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Citation: 2003TCC438
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Date: 20030715
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Docket: 2002-4368(IT)I
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BETWEEN:
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MICHEL BRISSON,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif, J.
[1] This is an appeal from an income tax assessment for the 2000 taxation year.
[2] The facts assumed and alleged for making and upholding the assessment have been admitted by the Appellant. The facts are the following:
(a) The Appellant and France Marcouiller were married on July 4, 1987;
(b) The union has produced two children: Mélinda and Kévin;
(c) The Appellant and France Marcouiller have lived apart since January 23, 1999;
(d) Over the course of the year at issue, the Appellant and France Marcouiller had joint custody of their two children;
(e) Over the course of the year at issue, the Appellant paid France Marcouiller a support amount for Mélinda and Kévin as defined at subsection 46.1(4) of the Income Tax Act.
[3] The point at issue is whether the credit, claimed as an equivalent-to-married amount by the Appellant, was correctly dismissed by the Minister of National Revenue.
[4] For the 2000 taxation year, the Respondent disallowed the Appellant's claim of $6,140.00 as an equivalent-to-married amount for his minor son, given that he paid a support amount for this child over the course of that same taxation year.
[5] The Respondent relied on the judgment of Lamarre J. in Lavoie v. Canada, [2001] T.C.J. No. 809 (Q.L.), at section 3:
3. The respondent is relying on subsections 56.1(4) and 118(5) of the Act to deny the appellant that credit. Those legislative provisions read as follows:
"56.1(4)"
(4) Definitions. The definitions in this subsection apply in this section and section 56.
"support amount" - "support amount" means an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount, and
(a) the recipient is the spouse or common-law partner or former spouse or common-law partner of the payer, the recipient and payer are living separate and apart because of the breakdown of their marriage or common-law partnership and the amount is receivable under an order of a competent tribunal or under a written agreement; or
(b) the payer is a natural parent of a child of the recipient and the amount is receivable under an order made by a competent tribunal in accordance with the laws of a province.
"118(1)(b)"
(b) Wholly dependent person - in the case of an individual who does not claim a deduction for the year because of paragraph (a) and who, at any time in the year,
(i) is
(A) a person who is unmarried and who does not live in a common-law partnership, or
(B) a person who is married or in a common-law partnership, who neither supported nor lived with their spouse or common-law partner and who is not supported by that spouse or common-law partner, and
(ii) whether alone or jointly with one or more other persons, maintains a self-contained domestic establishment (in which the individual lives) and actually supports in that establishment a person who, at that time, is
(A) except in the case of a child of the individual, resident in Canada,
(B) wholly dependent for support on the individual, or the individual and the other person or persons, as the case may be,
(C) related to the individual, and,
(D) except in the case of a parent or grandparent of the individual, either under 18 years of age or so dependent by reason of mental or physical infirmity,
an amount equal to the total of
(iii) $7,131, and
(iv) the amount determined by the formula
$6,055-(D-$606)
where
D is the greater of $606 and the dependent person's income for the year,
"118(5)"
(5) Support. No amount may be deducted under subsection (1) in computing an individual's tax payable under this Part for a taxation year in respect of a person where the individual is required to pay a support amount (within the meaning assigned by subsection 56.1(4)) to the individual's spouse or common-law partner or former spouse or common-law partner in respect of the person and the individual
(a) lives separate and apart from the spouse or common-law partner or former spouse or common-law partner throughout the year because of the breakdown of their marriage or common-law partnership; or
(b) claims a deduction for the year because of section 60 in respect of a support amount paid to the spouse or common-law partner or former spouse or common-law partner.
[6] The Appellant argued equity, reasonableness and common sense to support his appeal. He also relied on an interpretation bulletin of the ministère des Finances du Québec dated July 5, 2001, the relevant portion of which reads as follows:
[translation]
1.1 Confirmation of the right of the payer of a support payment to claim a tax credit for a child whose custody he shares
Under taxation laws for a taxation year, a taxpayer can claim a non-refundable tax credit for a child of which he or she is the father or mother, in so much as, in particular, this child has ordinarily lived with him and been in his charge at any time during the year.
In the event that a number of taxpayers can claim a tax credit for the same child, taxation laws provide that they must come to an agreement with regard to dividing the amount of the tax credit between them. Should they fail to come to an agreement, the Ministre du Revenu can set the amount that each of these taxpayers may deduct in calculating taxes to be paid.
However, since the 1986 taxation year, the objective of this particular rule has been to prevent a taxpayer from both simultaneously claiming, for his or her spouse or child for a taxation year that is subsequent to that in which the relationship failed, a deduction for support that he had paid for one or the other of these individuals and a personal exemption or tax credit, as the case may be, for the same person. However, this rule did not deny this opportunity to a taxpayer whose child was in joint custody.
Moreover, despite the 1997 non-taxation of support payments for children, this particular rule was kept to prevent the payer of support for a spouse or child from claiming, for a taxation year subsequent to that in which the relationship failed, a tax credit for his or her spouse or a child who was not in joint custody.
