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Citation: 2004TCC133
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Date: 20040209
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Docket: 2003-511(IT)G
2003-283(CPP)
2003-284(EI)
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BETWEEN:
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WILLIAM SHAWN DAVITT,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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REASONS FOR ORDER
Little J.
A. FACTS:
[1] The Appellant filed a Notice of
Appeal with respect to the Notice of Assessment issued pursuant
to the Income Tax Act (the "Act") for his
2000 taxation year.
[2] Basic Personal Credit - The
Appellant says that the Basic Personal Credit is unreasonably
low.
[3] The Appellant maintains that
because the Basic Personal Credit is unreasonably low,
individuals who receive low incomes are forced to pay income tax.
The Appellant argues that the imposition of income tax on
"low income" Canadians violates the individual's
right of life, liberty and the security of the person that is
protected by section 7 of the Charter of Rights and
Freedoms (the "Charter").
[4] Discrimination on the Basis of
Age, Marital Status and Against the Poor - The Appellant also
argues that subsection 15(1) of the Charter is violated by
the unreasonably low Basic Personal Credit on the basis of age
and marital status.
[5] Tuition and Education
Credit - The Appellant argues that his tuition and education
credits for the 2000 taxation year should be higher. The
Appellant maintains that if the Basic Personal Credit were at the
proper level, he would have a higher carry forward amount
covering tuition and education fees from previous years.
[6] Discrimination under Subsection
15(1) of the Charter - Age - The Appellant maintains
that the tax rates as set out in section 117 of the Income Tax
Act (the "Act") violate subsection 15(1) of
the Charter on the basis of age. The Appellant argues that
the debt incurred by the Government of Canada before he reached
the age of majority should not be his responsibility. The
Appellant maintains that the Federal Government is transferring
obligations for the Federal debt onto younger Canadians while the
benefits which gave rise to the debt went to older Canadians.
[7] Re: Marital Status -
The Appellant maintains that because the Basic Personal Credit is
unreasonably low the effective tax rate for single Canadians is
higher than for married Canadians.
[8] Re: Non-Resident -
The Appellant also maintains that the different tax treatment of
non-residents in the Act as compared to the tax treatment
of residents of Canada is a violation of subsection 15(1) of the
Charter.
[9] Counsel for the Respondent filed a
Notice of Motion dated November 4, 2003. The Notice of Motion
reads as follows:
1. The Notice of Appeal or parts of the Notice of Appeal are
scandalous frivolous or vexatious or an abuse of the process of
the Court, as set out in Rule 53 (b) and (c) of the General
Procedure Rules.
2. The Notice of Appeal discloses no reasonable cause of
action, as set out in Rule 58(1)(b) of the General Procedure
Rules;
3. The Tax Court of Canada does not have the jurisdiction to
grant the relief sought by the Appellant;
4. Rule 12 of the General Procedure Rules;
5. Section 12 of the Tax Court of Canada Act, R.S.C.
1985, c. T-2 as amended and s. 171(1) of the Income Tax
Act, R.S.C. 1985, c. 1 (5th Supp.) and
6. Such further and other grounds as counsel may advise and
the Honourable Court may permit.
[10] Sections 53 and 58 of the Tax Court
of Canada Rules (General Procedure) read as follows:
53. The Court may strike out or expunge all or part of a
pleading or other document, with or without leave to amend, on
the ground that the pleading or other document
(a) may
prejudice or delay the fair hearing of the action,
(b) is
scandalous, frivolous or vexatious, or
(c) is an
abuse of the process of the Court.
58. (1) A party may apply to the Court,
(a) for the
determination, before hearing, of a question of law raised by a
pleading in a proceeding where the determination of the question
may dispose of all or part of the proceeding, substantially
shorten the hearing or result in a substantial saving of costs,
or
(b) to strike
out a pleading because it discloses no reasonable grounds for
appeal or for opposing the appeal,
. . .
B. ISSUE:
[11] Should the Respondent's Notice of
Motion be granted?
C. ANALYSIS:
Re: Basic Personal Credit
[12] The Appellant's argument is
premised on the belief that the Basic Personal Credit in the year
2000 should be in the amount of $10,920.00. The Appellant arrived
at this number by using the minimum wage levels in the Provinces
of Ontario and Québec and applying the minimum wage to a
40-hour workweek.
