Citation: 2013TCC83
Date: 20130315
Docket: 2012-3792(IT)I
BETWEEN:
JULEE DESMARAIS,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller J.
[1]
The Appellant has
appealed determinations made by the Minister of National Revenue (the
“Minister”) which determined that she was entitled to claim only a portion of
the Canada Child Tax Benefit (“CCTB”) and the Goods and Services Tax Credit
(“GSTC”) for her three children for the 2008, 2009 and 2010 base taxation
years.
[2]
The Appellant and her
former spouse, Ronald Desmarais, separated in March 2009. Following their
marriage breakdown, they lived separate and apart and they continue to do so.
The Appellant and her former spouse have three children, a daughter and two
sons. The sons are twins. Their daughter was born in February 1993 and their
sons were born in June 2001.
[3]
After the marriage
breakdown, the Appellant received the CCTB and the GSTC for her three children
until March 20, 2012 and April 5, 2012 respectively, when she was notified by
the Minister that her entitlement to the CCTB and GSTC had been redetermined
and she was requested to repay the overpayments of CCTB and GSTC.
[4]
According to the Appellant,
her former spouse contacted the Canada Revenue Agency (“CRA”) in December 2011
and the redetermination was made as a consequence of the information he
submitted.
[5]
The Appellant objected
to the redeterminations and the Minister again redetermined her eligibility for
the CCTB and GSTC. The latest redeterminations can be summarized as follows:
(a)
The Appellant and her
former spouse had a shared parenting arrangement for the period May 2010 to
March 2011 and each was entitled to receive one-half of the CCTB;
(b)
With respect to her
daughter, the Appellant was not the eligible individual to receive the CCTB for
the period August to November 2009;
(c)
With respect to her
sons, the Appellant was not the eligible individual to receive the CCTB for the
periods July 2009 to April 2010 and April 2011 to June 2012;
(d) With respect to the GSTC,
her sons were not her “qualified dependants” for the periods April 2011 to June
2011 and July 2011 to June 2012.
[6]
The witnesses at the hearing
were the Appellant, her daughter and her former spouse.
[7]
It was obvious from the
evidence given by all of the witness that the relationship between the Appellant
and her former spouse was and continues to be acrimonious. Their evidence was
conflicting and a summary of that evidence follows.
[8]
According to the Appellant,
the real issue in this appeal is not that she had the children full time during
the relevant period, but that there was an agreement between her and her former
spouse that she would receive the family allowance after the marriage breakdown
in place of his paying spousal support. She stated that she had no steady
income when she left the marriage because she had been a ‘stay at home’ mother
for 9 years. She would have been eligible to receive spousal support and, in
hindsight, she should have requested spousal support instead of making the
agreement with her former spouse.
[9]
The Appellant used the
term “family allowance” when she actually meant the CCTB and the GSTC.
[10]
In support of her
evidence, the Appellant submitted a letter which had been written by Marie
Morrison, the lawyer who represented her in the Provincial Court of British
Columbia. The letter was written April 10, 2012 and addressed to the CRA. A
portion of the letter read as follows:
Further,
when in attendance at court for the divorce proceedings on June 28, 2011 Mr.
Desmarais confirmed to Ms. Desmarais that he was agreeable to my client keeping
the Child Tax Benefit for the children due to her low income and his aversion
to paying child support.
[11]
With respect to the
children, the Appellant stated that her daughter did not reside with her former
spouse for the entire period August to November 2009. She resided with him for
the month of September only. Her daughter was at camp in July and August and
she resided with the Appellant in October and November 2009.
[12]
The Appellant agreed that
she and her former spouse had a shared parenting arrangement for the period May
2010 to March 2011. She also testified that there were periods when court
orders gave her former spouse sole custody of the children with supervised
access to her. However, these court orders were not respected and the children
resided with her former spouse 70% of the time and with her 30% of the time.
The only period she did not see her sons was March 18, 2011 to April 30, 2011
when her former spouse denied her access to her sons.
[13]
It was her evidence
that during the period July 2009 to March 2010 she lived with her mother. She
had one of her sons with her most of the time and they lived with her at her
mother’s home. The Appellant took her sons to school; made their lunches; and,
took them for haircuts.
[14]
The daughter stated
that she agreed with her mother’s evidence. She stated that she resided with
the Appellant in October and November 2009 at her grandparents’ home.
[15]
Mr. Desmarais denied
that there was an agreement between him and the Appellant with respect to the
receipt of the CCTB and the GSTC. It was his evidence that the Appellant had
only supervised access to the children during the periods July 2009 to April
2010 and April 2011 to June 2012. He followed the court orders so that his
children would not be taken into care by the Ministry of Child, Family and
Community Services.
