REASONS
FOR JUDGMENT
Smith J.
[1]
The issue in this appeal is whether the
Appellant was entitled to the Canada Child Tax Credit (“CCTB”) and Goods and
Services Tax Credit (“GSTC”) during the time periods in question on the basis
that she was the primary care giver or whether, as a shared‑custody
parent, she was only entitled to 50% of those benefits.
[2]
The Minister of National Revenue (the
“Minister”) has taken the position that the Appellant has been a shared‑custody
parent of her son S since January 2013 and of her daughter R since March
2014 and that she was only entitled to 50% of the benefits received after those
dates.
[3]
This matter involves a Notice of Redetermination
for the 2011, 2012 and 2013 base years but, for reasons explained at the
hearing, does not include the 2014 base year.
[4]
For reasons set out below, I am of the view that
the Minister’s decision should be revised on the basis that the Appellant and
the father have been shared‑custody parents of both children since March
2014.
I. Background
[5]
The Appellant and Ilan Liberman (the “father”)
were spouses of one another and the natural parents of two infant children.
They separated on May 1, 2012 and have been living separate and apart
since that time.
[6]
It is not disputed that the Appellant had
primary care and custody of both children (S born on June 17, 2010 and R born
on April 10, 2012) following the date of separation while the father had
limited access that increased over time.
[7]
By way of background, it is important to note
that shortly after the date of separation, the Appellant commenced proceedings
in the Ontario Superior Court of Justice to address various issues including
child custody, access and support and this led to the issuance of three court
orders.
[8]
The first was a temporary Order dated October 3,
2012. It provided that the father “shall have parenting time with both children”
followed by an access schedule to include over-night access to the eldest son S
on Tuesdays and Wednesdays and every other weekend from Friday evening to
Monday morning (or until 6:00 pm on statutory holidays). A similar
arrangement was in place for the youngest daughter R except for overnight
access on Wednesday.
[9]
The second Order was also a temporary Order. It
is dated February 7, 2014 and was obtained following a motion by the
father for expanded access to S who was now two years old and to arrange for
pickup of the children at the daycare instead of the Appellant’s residence. The
latter measure was intended to reduce conflict.
[10]
At paragraph 11 of the Order, Justice Hughes
confirms that the “this expansion of access shall not be used as a basis for
reducing or terminating the Respondent Father’s obligation to pay child support
to the Applicant mother.”
[11]
The last Order is dated September 30, 2014 and
contains the notation “Final” in the title of proceedings. The presiding judge
also delivered Reasons for Judgement consisting of 33 pages that were
filed as an exhibit.
[12]
I do not propose to repeat the contents of the
written reasons in any detail but include for the record an observation made by
the presiding judge on the issue of the father’s access schedule. At paragraph
175, he indicates:
(175) Examination of the terms of the
parties’ consent regarding the children’s care and control schedule reveals that
they have agreed to a roughly equal sharing of the children’s care.
[Emphasis added.]
[13]
Since the parties had agreed to continue the
access schedule, the Final Order of September 30, 2014 simply provides that the
father shall continue to have access to the children in accordance with an
access schedule that does not differ materially from the schedule set out in
the temporary Order of February 7, 2014, except that it provides for two
weeks during school vacations with alternating March breaks and religious
holidays.
[14]
While the Appellant had sought full custody of
the children, the Reasons for Judgement conclude (at paragraphs 225(a) and (b))
that “the parties shall have joint custody of the children of the marriage” and
“shall jointly decide major issues pertaining to the health, education,
religion and general welfare for the children”.
[15]
Also included was a provision for child support
payable by the father based on the “Ontario Child Support Guidelines”. Special
and extraordinary expenses were to be shared between the parties in proportion
to their income.
[16]
While the Final Order is dated September 30,
2014, it was only issued and signed by the presiding judge on January 22, 2015.
According to the Appellant, this was as a result of the father’s refusal to
approve the draft order as to form and content.
[17]
Neither the Reasons for Judgment nor the Final
Order refer to the CCTB or GSTC but it is clear that both parties had a
continuing obligation to provide income disclosure. It was also clear from the
Appellant’s testimony that these benefits had been declared and considered in
her monthly income.