In my opinion the Appellant's argument on this point is
unacceptable because there is no valid reason to determine the
Basic Personal Credit based upon minimum wage laws. It should be
noted that the Basic Personal Credit is determined by the Federal
Government and the minimum wage laws of a province are determined
by the Provincial Legislature. The Appellant's determination
of what the Basic Personal Credit should be is based upon dubious
or incorrect reasoning in order to justify "subjective
notions" as to when individuals should commence to pay
income tax. This argument is not sufficient to invoke section 7
of the Charter.
[13] With respect to a claim that section 7
of the Charter should apply I wish to note that in R.
v. Edwards [1996] 1 S.C.R. 128, the Supreme Court of Canada
ruled that the rights protected by the Charter are
personal rights that protect people. The Supreme Court said that
a person who wants to challenge a law under section 7 of the
Charter must show that his personal rights to life,
liberty and security of the person have been violated. A person
does not have standing to apply for a Charter remedy in
relation to a breach of someone else's rights.
[14] Subsection 15(1) of the
Charter - The Appellant also argues that subsection
15(1) of the Charter is violated on the basis of age,
marital status and income level because of the unreasonably low
Basic Personal Credit.
[15] The Appellant maintains that young
people have lower incomes and higher expenses. The Appellant also
argues that two people can live cheaper than one. In my opinion
these arguments are unfounded and cannot be accepted.
[16] Finally, the Appellant argues that poor
people pay higher effective tax rate. I am not prepared to
recognize that the impact of the tax rate on lower income
Canadians represents a violation of subsection 15(1) of the
Charter.
[17] Tuition and Education Credit -
The Appellant maintains that since the Basic Personal Credit is
unreasonably low, his Tuition and Education Credit from previous
years was eliminated and therefore he was unable to carry the
Tuition and Education Credit forward to future years.
For the reasons mentioned above the Appellant's argument
re the level of the Basic Personal Credit is unfounded and
therefore the Appellant's argument on this issue must
fail.
[18] Subsection 15(1) of the
Charter - The Appellant also maintains that the debt
incurred by the Government of Canada before he reached the age of
majority should not be his responsibility. The Appellant
maintains that this is a violation of his rights under the
Charter on the basis of age.
[19] In my opinion this argument is without
merit. With respect to the repayment of debt by the Federal
Government no taxpayer (young or old) is discriminated against
since the debt is the responsibility of all Canadians. I also
believe that it is incorrect for the Appellant to suggest that
the young did not benefit from the debt since much of the debt
was accumulated in order to build a significant infrastructure
which benefits all Canadians.
[20] The Appellant maintains that the
different tax treatment in the Act of non-residents
represents discrimination that would violate subsection 15(1) of
the Charter.
[21] It is correct to say that there are
certain provisions in the Act which impose tax on
non-residents of Canada in a manner different from residents of
Canada. However, I do not believe that the provisions in the
Act that apply to non-residents would amount to a
violation that would come within subsection 15(1) of the
Charter. It should also be noted that in many situations
non-residents of Canada are subject to tax by the country where
they reside.
[22] As noted above the Appellant has
maintained that portions of the Income Tax Act are in
violation of the Charter. In Clow v. Canada, 92 DTC
6155, Associate Chief Justice Jerome said at page 6158:
Taxing statutes affect economic rights and the courts have
clearly rejected the proposition that a right to life, liberty or
security of the person includes economic remedies.
[23] For the reasons outlined above I have
concluded that the Notice of Appeal is frivolous or vexatious and
an abuse of the process of the Court as set out in Rules
53(b) and (c) of the General Procedure Rules
in the Tax Court of Canada Act.
[24] The Respondent's Notice of Motion
is granted with costs and the Notice of Appeal filed under the
Act is struck out.
[25] The Appellant filed an appeal under the
Canada Pension Plan (the "CPP"). The
Appellant maintains that the CPP contribution rates set
out in section 11.1 of the CPP discriminate on the
basis of age contrary to subsection 15(1) of the
Charter.
