Latsay v. R., [1997] 2 CTC 2125

O’Connor T.CJ.:

These appeals were heard at Saskatoon, Saskatchewan on December 3, 1996 pursuant to the Informal Procedure of this Court.

The Appellant represented herself and was the only person to testify.

Issue

The issue is whether amounts of $2,925 and $1,686 (“Amounts”) received by the Appellant in 1993 and 1994 respectively as alimony were properly included in her income pursuant to the provisions of paragraphs 56(1)(b) and 56(1)(c) of the Income Tax Act (“Act”).

Facts

The facts are as stated in paragraph 13 of the Reply to the Notice of Appeal which reads as follows:

13. In so assessing the Appellant, the Minister made the following assumptions of fact:

(a) the Appellant reported the Amounts as income in the respective 1993 and 1994 taxation years;

(b) the Amounts were received by the Appellant in the respective 1993 and 1994 taxation years;

(c) the Amounts were received as an allowance payable on a periodic basis for the maintenance of the Appellant, children of the Appellant, or both the Appellant and children of the Appellant;

(d) the Appellant was living separate and apart from the person who was required to make the payment at the time the payment was made and throughout the remainder of the year;

(e) the person who was required to make the payment is the natural parent of the child of the Appellant;

(f) the Amounts were received under an order made by a competent tribunal in accordance with the laws of a province.

The Appellant argues that her rights and/or the rights of her child have been infringed contrary to the Canadian Charter of Rights and Freedoms and certain other enactments.

Respondent submits that for the 1993 year there was no tax assessed and, since there can be no appeal from a nil assessment, the appeal with respect to 1993 must be dismissed. The Respondent submits further that for both years neither the Appellant’s rights, nor the rights of her child, have been infringed. It was established that the assessment for 1993 was a nil assessment and that for 1994 the total amount of federal tax involved was $45.75.

The Appellant read from and presented to the Court a 31 page written submission. She stated that her appeal was a matter of principle and that she was appealing on behalf of all Canadian women in similar circumstances. I quote certain extracts from this written submission.

5. I verily believe this infringement contravenes my rights, declaration, and other laws as follows:

A) Charter of Rights

B) The Canadian Bill of Rights

C) The United Nations International Convention on the Elimination of all forms of Racism

D) The Universal Declaration of Human Rights

E) The International Covenant on Economic, Social and Cultural Rights

F) The International Convention on the Elimination of all forms of Discrimination against Women

G) The United Nations Declaration on the Rights of “A Child” - 1991

H) Canada Action Plan for Children

I) Campaign 2000

J) Child Development Initiative (1990) - Brighter Futures

K) Twentieth Century Rights - as per Constitution

L) International Year of the Family (1994) United Nations

M) International Year for the Eradication of Poverty (1996) United Nations

N) And any other reasons, laws, declaration the Appellant may formulate

O) These are not facts, as so the Respondent states -these are laws ratified by Canada, and therefore law, and can not be denied.

17. Based upon the arrears, default, ignorance and now variation order, the father the “male” pay “NIL” for child support. His financial share, his financial responsibility, his contribution, his “equal” share, his role has now been shifted to me. I am solely responsible for his share, and role and therefore now am “double burdened or double contributing” on what was to be equal financial responsibility on behalf of both parents. I am no longer equal - for I am over-burdened to provide his share, and my own share and not treated equally for performing his role, but forced “automatically” to perform his role due to arrears, default, ignorance and the variation order.

19. … For resuming the male role, I should be treated equally and given the same male deduction of ITA sec 60(b). I should have equal protection and benefit as he did for this role. He once was forced to pay support, now I am forced to resume it back all via Court orders and family law division. ...

20. Section 15 [of the Charter] seeks to eliminate the negative effects of law. Different needs of different groups must be taken into account. If a law has an adverse impact on an individual or group, then the Charter of Rights require the law to be altered to eliminate this. This group I belong to is custodial mothers. As per statistics 73.2% of women are the custodial parent. We belong to a group solely based upon our status.

29. I will always be given a “limited capped tax credit” no matter what my contribution is, or for performing his role. I will never be given the same “open-ended dollar for dollar credit” like the father received. I contribute “double” to our mutual child, but yet only given back a few pennies, if any, for this double contribution. I am in NO way justified in a free and democratic society for the infringement taking place.

Even in regards to the tax credit I receive, the difference I get in comparison to the “double contribution” is not justified nor has anything to do with this hearing today, if the Respondent chooses to use that argument. As stated in Supreme Court Ruling [in The Queen v. Thibaudeau, 95 D.T.C. 5278], Justice McLachlin (line 230) quote:

I note that the tax credits for equivalent to married status, for dependants and for children essentially operate separately from the deduction/inclusion scheme. It is therefore difficult to argue that these provisions offset the inequality created by the deduction/inclusion scheme since the conditions under which the two systems apply are not the same.

