Citation: 2007TCC637
Date: 20071019
Docket: 2006-112(IT)I
BETWEEN:
MARY LOUISE SULCS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Paris, J.
[1] The Appellant is
appealing from a reassessment of her 2003 taxation year by which the
Minister of National Revenue disallowed her claim for tuition
tax credits transferred to her by her sons. The Minister held that the Appellant's
sons were not entitled to any tuition tax credits and therefore that none were
available to be transferred to the Appellant.
[2] Subsection 118.5(1)
of the Income Tax Act,
sets out the requirements for obtaining a tuition tax credit, and section 118.9
of the Act allows a person who is entitled to a tuition tax credit to
transfer that credit to his or her parent or grandparent.
[3] The relevant portions of subsection 118.5(1) and section 118.9 read
as follows for the 2003 taxation year:
118.5(1) For
the purpose of computing the tax payable under this Part by an individual for a
taxation year, there may be deducted,
(a) where the individual was during the year a student
enrolled at an educational institution in Canada that is
(i) a university, college or other educational institution
providing courses at a post-secondary school level, or
(ii) certified by the Minister of Human Resources Development to
be an educational institution providing courses, other than courses designed
for university credit, that furnish a person with skills for, or improve a
person’s skills in, an occupation,
an amount
equal to the product obtained when the appropriate percentage for the year is
multiplied by the amount of any fees for the individual’s tuition paid in
respect of the year to the educational institution if the total of those fees
exceeds $100, except to the extent that those fees
(ii.1) are paid to an educational institution described in subparagraph
(i) in respect of courses that are not at the post-secondary school level,
(ii.2) are paid to an educational institution described in
subparagraph (ii) if
(A)
the individual had not attained the age of 16 years before the
end of the year, or
(B)the purpose
of the individual’s enrolment at the institution cannot reasonably be regarded
as being to provide the individual with skills, or to improve the individual’s
skills, in an occupation,
118.9 Where
for a taxation year a parent or grandparent of an individual (other than an
individual in respect of whom the individual’s spouse or common-law partner
deducts an amount under section 118 or 118.8 for the year) is the only person
designated in writing by the individual for the year for the purpose of this section,
there may be deducted in computing the tax payable under this Part for the year
by the parent or grandparent, as the case may be, the tuition and education tax
credits transferred for the year by the individual to the parent or
grandparent, as the case may be.
[4] The issue in
this appeal is whether the tuition fees paid by the Appellant’s sons in 2003
for flying lessons met the requirements set out in subparagraph 118.5(1)(a)(ii.2)
for obtaining the tax credits.
[5] The Respondent says
that those conditions were not met because the Appellant's sons had not reached
the age of 16 by the end of 2003, and their enrollment in flying lessons was
not for the purpose of providing them with skills, or improving their skills,
in an occupation.
[6] The Appellant
takes the position that her sons' flying lessons provided them with skills in
an occupation, as required by clause 118.5(1)(a)(ii.2)(B), and that
the age requirement in clause 118.5(1)(a)(ii.2)(A) is discriminatory
and is a breach of subsection 15(1) of the Canadian Charter of Rights and Freedoms, and should be held
to be of no force and effect.
First issue: Did the lessons provide skills in an occupation?
[7] The Appellant's
son, Max, testified that he began taking flying lessons in 2003 and that he
received his student pilot permit in 2004 at age 14 which is the minimum
age for obtaining it. This permit allowed him to fly solo. Max is now 17 years
old and holds a recreational pilot permit and has logged 120 hours of
flight time. He has been accepted into the flight program at Seneca College to train as a commercial pilot.
[8] The Appellant's
son, Erik, began flying lessons in 2003 and holds a student pilot permit. He
has been accepted into the same flight program at Seneca College as
Max.
[9] The skills
acquired by the Appellant's sons from the lessons allowed them to obtain their
student pilot permit, which in turn has allowed them to fly solo and build up
flight time towards the requirements of a commercial pilot license.