[26] The Appellant requests:
- a refund of all
CPP contributions collected (both the employee portion and
those collected via less employers) during 2001 ($2,566.00);
- his 2001 contributions
payable be reduced to $nil;
- a declaration that the
CPP contribution rates set out in section 11.1 of the
CPP discriminate on the basis of age contrary to
subsection 15(1) of the Charter and therefore section 11.1
is of no force and effect pursuant to section 52 of the
Constitution Act, 1982 and/or section 24 of the
Charter;
- in the alternative, the
Appellant requests that the Court reduce the assessment of his
2001 CPP contributions payable to an amount that ensures
the total amount of CPP contributions levied on the
Appellant and other members of his age group (both directly and
via their employees) over their lifetimes matches the total
CPP benefits the Appellant and his age group can expect to
receive over their lifetimes. In other words, adjust the combined
employer/employee CPP contribution rate from 9.9% to 5.79%
thereby eliminating any intergenerational wealth transfers (see
page 192 of the 17th Actuarial Report on the Canada
Pension Plan);
- punitive damages of
$12,000,000 pursuant to section 24 of the Charter;
- interest;
- costs;
- such other remedies as
are just and appropriate in the circumstances.
[27] The Notice of Motion filed in the CPP
appeal reads:
THE MOTION IS FOR:
1. an Order
striking the Notice of Appeal; in the alternative for
2. an Order
striking paragraphs 1 to 7 of the Notice of Appeal or any
combination thereof;
3. costs;
and
4. such
further and other relief that this Honourable Court deems
just.
THE GROUNDS FOR THE MOTION ARE:
1. the Notice
of Appeal or parts of the Notice of Appeal are scandalous,
frivolous or vexatious or an abuse of the process of the Court,
as set out in Rule 53(b) and (c) of the General
Procedure Rules;
2. the Notice
of Appeal discloses no reasonable cause of action, as set out in
Rule 58(1)(b) of the General Procedure Rules;
3. the Tax
Court of Canada does not have the jurisdiction to grant the
relief sought by the Appellant;
4. rule 12 of
the General Procedure Rules;
5. section 12
of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, as
amended and s. 171(1) of the Income Tax Act, R.S.C. 1985,
c. 1 (5th Supp.); and
6. such
further and other grounds as counsel may advise and this
Honourable Court may permit.
[28] The Tax Court of Canada has the
authority to hear appeals from determinations or assessments
issued under the CPP. However, there are limitations to
the type of relief that this Court can give in such appeals. The
relief claimed by the Appellant under the CPP is not the
type of relief that this Court can provide.
[29] The Appellant's appeal under the
CPP should be quashed with costs to the Respondent.
[30] The Appellant also filed an appeal
under the Employment Insurance Act (the "EI
Act"). The Appellant maintains that the EI Act
discriminates on the basis of age contrary to subsection 15(1) of
the Charter,
[31] The Appellant requests:
(a) a refund of all EI premiums
collected (both the employee portion and those collected via his
employers) during 2001 ($1,684.63) pursuant to
subsection 103(3) of the Employment Insurance
Act;
(b) his 2001 EI premiums payable be reduced
to $nil;
(c) a declaration that the EI premium rates
set out in section 66 of the EI Act discriminate on
the basis of age contrary to subsection 15(1) of the
Charter and therefore section 66 is of no force and effect
pursuant to section 52 of the Constitution Act, 1982
and/or section 24 of the Charter;
(d) in the alternative, the Appellant
requests the Court reduce the assessment of his 2001 EI premiums
payable to an amount that ensures the total amount of EI premiums
levied on the Appellant is consistent with the amount authorized
by section 66 of the Employment Insurance Act;
e. punitive damages of
$12,000,000 pursuant to section 24 of the Charter;
f. interest;
g. costs;
h. such other remedies as are
just and appropriate in the circumstances.
[32] The Notice of Motion filed in the EI
appeal reads:
THE MOTION IS FOR:
1. an Order
striking the Notice of Appeal; in the alternative for
2. an Order
striking paragraphs 1 to 14 of the Notice of Appeal or any
combination thereof;
3. costs;
and
4. such
further and other relief that this Honourable Court deems
just.
THE GROUNDS FOR THE MOTION ARE:
1. the Notice
of Appeal or parts of the Notice of Appeal are scandalous,
frivolous or vexatious or an abuse of the process of the Court,
as set out in Rule 53(b) and (c) of the General
Procedure Rules;
2. the Notice
of Appeal discloses no reasonable cause of action, as set out in
Rule 58(1)(b) of the General Procedure Rules;
3. the Tax
Court of Canada does not have the jurisdiction to grant the
relief sought by the Appellant;
4. rule 12 of
the General Procedure Rules;
5. section 12
of the Tax Court of Canada Act, R.S.C. 1985, c. T-2, as
amended and s. 171(1) of the Income Tax Act, R.S.C. 1985, c. 1
(5th Supp.); and
6. such
further and other grounds as counsel may advise and this
Honourable Court may permit.
