Citation: 2012 TCC 142
Date: 20120430
Docket: 2011-622(IT)I
BETWEEN:
DIANNE-MARIE BYDELEY,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Bédard J.
Facts
[1]
In the 2009 taxation
year, Dianne-Marie Bydeley (the “appellant”) received pension or superannuation
income from the Ontario Teachers Pension Plan (the “Payer”) in the amount of
$43,237.80
[2]
The Payer issued a T4A
slip, Statement of Pension, Retirement, Annuity, and Other Income for 2009.
[3]
In the 2009 taxation
year, $5,474.37 in tax was withheld at source in respect of the pension or
superannuation income of $43,237.80.
[4]
The appellant reported
total income of $0 in computing her income for the 2009 taxation year.
[5]
The appellant only
reported in her tax return for the 2009 taxation year tax withheld at source in
the amount of $5,474.37.
[6]
By Notice of Assessment
dated June 10, 2010, the Minister assessed the appellant’s tax liability
for the 2009 taxation year and in so doing included income in the amount of
$43,237.80 received by the appellant from the Payer.
[7]
The appellant served on
the Minister a Notice of Objection dated June 16, 2010 for the 2009
taxation year.
[8]
By Notification of
Confirmation dated February 3, 2011, the Minister confirmed the
appellant’s tax liability for the 2009 taxation year.
[9]
In determining the
appellant’s income tax liability for the 2009 taxation year, the Minister
relied on the following assumptions of fact:
a)
the facts as stated
above;
b)
in 2009, the appellant
resided at 118 Gracefield
Crescent, Kitchener, Ontario;
c)
in 2009, the appellant
was a Canadian resident.
Issue to be decided
[10]
The issue to be decided
is whether the Minister properly included in the appellant’s income for the
2009 taxation year the amount of $43,237.80 in pension or superannuation income
that the appellant received in that year.
Parties’ submissions
Appellant’s submissions
[11]
First, the appellant
says that she should not be liable under the Income Tax Act (“ITA”)
without her express consent. From the appellant’s point of view, to suggest
that under the ITA Parliament can compel a man or woman to pay tax without his
or her explicit consent is prima facie evidence of slavery.
[12]
The appellant also
argues that a “natural person” is not a person within the meaning of the term
“person” contained in the ITA and, consequently, a “natural person” is exempt
from paying income tax.
[13]
Moreover, the
appellant’s position is that she has no valid contractual obligation to the Canada
Revenue Agency (“CRA”) resulting from her application for a social insurance number
(“SIN”) and therefore has no “taxable income”. In reaching this conclusion, the
appellant relies particularly on the following reasons:
a)
When the appellant made
her application for a SIN, she was a minor and therefore unable to legally
contract.
b)
The appellant was
wrongfully led to believe that she could not be employed without a SIN and was
coerced into a contractual agreement with the CRA under threat, duress or
intimidation consisting in the prospect of losing an employment opportunity.
c)
The CRA changed the
terms or details of that contract when it changed the eight‑digit number
on the application to nine digits without the appellant’s consent.
[14]
Finally, the appellant
denies that she was a resident of Canada for the 2009 taxation year since, in
the Interpretation Act, R.S.C. 1985, c. I-21, “Canada” is defined as including “the internal waters of
Canada and the territorial sea of Canada”.
Using the legal maxim inclusio unius est exclusio alterius, which means
“the inclusion of one is the exclusion of another”, the appellant argues that
she was not a resident of Canada in 2009 since she was not residing in or
on water.
Respondent’s submissions
[15]
The respondent submits
that the appellant received from the Payer during the 2009 taxation year pension
or superannuation income in the amount of $43,237.80 and that the Minister correctly
included this amount in computing the appellant’s income for the 2009 taxation
year in accordance with section 3 and subparagraph 56 (1)(a)(i) of
the ITA.
[16]
The respondent further
submits that the appellant was resident in Canada
and earned taxable income in the 2009 taxation year, and thus the Minister
properly assessed the appellant’s liability for tax on the income in question for
the 2009 taxation year pursuant to section 2 of the ITA.
Analysis
Minister’s power to enforce
tax liability under the Income Tax Act
[17]
The appellant asks this
Court to protect her sovereign inalienable right to choose whether to pay taxes
or not.
[18]
Both the British
Columbia Supreme Court and the Supreme Court of Canada have already ruled that
the ITA is constitutional and intra vires legislation insofar as it
relates to the Federal Government's jurisdiction and authority to pass laws
requiring the payment of income taxes. As counsel for the respondent quite
correctly submitted, the case law is well settled that it is within
Parliament's power to impose taxes on its citizens. The relevant cases are the
following: Caron v. The King, [1924] 4 D.L.R. 105 (J.C.P.C. affirming
the S.C.C. decision reported at (1922), 64 S.C.R. 255; Bruno v. Canada (Customs
and Revenue Agency), 2002 BCCA 47; R. v. Klundert (2004),
187 C.C.C. (3d) 417 (Ont. C.A.), leave to appeal to the Supreme Court of Canada
refused 2005 CarswellOnt 1118 (S.C.C.)).
[19]
Regarding the argument
that the ITA tends toward a form of slavery, I think it sufficient simply to
examine the definition of slavery contained in the Oxford English Dictionary
online (2012) to clarify this issue:
Slavery, n.: … The condition or fact of being entirely subject to,
or under the domination of, some power or influence.
[20]
The ITA is a law passed
by a legislature whose power is exercised by a democratically elected
government. Therefore, I simply fail to see the merit of this argument.