II. Facts
[18]
The Appellant and the father were the only
witnesses at the hearing although a Canada Revenue Agency (“CRA”)
representative testified as to its administrative process and procedures in
making in a redetermination.
[19]
It was obvious from the testimony that both
parties are dedicated and caring parents but that their relationship remains
strained and acrimonious.
[20]
The Appellant’s basic position is that, since
the date of separation, she has had primary care and custody of the children.
She argues that the temporary Orders were mere access schedules intended to
provide the father with “parenting time with both children” (Justice Kaufman,
paragraph 2, temporary Order of October 3, 2012). She argues that even if
the father’s time with the children appears to be equal, she was the parent who
primarily fulfilled the parental role.
[21]
In particular she argues that the father did not
respect the access schedule set out in the temporary Order of October 2,
2012 and that she was obliged to pick‑up the children at the daycare,
clean, change and feed them, notably on Wednesdays and Fridays, before the
father picked them up for over‑night or weekend access. This continued
until at least February 7, 2014, the date of the second temporary Order.
[22]
Notwithstanding the revised access schedule which
appeared to give both parties equal access to the children, she maintains that
if there were issues at the daycare, she was the one who dealt with the
situation since the father was working. She added that on religious holidays or
when the children were sick, they stayed at home with her and not the father
since he was working.
[23]
She testified that she was the parent who
brought the children to their doctor’s appointments though she conceded that
the father attended a few times. She produced letters and details of numerous
visits that she had attended.
[24]
During cross-examination, she admitted that she
had consented to the access schedule set out in the Final Order, that it was a
continuation of the access schedule set out in the temporary Order of February
7, 2014 but argued that she did so in order to be able to address all the other
issues and that a proceeding to vary the father’s access schedule was scheduled
for June 2016.
[25]
The Appellant expressed the view that the father
has only been a joint custody parent since January 22, 2015, the date when the
Final Order was taken out.
[26]
As indicated above, the Minister called the
father as their first witness. He maintained that he had followed all the court
orders absolutely and “to a tee”.
[27]
He indicated that if there were issues at the
daycare during his access days, he would deal with the situation. He also
indicated that he attended several of the children’s doctors’ visits and that
he would have attended more often had he known of them. He described weekend
activities including sports.
[28]
With the assistance of counsel, he provided
examples of his parenting activities to address the various criteria set out in
section 6302 of the Income Tax Regulations (the “Regulations”) that I
will refer to below.
[29]
As far as the father was concerned, he has had
shared access of S since at least January 2013 and of his younger daughter R
since at least March 1, 2014, following the second temporary Order of
February 7, 2014.
[30]
During cross-examination by the Appellant, he
explained that he had first made enquiries about the CCTB and GSTC in early
2014, that he had collected what he was told were the necessary supporting
documents and that he had filed them with CRA in the fall of 2014. When asked
why he had waited until after the Superior Court of Justice hearing that led to
the Final Order of September 30, 2014, he indicated that he had his own
reasons and in particular, that he had done so at the suggestion of the CRA
officials with whom he had been dealing.
[31]
I will conclude my review of the facts by
indicating that the neither party presented a chart, schedule, an agenda or
detailed day-to-day summary of their time with the children. Their testimony
was of a general nature.
III. The Law
[32]
As indicated above, the CCTB regime is set out
in section 122.6 of the Income Tax Act (the “ITA”). It sets out a number
of important definitions as follows:
“eligible individual” in respect of a
qualified dependant at any time means a person who at that time;
(a) resides
with the qualified dependant;
(b) is a
parent of the qualified dependant who;
(i) is the parent
who primarily fulfils the responsibility for the care and upbringing of the
qualified dependant and who is not a shared-custody parent in respect of the
qualified dependant; or
(ii) is a shared-custody
parent in respect of the qualified dependant;
(c) is
resident in Canada or, where the person is the cohabiting spouse or common-law
partner of a person who is deemed under subsection 250(1) to be resident in
Canada throughout the taxation year that includes that time, was resident in
Canada in any preceding taxation year;
. . .
and for the purposes of this definition;
(f) where
the qualified dependant resides with the dependant’s female parent, the parent
who primarily fulfils the responsibility for the care and upbringing of the
qualified dependant is presumed to be the female parent;
(g) the
presumption referred to in paragraph 122.6 eligible individual (f) does not
apply in prescribed circumstances, and
(h) prescribed
factors shall be considered in determining what constitutes care and upbringing;
[Emphasis added.]
