Date: 20080422
Docket: T-1337-07
Citation: 2008 FC 524
Ottawa, Ontario, April 22,
2008
PRESENT: The Honourable Mr. Justice Harrington
BETWEEN:
RICHARD JOSEPH DONOVAN
Applicant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR ORDER AND ORDER
[1]
Death
and taxes are certain. Allowable deductions from income are not. This judicial
review of a decision of the Canadian Human Rights Commission not to investigate
Mr. Donovan’s plight is grounded in the Income Tax Act.
[2]
Mr. Donovan and his wife
separated in 1990 and later divorced. They had joint custody of their son with
equal time sharing arrangements. At first he was able to claim child support
payments and what was then known as the equivalent-to-spouse tax credit.
However, these credits were disallowed for the 1998, 1999 and 2000 tax years.
Mr. Donovan objected. The matter worked its way to the Tax Court.
[3]
In
dismissing his appeal from the assessments in question, Mr. Justice Hershfield accepted
that Mr. Donovan had a double obligation to support his son both when he was
with him and when he was with his former wife. The child support obligation was
covered by a judgment of the Manitoba Court of Queen’s Bench. However, since
April 2007 neither obligation gave rise to tax relief. He held that section
118(5) of the Income Tax Act, appended hereto, governed. On its face,
the section is clear and unambiguous in stating that no amount may be deducted in
Mr. Donovan’s circumstances.
[4]
However,
Mr. Donovan argued that section 118(5) violated his Charter rights, more
particularly section 15 (1) which provides:
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15.
(1) Every individual is equal before and under the law and has the right to
the equal protection and equal benefit of the law without discrimination and,
in particular, without discrimination based on race, national or ethnic
origin, colour, religion, sex, age or mental or physical disability.
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15. (1) La loi ne fait
acception de personne et s'applique également à tous, et tous ont droit à la
même protection et au même bénéfice de la loi, indépendamment de toute
discrimination, notamment des discriminations fondées sur la race, l'origine
nationale ou ethnique, la couleur, la religion, le sexe, l'âge ou les
déficiences mentales ou physiques.
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[5]
After
a full review of the case law, Mr. Justice Hershfield opined that although some
might think section 118(5) of the Income Tax Act is socially misguided,
it did not violate the Charter. Essentially, the policy of Parliament, as
expressed in the legislation, discriminated against Mr. Donovan’s on his ability
to pay. Such discrimination is not prohibited. His reasons are reported at Donovan
v. Canada, 2005 TCC 667, [2006] 1 C.T.C. 2041, [2006] T.C.J. No. 494.
[6]
Mr.
Donovan did not appeal that decision. Rather, he filed a complaint with the
Canadian Human Rights Commission because he was denied a tax credit for the
years 1998 to 2004. The basis of the complaint was that the Canada Revenue
Agency adversely discriminated against him based on sex, family or marital
status. The investigator informed Mr. Donovan that she would recommend that the
Commission not investigate as the alleged discrimination was not covered by the
Canadian Human Rights Act. The disadvantageous tax treatment he received
was based on his ability to pay, not on family or marital status.
[7]
The
Commission duly refused to investigate. It relied upon section 41 (1)(c) of the
Act which provides:
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41. (1) Subject to section 40, the Commission
shall deal with any complaint filed with it unless in respect of that
complaint it appears to the Commission that
[…]
(c) the
complaint is beyond the jurisdiction of the Commission;
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41. (1) Sous réserve de l’article 40, la
Commission statue sur toute plainte dont elle est saisie à moins qu’elle
estime celle-ci irrecevable pour un des motifs suivants :
[…]
c) la
plainte n’est pas de sa compétence;
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and said “the alleged discrimination is not
linked to a prohibited ground of discrimination as stipulated under the Canadian
Human Rights Act”
ISSUES
[8]
The
only issue is to determine the degree of deference owed to the Commission in
light of its refusal to investigate Mr. Donovan’s complaint on the ground that
it was without jurisdiction. Mr. Justice Hershfield’s decision, upholding the
assessments made under the Income Tax Act for the 1998, 1999 and 2000
taxation years, is not in issue. It is final and binding. Likewise, the Charter
is not before me, at least not directly.
DISCUSSION
[9]
Following
the decision of the Supreme Court last month in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008]
S.C.J. No.9, there are now two basic standards of judicial review; correctness
and reasonableness simpliciter. Much depends on whether the issue is one
of law, mixed fact and law, or pure fact. Generally speaking, but not always,
questions of law are reviewed on a correctness standard. Indeed, section
18.1(4) (c) of the Federal Courts Act provides that this Court may grant
relief if satisfied that the federal board or commission in question “…erred in
law in making a decision or an order, whether or not the error appears on the
face of the record.”
[10]
As
noted in Madam Justice Deschamps’ concurring reasons in Dunsmuir, above,
there certainly are instances in which the Federal Board or Tribunal has
greater expertise than the Court in interpreting its own legislation. One
guideline to Parliament’s intention is whether there is a privative clause in
the legislation. There is no such clause in the Canadian Human Rights Act.
[11]
At
issue in this case is the jurisdiction of the Canadian Human Rights Commission
and statutory interpretation. These are legal issues and should be reviewed on the
correctness standard as stated by Mr. Justice Russell in Canadian Museum of
Civilization Corporation v. Public Service Alliance of Canada, Local 70396,
2006 FC 703, 294 F.T.R. 163.
CANADIAN HUMAN RIGHTS ACT
[12]
The
purpose of the Act as set out in section 2 is to give effect, with respect to
matters within Parliament’s legislative authority, to the principle that all
individuals should have equal opportunity with others to make the lives they
are able and wish to have, and to have their needs accommodated, consistent
with their duties and obligations as members of society, without being hindered
or prevented from so doing by discriminatory practices based on, among other
things, sex, marital status and family status. The Act established both the
Canadian Human Rights Commission and the Canadian Human Rights Tribunal.
