Rousseau v. Agence du revenu du Québec, 2018 QCCQ 7340

The taxpayer, who had worked in Quebec until 1988 operating heavy machinery, moved to new employment in Fort McMurry in Alberta in 1999 while his wife (a stay-at-home mother) and their two children remained in his house in Longueuil, Quebec. In the taxation years in question (2003 to 2011, which were assessed by the ARQ on October 24, 2013) he worked for various employers at pipeline sites in Quebec but also other provinces west of Quebec. He was a member of the local Edmonton chapter of the Pipefitters union. Although he had a room in Edmonton, when on vacation, or on leave for s sufficient period, he would return to his home in Quebec.

In finding that the taxpayer was resident in Quebec, Allen JCQ stated (at paras. 51-54, TaxInterpretations translation):

The residency links with Quebec were numerous. He was the sole owner of the family residence located in Longueuil since1992 and bore all of the costs and expenses. This house was occupied by his wife and their two children during essentially all of the period under litigation, and their daughter occupied it from 2010 on. The children … were declared as dependents of Mr. Rousseau for all the taxation years under litigation.

During his stays in Quebec, Mr. Rousseau occupied the house in Longueuil and used one of the two automobiles registered in the name of Mrs. Crépeau. He also had a trailer with a Quebec registration.

He received all his mail at the Longueuil residence address and explained that this choice was made for reasons of practicality. His bank account was at a CIBC branch located in Quebec.

The entirety of the evidence demonstrates that Mr. Rousseau left Quebec solely for work purposes and that he never had the intention to sever his connections with Quebec, which was the place with which he maintained his strongest links between 2003 and 2011.

The taxpayer, who performed his work for various employers at pipeline sites outside Quebec for most of the taxation years at issue (2003 to 2011), but kept his house in Quebec, where his wife and children stayed and where he stayed as well on vacation or longer leave periods. Allen JCQ found that the taxpayer continued to reside in Quebec for those taxation years.

However, in finding that Mr. Rousseau had made out a due diligence defence to the imposition of penalties under the Quebec equivalent of ITA s. 162(1) for failure to file Quebec income tax returns for those years, Allen JCQ stated (at para. 60, TaxInterpretations translation), in accepting oral testimony of the taxpayer to this effect, that the taxpayer “relying on the independent opinion provided by his accountant, believed sincerely and in good faith that he was resident in Alberta.”

The taxpayer, who performed his work for various employers at pipeline sites outside Quebec for most of the taxation years at issue (2003 to 2011), but kept his house in Quebec, where his wife and children stayed and where he stayed as well on vacation or longer leave periods. Allen JCQ found that the taxpayer continued to reside in Quebec for those taxation years.

The taxpayer was assessed for those taxation years by the ARQ on October 24, 2013. Those years were not statute-barred as he had not filed Quebec returns for those years until returns were demanded by the ARQ. The reasons of Allen JCQ do not disclose whether the taxpayer applied for reassessments of the earlier years to vacate the Alberta tax within the 10-year time period described federally in s. 152(4.2).

Allen JCQ noted that he lacked jurisdiction to order, as requested by the taxpayer, that his Alberta taxes already paid be deducted from the assessed Quebec taxes, stating (at para. 64, TaxInterpretations translation):

[The Court’s] jurisdiction is limited to the matters set out in section 93.1.21 of the Tax Administration Act and it thus cannot order the Minister to undertake steps under the agreements between the federal government and the other provinces, including Alberta. That said … the Court is of the view the Minister should, in all equity, take steps under [such] agreements … so as to avoid this double taxation.