William J Hilton v. Minister of National Revenue, [1972] CTC 2067, 72 DTC 1073

W O Davis:—This is an appeal from an assessment to income tax, dated October 23, 1969 wherein provincial tax in the amount of $547.46 was levied for the 1968 calendar year, made up of $35.55 payable to the Province of British Columbia and $511.91 payable to the Province of Alberta.

This appeal was set down for hearing before me at a sittings of the Tax Appeal Board (as it was then constituted) due to commence at Vancouver on November 15, 1971. However, the matter was spoken to before me at a sittings of the Tax Appeal Board at Calgary, Alberta, on November 8, 1971, at which time it was proposed by the parties, with my concurrence, that an agreed statement of facts followed by written submissions would be filed with the Board in place of oral evidence and argument.

The agreed statement of facts, signed by counsel for the respective parties and filed on November 29, 1971, is as follows:

AGREED STATEMENT OF FACTS

The parties hereto, by their respective counsels (sic), hereby admit the following facts and documents, provided that such admission is made for the purpose of this action only and may not be used against either party on any other action or by any other person.

1. During the whole of the taxation years 1964, 1965, 1966, and 1967 the appellant resided at Midnapore, Alberta, where his chief source of income was from dairy farming.

2. During the year 1968 the appellant sold all his cattle and his farm and moved, for the purposes of retirement, to British Columbia in August of 1968 where he resided at least for the remainder of that year.

3. During the taxation years 1964 to 1968 inclusive, the appellant did not Carry on any business in any place other than in the Province of Alberta.

4. In his return of income for the year in question, the appellant reported, inter alia, income as follows:

Bank of Nova Scotia, Cloverdale, BC

Interest Income	$364.61
Bank of Nova Scotia, Midnapore, Alberta
Interest Income	$433.95

5. The interest income in the amount of $364.61 mentioned in paragraph 4 received from the Bank of Nova Scotia, Cloverdale, BC, was received while the appellant was resident in British Columbia.

6. The appellant sought to average his income for the 1968 taxation year under the provisions of Section 42 of the Income Tax Act, RSC 1952, c 148, which was permitted and also sought to average his income for the 1968 taxation year under the provisions of The Alberta Income Tax Act, Statutes of Alberta 1961, c 1 as amended, which was not permitted by the respondent.

When filing his income tax return for 1968, the appellant also filed an election to average his income for the five-year period 1964 to 1968 inclusive under the provisions of section 42 of the Income Tax Act, RSC 1952, c 148 and amendments thereto, which was accepted by the Minister of National Revenue and federal tax for the entire period calculated accordingly. However, on the notice of assessment appealed against, the appellant was informed that he was not permitted to average the provincial taxes over the same period, as his income for the averaging period was from more than one province, and therefore the provincial tax on his income for the year 1968 had been calculated at the normal rates on his actual income for that year.

The Minister supported his course of action by pointing out that in such circumstances the appellant did not meet the requirements of subsection 6a(2) of The Alberta Income Tax Act, Statutes of Alberta 1961 (2nd Sess), c 1, as amended by Statutes of Alberta 1964, c 34, which reads as follows:

6a. (2) Subsection (1) applies only in the case of an individual who

(a) throughout the averaging period

(i) resided in Alberta, and

(ii) did not carry on a business with a permanent establishment (which, in this subsection, has the meaning given to that expression under the regulations made pursuant to section 33 of the federal Act) outside of Alberta, or

(b) throughout the averaging period

(i) resided outside of Alberta, and

(ii) had no income other than his income from the carrying on of a

business with a permanent establishment in Alberta and nowhere else.

In assessing the appellant as he did, the Minister is stated to have relied on the following assumptions of fact:

(a) that the appellant resided in Alberta from January 1, 1968 until

August of 1968, at which time he moved to British Columbia where he resided from that time until at least the end of 1968;

and

(b) that during the 1968 taxation year while the appellant was a resident of White Rock, British Columbia, he received interest income from the Cloverdale Branch of the Bank of Nova Scotia (ie, in British Columbia), from the branch of the Bank of Nova Scotia at 1429 17th Avenue SW, Calgary, Alberta, and from the Investors Growth Fund of Canada Ltd.

