Charles Dally and 527208 Ontario Limited and W.E. Sandrin v. Minister of National Revenue, [1991] 1 CTC 2529, [1991] DTC 720

Mogan, T.C.J. [Orally]:—The appellant has commenced two separate appeals for his 1986 and 1988 taxation years respectively. In this proceeding, the respondent has brought before the Court two notices of motion (one in each appeal) requesting orders that each purported appeal be dismissed because this Court lacks jurisdiction to hear it. For each taxation year, 1986 and 1988, the appellant sent to the offices of Conscience Canada in Victoria, British Columbia, a certain amount of money as part payment for his taxes:

. . . to be held in trust until such time that the federal government was able to guarantee that this money would not be used for military expenditures or for the development of weapons.

(Quote from notices of appeal)

The appellant relies on section 2 of the Canadian Charter of Rights and Freedoms concerning freedom of conscience and religion and states his belief that the Charter guarantees his right:

. . . not to be forced to contribute against the dictates of my conscience to military or weapons expenditures.

(Quote from notices of appeal)

In his two original notices of appeal, the appellant did not challenge the respondent's computation of his income, his taxable income or his amount of tax payable. In other words, the appellant did not challenge the assessments for 1986 or 1988 but only the manner in which a portion of his tax dollars would be used.

At the commencement of the hearing of the respondent's motions, the appellant submitted to the Court an amended notice of appeal which consolidated in one document his appeals for 1986 and 1988 and restated his grounds for appeal. Counsel for the respondent stated that she did not object to the Court receiving the amended notice of appeal provided she would have the opportunity to file an amended reply if her motions were not successful. I therefore accepted the amended notice of appeal and instructed the Registrar to endorse both Court file numbers on the one document. The appellant concludes his amended notice of appeal with the following statement:

Therefore I petition this Tax Court to overturn the decision of the Minister of Revenue, and to rule that these monies are not now owing to the federal government.

I assume that the phrase "these moneys" refers to the amounts which the appellant sent to "Conscience Canada". This new petition is relevant because the appellant now, for the first time, appears to challenge the assessments as they relate to the amount of tax which he owes. I shall return to this point later.

In support of the respondent's motions, counsel put forward two basic arguments. Firstly, the appellant has not challenged the respondent's computation of income or taxable income or tax but he seeks only a judgment that his liability be reduced in proportion to federal defence spending; the appellant is seeking a declaratory judgment for a special rate of tax different from the rates prescribed in the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act"); and this Court does not have jurisdiction to issue a declaratory judgment or grant such a remedy. And secondly, the respondent submits that the Federal Court of Appeal has already decided in Prior v. Canada, [1989] 2 C.T.C. 280; 89 D.T.C. 5503 that no individual can use the "freedom of conscience" provision in the Charter of Rights and Freedoms to withhold any portion of the tax payable under the secular provisions of the Income Tax Act. Section 2 of the Charter states in part:

2. Everyone has the following fundamental freedoms:

(a) freedom of conscience and religion;

(b) . . .

(c) . . .; and

(d) . . .

When making his submissions, the appellant acknowledged that he did not challenge the respondent's computation of his income or his taxable income but he argued that his liability should be reduced by the portion of his tax which he regards as referable to federal defence spending. He also argued that his conscientious objection to war and military expenditures could easily be distinguished from other possible subjects of conscientious objection because of the extensive pain, suffering and death which war brings to many people and the unique devastation which war brings to the earth and its environment. Alter hearing the appellant argue on his own behalf, I do not doubt the sincerity of his position but I do question whether he is attempting to use a procedure in this Court to achieve a political objective (i.e., to change federal government policy with respect to military expenditures) rather than a legal remedy.

In my view, both of the respondent's arguments are well founded. The appellant has not instituted an appeal from his assessments for 1986 and 1988 because he has not challenged the respondent's computation of his income, his taxable income or his tax payable. I stated above that I would return to the appellant's petition in his amended notice of appeal for a ruling that certain moneys are not owing to the federal government. The appellant may have thought that such a petition would convert his claim into an appeal from his income tax assessments but it does not do so because he does not contest the Minister's computation of the tax payable under the prescribed rates in the Income Tax Act. Instead, the appellant takes a portion of the tax which the Minister has assessed—a portion which the appellant regards as referable to the federal government's military expenditures—and he claims that he is not obliged to pay that portion "these moneys are not owing") because of his conscientious objection to war and military expenditures. This is not a challenge to any computation by the respondent.