[10] In my view, the
evidence shows that Max and Erik took flying lessons in 2003 in order to
acquire skills in an occupation. According to the Canadian
Aviation Regulations enacted pursuant to the Aeronautics Act, an applicant for a
commercial pilot license must have completed a minimum of 200 hours of
flight time (including solo flight time) in order to apply for the license. Therefore,
the flying lessons taken by the Appellant's sons were a necessary first step
towards qualifying as professional pilots and the skills learned in those
lessons would form the basis of the skills used in that occupation.
Charter issue
[11] Counsel for the Respondent
asked for the hearing of the Charter issue to be split into two parts. Counsel
proposed that the Court first make a determination of whether clause 118.5(1)(a)(ii.2)(B)
of the Act is discriminatory within the meaning of subsection 15(1)
of the Charter, and that if it is found to be discriminatory, the
hearing be reconvened to allow the parties to present evidence related to the
question of whether such discrimination is justifiable under section 1 of
the Charter. The Appellant's representative did not object to this
procedure and the Respondent's request was granted.
[12] With respect to
the Charter issue, it is not disputed the Appellant's sons were both under
16 years of age at the end of 2003, thereby disqualifying the tuition fees
in issue for the tuition tax credit provided for in the Act. However, the Appellant says that the age requirement in clause 118.5(1)(a)(ii.2)(A),
and section 118.9 of the Act are discriminatory and breach the Appellant's
equality rights guaranteed by subsection 15(1) of the Charter.
[13] Subsection 15 (1)
of the Charter reads as follows:
15.(1) Every individual is equal before and
under the law and has the right to the equal protection and equal benefit of
the law without discrimination and, in particular, without discrimination based
on race, national or ethnic origin, colour, religion, sex, age or mental or
physical disability.
[14] The same issue
came before this Court in Troupe v. The Queen. In Troupe,
the taxpayer sought the transfer of a tuition credit from his 14-year-old
daughter who was enrolled in a professional program in ballet. A Court held
that her enrollment in the program was to provide her with skills in an
occupation, but that she was not entitled to the tuition tax credit because she
did not meet the age requirement imposed by clause 118.5(1)(a)(ii.2)(A).
The Court rejected the Appellant's argument that the age requirement constituted
discrimination against her under subsection 15(1) of the Charter.
[15] Although Troupe
was heard in the informal procedure, and according to section 18.28 of the Tax
Court of Canada Act
the decision should not be treated as a precedent, both parties referred
extensively to it. This was entirely appropriate, given the careful
consideration and extensive analysis of the issue undertaken by Lamarre, J. in
that case.
[16] In Troupe,
the Court applied the approach to the interpretation of subsection 15(1)
set out by the Supreme Court of Canada in Law v.
Canada (Minister of
Employment & Immigration),
of the Charter. The Supreme Court summarized this approach as
follows (at paragraph 88):
The approach adopted and regularly applied by this
Court to the interpretation of s. 15(1) focuses upon three central issues:
(A) whether a law imposes differential treatment
between the claimant and others, in purpose or effect;
(B) whether one or more enumerated or analogous
grounds of discrimination are the basis for the differential treatment; and
(C) whether the law in question has a purpose or
effect that is discriminatory within the meaning of the equality guarantee.
Accordingly, a court that is called upon to
determine a discrimination claim under s.15(1) should make the following three
broad inquiries:
(A) Does the impugned law (a) draw a formal
distinction between the claimant and others on the basis of one or more
personal characteristics, or (b) fail to take into account the claimant’s
already disadvantaged position within Canadian society resulting in
substantively differential treatment between the claimant and others on the
basis of one or more personal characteristics?
