Her Majesty the Queen v. Ray Ivan Reid, [1988] 1 CTC 313

Laycraft, C.J.A.: —Each individual in Canada liable to pay income tax is required by section 150 of the Income Tax Act to file a tax return in prescribed form. Section 151 requires that the taxpayer “shall in the return estimate the amount of tax payable”. In his defence to five charges of failing to file tax returns the appellant urged that section 151 is in breach of the right to “freedom of opinion” guaranteed to him by subsection 2(b) of the Canadian Charter of Rights and Freedoms and is therefore invalid.

In Provincial Court at Camrose, Judge J.A. Murray accepted this contention and declared subsection 151 to be invalid. He acquitted the appellant of the five charges. On the Crown's appeal to Court of Queen's Bench Mr. Justice Legg allowed the appeal and entered convictions. Mr. Reid appealed to this Court from that decision. I respectfully agree with the conclusion reached by Mr. Justice Legg and would dismiss the appeal.

The appellant, who is a farmer, did not file any income tax returns for the years 1979-1983. In correspondence with the department he took the position that he did not have the expertise to complete a tax return himself and could not afford to hire an expert. He offered to work with a person provided by Revenue Canada but, in fact, when the opportunity to do that was offered, he failed to do so.

Acting under the provisions of paragraph 231(3)(a) of the Income Tax Act, the Minister directed a letter to the appellant requiring him to file a T1 income tax return for each of the years in question. On January 24, 1985, an R.C.M.P. officer personally served him with the letter. When he failed to file the returns a charge was laid, for each year, that he had failed to file a "T1 Income Tax Return after Requirement Letter . . . under 231(3)(a) of the Income Tax Act contrary to Section 238(2) of the Income Tax Act".

In Provincial Court, Judge Murray held that the T1 income tax return is not merely a demand for information but incorporates the requirements of section 151 of the Income Tax Act which requires the taxpayer “in the return to estimate the amount of tax payable”. He regarded the term “estimate” to be synonymous with the term “opinion”. Thus, he concluded, the taxpayer is required to have, and to express, an opinion in breach of his Charter right. He held further that section 151 of the Income Tax Act is not saved by section 1 of the Charter.

On the Crown appeal to Court of Queen's Bench, Mr. Justice Legg said:

In my view the learned Provincial Judge erred in his interpretation of the word "estimate" in Section 151 of the Income Tax Act. It is not an opinion contemplated by Section 2(b) of the Charter. In my view, it is not an opinion at all.

Sometimes the words appear to be used interchangeably . . . But in my view there is a distinction when you consider context and usage. An opinion, to me, is a mental process whereby one comes to a conclusion on some matter based upon a thought process. An estimate on the other hand . . . is based more upon a calculation.

Mr. Justice Legg allowed the Crown appeal and entered a conviction on each of the five charges. He imposed the minimum mandatory penalty on each count of a fine of $200. On the appeal to this Court the Attorney General of Alberta intervened in support of the position taken by the federal Crown.

The first point to be considered is whether this case engages the constitutional validity of section 151 at all. For the Crown it is pointed out that the appellant is not charged with failure to estimate, in his tax return, the amount of tax payable. Rather, he is charged with failure to file a T-1 income tax return for each year after having been required by the Minister to do so. Thus, it is urged, the offence is made out, whether or not section 151 is valid.

In my view the validity of section 151 does arise in this case. The demand by the Minister was not simply for information. It required the appellant to file a specified tax document. While that form requires much other information, it is ultimately directed to the purpose of determining the amount of tax which the taxpayer estimates is payable by him. Thus it incorporates the provision of section 151 for an "estimate" of the tax payable. Whether or not a tax return without that estimate would be a valid tax return need not be decided here. The point is that the Minister required that estimate by requiring the filing of the return. The Minister’s authority for that requirement is section 151; its validity is therefore in issue.

Subsection 2(b) of the Charter invoked in this case provides:

2. Everyone has the following fundamental freedoms:

(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication.

2. Chacun a les libertés fondamentales suivantes:

(b) liberté de pensée, de croyance, d'opinion et d'expression, y compris la liberté de la presse et des autres moyens de communication.

The cases dealing with this section of the Charter deal almost exclusively with freedom of expression. That is undoubtedly because it is difficult to imagine legislation aimed at thought or belief or opinion in isolation from some expression or other manifestation of them. Even a totalitarian state would have difficulty in suppressing the thoughts of its citizens; it would be feasible to attack only the outward display of those thoughts. There are, moreover, no clear lines which separate thought, belief and opinion from expression.

An analysis of a Charter section must start by ascertaining its purpose. In R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295 at 344, Dickson, J. (now C.J.C.) said:

In Hunter v. Southam Inc., [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.