[33] The Tax Court of Canada has the
authority to hear appeals from determinations or assessments
issued under the EI Act. The relief claimed by the
Appellant under the EI Act is not the type of relief that
this Court can provide.
[34] The Appellant's appeal under the
EI Act should be quashed with costs to the Respondent.
[35] Before concluding my comments I wish to
refer with approval to the decision of Associate Chief Justice
Bowman in the first Notice of Appeal filed by Mr. Davitt. At
paragraphs 24 to 37 of Davitt v. The Queen, 2001 DTC 702,
Bowman, A.C.J. said:
[24] This court is not empowered
to do any of the things asked for. Our function is to hear
appeals from assessments made under certain federal statutes.
Generally, we can allow or dismiss appeals, and vacate or vary
assessments or refer the matter back to the Minister of National
Revenue for reconsideration and reassessment. Like all courts
this court has certain powers under the Canadian Charter of
Rights and Freedoms where a person's rights and freedoms
under the Charter have been infringed but those powers
must be exercised within the jurisdiction that Parliament has
conferred on the court, as for example in O'Neill Motors
Limited v. The Queen, 96 DTC 1486 aff'd 98 DTC 6424
(F.C.A.).
[25] What the appellant seeks
here is not within those powers or that jurisdiction. The
amendment of an act of Parliament is within the competence of the
legislative, not the judicial, branch of government.
[26] Paragraphs 73 to 113 are
struck.
[27] Paragraphs 114 to 134 deal
with the Canada Pension Plan ("CPP"). The
argument is that the CPP discriminates on the basis of
age, sex and marital status contrary to subsection 15(1) of the
Charter. The basis of this contention is set out in
paragraphs 124, 127 and 129, which read:
124. Subsections 11.1(1) of the CPP
Act operate to discriminate against younger Canadians by
requiring younger Canadians to make contributions to the CPP at
substantial higher rates than older Canadians even though younger
Canadians are not entitled to receive higher CPP benefits.
127. The taxpayer submits that section
11.1 of the CPP Act discriminates on the basis of sex
contrary to subsection 15(1) of the Charter as the CPP
Act requires Canadian men to contribute to the CPP at the
same rates as Canadian women, even though Canadian men, because
of a shorter life expectancy, will receive benefits for a period
that is substantially shorter than that for Canadian women.
129. Canadians who are single are
required to contribute to the CPP at the same rates as married
Canadians even though Canadians who are married receive more CPP
benefits; spouses of deceased CPP contributors they are entitled
to survivor's benefits.
[28] He asks for the following
relief:
133. - the court declare that sections
11.1 of the Canada Pension Plan Act are contrary to
section 15 of the Charter insofar as they require young,
single men to make CPP contributions that are not proportional to
the CPP benefits this group can expect to receive during their
lifetimes.
134. - the court amend section 11.1 of
the CPP Act so the CPP contributions of young, single men
are proportional to the CPP benefits this group can expect to
receive during their lifetime.
[29] There are procedures for
appealing to this court from determinations or assessments under
the CPP. They have not been followed. There are
limitations to the type of relief that this court can give in
such appeals. The relief sought here is not the type of relief
that this court can give. Moreover, the amendment of legislation
is not something that is available as a remedy that courts can
give under the Charter.
[30] Paragraphs 114 to 134 are
struck.
[31] Paragraphs 135 to 160 deal
with Employment Insurance premiums. The essence of the argument
put forward in these paragraphs is set out in paragraphs 144 and
145 which read:
144. The taxpayer submits that the
Employment Insurance Act (hereinafter "EI
Act") discriminates on the basis of age contrary to s.
15 of the Charter as it requires the taxpayer to pay
premiums even though, as a full-time university student, he is
ineligible to collect Employment Insurance benefits.
145. The taxpayer submits that the
EI Act discriminates on the basis of age contrary to s. 15
of the Charter as surplus EI contributions are a
'tax' that is primarily targeted at younger
Canadians.
