18 January 1990 Ministerial Correspondence 74544 F - Employment Income

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Subject:  24(1)

This is reply to your memorandum of November 27, 1989, wherein you requested our views 24(1) 

In support of their position they cite such court cases as Estate of Phaneuf v. The Queen 78 DTC 6001, The Queen v. Savage 83 DTC 5409 and Waffle v. M.N.R. [1968] CTC 572.

It is our view that, based on the comments of Cattanach, J. in Waffle, it is not necessary to have the amounts paid by the recipient's employer before paragraph 6(1)(a) of the Act can operate.

24(1)

It is our opinion that in this instance the proper focus of an interpretation of the clause "in respect of" should be upon the Nowegijick (SCC-1983) and Savage (SCC-1983) judgements.

In Nowegijick, Mr. Justice Dickson of the Supreme Court of Canada made the following statements with regard to the words "in respect of ":

     "The words "in respect of" are, in my opinion, words of the widest possible scope. They import such meanings as "in relation to", "with reference to " or "in connection with".  The phase "in respect of" is probably the widest of any expression intended to convey some connection between two related subject matters."

This principle was subsequently followed by the Supreme Court of Canada in Savage where the court interpreted the words  "... benefits ... in respect of, in the course of, or by virtue of an office or employment". Mr. Justice Dickson commented on an earlier case, Phaneuf:

     "With great respect, however, I do not agree with the latter part of the passage last quoted and in particular the statement that, to be received in the capacity of employee, the payment must partake of the character of remuneration for services. Such was the conclusion in the English cases but based on much narrower language. Our Act contains the stipulation, not found in English statutes referred to, "benefits of any kind whatever ... in respect of, in the course of, or by virtue of an office or employment". The meaning of "benefit of whatever kind" is clearly quit broad; in the present case the cash payment of $300 easily falls within the category of "benefit". Further, our Act speaks of a benefit "in respect of" an office or employment".

Mr. Justice Dickson then cited the above-noted passage from Nowegijick and continued on to say:

     "I agree with what was said by Evans, J.A. in R. v. Poynton, (1972) 3 O.R. 727 at page 738 (72 DTC 6329 at page 6335 - 6), speaking of benefits received or enjoyed in respect of, in the course of, or by virtue of an office or employment:

     "I do not believe the language to be restricted to benefits that are related to an office or employment in the sense that they represent a form of remuneration for services rendered.  If it is a material acquisition which confers an economic benefit on the taxpayer and does not constitute an exemption, e.g., loan or gift, then it is within the all-embracing definition of section 3."

Accordingly, the criteria for selection the recipients may not have any relevance on the operation of paragraph 6(1)(a) of the Act, depending upon particulars of any given situation.

B.W. Dath for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch