Date: 19980902
Docket: 97-2020-IT-I
BETWEEN:
STÉPHANE CÔTÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
LAMARRE PROULX, J.T.C.C.
[1] This is an appeal under the informal procedure in respect
of the 1994 taxation year.
[2] The issue is whether the appellant is a regular minister
of a religious denomination and whether he is in charge of a
congregation within the meaning of s. 8(1)(c) of the
Income Tax Act (“the Act”), which reads as
follows:
(1)
Deductions allowed — In computing a taxpayer’s
income for a taxation year from an office or employment, there
may be deducted such of the following amounts as are wholly
applicable to that source or such part of the following amounts
as may reasonably be regarded as applicable thereto:
. . .
(c)Clergyman’s residence — where the
taxpayer is a member of the clergy or of a religious order or a
regular minister of a religious denomination, and is in charge of
or ministering to a diocese, parish or congregation, or engaged
exclusively in full-time administrative service by appointment of
a religious order or religious denomination, an amount equal
to
(i)
the value of the residence or other living accommodation occupied
by the taxpayer in the course of or by virtue of the
taxpayer’s office or employment as such a member or
minister so in charge of or ministering to a diocese, parish or
congregation, or so engaged in such administrative service, to
the extent that that value is included in computing the
taxpayer’s income for the year by virtue of section 6,
or
(ii)
rent paid by the taxpayer for a residence or other living
accommodation rented and occupied by the taxpayer, or the fair
rental value of a residence or other living accommodation owned
and occupied by the taxpayer, during the year but not, in either
case, exceeding the taxpayer’s remuneration from the
taxpayer’s office or employment as described in
subparagraph (i) . . . .
[3] The facts on which the Minister of National Revenue
(“the Minister”) relied in arriving at his
reassessment are set out as follows in paragraphs 3 and 4 of the
Reply to the Notice of Appeal (“the Reply”):
[TRANSLATION]
3.
In making this reassessment the Minister took into account
inter alia the following facts:
(a)
when he filed his tax return for the 1994 taxation year, the
appellant claimed $4,500 for a clergyman’s residence;
(b)
during the 1994 taxation year the appellant was employed by the
Hôtel Château Neuville;
(c)
as the appellant was neither the senior pastor nor a person
responsible for an administrative service, the Minister
disallowed the $4,500 deduction claimed for a clergyman’s
residence.
4.
At the objection stage the appellant submitted an amended tax
return for the 1994 taxation year, revising his clergyman’s
residence deduction to $3,250, which was equivalent to the income
he received from the Assemblée Chrétienne du Nord
for that year.
5.
[4] The appellant’s Notice of Appeal states the
following, inter alia:
[TRANSLATION]
I am a pastor for the Assemblée Chrétienne du
Nord, a church affiliated with the Pentecostal Assemblies of
Canada. I hold credentials with that religious organization and
am thus a member of a recognized religious order. I am in charge
of a congregation and pay the cost of renting my apartment
myself.
[5] In his testimony the appellant described himself as a
youth pastor with the Assemblée Chrétienne du Nord.
He has held this position since 1993. He offered his services in
late 1993 to the church's committee; it decided to hire him
and make him responsible for the youth congregation, which
included some 20 young people ranging in age from 13 to 20.
Meetings were held at the A.N. Morin secondary school in
Mont-Roland on Fridays from 7:00 p.m. to 10:00 p.m. During the
week and on weekends he visited the young people.
[6] The appellant also took part in the congregation’s
meetings on Sundays from 10:00 a.m. to 12:30 p.m. At these
meetings, he assisted the senior pastor, Jocelyn Binette, who was
a full-time pastor.
[7] For these pastoral duties the appellant was paid a total
annual amount of $3,250 in monthly cheques.
[8] The appellant admitted subparagraphs 3(a) and (b) and
paragraph 4 of the Reply. On the statement in subparagraph 3(b),
he explained that he worked evenings, from 6:00 p.m. to midnight
Sunday to Thursday, as a receptionist and social director at the
time-sharing hotel. The total pay was $12,345.92.
[9] He also an worked at lunch time three days a
week—Monday, Wednesday and Friday—at the St. Joseph
school of the Laurentides school board. He was paid $1,233.21 for
this work. Exhibit I-1 consists of the various T4s, which
indicate the earnings he received from his various employers.
[10] In the taxation year at issue the appellant completed his
Bible studies to obtain a ministry licence and become an ordained
minister. At that time he was at the level of a lay preacher. He
said he could have performed marriage ceremonies if he had
applied for authorization from the government. The senior pastor
was authorized to do so.
[11] As can be seen at page 16 of the transcript, the
appellant described the various stages to be completed in order
to become an ordained minister as follows: [TRANSLATION]
“there are many, many stages: the first is the lay
preacher, the second is recognition of ministry, after that there
is a ministry licence which is granted until the person is an
ordained minister”.
[12] Marielle Gélinas, an appeals officer, testified at
the request of counsel for the respondent. She stated that on
June 20, 1996 she had telephoned Mr. Binette, the
congregation’s full-time pastor. He told her that the
appellant was a part-time pastor and was responsible for three
youth cells in the Northern region. He also explained that the
congregation did not have sufficient resources to pay the
appellant any more than it did. He added that the appellant was
engaged in Bible studies and needed two years' practical
experience before being consecrated as a pastor. The senior
pastor told her that he himself was authorized to perform
marriage ceremonies and that the appellant was not.
[13] Exhibit I-2 consisted of various letters
received by the appeals officer or placed at her disposal. The
first letters, dated September 14 and November 24, 1995, were
written by the committee of the Assemblée
Chrétienne du Nord and signed by two directors. Their
content is identical. They state the following:
[TRANSLATION]
This is to confirm that Stéphane Côté has
been in our employ since December 1993. In 1994 (beginning on
January 1), he:
(1)
held credentials as a lay preacher (in the
process of reclassification upwards to recognition of
ministry) in good standing with the Pentecostal Assemblies of
Canada, a charitable organization incorporated under the
Religious Corporations Act, with which the Eastern Ontario
and Quebec District is affiliated;
(2)
performed pastoral duties for our corporation, the
Assemblée Chrétienne du Nord (affiliated with the
Pentecostal Assemblies of Canada), incorporated under letters
patent pursuant to the Religious Corporations Act (R.S.Q.,
c. C-71, s. 2), working a minimum of 25 hours a week at
these duties in 1994;
(3)
worked in our church as youth pastor and musical director in
1994;
(4)
preached the Gospel in other assemblies affiliated with the
Pentecostal Assemblies of Canada.
(5)
[14] A letter dated November 27, 1995 and signed by the same
directors states the following:
[TRANSLATION]
This is to confirm that one of the pastors associated with our
church, Stéphane Côté, has been
employed by the Assemblée Chrétienne du Nord
since 1993 and leads several weekly meetings, various home
meetings and all activities connected with the operation of a
youth program. He also co-ordinates musical activities.
[15] The last letter is dated April 11, 1996 and was signed by
Jocelyn Binette, the senior pastor. It states the following,
inter alia:
[TRANSLATION]
We wish to confirm once again that pastor Stéphane
Côté has been employed by our church, the
Assemblée Chrétienne du Nord, since December
1993.
He is a member in good standing of our religious denomination
and as an associate pastor is responsible for several duties in
respect of which he is in charge of our congregation. You will
find attached a summary of his duties, which he has performed
since being hired.
. . .
The Assemblée Chrétienne is duly incorporated
under the Religious Corporations Act (R.S.Q., c. C-71, s.
2) and is affiliated with the Pentecostal Assemblies of
Canada.
. . .
DUTIES AND RESPONSIBILITIES
OF PASTOR STÉPHANE CÔTÉ
-
Pastor responsible for our congregation’s youth.
-
He occasionally teaches and preaches the Gospel to our
congregation at our Sunday meetings.
-
He is in charge of prayer meetings made available to our
congregation.
-
He plays an active role in our regular meetings.
-
He shares responsibility for visiting members of the congregation
and newcomers.
