Citation: 2011 TCC 34
Date: 20110120
Docket: 2010-905(IT)I
BETWEEN:
SVEINN S. SVEINSON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
The appellant, Sveinn Sveinson,
has been reassessed to reduce his entitlement to the age credit under
subsection 118(2) of the Income Tax Act. The relevant taxation year is
2008.
[2]
The calculation of the
age credit takes into account a taxpayer’s income for the year. The question in
this case is whether a lump sum amount received by the appellant under workers’
compensation legislation is included in income for this purpose.
[3]
The relevant background is this.
[4]
The appellant was a long-time
employee of Corrections Canada before his retirement in 2001.
[5]
Beginning in 1984, the appellant was
involved in several violent incidents involving inmates at the prison where he
worked. This caused severe symptoms of stress, and for the next 24 years the
appellant attempted to obtain redress for the situation.
[6]
Ultimately, the appellant was diagnosed
with post-traumatic stress disorder, and this was determined to have resulted
from the incidents in the prison. Being entitled to workers’ compensation, the
appellant received a cheque from the Workers’ Compensation Board of Manitoba in the
amount of $35,036.74 in mid-December 2008. Part of this amount represented
payment in lieu of future payments.
[7]
In accordance with the legislative
scheme for taxing workers’ compensation benefits, the Minister of National
Revenue included the workers’ compensation payment in the appellant’s income,
and allowed a deduction for an equivalent amount in computing taxable income. The
Minister also considered the amount as income for purposes of the age credit,
and the credit was reduced from $5,276 to $305.
[8]
The scheme of the relevant
legislation was described in detail by Little J. in Nicholas v. The
Queen, 2003 TCC 189, [2003] 3 CTC 2429. The appellant does not take issue
with this description, and in particular he does not dispute that the age
credit is reduced if the workers’ compensation payment is income.
[9]
In the appellant’s original notice
of appeal, relief was sought essentially on grounds of fairness. He stated:
It is
strange that although Workers Compensation is allegedly tax free, It [sic] has
cost me $1,379.34 in taxes. It is really sad that those who do need a little
extra, like senior citizens for example, who receive an extra exemption, but
are then penalized in this manner.
[10]
This argument was not pursued at
the hearing, and in any event it would not have been possible to grant relief
on this basis.
[11]
A second argument was raised by
the appellant in an amendment to the notice of appeal. The basis for the
argument is the following comment in the 2008 General Income Tax and Benefit
Guide (the “Guide”), at p. 13:
Amounts
that are not taxed
You do not
have to include certain amounts in your income, including the following
[…]
- compensation
received from a province or territory if you were a victim of a criminal act or
a motor vehicle accident;
[12]
The above statement by the Canada
Revenue Agency appears to provide some support for the appellant’s position.
The appellant led a significant amount of evidence at the hearing to establish
that he was the victim of criminal acts and that those acts directly led to his
illness and resulted in compensation from the Workers’ Compensation Board.
[13]
The difficulty with the
appellant’s position is that statements by the Canada Revenue Agency are not
legislation and they cannot be applied by this Court if they are not supported
by actual legislative provisions.
[14]
I would also comment that the Guide
is published in order to provide general assistance to taxpayers. It does not
purport to describe the legislative provisions in detail.
[15]
The provisions that are relevant
in this case are s. 81(1)(q) of the Income Tax Act, s. 6501(c)(i)
of the Income Tax Regulations, and s. 6(1) of The Criminal Injuries
Compensation Act (Manitoba), 1970. The provisions are reproduced below:
81(1)
There shall not be included in computing the income of a taxpayer for a
taxation year,
[…]
(q) an
amount paid to an individual as an indemnity under a prescribed provision of
the law of a province;
6501. For the purposes of
paragraph 81(1)(q) of the Act, “prescribed provision of the law of a
province” means
[…]
(c) in
respect of the Province
of Manitoba
(i) subsection
6(1) of The Criminal Injuries Compensation Act, S.M. 1970, c. 56, […]
6(1) Where
a person is injured or killed and the injury or death
(a) was caused
by any act or omission of another person that occurred in Manitoba and is
within the description of any of the criminal offences set out in Schedule 1;
or
(b) resulted to the person while he was endeavouring to
(i) arrest any person or preserve the peace, or
(ii) assist a
peace officer in carrying out his duties with respect to law enforcement, in Manitoba;
the board may
upon receipt of an application in writing and after a hearing make an order in
accordance with this Act for the payment of compensation
(c) to or for the benefit of the injured person;
(d) to a
person, in respect of pecuniary loss suffered or expenses incurred by the
person, as the result of an injury to a victim where the maintenance of the
victim is the responsibility of the person; or
(e) to any one or more of the dependants of a victim.
[16]
The lump sum payment received in
this case does not qualify for exemption under the above provisions because the
payment was made pursuant to workers’ compensation legislation and not
legislation specifically aimed at criminal injuries.
[17]
The relevant provision with
respect to the payment made to the appellant is paragraph 56(1)(v) of
the Income Tax Act. It clearly provides that workers’ compensation
payments must be included in income. It reads:
56(1) Without restricting the generality of section 3, there shall be
included in computing the income of a taxpayer for a taxation year,
[…]
(v)
compensation received under an employees’ or workers’ compensation law of Canada or a province in respect of an
injury, a disability or death;
[18]
Since the relevant legislation clearly
provides that the amount at issue must be included in income, I must
regretfully dismiss the appeal.
Signed at Toronto, Ontario this 20th
day of January 2011.
“J. M. Woods”
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