Date: 20001003
Docket: A-457-99
CORAM: DÉCARY J.A.
SHARLOW J.A.
MALONE J.A.
BETWEEN:
STEVEN WILLETT NELSON
Applicant
- and -
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
SHARLOW J.A.
[1] This is an application for judicial review of a decision of the Tax Court of Canada, reported as Steven W. Nelson v. Her Majesty the Queen, [1999] T.C.J. No.373 (QL). The applicant Mr. Nelson argues that his rights under subsection 15(1) of the Canadian Charter of Rights and Freedoms have been breached by the application of subsection 118(5) of the Income Tax Act, R.S.C. 1985, c. 1 (5th supp). Subsection 15(1) of the Charter reads 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.
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| 15. (1) La loi ne fait acception de personne et s'applique également à tous, et tous ont droit à la même protection et au même bénéfice de la loi, indépendamment de toute discrimination, notamment des discriminations fondées sur la
race, l'origine nationale ou ethnique, la couleur, la religion, le sexe,l'âge ou les déficiences mentales ou physiques.
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[2] I summarize the facts as follows. Mr. Nelson is divorced. There are two children of his former marriage, a daughter born in 1988 and a son born in 1991. There are court orders granting Mr. Nelson and his ex-wife joint custody of both children and requiring Mr. Nelson to pay child support to his ex-wife for both children. Mr. Nelson claims to provide the meals and accommodation for both children approximately 50% of the time. In 1996 Mr. Nelson's son resided with Mr. Nelson and was dependent upon him. Mr. Nelson claimed and was allowed a deduction for those payments under paragraph 60(b) or (c) of the Income Tax Act. For 1996, the Crown has accepted Mr. Nelson's entitlement to the "child tax benefit" for his son pursuant to section 122.6 of the Income Tax Act.
[3] Mr. Nelson also claimed the "equivalent to married" tax credit in respect of his son under paragraph 118(1)(b) of the Income Tax Act. In 1996, Mr. Nelson met the following conditions in paragraph 118(1)(b): he was not entitled to a tax credit for a dependent spouse, he was unmarried, and he maintained a home in which he lived and supported his son.
[4] The problem is that subsection 118(5) overrides what would otherwise be Mr. Nelson's entitlement to a tax credit in respect of his son under paragraph 118(1)(b). For the 1996 taxation year, subsection 118(5) read as follows:
| Where an individual in computing the individual's income for a taxation year is entitled to a deduction under paragraph 60(b), (c) or (c.1) in respect of a payment for the maintenance of a spouse or child, the spouse or child shall, for the purposes of this section ... be deemed not to be the spouse or child of the individual.
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Dans le cas où un particulier a droit à une déduction prévue à l'alinéa 60b), c) ou c.l) dans le calcul de son revenue pour une année d'imposition au titre d'un paiement effectué pour subvenir aux besoins de son conjoint ou de son enfant, le conjoint ou l'enfant sont réputés, pour l'application du présent article ... ne pas être le conjoint ou l'enfant du particulier.
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[5] The position of the Crown is that subsection 118(5) denies Mr. Nelson any tax credit for his son because Mr. Nelson made child support payments in 1996 in respect of his son and was allowed a deduction under paragraph 60(b) or (c) for those payments.
[6] Mr. Nelson was assessed on that basis and objected. His objection failed and he appealed to the Tax Court under its informal procedure. The Tax Court Judge dismissed his appeal on the basis of subsection 118(5), and also concluded that there had been no breach of the Charter. Mr. Nelson then commenced this application for judicial review of the decision of the Tax Court Judge.
[7] The Tax Court Judge was correct to conclude that subsection 118(5) precluded Mr. Nelson from claiming the "equivalent to married" tax credit. However, he should not have considered Mr. Nelson's Charter arguments because he did not comply with subsection 57(1) of the Federal Court Act, R.S.C. 1985, c. F-7, which reads 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).
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57. (1) Les lois fédérales ou provinciales ou leurs textes d'application, dont la validité, l'applicabilité ou l'effet, sur le plan constitutionnel, est en cause devant la Cour ou un office fédéral, sauf s'il s'agit d'un tribunal militaire au sens de la Loi sur la défense nationale, ne peuvent être déclarés invalides, inapplicables ou sans effet, à moins que le procureur général du Canada et ceux des provinces n'aient été avisés conformément au paragraphe (2).
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[8] It was established in Canada v. Fisher, (1996) 197 N.R. 60; [1996] 2 C.T.C. 103; 96 D.T.C. 6291; [1996] F.C.J. No. 427;(C.A.) (QL), that subsection 57(1) of the Federal Court Act applies to proceedings in the Tax Court under the informal procedure.
[9] That would be sufficient to dismiss this application for judicial review. However, the Crown did not raise subsection 57(1) of the Federal Court Act before the Tax Court Judge. Because of that, and in deference to Mr. Nelson's thoughtful and articulate presentation in this Court, I propose to comment briefly on the Charter issue he has raised. Mr. Nelson has complied with subsection 57(1) in respect of the proceedings in this Court.
[10] Mr. Nelson's argument is that subsection 118(5), in denying him the equivalent to married tax credit for his son, resulted in a disadvantage to him that amounts to a breach of his rights under subsection 15(1) of the Charter. Mr. Nelson's position is that for 1996, he ought to be entitled to both a deduction under paragraph 60(b) or (c) for support payments and the equivalent to married tax credit.
[11] As explained above, the critical fact that led to the application of subsection 118(5) is Mr. Nelson's obligation to pay child support to his former spouse in respect of his son even though he lives with and supports his son and has joint custody. I would identify the relevant comparator group in Mr. Nelson's case as a single parent who lives with and supports a child in a shared custody arrangement with the child's other parent but who has no legal obligation to pay child support to the other parent.
[12] In my view, the differential treatment created by subsection 118(5) of the Income Tax Act is not based on one of the grounds enumerated in subsection 15(1) of the Charter or an analogous ground. Subsection 118(5) does not draw a distinction between Mr. Nelson and the comparator group based on personal characteristics, or the stereotypical application of presumed group or personal characteristics, and does not bring into play the purpose of subsection 15(1) of the Charter in remedying such ills as prejudice, stereotyping, and historical disadvantage. Nor does the operation of subsection 118(5) of the Income Tax Act offend Mr. Nelson's dignity, intrinsic worthiness or self-respect. Therefore, the differential treatment resulting from subsection 118(5) is not discriminatory in the Charter sense.
[13] The premise underlying Mr. Nelson's argument is that Parliament should provide equal tax relief to all single parents who support their children in a shared custody arrangement. While that may be a laudable public policy objective, it is not one that can be advanced through a claim under subsection 15(1) of the Charter. Mr. Nelson's remedy lies with Parliament alone.
[14] I note that the same conclusion was reached by the Tax Court in Werring v. Canada, [1997] T.C.J. No. 361 (QL); 97 D.T.C. 3290. Mr. Nelson argued his case on a slightly different basis. He emphasized what he characterized as the rights of children, arguing that children are jeopardized by a tax system that provides less generous tax relief to joint custodial parents who have a legal obligation to pay child support than those who have no such legal obligation. The record discloses no factual foundation for that argument. Nor does the record establish whether, assuming there is such a disadvantage to children, the problem cannot adequately be addressed through an application to the family court for appropriate adjustments to the financial support obligations.
[15] This application for judicial review should be dismissed.
Karen R. Sharlow
J.A.
"I agree
Robert Décary"
"I agree
Brian Malone"
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