Date: 20051221
Docket: T-229-05
Citation: 2005 FC 1731
Halifax, Nova Scotia, December 21, 2005
PRESENT: THE HONOURABLE W. ANDREW MACKAY
BETWEEN:
JAMES R. ROSE
Applicant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR ORDER AND ORDER
[1] The applicant Mr. Rose, seeks a declaration that Canada's claim against him for income tax arrears, assessed originally in June 1987 as some $45,500.00 and interest accrued as assessed in September 1997 in an amount of $84,332.45, now more, is now precluded from being collected. That declaration is sought in the absence of any recent or current action or initiative of the Canada Collection and Revenue Agency ("CCRA") to collect these taxes or arrears.
[2] The assessments are not disputed. Yet it is urged that the original amount of taxes assessed may not be collected under the six-year limitation of collection action in accord with section 32 of the Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, as amended, as applied by the Supreme Court of Canada in Markevich v. Canada, [2003] 1 S.C.R. 94. Further, it is urged that in certain records of CCRA the original amount of taxes assessed has been referred to as "written off".
[3] By the Budget Implementation Act, 2004, S.C. 2004, c. 22, section 50 provision was made for a revised limitation period, within the Income Tax Act, in relation to income tax debts of a taxpayer. As a result, the limitation period for a tax debt like that of Mr. Rose, begins on March 4, 2004 and ends 10 years later (for a "tax debt payable on that date or which would have been payable on that date but for a limitation period that otherwise applied to the collection of the tax debt").
[4] It is urged by the applicant that, following the decision in Markevich, the limitation period to commence an action to recover the tax debt owed by him would not have extended beyond six years after the last assessment by the Crown, and that it cannot now be revived. It is said the provision of the Budget Implementation Act if applicable to him would be fundamentally unjust, and unconstitutional, in breach of section 12 of the Charter of Rights and Freedoms, since in removing an immunity against collection of debt it constitutes cruel and unusual punishment.
[5] In Gibson v. Canada, [2005] F.C.J. No. 817 (F.C.A.) (QL) and in Collins v. Canada (Customs and Revenue Agency), [2005] F.C.J. No. 1746 (F.C.A.) (QL) the Federal Court of Appeal has applied the legislation implementing the 10 year limitation period from March 2004. The legislation has been upheld as clear and applicable, not applying retroactively. Moreover, it is, I believe, clear that jurisprudence concerning section 12 of the Charter excludes, from "treatment" or "punishment" within that provision, generally applicable penal or taxing statutes.
[6] When this matter came on for hearing in Edmonton in November 2005, counsel for the applicant had no comment on the effect, if any, of the decisions in Gibson and Collins upon the implications of Markevich. The Court then allowed for further written submissions to be made in writing, within defined time limits by counsel for the parties. No written submissions have been received by the Court within the time provided.
[7] In the circumstances, I dismiss the application for a declaration. I am not persuaded that relief of that nature, always a matter of discretion for the Court, is warranted in this case. The change in the limitation period, enacted by the Budget Implementation Act, 2004 is clearly within the legislative competence of Parliament as a matter relating to taxation. It does not have retroactive application (see Gibson, supra), and it does not constitute "treatment" within section 12 of the Charter of Rights and Freedoms.
[8] When this matter was heard there was no active claim against the applicant Mr. Rose by CCRA or other agency of Her Majesty in Right of Canada to recover tax debts or arrears. If such initiative were to be taken, the dismissal of the application for declaratory relief shall be without prejudice to the issues here raised by Mr. Rose being raised in defence of any claim.
ORDER
THIS COURT ORDERS that this application for declaratory relief is dismissed without prejudice to the applicant raising the issues here raised in defence to any claim to recover arrears of tax debts or interest or penalties under the Income Tax Act.
"W. Andrew MacKay"
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