Although the Commission has a multi-faceted jurisdiction, the aspect thereof at
issue here is its right to investigate, or vet complaints, and if appropriate
refer them to the Tribunal.
[13]
Sections
27 and 49 (5), read together, provide that if a matter is referred to the
Tribunal, it may consider the underlying statute. This is consistent with the
many decisions which have given human rights legislation quasi-constitutional
status, decisions which have assumed that Parliament and provincial
legislatures intend that such legislation supersede other laws when conflict
arises.
[14]
The
Commission may encourage settlements, and the Tribunal may award damages.
[15]
Three
elements must be in place in order for the Commission to have jurisdiction to
investigate a complaint: 1) there must be a practice; 2) the practice must be
discriminatory; and 3) the discrimination must be prohibited under the Canadian
Human Rights Act.
[16]
A
“practice” within the meaning of the Act is not defined. However discriminatory
practices identified in the Act relate to the denial of goods, services,
facilities or accommodation, employment, or communication likely to expose a
person to hatred or contempt by reason of identification with a prohibited
ground of discrimination.
[17]
What
is at issue here is the enforcement of a statute. Parliament cannot have
intended to have equated “practice” and “enforcement”. I cannot possibly imagine
the Canada Revenue Agency being condemned to damages because it enforced a law
enacted by Parliament. It was not its practice to disallow the credits claimed
by Mr. Donovan; it was its duty.
[18]
Section
118(5) of the Income Tax Act may well be discriminatory. The graduated
income tax scale is discriminatory. However, the discrimination is based upon
Mr. Donovan’s ability to pay. This is a matter of legislative policy, not a
prohibited ground of discrimination.
[19]
There
is certainly nothing ambiguous about section 118(5) of the Income Tax Act.
I agree with the Commission. Mr. Donovan’s recourse was to challenge section
118(5) on the grounds it violated the Charter. He did so, but was not
successful, and did not appeal
[20]
The
Federal Court of Appeal has already expressed the view that section 118(5) of
the Income Tax Act does not violate the Charter (Nelson v. Canada,
2000 D.T.C. 6556, [2000] F.C.J. No. 1613). A decision I consider completely
persuasive is that of the Federal Court of Appeal in Canada (Attorney General) v.
Brown, 2001
FCA 385, [2001] F.C.J. No. 1882. In that case, the Court had already determined
that the inclusion of maternity benefits in the determination of the weeks of
employment benefits was not contrary to section 15 of the Charter, and that it
would be unjustifiable to hold that the same provision was discriminatory for
the purposes of the Canadian Human Rights Act. Mr. Justice Evans stated
at paragraph 6:
6 Since the Court has found that the statutory cap
on the weeks of regular benefits payable to a claimant who has received
maternity benefits in the same benefit period is not discriminatory for the
purpose of section 15 of the Charter, it would be unjustifiable to hold that
the same provision is discriminatory for the purpose of the Canadian Human
Rights Act. Further, counsel was unable to refer us to any authority for the
proposition that, on an appeal from a Board of Referees, it is open to an
Umpire to read out of the Employment Insurance Act a clear and otherwise valid
provision on the ground that it is contrary to the Canadian Human Rights Act.
Likewise, an allegation that section 118(5) of
the Income Tax Act runs afoul of the Canadian Human Rights Act cannot
be justified.
[21]
In
any event, the Charter was before Mr. Justice Hershfield, not before me. Mr.
Donovan had a right to appeal to the Federal Court of Appeal; he did not. His
complaint to the Commission smacks of a collateral attack or abuse of process.
(Toronto (City) v. Canadian
Union of Public Employees (C.U.P.E.), Local 79, 2003 SCC 63, [2003] 3
S.C.R. 77).
[22]
For these
reasons, the application shall be dismissed with costs.
ORDER
UPON judicial
review of the refusal of the Canadian Human Rights Commission to investigate a
complaint against Canada Revenue Agency for adverse differential treatment
based on marital status, family status, and sex;
THIS COURT ORDERS that the
application is dismissed with costs.
“Sean Harrington”
APPENDIX
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Section 118(5) of the Income Tax Act:
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Article 118 (5) de la Loi de l’impôt sur le
revenu :
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(5) No amount may be deducted under subsection (1) in computing an
individual’s tax payable under this Part for a taxation year in respect of a
person where the individual is required to pay a support amount (within the
meaning assigned by subsection 56.1(4)) to the individual’s spouse or
common-law partner or former spouse or common-law partner in respect of the
person and the individual
(a) lives separate and apart from the spouse or
common-law partner or former spouse or common-law partner throughout the year
because of the breakdown of their marriage or common-law partnership; or
(b) claims a deduction for the year because of
section 60 in respect of a support amount paid to the spouse or common-law
partner or former spouse or common-law partner.
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(5) Aucun montant n’est déductible en application du
paragraphe (1) relativement à une personne dans le calcul de l’impôt payable
par un particulier en vertu de la présente partie pour une année d’imposition
si le particulier, d’une part, est tenu de payer une pension alimentaire au sens
du paragraphe 56.1(4) à son conjoint ou ancien conjoint pour la personne et,
d’autre part, selon le cas :
a) vit
séparé de son époux ou conjoint de fait ou ex-époux ou ancien conjoint de
fait tout au long de l’année pour cause d’échec de leur mariage ou union de
fait;
b) demande
une déduction pour l’année par l’effet de l’article 60 au titre de la pension
alimentaire versée à son conjoint ou ancien conjoint.
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