“Natural person” argument
[21]
The “natural person”
argument has already been considered on many occasions by the Tax Court of
Canada, the Federal Court of Canada, the Federal Court of Appeal and the
Superior Courts and Courts of Appeal of the provinces and by many Provincial
Courts.
[22]
The appellant is
obviously not the first person to invoke the “natural person” argument and,
regrettably, is unlikely to be the last. I do not intend to get out in detail
the reasoning of the courts in dealing with this issue; suffice it to say that
all, without exception, have rejected the same argument as that made by the
appellant in the case at bar.
[23]
I would simply refer to
the following decisions:
·
Kennedy v. Canada (Customs and Revenue Agency), [2000] O.J. No. 3313 (Ont. S.C.J.) (QL).
·
M.N.R. v. Camplin, 2007 DTC 5165.
·
R. v. Lindsay, 2006 BCCA 150, [2006] 3 C.T.C. 146.
·
Canada (M.N.R.) v. Stanchfield, [2009] F.C.J. No. 61 (FC) (QL).
·
M.N.R. v. Stanchfield, 2009 DTC 5050 (FC).
·
Hovey Ventures Inc. v. The
Queen, 2007 DTC 617.
·
Kion v. The Queen, 2009 TCC 447.
·
Canada v. Galbraith,
2001 BCSC 675.
·
R. v. Dick, 2003 BCPC 13.
·
R. v. Carew, [1992] B.C.J. No. 995 (B.C.S.C.) (QL).
·
R. v. Sullivan, [1991] 1 S.C.R. 489.
·
PPG Industries Canada Ltd. v. Canada
(Attorney General), [1983] B.C.J. No. 2260
(B.C.C.A.) (QL).
[24]
In my view, the “natural person”
argument is without merit. As stated by Judge P.R. Meyers, “to repeat the same
analysis and reasoning as undertaken by the other Courts, would serve no useful
purpose. All it would accomplish is to put into my own words, what those Courts
have already more eloquently written. My conclusion and decision can best be
summarized, by the phrase, ‘I concur’”. See R. v. Sydel, [2006] 5
C.T.C. 88, at para. 9.
Interpretation Act’s definition of “Canada”
[25]
Notwithstanding the word
“includes”, the appellant argues that the term “Canada” as defined in the Interpretation
Act, R.S.C. 1985, c. I-21, embraces only the internal waters of Canada and the
territorial sea of Canada.
[26]
It should first be noted that
section 12 of the Interpretation Act states:
Every
enactment is deemed remedial, and shall be given such fair, large and liberal
construction and interpretation as best ensures the attainment of its objects.
[27]
The appellant’s position ignores
the fact that the ordinary meaning of “Canada” is first and foremost its land and that the purpose
of the statutory definition is to extend that meaning to include also the
internal waters and territorial sea of Canada.
[28]
The appellant’s position that, for
the purposes of the ITA, Ontario is not part of Canada is simply not tenable.
Fundamentals of tax liability in
Canada
[29]
The Appellant further argues that
she had no valid contractual obligation to the CRA based on her SIN and
therefore had no taxable income for the 2009 taxation year.
[30]
Sheridan J. had to deal with
similar facts in Tuck v. R., [2008] 1 C.T.C. 2598. In that case, the appellants
also challenged their assessments on among others, the grounds that they had never
asked for a SIN and that, accordingly, their assessments were not valid.
[31]
Called upon to rule on a motion to
strike out the notice of appeal, Sheridan J. found that this argument was
without merit and stressed that the case law is well settled that it is within
Parliament's power to impose taxes on its citizens. See Tuck, supra, at
paras. 7 and 10.
[32]
Whereas other countries may tax
income on the basis of citizenship, domicile or the obtaining of a number
analogous to the SIN, the principal basis on which the ITA imposes liability
for income tax is residence.
[33]
A person who is resident in Canada during a
taxation year is subject to Canadian income tax on his or her worldwide income
from all sources. See subsection 2 (1) of the ITA.
[34]
In determining the appellant’s
income tax liability for the 2009 taxation year, the Minister relied on the
assumption of fact that in 2009 the appellant was a Canadian resident.
[35]
It is trite law that the Minister,
in making assessments, proceeds on assumptions and that the initial onus is on
the taxpayer to “demolish” the Minister's assumptions on which the assessment
is based. This initial onus of “demolishing” the Minister's exact assumptions
is met where the appellant makes out at least a prima facie case. See Hickman
Motors Ltd. v. Canada, [1997] 2 S.C.R. 336, paras. 91-94.
[36]
In the case at bar, I fail to see
how the appellant has met her initial burden of proof.
[37]
The appellant admitted that she
had a dwelling place at 118 Gracefield
Crescent in Kitchener,
Ontario, during the 2009 taxation year. See testimony of Dianne-Marie Bydeley,
transcript at pages 2 and 34.
[38]
Moreover, the appellant did not
bring before this Court any type of evidence that could have established, prima
facie, that she was not a Canadian resident during the 2009 taxation year.
Conclusion
[39]
In conclusion, the appellant
received pension or superannuation income from the Ontario Teachers Pension
Plan in the amount of $43,237.80 in the 2009 taxation year.
[40]
Therefore, the Minister correctly
included the amount of $43,237.80 in computing the appellant’s income for the
2009 taxation year in accordance with section 3 and subparagraph 56
(1)(a)(i) of the ITA.
[41]
The Minister also properly
assessed the appellant’s liability for tax on that income for the 2009 taxation
year pursuant to subsection 2(1) of the Act.
[42]
For these reasons, the appeal is dismissed.
Signed at Ottawa, Canada, this 30th day of April 2012.
“Paul Bédard”
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