Citation: 2007TCC126
Date: 20070809
Docket: 2006-3341(OAS)
BETWEEN:
FERNAND JEAN,
Appellant,
and
THE MINISTER OF
HUMAN RESOURCES DEVELOPMENT,
Respondent.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] This is an appeal
from a determination based on sections 2 and 14 of the Old Age Security
Act ("the Act").
[2] The issue for
determination is whether the Minister of Human Resources and Social Development
("the Minister") correctly denied the Appellant the ability to
avail himself of the option for the year 2005 (payment period commencing in
July 2005 and ending in June 2006) following a reduction of rental
income in 2004, in accordance with sections 2 and 14 of the Act.
[3] The Appellant
admitted to all the assumptions of fact, which read:
[TRANSLATION]
(a) On February 10,
2005, the Minister sent the Appellant a form on which he was to provide
explanations concerning the reduction of his net self‑employment income
and the type of business that he operated.
(b) The form, dated
February 10, 2005, stated that the self-employment income decreased
from $3,421 in 2002, to $634 in 2003.
(c) On February 19,
2005, the Appellant returned the signed form and provided the following
explanations therein:
- the Appellant's self-employment
consisted of the operation of a furniture repair business, which ceased in
November 2003;
- in 2003, the furniture repair
activity decreased and the Appellant maintained the two rental houses that he
owned;
- one of those rental houses was sold
in 2004 further to a bankruptcy proposal and the other house was assigned to
the trustee on November 30, 2004, further to an assignment of
property;
(d) On June 23, 2005, the Appellant filled out an
option application form for the year 2005, in which he stated that the
reduction of his income was due to a bankruptcy that occurred on
November 30, 2004.
(e) On July 6, 2005, the Appellant's application
to avail himself of the option was considered and was granted for the November
2003 cessation of self‑employment, but not for the November 2004
bankruptcy.
(f) The income generated by the rental house
that was assigned to the trustee on November 30, 2004, was income
from property, not income from the carrying on of a business.
. . .
(h) For the payment period from July 2005 to
June 2006, the Appellant's benefit rate was calculated based on the actual
income for the year 2004, not the estimated income for the year 2005.
[4] The only contested
subparagraph is subparagraph (g), which reads:
[TRANSLATION]
(g) The reduction
of rental income is not a ground based on which one can avail oneself of the
option.
[5] The provisions of
the Act are very clear and leave no room for interpretation. In the case at
bar, the income involved was indeed income from a property, not income from a
business.
[6] Sections 2 and 14 of
the Act read as follows:
2. In this Act,
"income" of a person for a
calendar year means the person's income for the year, computed in accordance
with the Income Tax Act, except that
(a) there
shall be deducted from the person's income from office or employment for the
year
(i) a single
amount in respect of all offices and employments of that person equal to the
lesser of five hundred dollars and one fifth of the person's income from office
or employment for the year,
(ii) the amount
of employee's premiums paid by the person during the year under the Employment
Insurance Act, and
(iii) the amount
of employee's contributions made by the person during the year under the Canada
Pension Plan or a provincial pension plan as defined in section 3 of that
Act,
(b) there
shall be deducted from the person's self-employment earnings for the year the
amount of contributions made in respect of those self‑employed earnings
by the person during the year under the Canada Pension Plan or a
provincial pension plan as defined in section 3 of that Act,
(c) there
shall be deducted from the person's income for the year, to the extent that
those amounts have been included in computing that income,
(i) the amount
of any benefit under this Act and any similar payment under a law of a
provincial legislature,
(ii) the amount
of any death benefit under the Canada Pension Plan or a provincial
pension plan as defined in section 3 of that Act, and
(iii) the amount
of any social assistance payment made on the basis of a means, a needs or an
income test by a registered charity as defined in subsection 248(1) of the Income
Tax Act or under a program provided for by an Act of Parliament or a
provincial legislature that is neither a program prescribed under the Income Tax Act
nor a program under which the amounts referred to in subparagraph (i) are paid,
(d) there
shall be deducted from the person's income for the year three times the amount,
if any, by which
(i) the total of
any amounts that may be deducted under section 121 of the Income Tax Act
in computing the person's tax payable for the year
exceeds
(ii) the person's
"tax for the year otherwise payable under this Part" (within the
meaning assigned by subsection 126(7) of the Income Tax Act for the
purposes of paragraph 126(1)(b) of that Act) for the year, and
(e) there
shall be deducted from the person's income for the year any amount included
under subsection 56(6) of the Income Tax Act and there shall be included
in the person's income for the year any amount that may be deducted under
paragraph 60(y) of that Act;
Statement
or Estimate of Income
Statement of
income to be made
14. (1) Every person by whom an application for
a supplement in respect of a current payment period is made shall, in the
application, make a statement of the person's income for the base calendar year.