The Minister of National Revenue has taken the position that, since the appellant resided in the Province of Alberta only until August of 1968 and resided in the Province of British Columbia from August 1968 on, he did not reside in Alberta throughout the averaging period as required by paragraph 6a(2)(a) of The Alberta Income Tax Act nor did he, in the alternative, reside outside of Alberta throughout the averaging period as required by paragraph (b) thereof, and that consequently the appellant is not entitled to average his income for the years 1964 to 1968 inclusive under section 6a for the purposes of The Alberta Income Tax Act.

It appears to be beyond question that the appellant does not fall within the terms of subparagraph 6a(2)(b)(i) of The Alberta Income Tax Act, the only question remaining being whether he did in fact reside in the Province of Alberta throughout the averaging period, that is to say, throughout the years 1964, 1965, 1966, 1967 and 1968, the period of his election under section 42 of the federal Income Tax Act, RSC 1952, c 148. The answer to this problem appears to lie in the interpretation to be given to the key word “throughout” as it is used in subsection 6a(2) of The Alberta Income Tax Act.

Subsections (4) and (5) of section 2, which is the definition section of the Alberta Act, contain the following provisions:

2. (4) For the purposes of this Act, except where they are at variance with the definitions contained in this section, the definitions and interpretations contained in or made by regulation under the federal Act, as amended from time to time, apply.

(5) In any case of doubt, the provisions of this Act shall be applied and interpreted in a manner consistent with similar provisions of the federal Act.

The appellant has sought to apply the provisions of the above subsections (4) and (5) of section 2 of the Alberta Act as authorization to resort to the definition of the term “residence” which is found in subsection 139(3) of the federal Income Tax Act. On this premise, it was submitted on behalf of the appellant that, as he had resided in the Province of Alberta for more than 183 days in the calendar year, he should therefore be deemed to have resided in the Province of Alberta “throughout the 1968 taxation year”. That the taxpayer had been resident in the Province of Alberta for all the other years of the averaging period and had not carried on a business with a permanent establishment outside of Alberta was never in question; and it was therefore submitted that he fell squarely within the provisions of paragraph 6a(2)(a) of The Alberta Income Tax Act.

In this submission, the appellant seeks to rely on the definition of the word “residence” contained in the federal Act rather than taking cognizance of the precise wording of both paragraph (a) and paragraph (b) of subsection 6a(2) of the Alberta Act, which clearly requires that in order to avail himself of the averaging provisions a taxpayer must be able to establish either that throughout the averaging period he resided /n Alberta or that throughout the averaging period he resided outside of Alberta. It is recognized that the appellant William J Hilton resided in Alberta during the first four years of the averaging period, the only matter in question being whether he did in fact reside in Alberta throughout the calendar year 1968, the final year covered by his election to average.

The Shorter Oxford English Dictionary defines the word “throughout” as meaning:

A. (prep) 2. Through; through the whole of (a space, region, etc); in or to every part of; everywhere in. b. Through or during the whole of (a period of time or course of action; from beginning to end of.

B. (adverb) 1. Right through, quite through. 2. Through the whole of a time or course of action; at every moment or point; all through.

The Concise Oxford Dictionary defines the word “throughout” as follows:

Adv & Prep 1. Right through, in every part, in all respects, as Timber was rotten throughout, followed a sound policy throughout. 2. prep Right through, from end to end of, as throughout the length and breadth of the land, throughout the 18th century.

I am of the opinion that when this word “throughout” is used in subsection 6a(2) of The Alberta Income Tax Act, it is contemplated that a condition must exist from beginning to end of the averaging period, that is, from the beginning of the first day of the first year to the end of the last day of the last year of any averaging period chosen by the taxpayer.

Clearly the appellant did not reside in the Province of Alberta for the entire averaging period covered by his election to average but only for the averaging period from 1964 to 1967 inclusive, it having been admitted in the agreed statement of facts that the appellant left the Province of Alberta some time in the month of August 1968 and therefore did not reside in Alberta throughout that particular year of the averaging period. It cannot therefore be said that in so far as that year is concerned he met the requirements of the Alberta Act which are prerequisite to any right to avail himself of the averaging provisions of subsection 6a(1) thereof.

The appeal must therefore be dismissed, and the Minister’s assessment of the provincial taxes payable for the 1968 taxation year left undisturbed.

Appeal dismissed.