Notwithstanding the taxation policy is designed to allow taxpayers sharing custody of their children to claim a tax credit for dependent children, it is possible, considering the wording of the legislative provision establishing the particular rule, for a Court to decide that the Ministre du Revenu cannot, in the absence of an agreement between the parents sharing custody of the child, divide the amount of the tax credit claimed for the child if one of the parents pays child support on a regular basis during the entire year.
However, considering on the one hand, that under taxation law a child must, as a general rule, normally live with the taxpayer claiming a tax credit for him and that the value of this tax credit must be shared between all the taxpayers claiming this tax credit, and on the other hand, that the number of orders for joint custody is increasing, the particular rule applicable to payers of child support no longer appears to be necessary.
Moreover, considering that the wording of the legislative provision granting a spousal tax credit was also modified in 1997 to provide that a taxpayer is entitled to an amount for an individual who at some time during the year is his or her spouse if, at that time, he is subsidizing the needs of this individual from whom he is not living apart due to the failure of the relationship, the particular rule applicable to payers of spousal support has no further reason to exist.
Taxation law will thus be modified to override the particular rule applicable to spousal or child support starting with the 2001 taxation year. Moreover, for taxation years prior to 2001, taxation law will be clarified to confirm that the payer of child support can, if conditions are met in other respects claim a tax credit for this child of whom he or she has joint custody.
[7] He claimed reimbursement of the fees because he undoubtedly would not have filed an appeal if he had not been encouraged by an official to do so.
[8] The Appellant acknowledged that the assessment had been made pursuant to the relevant provisions of the Income Tax Act ("Act"). This matter has been dealt with on numerous occasions by this Court; there is no possible equivocation with regard to the scope of the relevant provisions.
[9] I do not believe it is necessary to analyse this matter again except to recall a few very relevant decisions:
Gautron v. Canada, 2003 DTC 326 ([2003] T.C.J. No. 140 (Q.L.));
Peeck v. Canada, [1998] T.C.J. No. 453 (Q.L.);
Ruel v. Canada, [1992] T.C.J. No. 695 (Q.L.);
Lavoie v. Canada, [2001] T.C.J. No. 809 (Q.L.); and
Nelson v. Canada, [2000] T.C.J. No. 1613 (Q.L.).
[10] The Appellant then indicated that he was approaching the Court to obtain a judgment in order to change the current state of the law.
[11] The Appellant submitted his point of view in a dignified and very pleasant manner while indicating that had he known the limits of this Court's authority with regard to the merits of his appeal, he certainly would not have filed the Notice of Appeal in consideration of the time required to do so, the nervousness he had to overcome and all the unknowns that the process involved.
[12] Subsequent to the Appellant's very pleasant submissions, the Court explained to him that it was not enough to submit fairness of arguments but that it was essential to submit points of argument arising from the Act alone since the Tax Court of Canada is obliged to apply the Act and not render judgments based on fairness.
[13] The late Mr. Justice Christie of this Court correctly expressed this constraint in Martin v. Canada, [1993] T.C.J. No. 45 (Q.L.) as follows:
At trial the appellant said she believed she had been reassessed "in accordance with the law". But her position is that the law is "unfair" and it is clear from what the appellant said that she is under the impression that this Court has some kind of general equitable jurisdiction to interfere with assessments of income tax if it can be persuaded that the law imposing the tax is unfair. That is not so. This Court is required to apply the law as enacted by Parliament and the basic approach in so doing is to ascribe to the words used in the Act their grammatical and ordinary sense. In Planetta v. M.N.R., 87 D.T.C. 554, this is said at p. 556:
"Where language employed by Parliament is clear, effect must be given to it by this Court. To do otherwise would be to infringe upon the functions of Parliament under the guise of interpretation of legislation. Further, as observed by Lord Greene in Howard De Walden v. Inland Revenue Commissioners, [1942] 1 All E.R. 287 at 289: 'It is illegitimate to force upon that language (of a taxing statute) a strained construction merely because it may otherwise lead to a result which to some minds may appear to be unjust.'"
In Kliman v. Winckworth, 17 T.C. 569, this is said at page 572:
". . . There is no room of course, in a taxing Act for equitable considerations, if by 'equity' the Commissioners meant there, as I suppose they did, considerations of what they conceived would effect a just result in all the circumstances. It is, of curse, for the legislature and not for the Courts to consider matters of that sort."
[14] The late Mr. Justice Sobier also dealt with this Court's authority in Sunil Lighting Products v. Canada, [1993] T.C.J. No. 666 (Q.L.), stating at paragraph 18:
The jurisprudence clearly affirms that the Tax Court of Canada is not a court of equity and its jurisdiction is based within its enabling statute. . . In addition, the Court cannot grant declaratory relief given that such relief is beyond the jurisdiction of the Court. . . In an income tax appeal, the Court's powers are spelled out in subsection 171(1) of the Income Tax Act. Consequently, these powers essentially entail the determination of whether the assessment was made in accordance with the provision of the Income Tax Act. . .
[15] For the above-indicated reasons, the appeal must be dismissed; in fact, the credit claimed as equivalent-to-spousal amount was denied in accordance with the provision of the Act.I order, however, that the amount of $100 paid by the Appellant to file his appeal be reimbursed to him.
Signed at Ottawa, Canada, this 15th day of July 2003.
Tardif, J.
Translation certified true
on this 24th day of March 2004.
Sharon Moren, Translator
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