Minister may
estimate income
(1.1) Where the requirement for an application for
payment of a supplement for any month has been waived under subsection 11(4),
the Minister may, on the basis of the information available to the Minister,
(a) estimate the applicant's income for the base
calendar year;
(b) in the case of an applicant who is a person
described in subsection 15(2), estimate the income of the applicant's spouse or
common-law partner for the base calendar year.
Statement of income where income estimated
(1.2) Where a person's income for a base
calendar year has been estimated under subsection (1.1), the Minister may
require that the person make a statement to the Minister of their income for
any month in that year.
Additional
statement where retirement in current payment period
(2) Where in a current payment period a person who is
an applicant, or who is an applicant's spouse or common-law partner who has
filed a statement as described in paragraph 15(2)(a), ceases to hold an
office or employment or ceases to carry on a business, that person may, not
later than the end of the payment period immediately after the current payment
period, in addition to making the statement of income required by subsection
(1) in the case of the applicant or in addition to filing a statement as
described in paragraph 15(2)(a) in the case of the applicant's spouse or
common-law partner, file a statement of the person's estimated income, other
than the estimated income from that office or employment or from that business,
as the case may be, for the calendar year in which the person ceased to hold
that office or employment or ceased to carry on that business, in which case
the person's income for the base calendar year shall be calculated as the total
of
(a) the person's income for that calendar year,
calculated as though the person had no income from that office or employment or
from that business, as the case may be, and no pension income for that calendar
year, and
(b) any pension income received by the person in that
part of that calendar year that is after the month in which the person ceased
to hold that office or employment or ceased to carry on that business, divided
by the number of months in that part of that calendar year and multiplied by 12.
Additional
statement where retirement in the last month of the calendar year that is in
the current payment period
(3) Despite subsection (2), where in the last month of
a calendar year that ends in the current payment period a person who is an
applicant, or who is an applicant's spouse or common-law partner who has filed
a statement as described in paragraph 15(2)(a), ceases to hold an office
or employment or ceases to carry on a business, the person may, not later than
the end of the payment period immediately after the current payment period, in
addition to making the statement of income required by subsection (1) in the
case of the applicant or in addition to filing a statement as described in
paragraph 15(2)(a) in the case of the applicant's spouse or common-law partner,
file a statement of the person's estimated income for the calendar year
immediately after the month in which the person ceased to hold that office or
employment or ceased to carry on that business, in which case the person's
income for that calendar year is deemed to be the person's income for the base
calendar year.
Additional
statement where loss of pension income in current payment period
(4) Where in a current payment period a person who is
an applicant, or who is an applicant's spouse or common-law partner who has
filed a statement as described in paragraph 15(2)(a), suffers a loss of
income due to termination or reduction of pension income, the person may, not
later than the end of the payment period immediately after the current payment
period, in addition to making the statement of income required by subsection
(1) in the case of the applicant or in addition to filing a statement as
described in paragraph 15(2)(a) in the case of the applicant's spouse or
common-law partner, file a statement of the person's estimated income for the
calendar year in which the loss is suffered, other than pension income received
by that person in that part of that calendar year that is before the month in
which the loss is suffered, in which case the person's income for the base
calendar year shall be calculated as the total of
(a) the person's income for that calendar year,
calculated as though the person had no pension income for that calendar year,
and
(b) any pension income received by the person in that
part of that calendar year that is after the month immediately before the month
in which the loss is suffered, divided by the number of months in that part of
that calendar year and multiplied by 12.
