Jolicoeur v. R., [1998] 3 CTC 2069

Tardif T.C. J.:

This appeal is governed by the informal procedure. Bernard Jolicoeur is appealing from an assessment for the 1994 taxation year. The appeal arises out of a notice of reassessment issued on November 14, 1995, disallowing the appellant’s deduction of the $150 in dues he paid to the council of physicians, dentists and pharmacists of the Centre de Santé de I’ Hématite (Hématite Health Center) and the $680 in dues he paid to the Association des chirurgiens dentistes [Association of dental surgeons]

The Minister of National Revenue is relying on sections 3 and 5, subsections 8(2) and 248(1) and paragraph 8(1 )(/) of the Income Tax Act (“the Act’) for the 1994 taxation year.

The facts on which the appeal is based are described in paragraphs 1 through 22 of the Notice of Appeal. Those paragraphs read as follows:

[TRANSLATION]

1. On November 14, 1995, Revenue Canada issued a notice of assessment against Dr. Bernard Jolicoeur under subsection 165(3) of the Income Tax Act.

2. Through the notice of assessment, Revenue Canada disallowed, among other things, the deduction of two sums of money by Dr. Bernard

Jolicoeur: $680 paid to the Quebec Association of Dental Surgeons and $150 paid to the council of physicians, dentists and pharmacists of the Hématite Health Center (Fermont Hospital, P.Q.).

3. In a letter to the appellant dated November 1, 1995, Revenue Canada alleged that these sums were not paid to maintain a professional status recognized by statute.

4. The appellant objected to the said assessment in a notice of objection dated January 24, 1996.

5. The Chief of Appeals confirmed the assessment in a notice of confirmation dated July 19, 1996.

6. During the period at issue, Dr. Bernard Jolicoeur held an appointment from the Hématite Health Center in Fermont, Quebec, as a dental surgeon. (Emphasis - amendment authorized the day of the hearing)

7. Dr. Bernard Jolicoeur was and still is paid according to the flat-rate fee method, as provided for in the agreement negotiated by the Minister of Health and Social Services of Quebec and the Quebec Association of Dental Surgeons under section 19 of the Health Insurance Act.

8. Dr. Bernard Jolicoeur is thus being paid by the Régie de l’assurance- maladie du Québec [Quebec Health Insurance Board], which is acting as the paying agency for the Minister of Health and Social Services as regards the remuneration of health professionals in Quebec.

9. The Quebec Association of Dental Surgeons is a professional syndicate incorporated under the Professional Syndicates Act.

10. Its object is the social and economic protection of its members.

11. As stated above, under the Health Insurance Act (section 19), the Association is responsible for negotiating the working conditions of its members delivering services provided to Quebecers by the Government of Quebec.

12. The agreement in effect at the relevant time and still in effect today determines Dr. Bernard Jolicoeur’s working conditions and contains clauses applying the Rand formula.

13. Dr. Bernard Jolicoeur has no choice but to pay dues to the Association, since he works in the Quebec hospital system.

14. The essential role of the Quebec Association of Dental Surgeons is to promote the improvement of its members’ conditions of employment or work.

15. Dr. Bernard Jolicoeur is also required to be part of the council of physicians, dentists and pharmacists of the Hématite Health Center, his employer.

16. The Act respecting health services and social services provides that, for every institution in which physicians, dentists or pharmacists are practising, a council must be established for them (section 213).

17. That section also provides that all the physicians, dentists and pharmacists practising in the institution make up what is known as the C.P.D.P.

18. A health professional who practises in an institution must be part of the C.P.D.P.

19. Dr. Bernard Jolicoeur is such a professional and is therefore subject to the C.P.D.P.’s internal management by-laws, which were approved by the board of directors of the Hématite Health Center.

20. Section 216 of the Act respecting health services and social services provides that the C.P.D.P. may adopt by-laws concerning its internal management Once those by-laws have been adopted and approved by the institution’s board of directors, they have force of law since they become by-laws of the institution that appointed the professional.

21. The by-laws of the C.P.D.P. of the Hématite Health Center provide for the payment of mandatory dues by members.

22. Dr. Bernard Jolicoeur must pay those dues to maintain his professional status.

In paragraph 11 of the Reply to the Notice of Appeal, the respondent describes the facts she assumed in making the reassessment. They are as follows:

[TRANSLATION]

(a) during the 1994 taxation year, the appellant was a pharmacist at the Hématite Health Center located at 1, rue Aquilon, Fermont, Quebec;

(b) the appellant claimed, among other things, the $150 in dues he paid to the council as a deduction for the purposes of an office or employment;

(c) the appellant also claimed, among other things, the $680 in dues he paid to the Association as a deduction for the purposes of an office or employment;

(d) these annual dues as a member of the council and the Association are not recognized as annual professional membership dues deductible from income from an office or employment, since they are not paid to maintain a professional status recognized by statute;

(e) the $150 in dues paid to the council and the $680 in dues paid to the Association are disallowed as deductions by the appellant in 1994.