33. In regards to the inclusion scheme as advised in General Income tax Guide and return (Exhibit “G”), when I received his child support I met all of the following conditions for line 128, and did so include as income.

In regards to the deduction provision on line 220, (Exhibit “H”), I also met all of the following conditions there due to arrears, default and court order. For instance it states:

When you made the payments, you were living apart, and you continued to live apart for the rest of the year, from the person to whom or on whose behalf you made the payment.

I was forced to resume on “his” behalf his share, and made his payment, and his role - on his behalf. Yes we continued to live apart.

The payments were made under court order or written agreement.

Yes, his arrears, default and variation order was all done by family law division with court order by judge.

The payments were made to maintain your spouse or former spouse, your children or both.

Yes, the payments and his role I was forced to resume were made to maintain me, (the former spouse) and our mutual child.

The payments were an allowance to be paid periodically. For example, the payments could be made monthly, quarterly, semi-annually or annually.

Yes, for every month he defaulted, and for every month after he was granted the variation order, I made the payments on a monthly on-going cycle. I perform his monthly share of what was to be his equal financial contribution and his role. It continues today. It is on-going and will continue to be on-going. It is automatic and absolute “burden” that I will incur for many years to come. This “double contribution” will effect my standard of living long after the child has left home.

34, The tax system is based upon

Equity - horizontal and vertical equity - where similar circumstances are treated equally.

Neutrality - that alikes are treated alike. Revenue Canada and ITA sec. 60(b) do not allow me the equity and neutrality for performing his role, or for doing his role. I will always be penalized and infringed upon, all of which is forced upon me without equal treatment of ITA sec. 60(b).

39. In regards to the Supreme Court of Canada ruling, the minority justices of L’Heureux-Dubé and McLachlin J.J. criticized all aspects of the majority justices reasonings and concluded than an infringement of Section 15 did occur, and that it was not justified under section 1 of the Charter. If the ITA of 56 (the inclusion provision) was concluded to be an infringement, then my appeal today of ITA sec 60(b) magnifies the infringement in this situation. The Supreme Court of Canada did not hear evidence of ITA sec 60(b) and was not dealt with in the ruling. Therefore, left intact.

The minority justices did not win the support of the majority, but it is a relevant to the promise of further equality rights challenges in this area, precisely because the dissenting justices analyses “failed” to attract a majority.

The Appellant’s submission further refers to letters and documents from various Members of Parliament, including Audrey McLaughlin, then leader of the New Democratic Party and to certain papers prepared by the Library of Parliament.

Analysis

With respect to the various letters and other documents submitted by of the Appellant, although they may support the Appellant’s position, they do not constitute amendments to the relevant legislation. In other words, although I may be sympathetic to the Appellant’s position, I am not at liberty to change the Act nor the provisions of the Charter as it has been interpreted.

With respect to the numerous treaties and other enactments referred to in paragraph 5 of the Appellant’s written submission the only one which is a law of Canada is the Canadian Charter of Rights and Freedoms and the Constitution Act, 1982. The most that can be said of the other enactments is that in interpreting the Charter they can, in certain circumstances, be of assistance; see Reference re Public Service Employee Relations Act (Alberta) [1987] 1 S.C.R. 313, 38 D.L.R. (4th) 161, 51 Alta. L.R. (2d) 97, in particular at pages 348-49 (D.L.R. 184, Alta. L.R. 123-24)

The most relevant provisions of the Act are paragraphs 56(l)(b) and 56(l)(c) as well as subsections 60(b) and 60(c) which read as follows:

56(1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,

(b) an amount received by the taxpayer in the year as alimony or other allowance payable on a periodic basis for the maintenance of the taxpayer, children of the taxpayer or both the taxpayer and the children if the taxpayer, because of the breakdown of the taxpayer’s marriage, was living separate and apart from the spouse or former spouse who was required to make the payment at the time the payment was received and throughout the remainder of the year and the amount was received under a decree, order or judgment of a competent tribunal or under a written agreement;

(c) an amount received by the taxpayer in the year as an allowance payable on a periodic basis for the maintenance of the tax-payer, children of the taxpayer or both the tax-payer and the children if

(i) at the time the amount was received and throughout the remainder of the year the taxpayer was living separate and apart from the person who was required to make the payment,

(ii) the person who was required to make the payment is the natural parent of a child of the taxpayer, and

(iii) the amount was received under an order made by a competent tribunal in accordance with the laws of a province;

60. There may be deducted in computing a taxpayer’s income for a taxation year such of the following amounts as are applicable:

(b) an amount paid by the taxpayer in the year as alimony or other allowance payable on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and the children, if the taxpayer, because of the breakdown of the taxpayer’s marriage, was living separate and apart from the spouse or former spouse to whom the taxpayer was required to make the payment at the time the payment was made and throughout the remainder of the year and the amount was paid under a decree, order or judgment of a competent tribunal or under a written agreement;

(c) an amount paid by the taxpayer in the year as an allowance payable on a period basis for the maintenance of the recipient, children of the recipient or both the recipient and the children, if

(i) at the time the amount was paid and throughout the remainder of the year the taxpayer was living separate and apart from the recipient,

(ii) the taxpayer is the is the natural parent of a child of the recipient, and

(iii) the amount was received under an order made by a competent tribunal in accordance with the laws of a province;

The relevant provisions of the Charter and subsection 52(1) of the Constitution Act, 1982 read as follows:

15(1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

24(1) Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

28 Notwithstanding anything in this Charter, the rights and freedoms referred to in it are guaranteed equally to male and female persons.