Additional statement where
retirement before current payment period
(5) Where, in the circumstances described in paragraphs
(a) and (b), a person who is an applicant, or who is an
applicant's spouse or common-law partner who has filed a statement as described
in paragraph 15(2)(a), ceases to hold an office or employment or ceases
to carry on a business, the person may, not later than the end of the current
payment period, in addition to making the statement of income required by
subsection (1) in the case of the applicant or in addition to filing a
statement as described in paragraph 15(2)(a) in the case of the
applicant's spouse or common-law partner,
(a) where the person ceases to hold that office or
employment or to carry on that business in the last calendar year ending before
the payment period, file a statement of the person's estimated income for the
calendar year ending in the current payment period, in which case the person's
income for that calendar year is deemed to be the person's income for the base
calendar year; and
(b) where the person ceases to hold that office or
employment or to carry on that business in a month that is before the payment
period and after the last calendar year ending before the payment period, file
a statement of the person's estimated income for the calendar year ending in
the current payment period showing also any income actually received by the
person in that calendar year from that office or employment or from that
business, as the case may be, in which case the person's income for the base
calendar year shall be calculated as the total of
(i) the person's income for that calendar
year, calculated as though the person had no income from that office or
employment or from that business, as the case may be, and no pension income for
that calendar year, and
(ii) any pension income received by the
person in that part of that calendar year that is after the month in which the
person ceases to hold that office or employment or to carry on that business,
divided by the number of months in that part of that calendar year and
multiplied by 12.
Additional statement where loss of
pension income before current payment period
(6) Where, in the circumstances described in paragraphs
(a) and (b), a person who is an applicant, or who is an applicant's
spouse or common-law partner who has filed a statement as described in
paragraph 15(2)(a), suffers a loss of income due to termination or
reduction of pension income, the person may, not later than the end of the
current payment period, in addition to making the statement of income required
by subsection (1) in the case of the applicant or in addition to filing a
statement as described in paragraph 15(2)(a) in the case of the
applicant's spouse or common-law partner,
(a) where the loss is suffered in the last calendar
year ending before the payment period, file a statement of the person's
estimated income for the calendar year ending in the current payment period, in
which case the person's income for that calendar year is deemed to be the
person's income for the base calendar year; and
(b) where the loss is suffered in a month that is
before the payment period and after the last calendar year ending before the
payment period, file a statement of the person's estimated income for the
calendar year ending in the current payment period showing also the amount of
pension income actually received by the person in that part of that calendar
year that is before the month in which the loss is suffered, in which case the
person's income for the base calendar year shall be calculated as the total of
(i) the person's income for that calendar
year, calculated as though the person had no pension income for that calendar
year, and
(ii) any pension income received by the
person in that part of that calendar year that is after the month immediately
before the month in which the loss is suffered, divided by the number of months
in that part of that calendar year and multiplied by 12.
Where
statement filed under subsection (2), (3) or (4)
(7) Where under subsection (2), (3) or (4) a statement
of estimated income is filed by an applicant or an applicant's spouse or
common-law partner, no supplement calculated on the basis of that statement may
be paid to the applicant for any month in the current payment period before
(a) the month immediately
following the month shown in the statement as the month in which the applicant
or the applicant's spouse or common-law partner, as the case may be, ceased to
hold the office or employment or ceased to carry on the business, or
(b) the month shown in the statement as the
month in which the applicant or the applicant's spouse or common-law partner,
as the case may be, suffered the loss of income due to termination or reduction
of pension income.
[7] Upon reading the
provisions reproduced above, there can be no doubt as to the meaning of the
wording. In other words, there is no way to claim that there is room for
interpretation of some kind.
[8] The wording is
clear, and the decision that the Appellant is disputing in this appeal is
completely in keeping with the provisions of the Act. The Appellant is
unfortunately not drawing the distinction between income from a property and
income from a business.
[9] I must confirm the
decision because it is well-founded in the relevant provisions.
[10] Consequently, the
appeal is dismissed, without costs.
Signed at Ottawa, Canada, this 9th day of August 2007.
"Alain Tardif"
Translation certified true
on this 5th day of September 2007.
Brian McCordick, Translator
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