Docket: 2012-4095(GST)I
BETWEEN:
JOSEPH SOLANKO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal
heard on March 13, 2014 at Hamilton, Ontario
By: The Honourable
Justice Judith Woods
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Jan Jensen
|
____________________________________________________________________
JUDGMENT
It is ordered that the
appeal with respect to an assessment made under the Excise Tax Act by
notice dated April 8, 2011 is dismissed. The parties shall bear their own
costs.
Signed at Toronto, Ontario this 28th day of March 2014.
“J.M. Woods”
Citation: 2014 TCC 100
Date: 20140328
Docket: 2012-4095(GST)I
BETWEEN:
JOSEPH SOLANKO,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Woods J.
[1]
Joseph Solanko appeals with
respect to the denial of a rebate for an owner-built home that is provided for
in subsection 256(2) of the Excise Tax Act.
[2]
The respondent submits that the
rebate was properly disallowed because the home was not constructed for use as
a primary residence. The respondent also suggests that the application for the
rebate was submitted long after the two year deadline that is provided for in
subsection 256(3) of the Act.
[3]
Mr. Solanko submits that he was
misinformed as to the application requirements and that it would be fair to
allow the tax rebate to him, as he has been an honest, hardworking taxpayer for
many years.
Discussion
[4]
I will first consider Mr.
Solanko’s arguments which are based on fairness considerations.
[5]
For many years, it has been
well-established by judicial authorities that this Court cannot grant relief
solely on grounds of fairness. Parliament has the mandate to enact legislation
governing the goods and services tax, and if this legislation does not permit a
rebate in Mr. Solanko’s circumstances, the Court must dismiss the appeal
regardless of whether the result is harsh. Even if Mr. Solanko had been misinformed
by the Canada Revenue Agency (CRA), this is not a basis to allow the rebate if
the legislation does not provide for it.
[6]
I turn now to the respondent’s
argument that the property was not constructed for use as a primary residence.
[7]
The residence requirement is
contained in paragraph 256(2)(a) of the Act. Relevant excerpts are set
out below:
256.(2) Rebate for owner-built homes -
Where
(a)
a particular individual constructs or substantially renovates, or engages
another person to construct or substantially renovate for the particular
individual, a residential complex that is a single unit residential complex or
a residential condominium unit for use as the primary place of residence of the
particular individual or a relation of the particular individual,
[…]
the
Minister shall, subject to subsection (3), pay a rebate to the particular
individual equal to the amount determined by the formula
[…]
[8]
The facts are not in dispute. In
2002, Mr. Solanko constructed a home that was intended to be his primary
residence upon retirement. At the time, Mr. Solanko was living in Toronto and worked for the Toronto Transit Commission. He expected to retire in 2010. The
newly-constructed home was located in Ayton, Ontario, which is approximately
170 kilometers from Toronto.
[9]
From the time that the Ayton
residence was built until Mr. Solanko’s retirement, he stayed at the family
home in Toronto during weekdays and went to the Ayton property on weekends.
[10]
After his retirement in 2010, Mr.
Solanko began to live in Ayton on a full-time basis. His spouse, however,
continued to reside in the family home in Toronto to be close to her elderly
mother. She still lives in Toronto.
[11]
The question to be determined is
whether Mr. Solanko satisfies the legislative requirement that the Ayton
residence was constructed for use as Mr. Solanko’s primary place of residence.
I note that the legislation does not require immediate use of the
newly-constructed home as a primary residence. However, the home must be
constructed for this use.
[12]
In my view, it would strain the
rebate provision beyond what Parliament intended to allow the rebate in this
case. I accept that when Mr. Solanko constructed the Ayton residence, he had in
mind that he would reside there as his primary residence when he planned to
retire in eight years time. However, at the time of the construction,
retirement was far off. Essentially, it was speculation on Mr. Solanko’s part
as to what his circumstances would be in 2010.
[13]
In addition, it is unlikely that
Parliament had in mind that individuals could claim the rebate based on
self-interested statements as to their intentions far into the future. The
requirement in the legislation that the residence is constructed for use as a
primary residence contemplates that the taxpayer has an intention to use the
property as a primary residence closer in time to the construction than is in
the case in this appeal.
[14]
I would conclude that the appeal
should be disallowed on this basis.
[15]
In light of this conclusion, I do
not propose to consider the respondent’s second argument that the application for
the rebate was made out of time. This issue is not clear cut because Mr.
Solanko had first applied for the rebate before the two-year deadline.
Signed at Toronto, Ontario this 28th day of March
2014.
“J.M. Woods”
CITATION: 2014 TCC 100
COURT FILE NO.: 2012-4095(GST)I
STYLE OF CAUSE: JOSEPH SOLANKO AND HER MAJESTY THE QUEEN
PLACE OF HEARING: Hamilton, Ontario
DATE OF HEARING: March 13, 2014
REASONS FOR JUDGMENT BY: The
Honourable Justice Judith Woods
DATE OF JUDGMENT: March 28, 2014
APPEARANCES:
|
For the
Appellant:
|
The Appellant himself
|
|
Counsel for the
Respondent:
|
Jan Jensen
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: William F. Pentney
Deputy
Attorney General of Canada
Ottawa, Ontario
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