Date: 19990823
Docket: 98-1144-IT-I
BETWEEN:
FRANK ARSENAULT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Bell, J.T.C.C.
ISSUE:
[1] The issue is whether
(a) Workers' Compensation benefits in the sum of
$39,609.61 were properly included in the Appellant's income
for his 1996 taxation year, and
(b) the Appellant is required to repay benefits pursuant to
the Employment Insurance Act ("Act") for
that year in the amount of $3,082.50.
FACTS:
[2] The Appellant, an employee of Canadian National Railway,
was injured in 1993, suffered partial disability and applied for
unemployment insurance benefits. He testified that he received
notice from Workers' Compensation that he could take a lump
sum of $39,609.61 or monthly payments of $208.00 for life. He
further testified that he went to the Unemployment Insurance
office and asked whether by accepting the lump sum he'd be
affected by the "UI" clawback. He said that he had been
advised by the head of Unemployment Insurance at Jasper, Alberta
that receipt of a lump sum payment would not affect his
income.
[3] The Appellant acknowledged having received and reported
the following sums in respect of his 1996 taxation year,
namely:
Employment income $14,524.86
Employment insurance benefits $10,275.00
Interest income $ 62.04
Other income $ 393.16
Workers' Compensation benefits $39,609.61
Total income $64,864.67
[4] Revenue Canada assessed the Appellant for an amount
determined under a formula described in the Notice of Appeal as
being pursuant to the Act in the amount of $3,082.50 for
the 1996 taxation year calculated as follows:
30% x lessor (sic) of: _________
(i) total benefits paid to the Appellant $10,275.00;or
(ii) net income before
deducting repayment = $63,344.95
minus
maximum yearly insurable
earnings of $39,00.00 x 1.25=$47,750.00 _________
$14,594.95
Repayment=30% x 10,275.00 - $ 3,082.50
[5] The inclusion of the previous amounts in the
Appellant's income for 1996 is not in dispute. The Appellant
states simply that he received incorrect advice from Revenue
Canada, that being the foundation of his plea. Unfortunately,
that cannot be of assistance to him. The presentation of the
formula by Revenue Canada as above set forth is consistent with
the provisions of section 145 of the Act, particularly
subsections 1 and 4. They read as follows:
145(1) If a claimant's income for a taxation year exceeds
1.25 times the maximum yearly insurable earnings, the claimant
shall repay to the Receiver General 30% of the lesser of
(a) the total benefits paid to the claimant in the taxation
year; and
(b) the amount by which the claimant's income for the
taxation year exceeds 1.25 times the maximum yearly insurable
earnings.
...
[6] Looking at subsection 145(1) the meaning of the term
"maximum yearly insurable earnings" becomes
significant. Through a convoluted statutory path, described in
section 190 and its references[1], under subsection 4(1) that term means the sum
of $39,000 for 1996. Accordingly, I am in agreement with the
conclusion reached by Revenue Canada as set forth above. Assuming
that the Appellant was advised by an official of Revenue Canada
in the fashion above described (and I have no reason to doubt
that he was) it is unfortunate that he made the selection which
triggered a repayment of benefits. However, this, once more,
indicates the folly of relying upon advice from an official of
Revenue Canada which will be quick to state that the Crown is not
bound by the acts of her servants.
[7] Accordingly, the appeal is dismissed.
Signed at Ottawa, Canada this 23rd day of August,
1999.
"R.D. Bell"
J.T.C.C.
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