[32] The relief sought is the
following:
155. - provisions of the EI Act be
declared contrary to section 15 of the Charter
insofar as it requires young Canadians who are full-time
university students to contribute to the EI plan at standard
rates but disqualifies them from receiving the associated
benefits;
156. - the EI Act be declared
contrary to section 15 of the Charter insofar as the EI
premiums collected are excessive and are being used to fund other
Government of Canada programs.
157. - section 5(2) of the EI Act
be amended so that the class of 'excluded employment', as
that term is used in the Act, be expanded to include the
employment earnings of full-time students; and
158. - the EI Act be amended so
the EI contributions do not exceed the amount required to provide
EI benefits and are not used to fund other government
programs;
159. - the taxpayer receive a full
refund of the Employment Insurance premiums paid by him and the
related employer EI contributions, totalling $1,200;
160. - the court order such other
remedies as the court considers appropriate and just in the
circumstances.
[33] The relief sought is not
relief that this court is empowered to give. This court is not
able to amend legislation. Moreover, the arguments under section
15 of the Charter have no hope of success. They are wholly
without merit.
[34] Paragraphs 135 to 160 are
struck.
[35] Paragraphs 161 to 171 argue
essentially that certain provisions of Part I.2 of the Income
Tax Act which "claw-back" Old Age Security benefits
in accordance with a formula one component of which is $53,215
discriminate against younger Canadians on the basis of age
because the partial indexing of the amount of $53,215 under
subsection 117.1(1) of the Income Tax Act erodes the
Old Age Security benefits paid to Canadians.
[36] The relief sought is the
following:
169. - Part I.2 of the ITA as
it was in 1998 be declared contrary to section 15(1) of the
Charter insofar as the income threshold under Part I.2 of
$53,215 was only partially indexed thereby operated to erode the
taxpayer's after-tax Old Age Security benefits;
170. - the ITA be amended so the
income taxes levied on younger Canadians are proportional to the
government benefits their generation will receive over their
lifetime.
[37] There is no more merit in
the positions advanced with respect to the so-called
"claw-back" of Old Age Security benefits than there was
with respect to employment insurance and the CPP.
Section 15 of the Charter cannot be invoked every
time someone dislikes a provision of the Income Tax Act.
The fact that social benefits are unequally distributed does not
of itself justify a remedy under the Charter. The
amendment of fiscal or any other legislation to correct some
perceived or imagined inequity is not something that the
Charter empowers the court to do. Indeed the arguments
here are even more devoid of merit than with respect to the
Employment Insurance Act and the CPP. The appellant
is not of an age where he might receive Old Age Security
benefits. The fact that they might be "clawed-back"
some thirty years hence (assuming the legislation remains
unchanged - a rather fanciful conjecture) is no basis upon which
any action of this court could be based. This is clear from the
judgment of Dickson J. in Operation Dismantle
(supra) at pages 456-457.
...
[53] I am in any event not
striking out this appeal on procedural grounds. I am striking it
out because it is frivolous, vexatious and scandalous and
discloses no reasonable cause of action. I have not for some time
seen such an array of singularly unmeritorious propositions.
There can be no objection to law students debating imaginative
and indeed far-fetched notions in a college common room. It is no
doubt a salutary and necessary part of their education. It is
however a waste of public funds and of the court's time to
advance such matters before the courts. (Underlining
added)
[36] I also wish to refer to the comments
made by my associate Justice C.H. McArthur on the
Notice of Appeal filed by Mr. Davitt under the Canada Pension
Plan. In Davitt v. M.N.R., file number 2003-283(CPP)
Justice McArthur said in his Reasons for Judgment:
[14] The Appellant appears to
have a fixation directed at the CPP and other Canadian
tax-related legislation. The relief he seeks would probably cost
the Treasury billions of dollars. This Court is not the forum for
these colossal social upheavals. I believe that the Appellant can
only find relief from the Federal Parliament.
[15] I urge the Appellant to
cease arguing his social reforms before the Tax Court of Canada.
His extraordinary efforts would be better spent in other
directions. This Court's resources are better spent dealing
with more worthy appeals. The motion is granted and the appeal is
struck out in its entirety, with costs to the Respondent.
[37] I wish to repeat the comments of
Associate Chief Judge Bowman:
It is however a waste of public funds and of the court's
time to advance such matters before the courts.
Signed at Vancouver, British Columbia, this 9th day of
February 2004.
Little J.
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