Date: 20020702
Docket:
2001-1932-IT-I
BETWEEN:
ROBERT
FRASER,
Appellant,
and
HER MAJESTY THE
QUEEN,
Respondent.
Reasonsfor Order
Bowie J.
[1]
I heard this appeal under the Court's
informal procedure at Edmonton, Alberta. It is from the
disallowance by the Minister of National Revenue of the
Appellant's claim that in computing his income under the
Income Tax Act for the year 1999 he is entitled to
deduct an amount paid by him in that year as child maintenance.
Mr. Fraser and the mother of his child have never been married,
nor have they lived together in a conjugal relationship. After
the birth of their child they entered into an agreement under
section 6 of the Alberta Parentage and Maintenance Act, and that agreement was filed in the
Alberta Court of Queen's Bench.
[2]
Both parties acknowledged at the hearing that the facts of this
case are indistinguishable from those in Hewko v The
Queen. I am today releasing Reasons for an Order in that case
requiring counsel for the Respondent to serve Notice of a
Constitutional Question on the provincial Attorneys General to
comply with section 57 of the Federal Court Act. A copy of those Reasons is appended
hereto. The same constitutional question as to the validity of
section 34 of the Maintenance Enforcement Act of Alberta must be addressed
in this case, and so I am making an Order in this case in the
same terms as my Order in Hewko, for the same
reasons. Both cases may then be reopened at the same time
to hear submissions as to this issue.
Signed at Ottawa, Canada, this 2nd day of
July, 2002.
J.T.C.C.
2001-3255(IT)I
BETWEEN:
HOWIE A.
HEWKO,
Appellant,
and
HER MAJESTY THE
QUEEN,
Respondent.
Appeal heard in part
on February 21, 2002, at Edmonton, Alberta, by
the Honourable Judge
E.A. Bowie
Appearances
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Margaret McCabe
ORDER
IT IS HEREBY ORDERED THAT counsel for the Respondent shall serve
upon the Appellant and upon the Attorney General for each
province a Notice of Constitutional Question in essentially the
form of the Notice which is Appendix "A" to this
Order, together with a copy of the Reasons for Order, not later
than July 31, 2002, and shall file proof of service thereof not
later than August 15, 2002.
IT IS
FURTHER ORDERED THAT the hearing of this appeal shall be
reopened, to be continued by telephone conference at a time to be
fixed by the registry.
Signed at Ottawa, Canada, this 2nd day of
July, 2002.
J.T.C.C.
APPENDIX "A"
COURT
STYLE OF CAUSE
NOTICE OF CONSTITUTIONAL
QUESTION
You are hereby advised that the constitutional
validity of section 34 of the Maintenance Enforcement Act,
R.S.A. 1985, c. M-0.5 (now R.S.A. 2000, c. M-1 s. 41) has been
called into question in this proceeding, and that a continuation
of the hearing will be convened by telephone conference to hear
submissions with respect to that issue. Those Attorneys General
who wish to make submissions to the Court as to the validity of
this provision should so inform the Court, before August 31, 2002
by letter addressed to:
The Registrar
Tax Court of Canada
200 Kent Street,
Ottawa, ON K1A
0M1
Arrangements for the continuation of the
hearing by conference call will be made by the Registry with the
parties and those Attorneys General who indicate that they wish
to be heard.
The material facts giving rise to this
constitutional question are found in the Reasons for Order of The
Honourable Judge E.A. Bowie accompanying this Notice.
The legal basis for this constitutional
question is [basis of the challenge to be inserted by counsel
for the Respondent]
Dated at Edmonton, Alberta this
day of 2002.
_________________________________________________
Counsel for the Attorney General of
Canada
[Address for Service]
TO: The
Appellant
The
Attorney General of each province
Date: 20020702
Docket:
2001-3255(IT)I
BETWEEN:
HOWIE A.
HEWKO,
Appellant,
and
HER MAJESTY THE
QUEEN,
Respondent.
REASONS FOR
ORDER
Bowie J.