This case raises two issues. The first is whether the $150 in annual dues paid to the council of physicians, dentists and pharmacists (C.P.D.P) was deductible in computing the appellant’s income for the 1994 taxation year.

Second, I must determine whether the $680 in dues paid by the appellant to the Association des chirurgiens dentistes du Québec (A.C.D.Q.) [Quebec Association of Dental Surgeons] for the 1994 taxation year was deductible.

As regards the first issue, what must essentially be decided is whether the dues paid by the appellant were annual professional membership dues the payment of which was necessary to maintain a professional status recognized by statute. In this connection, paragraph 8(1 )(i) of the Act reads as follows:

(i) Dues and other expenses of performing duties - amounts paid by the taxpayer in the year as

(i) annual professional membership dues the payment of which was necessary maintain to maintain a professional status recognized by Statute,

to the extent that the taxpayer has not been reimbursed, and is not entitled to be reimbursed in respect thereof;

Was the council of physicians, dentists and pharmacists a professional association, and were the dues paid by the appellant necessary to maintain a professional status?

Was membership in such a professional association required to maintain a professional status?

Gérard Dion’s labour relations dictionary published by Les Presses de l’Université Laval (Québec, 1976) defines “association professionnelle” [professional association] as follows:

[TRANSLATION]

Corporation formed to safeguard and promote the privileges and rights of a profession or trade, to ensure that members of the profession or trade are competent, to establish a code of ethics and, in general, to promote the economic, social and educational interests of its members. A professional association is a private body created by letters patent or a charter in which membership is voluntary and which has the powers provided for in the ordinary rules applicable to corporations, the Labour Code (Quebec) or the Professional Syndicates Act. A professional association is characterized by the importance it attaches to the interest of the profession itself, but it may also play a role equivalent to that of a union when, in certain cases, it handles the negotiation and application of collective agreements for its members who are employees. Professional associations may group together employees, employers or self- employed workers. Union;* trade association;** quasi union.**

The appellant adduced very extensive evidence, supplemented by the relevant documentary evidence. The evidence showed that membership in the professional association — the council of physicians, dentists and pharmacists — was a prerequisite for obtaining a position in the institution in question. Payment of the dues was not free and voluntary, but mandatory; since they had to be paid to obtain the status, they were mandatory for maintaining that status.

The respondent suggested a very strict interpretation; she argued that a professional status is indivisible and that a person generally has only one such status. In other words, according to the respondent, a professional would actually, in tax terms, be entitled to deduct only one dues payment as a member of his or her professional association. The respondent also argued that a physician cannot have a second professional status unless he or she becomes a member of another professional association, such as an association of lawyers or engineers, in which case, as a member of two different professional corporations, he or she would be entitled to deduct two annual dues payments under paragraph 8( 1 )(z)(i) of the Income Tax Act. Relying on that logic, the respondent maintained that the appellant was entitled to deduct just one dues payment, specifically the one that entitled him to practise as a dental surgeon.

Some excerpts from the argument of counsel for the respondent show just how restrictive his interpretation 1s:

[TRANSLATION]

And I’ll spare you the rest. So we’re talking about a profession, a trade. In that sense, I submit to you, Your honour, that when we refer to a profession or trade, it would include, for example, being a physician, a lawyer or an engineer. In that sense, when we look at the composition of the CPDP, we see not on- ... that it’s not made up only of dentists, but of dentists, pharmacists and physicians. In that sense, and based on Gérard Dion’s definition of “professional association”, we submit to you that the CPDP therefore doesn’t fall under the concept of “professional association”, mainly because the association, sorry, I mean the committee, the council includes people practising completely different professions, although there are some parallels — it can be said that they are all people who work in the field of health, but they are all practising different professions. And this is all the more so given that there is an Ordre des médecins du Québec as well as an Ordre des dentistes du Québec and an Ordre des pharmaciens du Québec.

when we talk about professional status, we are in fact, as I said a bit earlier, talking about physicians or lawyers or engineers or dentists and not...