[16]
It was Mr. Desmarais’
evidence that, at no time during the period that the Appellant had only
supervised access to the children, did the twins reside with her. They visited
with the Appellant and each son may have stayed overnight but this would have
been on only two or three occasions during the period.
[17]
In accordance with the
court orders, the twins were enrolled in Kids Klub, an organization which provided
care and counselling for children. The twins attended Kids Klub before and
after school and everyday during the summer. It was Mr. Desmarais’ evidence
that he took the twins to the Kids Klub before and after school and during the
summer. He also picked them up at the end of their sessions. This aspect of Mr.
Desmarais’ evidence was confirmed by a document from the Kids Klub.
[18]
With respect to his
daughter, he stated that she was under his care when she was in camp in July
and August 2009. After camp, she resided with him until mid-November 2009 when
she decided to reside with the Appellant.
[19]
A summary of the
several orders tendered at the hearing disclosed the following. In June 2009,
the Director of Child, Family and Community Services found that the children
were in need of protection from the Appellant. She left the family home and Mr.
Desmarais moved in with the children. He resided with them until April 13,
2010. During this period, the orders specified that the Appellant had access to
the children at Mr. Desmarais’ discretion. By order dated April 13, 2010, both
parents were given joint custody of the children. Then, an interim order dated
April 5, 2011 ordered that Mr. Desmarais have interim sole custody of the twins
with the Appellant to have supervised access to the twins at the discretion of
her former spouse. An order dated April 7, 2011 confirmed the interim order and
stated that the twins would be placed in the care of the province if any of the
terms of the supervision order were not met. Finally, on February 2, 2012, the
Appellant was given specific days to have access to the twins and on July 13,
2012 the Appellant and Mr. Desmarais were given joint custody of the twins.
Analysis
[20]
To qualify for the
CCTB, an individual must be an eligible individual as defined in section 122.6
of the Income Tax Act (“ITA”). The relevant portions read:
“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
[21]
The determination of
who “primarily fulfils the responsibility for the care and upbringing” of the
children during the relevant period is a question of fact. It requires an
assessment of the prescribed factors given in section 6302 of the Income Tax
Regulations (the “Regulations”) and any other factors which may
exist. The factors in section 6302 are:
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.
[22]
It is my view that the
Appellant provided insufficient evidence to establish that she primarily
fulfilled the responsibility for the care and upbringing of the twins either
30% or 50% of the time during the disputed period. I have concluded from a
review of the evidence that Mr. Desmarais was the eligible individual to
receive the CCTB for the twins during the period July 2009 to April 2010 and
April 2011 to June 2012. In reaching my conclusion, I have accepted the Appellant’s
evidence that her sons visited with her at her home and did sleep over on
occasion. However, this does not mean that they no longer resided with Mr.
Desmarais and that they resided with her. The word “resides” as used in section
122.6 connotes a settled and usual abode: S.R. v The Queen, 2003 TCC 649
at paragraph 12.
[23]
I agree with Mr.
Desmarais that he was the primary care giver and the “eligible individual” with
respect to his daughter when she attended camp in July and August 2009.
However, I accept that the daughter started to reside with the Appellant in
October and November 2009 and thereafter the Appellant was the eligible
individual to receive the CCTB until her daughter turned 18 years old in
February 2011.
[24]
It is also my view that
there was an agreement between the Appellant and Mr. Desmarais that the Appellant
would receive the CCTB and GSTC in place of spousal support. Nevertheless,
there is no provision in section 122.6 which would allow the parties to make an
agreement which would override a finding of who is entitled to receive the
CCTB.
[25]
When a child resides
with more than one parent, subsection 122.5(6) of the ITA allows the
parties to make an agreement with respect to the receipt of the GSTC: Fraser
v R, 2010 TCC 23. In the circumstances of this appeal, there was no dual
residence situation for the twins during the periods July 2009 to April 2010
and April 2011 to June 2012 and subsection 122.5(6) does not apply.
[26]
There is no provision
in the ITA that would allow the parties to agree to substitute the CCTB
and the GSTC for spousal support.
[27]
The appeal is allowed
on the basis that the Appellant was the eligible individual to receive the CCTB
for her daughter for October and November 2009 and the GSTC for her daughter
for the quarter beginning October 2009.
Signed at Halifax, Nova Scotia, this 15th
day of March 2013.
“V.A. Miller”
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