What was the purpose of subsection 2(b) of the Charter? What interests of our Canadian society was it designed to protect? Section 2 as a whole, which sets forth the “fundamental freedoms", expresses concepts which are the foundation of our society. Freedom of speech and the thoughts, beliefs and opinions which precede intelligent communication are all part of these fundamental freedoms. In his perceptive article "The Scope of Freedom of Expression" (1985), 23 Osgoode Hall Law Journal 331, Richard Moon of the Ontario Bar, reviews the various theories which have been advanced over the centuries as the philosophic basis for the general right of free speech. In modern times, the accepted basis is that freedom of expression makes possible the social co-operation between individuals by which our democratic society exists. He concludes at pages 356-57:

Unity and social solidarity only exist, in any real sense, when individuals are free to make judgments and direct their lives. If communication were suppressed, the result would be a population which was inhibited in its ability to reflect upon important questions of value and a society which was closed and rigid rather than "free and democratic.”

The provisions of subsection 2(b) recognize the importance of social interaction between citizens in their individual and collective development. The section protects both speaker and listener. It recognizes the right to have an opinion and the right to have no opinion. It enshrines the process of communication leading to social development which is fundamental to the life of our nation and enjoins interference with it. From these concepts we may perceive the lofty purpose of the section and the interests of society it was designed to protect.

Having made that definition of purpose, we must also note the universal recognition of some limitations to that freedom. Mr. Justice Holmes recognized one of them when he denied the right of anyone to shout a false alarm of “fire” in a crowded theatre. The same considerations lead society to protect its members either singly or collectively by laws concerning defamation or against unfair advertising, to cite only two examples.

In my view, still other examples of human thought were never intended by the draftsmen to be within the words used in subsection 2(b). In their widest sense, the words "thought, belief and opinion” would encompass virtually every mental process. Every human action is preceded by some thought, however fragmentary, giving rise to some opinion as to the appropriate course to follow; to the extent to which that opinion is not susceptible to rigorous proof, it becomes a belief. Yet the section cannot have been intended to protect, as a “fundamental freedom" the mental aspect of every human activity. The section has some finite limit. In Reference Re Compulsory Arbitration (1985) 35 Alta. L.R. (2d) 124 at 133 Kerans, J.A. said:

. . . the structure of the Charter tells us that the catalogue of protected rights is finite. We must assume that the Charter does not require every law to be reviewed under s. 1, for if that were to be, the Charter could simply say it.

If the words of section 2 are given the widest possible meaning, virtually any action by the state requiring or requesting some action or lack of action by the citizen may be stultified. The simplest question to any citizen when, for example, he is a witness in court would be required to be tested against section 1. The assertion of his right to have no opinion, and certainly of his right not to express any he does have, would be a ready answer to any such intrusion into his affairs. The odd consequence would be that the state could hardly deal with its citizens without breaching their Charter rights. It would then fall to the Canadian judiciary to test most statutory provisions against the provisions of section 1 of the Charter so that judges and not legislators would become the arbiters of the wisdom of most, if not all, legislation. That role for the courts would be so intrusive in our democratic processes as to stifle the very freedoms being protected.

It has become trite to say that the courts must avoid a narrow and legalistic interpretation of the Charter. Nevertheless, as Dickson, C.J.C. pointed out in R. v. Big M Drug Mart Ltd. (supra) at page 394:

It is most 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 . . . be placed in its proper linguistic, philosophic and historical context.

In my view, nothing in the calculation which makes up the "estimate" of tax payable or in the mental process on which it is based, has anything to do with the fundamental freedoms intended to be protected by subsection 2(b) of the Charter. Whatever meaning is ultimately ascribed to the first seven words of subsection 2(b), I cannot believe that the fundamental freedoms enshrined by those words were intended to comprehend the mere awareness of fact and the calculation based upon fact contemplated by section 151 of the Income Tax Act. I reach this conclusion, not by testing the tax provision in question against section 1 of the Charter; rather, in my view, the requirement for an "estimate" of tax payable is not an “opinion” as that word is used in subsection 2(b).

In the context in which it is found, section 151 requires a calculation based upon other information. It is true that the taxpayer's "estimate" involves interpretation of the law which at times is quite complex. That is not, however, a decisive consideration in determining whether his "estimate" is an "opinion". In virtually every activity in which he engages, the citizen must, to some extent, interpret and apply the law relating to that activity. He is not for that reason excused from complying with the law nor are his Charter rights thereby necessarily breached.

It was urged for the appellant that the section requires the taxpayer to "know the law and to express an opinion” as to what the Minister's assessment will be. Moreover, it was said, his opinion of the amount of the Minister's ultimate assessment must, at his peril, be correct because he faces penal consequences if he is wrong. Neither statement is correct. It is true that the Minister's assessment fixes the liability for tax in the first instance. But thereafter there are many provisions for review and for appeal through the Courts. If the taxpayer, in the result, has paid too little, he will be required to pay the difference with interest. On the other hand he will receive a refund with interest if he has paid too much. In either case the interest is not a penal sum; rather it is compensation either way for the use of money. Penal consequences arise only from fraudulent statements intended to mislead, from failure to make the disclosures required, or from gross negligence.

I respectfully agree with Mr. Justice Legg that the mental process required in making an “estimate” under section 151 of the Income Tax Act does not come within the word “opinion” in subsection 2(b) of the Charter. I would dismiss the appeal.

Appeal dismissed.