So therefore, as soon as the person obtains a licence from the Ordre des dentistes du Québec, we can then, once the person practises and has a — that he or she has a professional status as a dentist.

In this case, Your honour, the professional status recognized by statute, once again, if we look at the general meaning of the terms, the professional status recognized by statute in this case would be the professional status arising from membership in the Ordre, in this case the Ordre des dentistes du Québec.

an individual could have, unless the individual practises different professions, unless he or she is both a physician and a lawyer, both a physician and an engineer, I have trouble seeing how an individual could have two professional statuses and say: I am a lawyer but I have two professional statuses — I’m coming back to this example again — I have two professional statuses, as a tax practitioner and as a lawyer practising matrimonial law or immigration law. I think that if we look at the ordinary interpretation of the terms, and once we’ve determined that the individual is a dentist, a lawyer or something else, that the individual has a profession, once we’ve done that we’ve determined what the individual’s professional status is.

I think that in this case, even if a person isn’t a member of a council of physicians, dentists and pharmacists, or rather, to be more specific, that a dentist with a private practice who is therefore not a member of a council of physicians, dentists and pharmacists, a professional status as a dentist. That person doesn’t have to be a member of ... and once again, I don’t think the dentist would go out and say “I’m a dentist with a private practice” versus “I’m a dentist in a hospital or institution”.

If I have knowledge in a field, then I have just one status.

I do not think that the Act authorizes such a strict, conservative interpretation. Moreover, such an interpretation goes against the present- day reality where professional associations are much more numerous. We are living in an era of ultra-specialization in which even the traditional professions are now segmented into several fields of practice.

Such a development requires the professionals within each group or segment to get organized and establish a structure for themselves for a great many reasons and purposes, including the defence of their interests, the very existence of their status, the definition of their respective fields of activity and their working conditions. These many changes have so transformed the practice and fields of activity of professionals generally that they must now organize themselves to deal with the many new realities that are often restricting and always highly regulated.

The professional status that the respondent believes is described or covered by the Act is outdated. The wording of the Act does not have the strict meaning attributed to it by the respondent. The words used by Parliament in no way preclude the deduction of several dues payments. Parliament did not express its intention as follows: “to maintain his or her professional status”. The words used do not have an exclusive or limited meaning, but refer simply and clearly to the position of a member of a professional group. The only limit or restriction is the existence of a very specific condition: the dues must be “necessary to maintain a professional status recognized by statute”.

According to the usual meaning of the words used, the interpretation advanced by the respondent cannot stand.

I consulted Le Robert: dictionnaire de la langue française to get a better idea of the meaning and scope of the words used by Parliament:

Volume 1, p. 617

[TRANSLATION]

ASSOCIATION - the act of joining together or the result of that act; assembly, gathering, group, grouping, organization, rapprochement, meeting, company, solidarity, union.

Volume 2, p. 840

[TRANSLATION]

MAINTENANCE - the state of being maintained - upkeep, care, upholding, preservation, protection, safeguarding.

Volume 8, p. 956

[TRANSLATION]

STATUS - all of the social positions held by an individual (sex, age, occupation, family position, politics) and the roles associated with those positions.

The Petit Robert defines “status” as follows: state, factual situation, position.

It was shown that the council of physicians, dentists and pharmacists of the Hématite Health Center (Fermont Hospital, P.Q.) was a real professional association to which the appellant had to belong to maintain a professional status essential to the kind of practice he had chosen. That professional status was, of course, different than the status that enabled him to practise dentistry in general; the payment of the dues in question made him a member of an association that gave him a professional status recognized by statute, and that status gave him access to a distinct, defined field of practice. The evidence showed that the professional status in question was recognized by statute.

That status provided for by statute was the status of a dentist in an institution. It was a specific status held by professionals practising in institutions, and it was created by the Act respecting health services and social services pursuant to sections 213 and 237 of that Act.

The $150 in dues the appellant paid for the 1994 taxation year was a deductible dues payment within the meaning of the Income Tax Act.

I read the cases submitted by the respondent with a great deal of interest. The Department seems to be relying on those cases as a basis for concluding that dues payments can be deducted only by those practising a profession as a business. In other words, to be entitled to certain dues-related deductions, professionals would have to practise their profession as business persons, failing which they would not be entitled to the deduction for dues paid in and for the purpose of practising their profession.

The term “professional” is not based in any way on how an individual professes his or her knowledge; it is essentially based on the individual’s training, experience and competence, regardless of whether the individual is an independent contractor, a self-employed person or an employee.

