c. 48, s. 143; 1976-77, c. 54, s. 66; 1978-79, c. 7, s. 14.

126. For the purposes of this Part, subsections 150(2) and (3), section 152 (except subsections 152(1.1) to (1.3) and (6)), section 158, subsections 159(1) to (3), section 160 (except paragraph 160(1)(d)), subsections 161(1) and (11), sections 162 to 167, Division J and subsections 227(10) and 248 (7) and (11) of the Income Tax Act are applicable, with such modifications as the circumstances require, except that, in the application of those provisions and those referred to in subsection 127(2) for the purposes of this Part, the words

(a) "Act" shall be read as “Part VII of the Unemployment Insurance Act";

(b) "person" and "taxpayer" shall be read as “claimant” ;

(c) "tax" and "taxes" shall be read as “benefit repayment";

(d) "under this Part" shall be read as "under Part VII of the Unemployment Insurance Act"; and

(e) and paragraph 163(2)(a) of the Income Tax Act shall be read as follows:

"(a) the benefit repayment payable by him for the year as determined under section 123 of the Unemployment Insurance Act;".

The facts on which the respondent's assessment was based are described as follows in paragraph 4 of the reply to the notice of appeal:

[Translation]

In assessing the appellant with respect to his 1988 taxation year, the respondent took the following facts, inter alia, as given:

(a) the appellant’s net income for the 1988 taxation year was $51,136.99;

(b) that amount included, inter alia, a taxable capital gain of $24,800.18;

(c) during the 1988 taxation year, the maximum yearly insurable earnings for purposes of determining the unemployment insurance benefits payable were $29,380;

(d) during the 1988 taxation year, the appellant received $9,615 in unemployment insurance benefits;

(e) regarding the above, the appellant was supposed to repay to the Receiver General of Canada, on or before April 30, 1989, $2,120.09 in unemployment insurance benefit overpayments, which amount represents 30 percent of the lesser of the following two amounts:

(i) total of unemployment insurance benefits	$9,615
paid to the appellant during the 1988
taxation year
(ii) the appellant’s net income for the 1988	$51,136.99
taxation year
minus	$44,070.00 $7,066.99*
1.5 x the maximum yearly insurable
earnings for 1988
(1.5 X $29,380 = $44,070.00)
*30% of $7,066.99 = $2,120.09

(f) As a result, the Minister of National Revenue has required that the appellant repay the amount shown in subparagraph (e) and has granted the appellant the right to deduct an equivalent amount in computing his taxable income for the 1988 taxation year;

The amounts are not contested. The issue concerns the meaning to be given to the word "income" in section 123 of the Act.

The appellant claims that to include earnings other than earnings on account of income within the meaning of the word "income" would run counter to the spirit of the Act and that a capital gain should not be included in the meaning of the word "income" for the purposes of that section.

According to counsel for the respondent, the word "income" should be construed in accordance with the provisions of the Income Tax Act since that is how it is defined in section 122 of the Act; she argues that, according to the Income Tax Act, "income" is computed in accordance with the provisions of Division B of that statute, with the result that the capital gain in question is included in the computation of the taxpayer's income.

The appellant refers to dictionary definitions of the word “revenu” [income] as well as to the definition of "gross revenue" [revenu brut] found in subsection 248(1) of the Income Tax Act, R.S.C. 1952, c. 148 (am.S.C. 1970-71-72, c. 63).

The appellant tells me that the 1991 Larousse Illustré dictionary defines the word "revenu" as follows:

[Translation]

An annual amount collected by a person or body either in the form of an annuity or as earnings from an activity or from employment.

The Income Tax Act defines “gross revenue" [revenu brut] as follows:

248(1) . . .

"gross revenue of a taxpayer for a taxation year, means the aggregate of

(a) all amounts received in the year or receivable in the year (depending on the method regularly followed by the taxpayer in computing his income) otherwise than as or on account of capital, and

(b) all amounts (other than amounts referred to in paragraph (a)) included in computing the taxpayer's income from a business or property for the year by virtue of paragraph 12(1)(o) or subsection 12(3), (4) or (8) or section 12.2;

As we can see, this latter definition excludes amounts received on account of capital. The appellant therefore argues that either this definition or the dictionary definitions of revenu [income] could be used for the purposes of section 123 of the Act.

It is interesting to note that the term "revenu brut has been translated into English as "gross revenue" rather than as "gross income". At any rate, considering that the term is "revenu brut in French, that is the term I accept. It is clear from reading the Income Tax Act that the definition in question is only valid for interpreting sections of that statute employing the term "gross income" [revenu brut ]. This term can be found, inter alia, in subparagraphs 130(3)(a)(iv) and 133(8)(d)(iii) of that statute.

As for dictionary definitions, it is a well-known rule of interpretation of statutes that they do not modify an exhaustive definition found in an enactment (Pierre-André Côté, The Interpretation of Legislation in Canada (Les Editions Yvon Blais), at pages 41-43.

On reviewing the Income Tax Act, I note that the word "income" [revenu] on its own is only used in Division B of that statute, and that elsewhere it is attached to a qualifier, which gives it a specific meaning different from the word "income" on its own. Thus, Division C of the Income Tax Act concerns taxable income, and the term "gross revenue" [revenu brut] also appears in Division F of that same statute. The Table of Contents of the Income Tax Act is informative on this topic. In that statute, the term used is the word "income" [revenu] on its own without the addition of a qualifier such as “taxable” or "gross".

Considering the use of the word "income" [revenu] on its own, that is, without the addition of a qualifier, in section 123 of the Act, considering that section 122 of the same Act provides that the term "income" is to be construed in accordance with the provisions of the Income Tax Act, and considering that the Income Tax Act employs that word in its Division B, which concerns the computation of income, I therefore find that the income at issue in section 123 must be calculated in accordance with the provisions of Division B of the Income Tax Act.

The appellant does not contest that, should I reach this conclusion, the capital gain must, in the light of section 3 of the Income Tax Act, be included in the computation of income.

The respondent's assessment is therefore valid in fact and in law, and the appeal is dismissed.

Appeal dismissed.