“shared-custody parent” in respect of a
qualified dependent [sic] at a particular time means, where the presumption
referred to in paragraph (f) of the definition “eligible individual” does not
apply in respect of the qualified dependant, an individual who is one of the
two parents of the qualified dependant who;
(a) are not
at that time cohabitating spouses or common-law partners of each other;
(b) reside
with the qualified dependant on an equal or near equal basis; and
(c) primarily
fulfil the responsibility for the care and upbringing of the qualified
dependant when residing with the qualified dependant, as determined in
consideration of prescribed factors.
[Emphasis added.]
[33]
Following the date of separation and up to the
disputed periods (January 2013 for S and March 2014 for R), it is apparent that
the Appellant had the benefit of the presumption set out in paragraph 122.6
eligible individual (f) in that both children primarily resided with her and,
as the female parent, she was presumed to be the parent who primarily fulfilled
the responsibility for their care and upbringing.
[34]
However, the presumption in favour of the female
parent is rebuttable where both parents meet the definition of “shared-custody
parents” or another parent has filed an application claiming to be the primary
caregiver as provided by subsection 6301(1)(d) of the Regulations.
[35]
In this instance, the father filed an
application with CRA in the fall of 2014 and the Minister concluded that both
the Appellant and the father met the definition of “shared‑custody
parents” in that both children resided with them “on an equal or near equal
basis” and both primarily fulfilled the responsibility for their care and
upbringing when they are residing with them, taking into consideration the
prescribed factors set out in section 6302 of the Regulations:
6302. Factors — For the purposes of
paragraph (h) of the definition “eligible individual” in section 122.6
of the Act, the following factors are to be considered in determining what
constitutes care and upbringing of a qualified dependant:
(a) the
supervision of the daily activities and needs of the qualified dependant;
(b) the
maintenance of a secure environment in which the qualified dependant resides;
(c) the
arrangement of, and transportation to, medical care at regular intervals and as
required for the qualified dependant;
(d) the
arrangement of, participation in, and transportation to, educational,
recreational, athletic or similar activities in respect of the qualified
dependant;
(e) the
attendance to the needs of the qualified dependant when the qualified dependant
is ill or otherwise in need of the attendance of another person;
(f) the
attendance to the hygienic needs of the qualified dependant on a regular basis;
(g) the
provision, generally, of guidance and companionship to the qualified dependant;
and
(h) the
existence of a court order in respect of the qualified dependant that is valid
in the jurisdiction in which the qualified dependant resides.
IV. Analysis
[36]
In order to address this matter, the Court needs
to consider the definition of “shared-custody parent” and determine, in light
of the evidence:
1. Whether the children resided with the Appellant and the
father on “an equal or near equal basis”; and
2. Whether each parent primarily fulfilled the responsibility
for the care and upbringing of the children when they resided with them, as
determined in consideration of the prescribed factors set out in section 6302
of the Regulations.
[37]
The definition uses the conjunctive “and”
suggesting that a parent must meet both requirements. In this instance, I am
satisfied that both parents fulfilled the responsibility for the upbringing of
the children when they resided with them.
[38]
However, the existence of the three court orders
needs to be addressed as they present a particular challenge in the context of
determining whether the parties were “shared-custody parents” as that term is
defined in the ITA. At first blush, it is difficult to disagree with the Appellant’s
position that the father was merely entitled to an access schedule from the
date of separation until the final Order of September 30, 2014 when the
Ontario Superior Court of Justice determined that he would have “joint custody
of the children of the marriage” and henceforth would “jointly decide major
issues pertaining to the health, education, religion and general welfare of the
children”.