The other issue in this case is whether the dues paid to the A.C.D.Q. were annual dues deductible under subparagraph 8( 1 )(/)(iv) of the Act. The applicable portion of the Act reads as follows:

(i) Dues and other expenses of performing duties - amounts paid by the taxpayer in the year as

(iv) annual dues to maintain membership in a trade union as defined

(A) by section 3 of the Canada Labour Code, or

(B) in any provincial statute providing for the investigation, conciliation or settlement of industrial disputes,

or to maintain membership in an association of public servants the primary object of which is to promote the improvement of the members’ conditions of employment or work,

to the extent that the taxpayer has not been reimbursed, and is not entitled to be reimbursed in respect thereof;

Once again, it is my view that the respondent’s interpretation is much too strict. The respondent backed up her arguments by putting a lot of emphasis on the definition usually given to the term “trade union”, which generally refers to a group of employees. Counsel stated this very specifically, as follows:

[TRANSLATION]

We respectfully submit that in its usual sense, the term “trade union” is defined as a group of workers or employees, not as a group of individuals practising a profession, some of whom are self-employed or even employers.

The respondent’s argument is essentially based on the concept of “workers” or “employees”. The respondent is arguing that a professional is neither an employee nor a worker. I do not agree with that interpretation. Moreover, such an interpretation is inconsistent with the definitions given in section 3 of the Canada Labour Code:

“EMPLOYEE" means any person employed by an employer and includes a dependent contractor and a private constable, but does not include a person who performs management functions or is employed in a confidential capacity in matters relating to industrial relations;

“TRADE UNION” means any organization of employees, or any branch or local thereof, the purposes of which include the regulation of relations between employers and employees;

It is true that in common, everyday parlance, the concept of “worker” no doubt excludes professionals; on the other hand, it is common for professionals to be employees in both the public and private sectors. Very often, professionals working for the government are described as government employees. It is also quite common to describe some professionals as employees. Are not all physicians employees of the government? The legislation seems clear to me: it authorizes the inclusion of the dues paid by the appellant. The concept of “employee” excludes only professionals practising their profession as a business. In a law firm where several members of the bar association work, there are generally partners who are business persons and lawyers who are employees and are paid only the salary agreed on for their work.

The dues paid by the appellant were annual dues required to remain a member of the A.C.D.Q. This is clear from the content of the by-laws. Article 2.5.1 of the dues by-laws reads as follows:

[TRANSLATION]

Every year, each member of the Association shall pay the annual dues determined and approved at the general meeting. Paragraph (c): Failure by a member to pay the dues within three (3) months of the date set shall ipso facto lead to the member’s suspension until the member has fulfilled his or her obligations.

I consider the document filed as Exhibit A-15, the 1992 Constitution, convincing as to the status of the A.C.D.Q.. I am referring, among other things, to article 3, which defines the Association’s objects as follows:

[TRANSLATION]

The objects of the Association are to study, defend and promote the economic, social and moral interests of its members. Pursuant to those objects and to its incorporating legislation, it shall negotiate all agreements deemed necessary with any authority to protect the interests of its members.

In light of the evidence adduced, it is my opinion that the A.C.D.Q.’s primary role was to promote the improvement of the conditions of employment or work of its members, including, of course, the appellant.

In this regard, I believe it is worth reproducing the following passage from the excerpt from Pierre-André Côté’s treatise on the interpretation of legislation in Canada cited in the written argument of counsel for the appellant:

Assuming a statute to be well drafted, an interpretation which adds to the terms of its provisions or deprives them of meaning is suspect.

Since the judge’s task is to interpret the statute, not to create it, as a general rule, interpretation should not add to the terms of the law. Legislation is deemed to be well drafted, and to express completely what the legislator wanted to say....

This passage is also entirely consistent with what was stated by Fauteux C.J. in Ville de Montréal and ILGWU Center Inc. and Public Service Board and La Régie de la Place des Arts, [1974] S.C.R. 59, at page 66:

The legislator is presumed to mean what he says; and there is no need to resort to interpretation when the wording is clear....

The evidence showed that the A.C.D.Q. was a properly incorporated trade union that met the requirements set out in the Act’s provisions. Accordingly, it is my view that the dues paid by the appellant to the A.C.D.Q. were deductible.

For these reasons, the appellant’s appeal is allowed, since the $680 and $150 in dues paid respectively to the Quebec Association of Dental Surgeons and the council of physicians, dentists and pharmacists of the Hématite Health Center (Fermont Hospital, P.Q.) were both deductible; the appellant shall be entitled to costs.

Appeal allowed.