(B) Is the claimant subject to differential treatment
based on one or more enumerated and analogous grounds?
and
(C) Does the differential treatment discriminate, by
imposing a burden upon or withholding a benefit from the claimant in a manner
which reflects the stereotypical application of presumed group or personal characteristics,
or which otherwise has the effect of perpetuating or promoting the view that
the individual is less capable or worthy of recognition or value as a human
being or as a member of Canadian society, equally deserving of concern,
respect, and consideration?
[17] In Troupe,
this Court found that clause 118.5(1)(a)(ii.2)(A) of the Act,
in combination with section 118.9 of the Act, resulted in
differential treatment of the taxpayer on the basis of a personal
characteristic. The Court arrived at this conclusion by comparing the treatment
of the Appellant under the Act to the treatment accorded to parents of
children over 16 years of age and enrolled in a qualifying school or
institution.
[18] The Court found
that the basis of the differential treatment was age, an enumerated ground of
discrimination in subsection 15(1). However, the Court went on to find
that the differential treatment was ultimately not discriminatory within the
meaning of that provision because no violation of human dignity was involved.
The differential treatment did not promote the notion that parents of children
under the age of 16, enrolled in qualifying schools, were less deserving of
concern, respect and consideration. The Court also found that the differential
treatment was temporary only until the child attained the age of 16, at which
point the tax credits became available either to the child or to his or her
parent or grandparent.
[19] In the case
before me, the Appellant attempts to distinguish her case from that of the
taxpayer in Troupe by choosing a different comparator group. The
Appellant asserts, that since she was denied a tuition tax credit transfer
because her sons were under 16 at the end of the year in which the tuition fees
were paid, the appropriate comparator group would be children over 16 years of
age who took flying lessons at a certified school or establishment, rather than
the parents of those children.
[20] I disagree with
the Appellant. As part of the determination of whether legislation results in differential
treatment, the treatment accorded to a claimant must be compared to the treatment
accorded to other persons. If there is differential treatment, the grounds for
that differential treatment must then also be established. With respect to the
selection of the appropriate comparator group, the Supreme Court also said
in Law
that:
(6) The equality guarantee is a comparative concept,
which ultimately requires a court to establish one or more relevant
comparators. The claimant generally chooses the person, group, or groups
with whom he or she wishes to be compared for the purpose of the discrimination
inquiry. However, where the claimant’s characterization of the comparison
is insufficient, a court may, within the scope of the ground or grounds pleaded,
refine the comparison presented by the claimant where warranted. Locating
the relevant comparison group requires an examination of the subject-matter of
the legislation and its effects, as well as a full appreciation of context.
[21] The comparator group chosen by the Appellant
in this case must be refined because it does not allow for any meaningful
comparison between the Appellant and other persons. It is of no assistance to
compare the Appellant to children over 16 who took flying lessons. The “inquiry into whether legislation demeans the
claimant’s dignity must be undertaken from the perspective of the claimant
and from no other perspective…”
(Law, paragraph 60) (emphasis added)
[22] In my view, a consideration of the subject
matter of the relevant legislation and its effects, and a consideration of the
relevant context all support Lamarre, J.’s choice of comparator group in Troupe. This allows for
a more appropriate analysis of whether the combined effect of section 118.9 and subsection 118.5(1) is
discriminatory vis-à-vis
the Appellant.
[23] The legislative subject matter here is the
transfer of a tuition tax credit to a parent or grandparent pursuant to
section 118.9 of the Act. The effect of the legislation is to
provide a benefit to the parent or grandparent of the student. In terms of
context, it is important to note that the availability of a benefit under
section 118.9 is predicated on the student qualifying for the tax credit
in the first place under subsection 118.5(1).
[24] Each of these factors must be taken into
account in selecting the appropriate comparator group, and in my view the
comparator group must therefore be made up of parents of children over 16 who
took flying lessons. This allows the Court to situate the distinction that the Appellant
alleges to be discriminatory in the appropriate context and to evaluate the
impact of the distinction on the Appellant, who is the person seeking the
benefit of the transfer of the tax credit. On the other hand, the comparator
group suggested by the Appellant focuses the comparison not on her but only on
her sons.