The purposes of an appeal are stated in section 169 of the Income Tax Act:

169. Where a taxpayer has served a notice of objection to an assessment under section 165, he may appeal to the Tax Court of Canada to have the assessment vacated or varied . . .

An assessment of tax is the ascertainment of the amount of tax to be levied. The appellant does not contest the Minister's ascertainment of his income tax for 1986 or 1988. In fact, the appellant relies on the amount of tax ascertained by the Minister in order to allocate the portion which he regards as referable to military expenditures. His only objection is to the manner in which a portion of his assessed tax dollars are expended. Therefore, the appellant does not seek to have his assessments vacated or varied. On the respondent's first argument, I find that the appellant has not instituted appeals from his income tax assessments for 1986 and 1988. The purported appeals which the appellant has launched in this Court should be quashed because, not being valid appeals from assessments, I doubt that there are appeals to "dismiss" under the provisions of section 171 of the Act. Although this finding on the respondent's first argument is sufficient to dispose of the motions and grant the orders which are sought, I will consider briefly the respondent's second argument.

In Prior v. Canada, supra, the Federal Court of Appeal stated at page 283 (D.T.C. 5505):

2. I have no difficulty in saying with the motions judge that neither the payment of income tax nor the defence expenditures of the Government of Canada in any way affect, curtail, diminish or infringe the appellant's conscience or religion within the meaning of paragraph 2(a) of the Charter. The income tax paid by her under the secular scheme of the Income Tax Act charging her business or employment income to tax, in no way identifies her with any of the functions of the Government of Canada be they political, social, economic, defence or for the Peace Order and Good Government of Canada.

4. The declaration sought would mean that the power given to Parliament by section 91 of the Constitution Act, 1867 to levy taxes is lawful, in relation to certain taxpayers, only if the moneys collected are not used for certain types of defence expenditures. ‘The challenge is formally directed against the Income Tax Act but, in reality, it extends to any legislation levying taxes. It is the power itself which is put in question.

5. I finally agree with the motions judge that the reliefs sought by the action are beyond the jurisdiction of the Court. As submitted by the Attorney General, to give effect to the appellant's argument, the Court must either amend the rate provisions of the Income Tax Act, or create a credit scheme exempting the appellant from payment of a portion of her income tax otherwise payable, to the Receiver General of Canada, under the provisions of that Act. A change in the statutory scheme of the Income Tax Act would therefore have to be devised. That is not the role of the Court.

The decision of the Federal Court of Appeal in Prior was issued on October 10, 1989. Six weeks earlier, on August 24, 1989, the appellant made the following statement in his notice of objection for 1988:

. . . hold my objection in abeyance at least until the case of Dr. Jerilynn Prior is concluded in all the courts as my case is based on the same freedom as hers.

The statements quoted above from the Federal Court of Appeal in Prior apply directly to the issue before me in this case.

The appellant's purported appeals are without merit. His freedom of conscience has not been violated or even infringed by his requirement to pay the full amount of tax assessed under the Income Tax Act. He is not required to join the Canadian military forces. He is not required to work in the production of arms and weapons. He is not required to affirm his support for any action taken by the Canadian military forces. And he is not prohibited or even restrained from expressing in public his opposition to the use of military force or the production of arms and weapons.

The result which the appellant attempts to achieve in this Court through his right to freedom of conscience is, in my opinion, so unreasonable that he demeans section 2 of the Charter by using it to prop up what is really a political objective and not a legal remedy. In a free and democratic society like Canada, there are other public forums where such an objective may be pursued with enthusiasm.

The respondent's motions are granted and the purported appeals for 1986 and 1988 are quashed. Alternatively, if the proceedings herein should be valid appeals, then such appeals are dismissed.

Appeals dismissed.