Date: 20070613
Docket: A-397-06
Citation: 2007 FCA 229
CORAM: RICHARD
C.J.
LÉTOURNEAU J.A.
NADON
J.A.
BETWEEN:
RAYMOND LAQUERRE
Appellant
and
HER MAJESTY THE QUEEN
Respondent
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.:
[1]
Is the
amount of $3,955 received by the appellant as indexation of his pension taxable
under subparagraph 56(1)(a)(i) of the Income Tax Act, R.S.C. 1985,
c. 1 (Act)? Mr. Justice Tardif (judge) of the Tax Court of Canada answered this
question in the affirmative. This is the decision that is under appeal.
[2]
The
appellant represented himself. His employment with the Royal Canadian Mounted
Police (RCMP) ended in 1995 for reasons of physical disability. Although he was
under sixty (60) years of age, the appellant was entitled to indexation of his
pension because his employment was terminated due to disability. In 2003, the
amount of his pension was $29,905, of which $3,955 was the amount of
indexation.
[3]
Certain
pension payments or compensation from the RCMP are exempted from taxation under
paragraph 81(1)(i) of the Act. One such pension is paid under section 32
or 33 of the Royal Canadian Mounted Police Superannuation Act, S.C.
1985, c. R-11 (RCMPSA).
[4]
The
appellant acknowledged before the judge that the tax exemption he was claiming
was not provided for in any law. He nevertheless asked the judge to create the
requested exemption.
[5]
The judge
is obliged to apply the Act and it was not in his power to grant the
appellant’s request. He nevertheless analyzed the Act and the RCMPSA to ensure
that the appellant was excluded from the benefit of paragraph 81(1)(i)
of the Act.
[6]
The judge
rightly concluded that the pension received by the appellant was not paid to
him under section 32 or 33, but rather under Part III of the RCMPSA. Section 32
deals with the eligibility for an award, while section 33 pertains to the
payment of a treatment allowance. Obviously, these two amounts differ from a
pension received under a contributory pension plan.
[7]
The judge
was also of the opinion that the appellant’s pension was the principal, while
the indexation of the pension was accessory to the principal, because it is
calculated on the base annuity. Consequently, the accessory was, in his view,
taxable on the same basis as the principal.
[8]
The
appellant acknowledges that the principal, that is, the amount of his pension,
is taxable, but submits that the indexation is not. He asserts that he has been
unfairly treated because, in his view, the benefits paid for an occupational
disease under the Act respecting occupational health and safety, R.S.Q.,
c. S-2.1 and the Act respecting industrial accidents and occupational
diseases, R.S.Q., c. A-3.001, as well as the related indexation, are not
taxable.
[9]
Section 44
of the Act respecting industrial accidents and occupational diseases
provides for payment of an income replacement indemnity to a person who becomes
unable to carry on employment by reason of an employment injury. The latter
includes an occupational disease.
[10]
The income
replacement indemnity corresponds to 90% of income and is subject to a certain
number of deductions: see sections 45, 144 and 144.1 of that legislation. There
is under section 117 a sort of indexation further to an annual revalorization
of the annual gross income used as the basis for computing the income
replacement indemnity.
[11]
It is
true, as the appellant submits, that this income replacement indemnity is not
taxable. This is expressly provided for in section 144. However, the amount
received by the appellant is not an income replacement indemnity, but rather a
pension under the RCMPSA, which is governed by the provisions of the RCMPSA.
[12]
With
respect, the judge was right to conclude that the amount at issue in this case
was subject to the general taxation system provided for in the Act.
[13]
For these
reasons, I would dismiss the appeal with costs.
“Gilles
Létourneau”
“I
concur.
J. Richard C.J.”
“I
concur.
Marc
Nadon J.A.”
Certified
true translation
Susan
Deichert, LLB
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