Kempo,
J.T.C.C.
(orally):—This
informal
procedure
appeal
concerns
the
appellant's
1992
taxation
year.
The
core
issue
pertains
to
whether
the
old
age
security
allowance
received
by
his
spouse
under
Canada's
health
and
welfare
legislation
is
properly
includable
as
"income"
in
the
calculation
of
the
amount
he
may
deduct
for
the
married
amount
pursuant
to
paragraph
118(1
)(a)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act").
The
appellant
submits
that
since
this
allowance
is
not
taxable
to
its
recipient,
his
wife,
and
that
since
it
forms
part
of
a
guaranteed
annual
income
allowance,
it
would
not
be
fair
or
equitable
that
he
should
have
to
pay
a
tax
on
it
indirectly.
This
indirect
taxation
is
said
to
arise
because
while
the
appellant
and
his
wife
may
claim
a
deduction
in
the
computation
of
their
“taxable
income”
pursuant
to
paragraph
110(1)(f)
of
the
Act
respecting
their
own
individually
received
social
assistanceallowances,
this
tax
free
status
is
effectively
lost
when
it
is
purportedly
to
be
included
in
calculating
the
"marrried
amount"
which
the
appellant
seeks
to
deduct
pursuant
to
paragraph
118(1
)(a)
of
the
Act.
This
latter
provision
requires
the
inclusion
of
his
spouse's
"income"
within
its
formula.
At
the
outset
it
appears
that
the
issue,
for
all
intents
and
purposes,
is
almost
identical
to
that
of
Brannen
v.
M.N.R.,
[1992]
1
C.T.C.
2329,
92
D.T.C.
1147
(T.C.C.)
excepting
for
minor
differences
having
been
advanced
on
behalf
of
that
taxpayer.
The
appeal
in
that
case
failed.
In
the
case
at
bar
the
provisions
of
subsection
3(a)
and
clause
56(1
)(a)(i)(A)
of
the
Act
drive
the
relevant
calculation
of
the
appellant’s
spouse's
“income”
which
includes
the
amount
of
her
allowance
under
the
Old
Age
Security
Act,
R.S.C.
1985,
c.
O-9,
and
the
deduction
for
this
allowance
is
for
purposes
of
calculating
her
“taxable
income".
As
noted
earlier,
the
appellant’s
deduction
sought
here
arises
pursuant
to
paragraph
118(1)(a)
of
the
Act
which
in
its
calculations
employs
the
term
“income”,
not
“taxable
income”,
of
the
spouse.
The
appellant
submits
that
because
the
old
age
security
allowance
was
not
taxable
income
to
his
spouse
it
ought
to
remain
non-income
for
all
taxation
purposes
and
therefore
it
ought
not
to
be
taxable
“directly,
indirectly
nor
furtively"
thus
rendering
it
"ultra
vires
to
the
legal
power
of
Revenue
Canada”.
I
do
not
accede
to
the
appellant’s
arguments.
They
ignore
the
fact
that
he
and
his
wife
are
fiscally
separate
taxpayers
and
that
paragraph
110(1)(f)
of
the
Act
provides
for
deductibility
of
these
allowances
to
the
recipient
taxpayer
for
the
purpose
of
computing
his
or
her
own
"taxable"
income.
The
terms
"income"
and
“taxable
income”
are
not
interchangeable
at
will
on
the
basis
of
perceived
unfairness.
If
Parliament
had
intended
the
spouse's
"taxable
income"
amount
to
be
included
in
the
calculation
of
the
married
amount
it
could
and
would
have
said
so
in
clear
terms.
I
see
no
reason
to
distort
the
ordinary
and
plain
meaning
pertaining
to
the
spouse's
“income”
arising
from
inclusions
of
amounts
premise
on
subsection
3(a)
and
subparagraph
56(1)(a)(i)
of
the
Act
in
favour
of
and
to
integrate
with
philosophies
underlying
social
legislation
where
there
is
no
reference
or
intent
to
do
so
specifically
within
the
fiscal
legislation
itself
which
for
the
appellant
is
paragraph
118(1
)(a)
of
the
Act.
For
the
reasons
given,
the
appeal
is
dismissed.
Appeal
dismissed.
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