[1]
I heard this appeal under the Court's
informal procedure at Edmonton, Alberta. It is from the
disallowance by the Minister of National Revenue of the
Appellant's claim to deduct in computing his income an amount
paid by the him as child maintenance in the year 1999, and it
raises questions as to the interaction of the Income Tax
Actof Canada and the Maintenance
Enforcement Act of the province of Alberta
(the MEA).
[2]
The facts are straightforward, and not in
dispute. The Appellant is the father of a child borne by a person
whom I shall simply call the mother. They were never married, nor
have they ever lived together in a conjugal relationship. They
entered into a written agreement, signed by them both, under
section 6 of the Alberta Parentage and Maintenance Act. The Appellant has made the payments
that he was required to make under that agreement. In filing his
returns for the taxation years 1998 and 1999, he claimed to be
entitled to deduct those payments in the computation of his
income under the Act. Initially he was assessed on that
basis. For 1998 he was reassessed to disallow the payments, and
then reassessed to allow them. For 1999 he was less fortunate; he
was reassessed only once, and that to disallow the deduction he
had claimed. It is from that reassessment that he now
appeals.
[3]
It is understatement to say that both the
history and the present provisions of the Act governing
the right of a taxpayer to deduct maintenance payments are
complex. They are in fact mind-numbing. However, for present
purposes it is sufficient to say that since the Act first
allowed for the deduction of child maintenance payments made by
one parent to the other in circumstances where they had never
been married or lived together conjugally, one requirement for
deductibility has been that the payments be made pursuant to a
court order. Under the present version, which governs this case,
this requirement appears as part of the definition of
"support amount" found in subsection 56.1(4), which
is made applicable to section 60 as well. That definition
reads:
56.1(4)
The definitions in this subsection apply in this section and
section 56.
"support
amount" means an amount payable or receivable as an
allowance on a periodic basis for the maintenance of the
recipient, children of the recipient or both the recipient and
children of the recipient, if the recipient has discretion as to
the use of the amount, and
(a)
the recipient is the spouse or former spouse of the payer, the
recipient and payer are living separate and apart because of the
breakdown of their marriage and the amount is receivable under an
order of a competent tribunal or under a written agreement;
or
(b)
the payer is a natural parent of a child of the recipient and the
amount is receivable under an order made by a competent tribunal
in accordance with the laws of a province.
For the Appellant to succeed, then, there must be a court
order, or else he and the child's mother must be shown to
be spouses. I shall return to the latter possibility.
[4]
The Appellant's case rests upon the
definition section of the MEA. It provides, so far as is
relevant, the following.
Definitions
1(1) In this Act
...
(e)
"maintenance order" means an order or interim order of
a court in Alberta, a Queen's Bench protection order under
the Protection Against Family Violence Act or an Order,
other than a provisional order that has not been confirmed,
registered under the Reciprocal Enforcement of Maintenance
Orders Act that has a provision requiring the payment of
maintenance.
1(2) An
agreement entered into under section 6 of the Parentage and
Maintenance Act or section 51 of the Income Support
Recovery Act is deemed to be a maintenance order under this
Act.
1(3) A
maintenance agreement entered into under the Child Welfare
Act is deemed to be a maintenance order under this
Act.
The MEA makes detailed provisions for the enforcement of
maintenance orders by the Director of Maintenance Enforcement,
whose office is established by section 4. Section 12
reads:
Enforcement
12(1)
The Director or a creditor may file with the Court of Queen's
Bench a maintenance order that is not otherwise filed with the
Court and, on being filed, the parts of the maintenance order
that relate to maintenance are deemed to be a judgment of the
Court of Queen's Bench.
12(2) If
a maintenance order filed under subsection (1) was made by the
Provincial Court, the Court of Queen's Bench may from time to
time vary the order either by altering the times of payment or by
increasing or decreasing the amount, or may temporarily suspend
the order as to the whole or any part of the money so ordered to
be paid and may again revive the order wholly or in part, as the
Court of Queen's Bench considers appropriate.
The agreement in question here
was filed with the Alberta Court of Queen's Bench under
subsection 12(1). The question before
me, put shortly, is whether sections 1 and 12 of the MEA
cause an agreement entered into under section 6 of the
Parentage and Maintenance Act, and filed under subsection
12(1), to be "an order made by a competent tribunal in
accordance with the laws of [Alberta]" for the purposes of
the Income Tax Act.