52(1) The Constitution of Canada is the supreme law of Canada, and any law that is inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no force or effect.

The Appellant’s principal contention is that the decision of the Supreme Court of Canada in Thibaudeau v. R., [1995] 2 S.C.R. 627, (sub nom. Thibaudeau v. Canada) [1975] 1 C.T.C. 382, 95 D.T.C. 5278, does not apply to her situation because the Supreme Court simply decided whether paragraph 56(l)(b) was contrary to the Charter. She argues that the Court did not consider subsection 60(b) and it is that section which results in the discrimination which she claims. She states that the deduction provision discriminates against custodial parents bearing the full burden of child support. The Thibaudeau decision did not discuss situations of default in child support. The basis of her claim is that the Act does not allow the custodial parent to deduct the defaulting non-custodial parent’s share which she has been forced to assume but which the defaulting parent would, upon payment, be able to deduct fully. She states she should be allowed a deduction at line 220 of her return because she made payments “on behalf” of the defaulting parent. She adds that this results in a disadvantage to her arising from her inability to deduct the double share as compared to the automatic and absolute advantage available to the non-custodial paying parent.

For purposes of clarity and precision, I point out that the provisions in question are really paragraph 56(l)(c) and subsection 60(c) as those are the provisions that relate to a natural parent as opposed to a former spouse. From a Charter perspective I do not believe that changes the issue as 56(l)(b) in substance is the same as 56(l)(c) and 60(b) in substance is the same as 60(c).

In Thibaudeau the majority of the Supreme Court clearly examined both paragraphs 56(l)(b) and 60(b) and the entire deduction/inclusion process and therefore, in my opinion that majority decision applies in these appeals. The deduction/inclusion process was found not to violate the provisions of the Charter. Subsections 60(b) and 60(c) provide for a deduction to the supporting non-custodial parent but to my knowledge there is no provision in the Act which allows the custodial parent to deduct the amounts she personally contributes to the support of the child as well as the amounts she may have to make up and pay because the non-custodial parent has defaulted. This may seem unfair but that is what the law provides and this Court cannot change the law. To a certain extent the perceived unfairness is offset by various credits and benefits allowed to the supporting parent, such as the equivalent to married credit, the credit for dependant children and the child tax benefit. Further, in my opinion, the Appellant’s argument that she is entitled to the deduction because she paid “on behalf’ of the defaulting parent cannot succeed. Section 60 clearly grants the deduction to the non-cus- todial parent who pays support and no other provision of the Act permits the custodial parent to claim that deduction.

In conclusion the appeals must be dismissed for the following reasons:

1. The appeal with respect to 1993 was from a nil assessment and there can be no Appeal therefrom.

2. With respect to both 1993 and 1994, in my opinion, the Appellant is bound by the majority decision of the Supreme Court of Canada in Thibaudeau; and

3. No notices were given to any of the Attorneys General in Canada as required by section 57 of the Federal Court Act which provides as follows:

57(1) Where the constitutional validity, applicability or operability of

an Act of Parliament or of the legislature of any province, or of regulations thereunder, is in question before the Court or a federal board, commission or other tribunal, other than a service tribunal within the meaning of the National Defence Act, the Act or regulation shall not be adjudged to be invalid, inapplicable or inoperable unless notice has been served on the Attorney General of Canada and the attorney general of each province in accordance with subsection (2).

(2) Except where otherwise ordered by the Court or the federal board, commission or other tribunal, the notice referred to in subsection (1) shall be served at least ten days before the day on which the constitutional question described in that subsection is to be argued.

(3) The Attorney General of Canada and the attorney general of each province are entitled to notice of any appeal or application for judicial review made in respect of the constitutional question described in subsection (1).

(4) The Attorney General of Canada and the attorney general of each province are entitled to adduce evidence and make submissions to the Court or federal board, commission or other tribunal in respect of the constitutional question described in subsection (1).

(5) Where the Attorney General of Canada or the attorney general of a province makes submissions under subsection (4), that attorney general shall be deemed to be a party to the proceedings for the purposes of any appeal in respect of the constitutional question described in subsection (1).

Reference is also made to À. v. Fisher, [1996] 2 C.T.C. 103, 96 D.T.C. 6291 where the Federal Court of Appeal held that in every case in which the constitutional validity or applicability of a law is brought into question, section 57 of the Federal Court Act applies and the notice required thereby must be given.

Appeal dismissed.