[39]
The Appellant’s position basically suggests that
the father cannot be a shared‑custody parent effective the dates put
forward by the Minister since the court order establishing that he was a
custodial parent was not made before September 30, 2014 (though she argues it
should be January 22, 2015 when the Final Order was taken out).
[40]
Also, the second Order dated February 7, 2014
stated that the increase to the father’s access schedule for his youngest
daughter would not have the effect of reducing his obligation to pay child
support to the Appellant.
[41]
With the filing of the father’s application for
the CCTB and GSTC (after the Final Order of September 30, 2014) and retroactive
nature of the Minister’s decision, the net effect is that the Appellant’s
entitlement to child support is in fact reduced, albeit only indirectly as a
result of the reduction in her monthly income.
[42]
The Appellant argues that the father’s
application was intended to “cripple her financially” since she was obviously
dependant on the receipt of those benefits.
[43]
I will make the observation that I do have some
difficulty with the notion that the father seeks to obtain what he views as
only his fair share of the CCTB and GSTC when it appears that he has been less
than candid in the Superior Court of Justice proceedings. In particular, he
must have known and understood that his child and spousal supports payments
would be established in light of the Appellant’s monthly income that included
the receipt of the CCTB and GSTC benefits. He nonetheless chose to file his
application with CRA after the Final Order.
[44]
While I might be tempted to draw a negative
inference from the observation noted above, it is not the role of this Court to
seek to enforce the Orders of the Ontario Superior Court of Justice, directly
or indirectly, but to consider them as one of several factors in determining
whether a parent “primarily fulfills the responsibility for the care and
upbringing of the qualified dependant when residing with the qualified
dependant” as set out in paragraph (c) of the definition of a “share‑custody
parent”.
[45]
Having heard the evidence of both parties and
having concluded that both of them fulfilled the responsibility for the care
and upbringing of the children when they reside with them, the remaining issue
is whether the children resided with each parent on “an equal or near equal basis”.
[46]
As indicated above, the parties did not submit a
detailed chart, agenda or schedule to assist the Court in making any kind of a
quantitative analysis although in cross‑examination, the Appellant was
asked whether she agreed that the father had access to both children 7 out of
every 14 days. She did not agree.
[47]
The meaning of “equal or near equal basis” and
the case law that deal with this issue were reviewed in detail in the recent
case of Morrissey v. The Queen (2016 TCC 178) where Sommerfeldt J.
concluded (at paragraph 64) that the acceptable range is anywhere from
55/45 to 60/40 in percentage terms.
[48]
Prior to March 1, 2014, I find that the
conflict between the parties was such that the Appellant assumed more than her
share of the responsibility for picking‑up the children at the daycare
and that, for weekdays, the father’s access was really only for an over‑night
period and not a full 24‑hour day.
[49]
On balance, I find that the children were in the
care of the Appellant for time periods exceeding 60% up to March 2014, but that
both parties shared the parenting responsibilities on an equal basis or within
an acceptable range thereafter.
[50]
I find that this conclusion is consistent with
the Final Order of September 30, 2014, where the presiding judge noted (at
paragraph 175 of the Reasons for Judgment, referenced above) that the consent
of the parties to a revised access schedule revealed that they had agreed “to a
roughly equal sharing of the children’s care”. That revised scheduled referred
to the access schedule of February 7, 2014.
V. Conclusion
[51]
On the basis of the foregoing, I would allow the
appeal and refer the matter back to the Minster for reconsideration and redetermination
on the basis that the Appellant and the father have been shared‑custody
parents of both children since March 1, 2014. In all other respects, I
confirm the Minister’s decision with respect to the remaining months of the
2012 and 2013 base years.
[52]
At the request of the Minister, I would order
that the Court file be sealed with access restricted to the Crown, the
designated representatives of the Crown, the Appellant, and judges and registry
officers of the Tax Court of Canada.
Signed at Ottawa, Canada, this 29th day of August 2016.
“Guy Smith”
Email this Content