[5]
Counsel for the Respondent referred me to two
earlier decision of this Court in which exactly the same issue
has been decided. In Fantini v. The Queen,Bowman J. (as he then was) held that the Alberta
statute could have no such effect. He said:
...
This is not a constitutional matter of legislative competence. It
is a simple matter of statutory construction. As James L.J. said
in Ex parte Walton; In re Levy, 17 Ch. D. 746 at
756:
|
|
When a
statute enacts that something shall be deemed to have been
done, which in fact and truth was not done, the Court is
entitled and bound to ascertain for what purposes and
between what persons the statutory fiction is to be
resorted to.
|
|
That
observation was made in the context of the interpretation of one
statute. It applies a fortiori in this case. Here we have
the Minister of National Revenue seeking to transpose a
provincial statutory fiction into a federal statute. That cannot
be done. Of course Parliament could by appropriate language in a
federal statute adopt, for the purposes of that statute, a
provincial statutory fiction. That is not however what happened
here. The point seems self-evident.
I
am not unmindful of the decision of the Federal Court of Appeal
in Hillis v. The Queen, 83 DTC 5365 where the
effect of a deeming provision in a Saskatchewan statute was
considered in relation to when an estate became indefeasibly
vested. This I think is an illustration of the principle, as
stated in Dale v. The Queen, 97 DTC 5252, that the
Minister takes legal relationships between subjects as he finds
them and they are in most cases governed by provincial law. It
does not follow from that case that something that is deemed to
be something that it is not for the purposes of a provincial
statute can have that artificial meaning apply for the purposes
of the Income Tax Act.
In that case, the
Appellant was the custodial parent and the recipient of the
maintenance payments. Judge Bowman held that she was not liable
to include them in her income for the year.
[6]
The same point came before Judge Teskey in Hollands v. The
Queen.
He took a different view of the matter from Judge Bowman.
Referring to the passage from Judge Bowman's reasons for
judgment that I have quoted, he said:
I respectfully
disagree with this position. By using the phrase "an order
made by a competent tribunal in accordance with the laws of a
province" in paragraph 56.1(4)(b) of the Act,
Parliament has decided to transpose the laws of a province
concerning orders into a federal statute. If the laws of a
province operate to create a statutory fiction then it is not for
the Minister to decide otherwise. The agreement therefore is a
court order.
The Appellant before
Judge Teskey was the non-custodial parent seeking to deduct the
payments that he had made. His appeal too was allowed. Judge
Teskey also referred to the Federal Court of Appeal decisions of
Hillis v. The Queen
and Dale v. The Queen.
[7]
A provincial legislature may, as to subject
matters assigned to the provinces by section 92 of the
Constitution Act, 1867, deem a thing to be that which in
reality it is not. Provided that deeming is not a colourable
intrusion upon the legislative field assigned to Parliament, it
can be effective for all purposes, if that is what the
legislature intends. In such a case, the legal status of the
thing deemed is established by the provincial law, for purposes
of both federal and provincial statutes. However, as Bowman
A.C.J. pointed out in Fantini, the extent to which the
deeming applies must be ascertained as a matter of construction
of the provincial legislation. It is quite clear, in my view,
from both the context and the language of subsection 1(2) of the
MEA, that its operation is limited to the confines of that
act. First, it is found in a section which deals with
definitions. That suggests that its operation is limited to the
act in which it is found. Second, the agreement is deemed to be a
maintenance order "under this Act". That,
too, suggests that the operation of the deeming provision is
limited to the purposes of the MEA. Its purpose is to
bring an agreement within the expression "maintenance
order", which is defined immediately above to mean one of a
number of types of orders there referred to, including orders of
courts outside the province that have been registered under the
Reciprocal Enforcement of Maintenance Orders Act. The
MEA creates an office called the Director of Maintenance
Enforcement. Its whole purpose is to provide for the enforcement
of certain types of court orders by the Director, for the benefit
of children, spouses and former spouses who are the beneficiaries
of those orders. For that purpose, the Director is given certain
powers, and it is only for that purpose that the agreement here
in question, as well as agreements made under the Income
Support Recovery Act and the Child Welfare Act, are
deemed to be within the expression "maintenance
order" when it is used in the MEA.
