REASONS FOR JUDGMENT
Bodie J.
THE ISSUE
[1] The issue in this appeal, which proceeded under the Court’s informal procedure, is whether a taxpayer, who included a benefit received under the Employment Insurance Act in her income is required to deduct the subsequent repayment of that benefit in the taxation year of repayment as opposed to another taxation year of the taxpayer’s choosing.
THE FACTS
[2] The Appellant in this case, Bdour Dandees was employed as a registered nurse in the 2022 taxation year. During that same year, Ms. Dandees experienced health issues. Upon falling ill, Ms. Dandees began receiving employment insurance benefits. She received employment insurance benefits in the amount of $5,742 for the 2022 taxation year and $1,914 for the 2023 taxation year. Such amounts were included in her income for the 2022 and 2023 taxation years respectively.
[3] However, at some point in 2023, it was determined that Ms. Dandees was not entitled to employment insurance benefits and she therefore repaid the full amount of the $7,656 she had received in benefits in 2023. She accordingly received a corresponding deduction of the same amount for the 2023 taxation year.
THE POSITIONS OF THE PARTIES
[4] Ms. Dandees appealed the Minister of National Revenue’s reassessments for the 2022 and 2023 taxation years because, in her view, she did not fully recover the amount of tax paid on the employment insurance benefits received, as she was subject to a higher tax bracket in 2022 than in 2023.
[5] She argued that subparagraph 60(n)(iv) of the Income Tax Act (the “Act”
) creates a disadvantage in her situation by only permitting her to take the deduction for the amounts repaid in the year of repayment. She submitted that a taxpayer should be able to choose the year of deduction similar to the manner in which subparagraph 60(n)(v.3) allows taxpayers to choose the year of deduction for repayments of certain COVID-19 benefits. All statutory references herein are to the Act.
[6] In response, the Respondent argued that subparagraph 60(n)(iv) is clear in only allowing a deduction for the repayment of employment insurance benefits in the year of repayment.
THE LAW
[7] Pursuant to subparagraph 56(1)(a)(iv), any amount of employment insurance benefits received in the year must be included in the taxpayer’s income in the year the benefits are received.
[8] When a taxpayer has made a repayment of pension or benefits in a year, paragraph 60(n) permits the taxpayer to claim a corresponding deduction. Subparagraph 60(n)(iv) specifies as follows:
Other deductions
60 There may be deducted in computing a taxpayer’s income for a taxation year such of the following amounts as are applicable
[…]
Repayment of pension or benefits
(n) any amount paid by the taxpayer in the year as a repayment (otherwise than because of Part VII of the Employment Insurance Act or section 8 of the Canada Recovery Benefits Act) of any of the following amounts to the extent that the amount was included in computing the taxpayer’s income and not deducted in computing the taxpayer’s taxable income, for the year or for a preceding taxation year namely,
[…]
(iv) a benefit described in subparagraph 56(1)(a)(iv)
ANALYSIS
[9] Neither of the parties nor any of my own research nor that of my clerks turned up caselaw which directly considers the question that is raised by Ms. Dandees in this appeal. Perhaps that is because the words of subparagraph 60(n)(iv) are clear and unambiguous and therefore do not lend themselves to multiple interpretations. In such circumstances a mere reading of subparagraph 60(n)(iv) is sufficient to answer Ms. Dandees’ question.
[10] Subparagraph 60(n)(iv) provides clear direction on the taxation year in respect of which a taxpayer may deduct a repayment of the type Ms. Dandees made in the 2023 taxation year. It provides that in computing their income for a taxation year, a taxpayer may deduct “any amount
paid
by the taxpayer in the year
as a repayment…”
(emphasis added).
[11] Where the provision at issue is clear and unambiguous, there is no need to go beyond the precise words of the text. In Canada Trustco MortgageCo. v. Canada, 2005 SCC 54, the Supreme Court of Canada confirmed the following position with respect to statutory interpretation of tax laws:
[10] It has been long established as a matter of statutory interpretation that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: see 65302 British Columbia Ltd. v. Canada, 1999 CanLII 639 (SCC), [1999] 3 S.C.R. 804, at para. 50. The interpretation of a statutory provision must be made according to a textual, contextual and purposive analysis to find a meaning that is harmonious with the Act as a whole. When the words of a provision are precise and unequivocal, the ordinary meaning of the words play [sic] a dominant role in the interpretive process. On the other hand, where the words can support more than one reasonable meaning, the ordinary meaning of the words plays a lesser role. The relative effects of ordinary meaning, context and purpose on the interpretive process may vary, but in all cases the court must seek to read the provisions of an Act as a harmonious whole.
[11] As a result of the Duke of Westminster principle (Commissioners of Inland Revenue v. Duke of Westminster, [1936] A.C. 1 (H.L.)) that taxpayers are entitled to arrange their affairs to minimize the amount of tax payable, Canadian tax legislation received a strict interpretation in an era of more literal statutory interpretation than the present. There is no doubt today that all statutes, including the Income Tax Act, must be interpreted in a textual, contextual and purposive way. However, the particularity and detail of many tax provisions have often led to an emphasis on textual interpretation. Where Parliament has specified precisely what conditions must be satisfied to achieve a particular result, it is reasonable to assume that Parliament intended that taxpayers would rely on such provisions to achieve the result they prescribe.
[…]
[13] The Income Tax Act remains an instrument dominated by explicit provisions dictating specific consequences, inviting a largely textual interpretation. […]
[12] The text of subparagraph 60(n)(iv) is precise and clear. A taxpayer who repays an employment insurance benefit is entitled to a deduction in the taxation year in which the repayment is made. In my view, the provision does not allow a taxpayer any discretion in choosing the year in which to take the deduction.
[13] This may be contrasted with the text found in paragraph 60(v.3), which appears to allow a taxpayer some choice in determining the taxation year in which a deduction may be taken for the repayment of certain COVID-19 benefits. It provides that there may be deducted in computing a taxpayer’s income for a taxation year, “any benefit repaid by the taxpayer before 2023…”
On the other hand, the text of subparagraph 60(n)(iv) is very precise with respect to the taxation year in which the amount of a repayment may be deducted.
CONCLUSION
[14] Accordingly, on the plain wording of subparagraph 60(n)(iv), I cannot find in favour of Ms. Dandees.
[15] However, I must note that Ms. Dandees, who was self represented, did not take vigorous issue with the Respondent’s interpretation of subparagraph 60(n)(iv). Her argument was not so much that the provision allows her a choice of the taxation year in which she may take a deduction, as much as it was that the provision should provide her with that choice. That may be a reasonable expectation on her part. However, as has often been pointed out, the Tax Court of Canada, which is not a court of equity, is not the forum for making such a determination. In our system of government, only Parliament can make that determination. As Justice Rothstein of the Federal Court of Appeal, as he then was, noted in Chaya v. R, 2004 FCA 329, at paragraph 4:
The applicant says that the law is unfair and he asks the Court to make an exception for him. However the Court does not have that power. The Court must take the statute as it finds it. It is not open to the Court to make exceptions to statutory provisions on the grounds of fairness or equity. If the applicant considers the law unfair, his remedy is with Parliament, not with the Court.
[16] Nevertheless, in coming before this Court to state her arguments and positions as respectfully and as ably as she has, Ms. Dandees is fully exercising her rights as a taxpayer in our system of government. For that, I congratulate her.
[17] However, for the reasons stated above, the appeal is dismissed, without costs.
Signed this 19th day of November 2025.
“J. Scott Bodie”
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