Citation: 2010TCC270
Date: 20100531
Docket: 2010-41(IT)I
BETWEEN:
GIFFORD H. TOOLE,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR ORDER
Webb, J.
[1]
The
Appellant filed a Notice of Objection with the Canada Revenue Agency in January
2009. The Appellant used the form that indicated that he was filing an appeal
under the Income Tax Act and the Canada Revenue Agency treated his appeal
as an appeal under the Income Tax Act and a confirmation was issued by
the Canada Revenue Agency on behalf of the Minister of National Revenue.
However, the Appellant was appealing the determination that no contributions
were payable by him under the Canada Pension Plan (“CPP”) for
1999, 2000 and 2001.
[2]
The Respondent brought
a Motion to quash the Appellant’s purported appeal under the Income Tax Act.
The Appellant acknowledged at the hearing of the Motion that he was not disputing
the amount of his liability for income taxes for any of these years. He was
only disputing the determination that no contributions were payable by him under the CPP
for 1999, 2000 and 2001.
[3]
It
seems obvious to me that this is a matter that should be determined in
accordance with the provisions of the Canada Pension Plan.
[4]
Section 26.1 of the CPP provides
as follows:
26.1 (1) The Minister of Social Development, an employer, an employee
or a person claiming to be an employer or an employee may request an officer of
the Canada Revenue Agency authorized by the Minister of National Revenue to
make a ruling on any of the following questions:
(a) whether an
employment is pensionable;
(b) how long
an employment lasts, including the dates on which it begins and ends;
(c) what is
the amount of any earnings from pensionable employment;
(d) whether a
contribution is payable;
(e) what is
the amount of a contribution that is payable; and
(f) who is the
employer of a person in pensionable employment.
[5]
Whether a contribution
is payable and the amount of a contribution that is payable are matters that
can be the subject of a ruling.
[6]
Section 27 of the CPP provides
as follows:
27. An appeal
to the Minister from a ruling may be made by the Minister of Social Development
at any time, and by any other person concerned within 90 days after the person
is notified of the ruling.
[7]
Section 28 of the CPP provides
as follows:
28. (1) A person affected by a decision on an appeal to the Minister
under section 27 or 27.1, or the person's representative, may, within 90
days after the decision is communicated to the person, or within any longer
time that the Tax Court of Canada on application made to it within 90 days
after the expiration of those 90 days allows, appeal from the decision to
that Court in accordance with the Tax Court of Canada Act and the
applicable rules of court made thereunder.
[8]
Subsection 30(5) of the
CPP provides that:
(5) The amount of any contribution required by this Act to be made
by a person for a year in respect of their self-employed earnings for the year
is deemed to be zero where
(a) the return of those earnings required by this section to be
filed with the Minister is not filed with the Minister before the day that is
four years after the day on or before which the return is required by
subsection (1) to be filed; and
(b) the Minister does not assess the contribution before the end of
those four years.
[9]
As it appears that the
Appellant did not file his tax returns for 1999, 2000 and 2001 until June 2007,
it was apparently determined that no contributions were payable by the
Appellant for these years as a result of the application of the provisions of
Subsection 30(5) of the CPP. Counsel for the Respondent submitted that
this distinguished this case. However the issue in this motion is not whether
the Appellant will be successful but whether he should be permitted to continue
his appeal and have his case heard with respect to the interpretation and
application of subsection 30(5) of the CPP to the facts that may be
established at the hearing.
[10]
The position of the
Respondent was also that there was an assessment, not a ruling. However it
seems to me that a ruling had to be made by the Canada Revenue Agency that no
contributions were payable by the Appellant for any of these years in order to
issue an assessment that indicated a nil liability. The notice of assessment
was simply the means by which the Appellant was notified of the determination
that no contributions were payable by him for these years. The determination
that no contributions were payable by him for 1999, 2000 and 2001 would be a
ruling in relation to this matter and is the type of ruling referred to in
section 26.1 of the CPP. Therefore the Appellant has a right of appeal
from this ruling. The appeal from the ruling that no contribution was payable
is made to the Minister referred to in section 27 of the CPP. Subsection
5(1) of the CPP provides that “Minister” for the purposes of Part I of
the CPP means the Minister of National Revenue. Section 27 is in Part I
of the CPP. Even though the form filed by the Appellant was treated by
the Canada Revenue Agency as an objection under the Income Tax Act,
since it was dealt with by the Canada Revenue Agency acting on behalf of the
Minister of National Revenue, it seems to me that it can also be treated as an
appeal under section 27 of the CPP because the Minister of National
Revenue is also the Minister to whom an appeal is to be brought under section
27 of the CPP.
[11]
Counsel for the
Respondent also submitted that the assessment indicated a nil liability for
contributions under the CPP for these years and referred to cases under
the Income Tax Act which provide that the Appellant cannot appeal a nil
assessment. As Justice Campbell noted in Esesson Canada Inc. v. The
Queen 2009 TCC 336, [2009] 5 C.T.C. 2182, 2009 D.T.C. 1168:
5 The Federal Court of Appeal in Interior
Savings Credit Union v. R., 2007 D.T.C. 5342 (Eng.) (F.C.A.), definitively states that a
“nil assessment” of a taxpayer identifies an assessment that cannot be appealed
by that taxpayer. At paragraphs [17] and [18] of that decision, the Federal
Court of Appeal sets out the two reasons why a notification to a taxpayer that
no tax is payable cannot be appealed to the Tax Court of Canada:
[17] ...First, an appeal must be directed against an assessment and
an assessment which assesses no tax is not an assessment (see Okalta Oils
Limited v. MNR, 55 D.T.C. 1176 (SCC) at p. 1178: “Under these
provisions, there is no assessment if there was not tax claimed”). Second, there
is no right of appeal from a nil assessment since: “Any other objection but one
related to an amount claimed [as taxes] was lacking the object giving rise to
the right of appeal ...” (Okalta Oils, supra, at p. 1178).
[18] The two aspects of the rule are succinctly put by Lamarre
Proulx, J. in Faucher v. Canada, 94 D.T.C. 1575, at p. 1579:
In conclusion, there is no right of appeal from an assessment of a
nil amount, or from an assessment of which a reduction is not requested, ..
[12]
However the appeal in
this case is under the CPP not the Income Tax Act. Since a right
of appeal is specifically granted under the CPP in relation to the
question of whether a contribution is payable under the CPP and also
with respect to the amount of any such contribution that is payable, it seems
to me that this can be distinguished from the cases addressing the issue of
whether a person has a right of appeal from a nil assessment under the Income
Tax Act. It seems to me that a person will have a right of appeal under the
CPP from a determination that no contribution is payable for certain
years.
[13]
As a result, I agree
that this is not a proper appeal under the Income Tax Act. However, it
seems to me that this is an appeal under the CPP from a decision of the
Minister of National Revenue and it should continue as such. Therefore the
Respondent’s Motion is denied but the matter is to continue as an appeal under
the CPP.
[14]
The Respondent shall
have until July 19, 2010 to file a Reply.
Signed at Halifax, Nova Scotia, this 31st day of May, 2010.
“Wyman W. Webb”
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