[25] As already noted, the Respondent conceded in this
case, as in Troupe, that the operation of clause 118.5(1)(a)(ii.2)(A) and section 118.9 creates
a differential treatment between the Appellant and comparator group, and that
the differential treatment can reasonably be found to be based on age, an enumerated
ground under subsection 15(1).
[26] The real issue is whether the purpose or effect of
these provisions is discriminatory within the meaning of subsection 15(1).
[27] The purpose of the provisions was stated by Lamarre,
J. to be to provide tax relief to
students (or to a supporting person) by recognizing the tuition and non‑tuition
costs they need to incur in order to receive post-secondary education or
employability training through a certified institution that teaches
occupational skills. The cutoff
age was set at 16 in order to be
consistent with provincial requirements that every individual receive secondary
schooling up to a certain mandatory age (16 in most of Canada's
provinces) before continuing on to occupational training or post-secondary
education.
[28] Although Lamarre, J. was relying on an affidavit
material filed in that case, the purpose of the legislation appears clear from
the wording of the legislation itself, and from the relevant provincial and
territorial legislation regarding compulsory school attendance. In any event,
the Appellant did not claim that any purpose of the legislation (as opposed to its
effects) were discriminatory.
[29] The Appellant argues, however, that the effects of
these provisions demeans the dignity of her sons, because it treats them as
less worthy members of society than children over 16 years of age who took
flying lessons. She relied on the testimony of her son, who said that a denial
of the tuition tax credit made him feel like a second‑class citizen, and
put him and his family at an economic disadvantage compared to flying students
who received the grant. He said that if he had waited until he was 16 to take
flying lessons, the delay would be reflected in the time at which he could
obtain his commercial pilot license and begin to earn a living in that
occupation.
[30] The evidence led by the Appellant did not, however,
address the question of whether the legislation promotes the view that the
Appellant, as the parent of a child under 16, is less worthy of recognition or
value as a human being or as a member of Canadian society, and I am unable to
see any basis in the evidence for so holding.
[31] Firstly, it has not been shown that parents of
children under 16 form a historically disadvantaged or vulnerable group, which
makes a finding of discrimination more difficult.
[32] Secondly, as pointed out by Lamarre, J., the
disadvantage in issue is not a substantive disadvantage, but rather a temporary
one, in that the tax credits become available once a child attains the age of
16, and the disadvantage does not demean the dignity of persons in the Appellant's
position.
[33] Thirdly, the impugned legislation reflects
the fact that, because of compulsory attendance legislation, children are much
less likely to undertake vocational or occupational training in certified
educational institutions before the age of 16. As was found to be the case by
the Supreme Court in Law (at paragraph 102):
The law functions not by the device of stereotype, but by
distinctions corresponding to the actual situation of individuals it affects.
It is important to recall that the Supreme Court also stated
in Law (at paragraph 105) that:
In referring to the existence of a correspondence between a
legislative distinction in treatment and the actual situation of different
individuals or groups, I do not wish to imply that legislation must always
correspond perfectly with social reality in order to comply with s. 15(1)
of the Charter.
(emphasis added)
[34] The Supreme Court accepted that it was
sufficient that the provisions of the legislation being challenged correspond
to a very large degree with the needs and circumstances of the persons whom the
legislation was targeting. This is also true of the legislation being
challenged by the Appellant here.
[35] I conclude that the Appellant has not
shown that the provisions in issue, either in purpose or effect, demean her
human dignity, and she has therefore not shown that they infringe
subsection 15(1) of the Charter.
[36] Given this conclusion, it is not necessary
to reconvene the hearing to deal with section 1 of the Charter.
[37] For all of these reasons the appeal is
dismissed.
Signed at Ottawa, Canada, this
19th day of October 2007.
“B.Paris”
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