Rip
J.T.C.C.:-Angus
L.
Smith
has
appealed
his
income
tax
assessments
for
1987
and
1988
taxation
years
in
which
the
Minister
of
National
Revenue
("Minister")
disallowed,
amongst
other
things,
his
claim
for
a
deduction
as
a
northern
resident
in
accordance
with
section
110.7
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
The
facts
are
not
in
issue
and
the
parties
provided
written
submissions
for
my
consideration.
The
facts,
as
set
out
in
the
agreed
statement
of
facts,
are
as
follows:
1.
the
appellant
resided
at
Fort
Nelson,
B.C.,
Watson
Lake,
Carmacks
and
Whitehorse,
Yukon
Territory
from
May
20
to
May
25,
1987,
for
a
total
of
five
days;
2.
the
appellant
resided
in
Motels
in
Dawson
City,
Yukon
Territory
from
May
26
to
June
4,
1987
for
a
total
of
ten
days;
3.
the
appellant
resided
in
mining
camps,
including
a
work
site
of
Duncan
Mines
Ltd.,
in
the
Yukon
Territory
from
June
5
to
October
20,
1987,
for
a
total
of
140
days;
4.
the
appellant
resided
at
Carmacks
and
Watson
Lake,
Yukon
Territory
from
May
13
to
May
15,
1988,
for
a
total
of
three
days;
5.
the
appellant
resided
at
Dawson
City
and
Whitehorse,
Yukon
Territory
from
May
16
to
May
20,
1988,
for
a
total
of
five
days;
6.
the
appellant
resided
at
Duncan
Mines
Ltd.,
work
site,
Yukon
Territory
from
May
21
to
October
7,
1988,
for
a
total
of
139
days;
7.
the
appellant
resided
at
Dawson
City
and
Whitehorse,
Yukon
Territory
from
October
8
to
October
26,
1988,
for
a
total
of
18
days;
8.
in
his
1987
taxation
year,
the
appellant
resided
in
a
prescribed
area
within
the
meaning
of
section
110.7
of
the
Income
Tax
Act,
a
total
of
155
days;
9.
in
his
1988
taxation
year,
the
appellant
resided
in
a
prescribed
area
within
the
meaning
of
section
110.7
of
the
Income
Tax
Act,
a
total
of
165
days;
10.
the
appellant
filed
the
prescribed
forms
in
both
his
1987
and
1988
taxation
years.
Subsection
110.7(1)
provided
that
individuals
residing
in
certain
prescribed
areas
for
at
least
six
months
commencing
or
ending
in
the
year
are
entitled
to
deductions,
commonly
called
northern
resident
deductions,
in
computing
their
taxable
income
for
the
year
in
respect
of
travelling
expenses
[paragraph
110.7(1)(d)]
and
housing
[paragraph
110.7(1
)(e)].
The
amount
of
the
housing
deduction,
pursuant
to
paragraph
110.7(1)(e),
in
1988
was
the
lesser
of
20
per
cent
of
the
taxpayer’s
income
for
the
year,
and
(ii)
the
aggregate
of
(A)
$450
multiplied
by
the
quotient
obtained
when
the
number
of
days
in
the
year
included
in
that
portion
of
the
period
throughout
which
he
maintained
and
resided
in
a
self-contained
domestic
establishment
(except
any
day
included
in
computing
a
deduction
claimed
under
this
paragraph
by
another
person
who
resided
on
that
day
in
the
establishment)
is
divided
by
30,
and
(B)
$225
multiplied
by
the
amount,
if
any,
by
which
(I)
the
quotient
obtained
when
the
number
of
days
in
the
year
included
in
the
period
is
divided
by
30
exceeds
(II)
the
quotient
determined
under
clause
(A).
Subsection
110.7(3)
stated
that:
110.7(3)
For
the
purposes
of
subparagraph
l(e)(ii),
where
a
quotient
is
not
a
whole
number,
it
shall
be
rounded
to
the
nearest
whole
number
or
where
it
is
equidistant
from
two
such
consecutive
whole
numbers,
it
shall
be
rounded
to
the
higher
thereof.
The
appellant’s
agent,
Ms.
G.
Smith,
argued
that
because
of
the
nature
of
Mr.
Smith’s
employment
he
spent
between
five
and
one-half
to
seven
months
in
the
Yukon
Territory.
The
northern
resident
allowance
should
be
allowed
as
that
is
where
he
earned
his
livelihood.
