Date: 20000619
Docket: 1999-1142-IT-I
BETWEEN:
DAVID M. EKMEKJIAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Bonner, .T.C.J.
[1] This appeal relates to the 1995 and 1996 taxation years.
In his income tax returns for 1995 and 1996 the Appellant
deducted $4,925.18 and $5,158.32 respectively in computing the
balance of the tax owing by him. Provision for deductions of this
sort is made in s. 253 of the Excise Tax Act
("GST") which is intended to allow rebates of GST to
employees and members of partnerships in respect of employment or
partnership-related expenses which they may deduct in computing
income from those sources for purposes of the Income Tax
Act ("ITA"). The issue in the appeal relates
not to quantum of rebate but rather to eligibility to claim the
rebate at all.
[2] The Appellant's claims for the rebate were contained
in income tax returns for the Appellant's 1995 and 1996
taxation years. Those returns were not dated by the Appellant.
However, in line 699 of the returns the following dates are
given: 1996/04/27 and 1997/04/26 in the 1995 and 1996 returns
respectively. Thus, the claims for rebate appear to have been
made after the amendments to section 253 effected by S.C.
1997 c. 10, s. 62 became applicable. Subsection 62(4)
provided:
(4) Subsections (1) to (3) are deemed to have come into force
on December 17, 1990 but do not apply for the purpose of
determining any rebate under section 253 of the Act that was
claimed in an application received by the Minister of National
Revenue before April 23, 1996 (other than an application deemed
under paragraph 296(5)(a) of the Act to have been filed as
a result of an assessment made after that day).
[3] As a result of the amendments effected by section 62 the
relevant part of section 253 read:
253. (1) Where
(a) a musical instrument, motor vehicle, aircraft or
any other property or a service is or would, but for subsection
272.1(1), be regarded as having been acquired or imported by an
individual who is
(i) a member of a partnership that is a registrant, or
(ii) an employee of a registrant (other than a listed
financial institution),
(a.1) in the case of an individual who is a member of a
partnership, the acquisition or importation is not on the account
of the partnership,
(b) the individual has paid the tax payable in respect
of the acquisition or importation, and
the Minister shall, subject to subsections (2) and (3), pay a
rebate in respect of the property or service to the individual
for each calendar year equal to the amount determined by the
formula
A x (B – C)
where ...
[4] Section 253 was amended further by the same legislation,
S.C. 1997 c. 10, s. 220(1). The English version of the
GST now lacks the former subparagraphs 253(1)(a)(i) and
(ii). However the obvious oversight in the English version is not
present in the French version and in any event the amendment does
not govern the substantive rights in question in this appeal. The
amendment to subsection 220(1) did not come into force until
April 1, 1997.
[5] It was the position of the Respondent that the Appellant
was ineligible for the rebate because he was an employee of a
listed financial institution within the meaning of subparagraph
253(1)(a)(ii). The term "listed financial
institution" is defined in subsection 123(1) of the GST to
be a person referred to in paragraph 149(1)(a). That
provision reads:
149. (1) For the purposes of this Part, a person is a
financial institution throughout a particular taxation year of
the person if
(a) the person is
(i) . . .
(ii) . . .
(iii) a person whose principal business is as a trader or
dealer in, or as a broker or salesperson of, financial
instruments or money, . . .
at any time in the particular year.
[6] The Appellant was employed during the first part of 1995
by Sanwa McCarthy Securities; during the latter part of 1995 and
the first part of 1996 by Majendie Charlton Securities Ltd.; and
during the last part of 1996 by Yorkton Securities Inc. All three
employers were registered for purposes of the GST. On assessment
the three firms were assumed to be listed financial institutions
and there was no clear evidence to the contrary.
[7] The Appellant appeared on his own behalf at the hearing of
the appeal and was the only person to give evidence. He stated
that at the relevant time he held a licence as a portfolio
adviser, that none of the three employers mentioned above was so
licenced and that in respect of services which he performed as
portfolio adviser to clients of the three firms, he charged fees
on which GST was levied. He stated that his employers provided
office space, business cards, a computer and some support staff.
He stated that he hired an assistant who received some salary
from his employer and a bonus from him.
[8] The Appellant was a truthful witness. However there is no
evidence on which I can find that the Appellant's activity as
portfolio adviser or manager was not carried on by him qua
employee. There is no suggestion in the evidence that the
Appellant was a member of any partnership.
[9] In my opinion the Appellant is not entitled to a rebate
under section 253 because he was excluded from the category
of employees who do qualify by clear words of exception found in
subparagraph 253(1)(a)(ii). The Appellant seems to assume
that the exception should not apply to employees of listed
financial institutions where those employees provide services
which are subject to tax. The short answer to this contention is
that the legislature has not seen fit to cut down on the language
of the exception. This court must apply the clear language of the
statute as it finds it.
[10] The appeal will be dismissed.
Signed at Ottawa, Canada, this 19th day of June 2000.
"Michael J. Bonner"
J.T.C.C.
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