-
Analysis
[16] The evidence should have been more complete. It would
have been necessary to see the document under which the
Assemblée Chrétienne du Nord was constituted, and
its by-laws. In their letter of November 24, 1995, reproduced in
paragraph 13 of these reasons, the directors of that assembly
state that it is affiliated with the Pentecostal Assemblies of
Canada. However, there is no description of the rules established
by this religious denomination regarding the various stages to be
completed by those who want to practise as a minister of the
religious denomination. The same letter states that the appellant
had the status of a lay preacher in their community (in the
process of reclassification upwards to recognition of ministry).
There was no explanation either in the letters or at the hearing
of the status of a lay preacher of the congregation or of the
studies and training required to become a lay preacher. As
regards the status of a minister, the appellant explained, as the
senior pastor had done to the Minister’s officer, that he
was then engaged in Bible studies in order to be consecrated as a
pastor and become an ordained minister.
[17] Section 8(1)(c) of the Act does not require a
minister to perform his duties full-time, in contrast with what
is required of someone engaged in administrative service for a
religious denomination. The appellant did not spend all his time
on his pastoral duties but did spend time on them on a regular
basis; his appeal cannot fail on this ground.
[18] Nor does section 8(1)(c) state that only a person
at the head of a ministry for a congregation can receive the
deduction allowed in that section. In the church hierarchy there
are duties and certain powers correspond to those duties. In my
view, for a person to have full powers over performance of the
liturgy is not necessarily an essential condition of
s. 8(1)(c) of the Act. What matters is that the
person be a regular minister of the religious denomination.
[19] The meaning of “regular minister” was
considered in depth in Walsh v. Lord Advocate, [1956] 3
All E.R. 129 (H.L.). Under a provision of Great Britain's
military service legislation, a regular minister of a religious
denomination could be exempted from military service. The
question thus was what was meant by “regular
minister”. Mr. Walsh was a Jehovah’s Witness. Among
Jehovah’s Witnesses all members have the title of minister
or servant of God and his Gospel, and that religious denomination
makes no distinction between clergy and lay members. The House of
Lords unanimously ruled, as the lower courts had done, that
“regular minister” within the meaning of the Act
refers to a member of the religious denomination having superior
and distinct standing in that denomination in spiritual matters
and that, if a religious domination makes no distinction between
clergy and lay members, the concept of a regular minister of a
religious denomination cannot apply.
[20] I quote the following extracts from the reasons for
judgment of Lord MacDermott in Walsh, supra, at p.
135:
In my opinion the words “a regular minister”
connote a class which forms but a part of the denomination in
question and is acknowledged by that denomination as having a
superior and distinct standing of its own in spiritual
matters. . . . LORD MACKINTOSH puts this
requirement very clearly when, speaking of the “regular
minister”, he says:
“. . . he must have by virtue of his appointment as a
minister what might be called ‘a clergyman status’
which sets him apart from and places him over the laity of his
denomination in spiritual matters.”
[21] This decision was cited and followed by Judge Beaubier of
this Court in Kolot v. The Queen, 92 DTC 2391, at p. 2394,
and by Judge Goetz in Jacob Small and William J. McRae v. The
Minister of National Revenue, 89 DTC 663, at p. 669.
[22] We know that the appellant is not an ordained minister in
his religious denomination, but a lay preacher. We also know that
he participates as such in the pastoral work of his church.
However, as has just been said, it is not the title which
determines the status of a regular minister: the person must be a
member of a group which has a superior and distinct standing of
its own in spiritual matters in his church. I will refer to this
group as “clergy” to make these reasons easier to
read.
[23] It is well known that churches have lay members who
assist members of the clergy or perform quasi-ecclesiastical
duties. That does not make them members of the clergy of that
church. To determine which members belong to the clergy and which
belong to the lay assembly, it is necessary to know how the
church or religious denomination in question is organized.
[24] The evidence did not show how the religious denomination
to which the appellant belongs is organized. Accordingly, we do
not know how someone acquires the status of a member of the
clergy of his church or what a member of its clergy is entitled
to do as contrasted with the lay members of the church. Nor was
there any evidence as to the training of a lay preacher or as to
his function under the rules of the appellant’s church. I
thus cannot be certain that the appellant belongs to the class of
clergy of his church as opposed to its lay members.
[25] The appeal must accordingly be dismissed.
Signed at Ottawa, Canada, September 2, 1998.
“Louise Lamarre Proulx”
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
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