The
length
of
residency
is
relevant
to
the
duration
of
employment
which
is
determined
by
weather,
road
conditions,
accessibility
to
job
site
and
can
vary
from
one
year
to
the
next.
The
appellant’s
agent
added
that
under
subsection
110.7(3)
where
a
quotient
is
not
a
whole
number
or
where
it
is
equidistant
from
two
such
consecutive
whole
numbers,
it
should
be
rounded
to
the
higher
thereof.
The
1988
claim
was
for
165
*
30
days
=
5.5
=
6
months
and
should
qualify
for
the
northern
resident
allowance,
she
argued.
The
appellant
also
submitted
the
1987
claim
was
made
after
the
income
tax
return
was
filed
with
a
covering
letter
asking
if
the
claim
qualified.
His
agent
said
the
return
was
originally
assessed
as
filed
but
the
appellant
was
reassessed
August
10,
1990,
"three
years
after
submission".
In
order
to
be
eligible
for
the
northern
resident
deduction
a
taxpayer
must
reside
in
a
prescribed
area
"throughout
a
period
of
not
less
than
six
months
commencing
or
ending
in
the
year"
[subsection
110.7(1)].
In
1987
Mr.
Smith
resided
in
a
prescribed
area
from
May
20
to
October
20.
In
1988
he
resided
in
a
prescribed
area
from
May
13
to
October
26.
Mr.
Smith
resided
in
a
prescribed
area
during
two
distinct
and
separate
periods,
one
in
1987
and
the
other
in
1988.
He
did
not
reside
in
a
prescribed
area
"throughout
a
period
of
not
less
than
six
months...".
The
word
"throughout"
is
defined
in
the
Shorter
Oxford
English
Dictionary
on
Historical
Principles
as:
b.
Through
or
during
the
whole
of
(a
period
of
time
or
course
of
action);
from
beginning
to
end
of
1540.
A
month,
in
paragraph
110.7(3)(a)
means
a
calendar
month:
Interpretation
Act,
R.S.C.
1985,
c.
1-21,
section
35.
The
term
"calendar
month"
is
a
legal
and
technical
term
and
means
a
period
to
be
calculated
from
a
day
in
a
month
to
the
day
numerically
corresponding
to
that
day
in
a
following
month
less
one:
Kayelle
Management
(Yukon)
Inc.
v.
M.N.R.,
[1994]
1
C.T.C.
271,
94
D.T.C.
6116
(F.C.A.),
at
page
273
(D.T.C.
6117-18).
It
is
obvious
that
Mr.
Smith
did
not
reside
in
a
prescribed
area
during
the
whole
of
six
months.
In
1987
he
resided
in
a
prescribed
area
for
five
months
plus
a
day
and
in
1988
for
a
period
of
five
months
and
14
days.
Appellant’s
agent
argued
that
pursuant
to
subsection
110.7(3)
the
number
of
months
he
lived
in
a
prescribed
area
should
be
"rounded
off"
and
his
claim
for
1988
should
therefore
be
allowed.
Subsection
110.7(3)
relates
specifically
to
subparagraph
110.7(l)(e)(ii)
and
the
calculation
of
the
question
of
the
housing
deduction.
It
has
no
bearing
on
the
opening
words
of
subsection
110.7(1),
specifically
the
words
"six
months...",
a
period
that
must
be
met
before
one
may
even
consider
the
calculation
in
subparagraph
110.7(1
)(e)(ii).
In
other
words,
before
considering
the
calculation
of
the
amount
of
the
housing
deduction
one
must
determine
if
the
taxpayer
resided
in
the
prescribed
area
for
a
period
of
not
less
than
six
months.
If
the
taxpayer
has
not
resided
in
the
prescribed
area
for
a
period
of
six
months,
he
is
not
entitled
to
a
northern
allowance
deduction,
no
calculation
is
made
for
the
purposes
of
subparagraph
110.7(
1
)(e)(ii),
and
subsection
110.7(3)
is
not
relevant.
The
Minister
may
reassess
a
tax
return
for
1987
within
three
years
of
the
date
of
the
original
assessment:
paragraph
152(4)(c)
of
the
Act
as
it
read
for
1987.
Again,
in
other
words,
once
the
Minister
has
assessed
1987
for
the
first
time
he
has
three
years
to
change
his
mind.
The
assessments
for
1987
and
1988
are
good
assessments
and
the
appeals
will
have
to
be
dismissed.
Appeals
dismissed.
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