[8]
Does section 12, which deems a maintenance order filed with the Court of
Queen's Bench to be a judgment of that Court, have effect beyond the confines of the MEA? I
do not believe it does. Standing alone, it might appear to, but
it must be read with section 1. If the deeming of the
agreement to be a maintenance order is limited to the
purposes of the MEA, then the operation of section 12 on
that Order must equally be limited. I conclude, therefore, that
the agreement pursuant to which the Appellant made the
maintenance payments is not "¼ an
order made by a competent tribunal in accordance with the laws of
a province ¼" for
purposes of the Income Tax Act.
[9]
As I have said earlier, the only other avenue
by which the Appellant could bring his payments within the
definition of support payments would be to show that he is a
spouse, or former spouse, of the mother of his child, to whom he
made the payments. Ms. McCabe, counsel for the Respondent, very
properly brought section 34 of the MEA to my
attention during the hearing. That section reads:
34.
For the purposes of the Income Tax Act (Canada) a spouse
includes a person who is required to make periodic payments in
respect of maintenance under a written agreement or a maintenance
order.
Ms. McCabe did not argue that it was ultra vires,
because, she said, it had only come to her attention at the last
moment, and there had been no time for her to give the required
notice to the Attorneys General of the provinces under section 57
of the Federal Court Act. If I were to give effect to that
section, it would have the result of overcoming the requirement
of the Income Tax Act that the maintenance payments, to be
deductible, must be made pursuant to a court order and not simply
an agreement. Obviously, a question as to its constitutional
validity arises, and must be dealt with. I am therefore directing
that counsel for the Respondent serve on the provincial Attorneys
General a notice in the form that is Appendix "A"
to my Order. Once the Attorneys General have had notice, the
hearing of the appeal will be reconvened by telephone conference
to hear submissions as to the validity of section 34 of the
MEA. I regret that this will delay the final resolution of
this appeal, but in the circumstances, I see no proper
alternative.
Signed at Ottawa, Canada, this 2nd day of
July, 2002.
"E.A. Bowie"
J.T.C.C.
COURT FILE
NO.:
2001-3255(IT)I
STYLE OF
CAUSE:
Howie A. Hewko & Her Majesty the Queen
PLACE OF
HEARING:
Edmonton, Alberta
DATE OF
HEARING:
February 21, 2002
REASONS FOR ORDER
BY:
The Honourable Judge E.A. Bowie
DATE OF
ORDER:
July 2, 2002
APPEARANCES:
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Margaret McCabe
COUNSEL OF RECORD:
For the
Appellant:
Name:
N/A
Firm:
N/A
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE
NO.:
2001-1932(IT)I
STYLE OF
CAUSE:
Robert Fraser & Her Majesty the Queen
PLACE OF
HEARING:
Edmonton, Alberta
DATE OF
HEARING:
May 31, 2002
REASONS FOR ORDER
BY:
The Honourable Judge E.A. Bowie
DATE OF
ORDER:
July 2, 2002
APPEARANCES:
Agent for the
Appellant:
George A. Horne
Counsel for the
Respondent:
Mark Heseltine
COUNSEL OF RECORD:
For the
Appellant:
Name:
N/A
Firm:
N/A
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-1932(IT)I
BETWEEN:
ROBERT FRASER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard in part on May 31, 2002, at
Edmonton, Alberta, by
the Honourable Judge E.A. Bowie
Appearances
Agent for the
Appellant:
George A. Horne
Counsel for the Respondent: Mark
Heseltine
ORDER
IT
IS ORDERED THAT counsel for the Respondent shall serve upon the
Appellant and upon the Attorney General for each province a
Notice of Constitutional Question in essentially the form of the
Notice which is Appendix "A" to this Order,
together with a copy of the Reasons for Order, not later than
July 31, 2002, and shall file proof of service thereof not later
than August 15, 2002.
IT IS FURTHER ORDERED THAT the hearing of this
appeal shall be reopened, to be continued by telephone conference
at a time to be fixed by the registry.
Signed at Ottawa, Canada,
this 2nd day of July, 2002.
J.T.C.C.
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