Margaret a Hansen v. Minister of National Revenue, [1980] CTC 2600, 80 DTC 1518

John B Goetz:—This is an appeal by the appellant with respect to an assessment for income tax for her 1977 taxation year. The appellant and the respondent agreed on facts as follows: In 1977 the appellant withdrew an amount of $2,512.32 from her registered retirement savings plan which she maintained with Canada Permanent Trust Company Limited. At the same time she sought to deduct therefrom an amount of $1,000 as a pension income deduction. In the 1977 taxation year the appellant had not attained the age of 65 years.

The position of the respondent was that the $2,512.32 received by the appellant in her 1977 taxation year was not qualified pension income as defined in paragraph 110.2(3)(b) of the Income Tax Act, SC 1970-71-72, c 63, as amended. The appellant relied on subsection 110.2(2) as well as paragraphs 110.2(3)(a)(i) and 110.2(3)(b) of the Act which read as follows:

(2) For the purpose of computing the taxable income for a taxation year of an individual (other than a trust or an individual referred to in subsection (1)), there may be deducted from his income for the year an amount equal to the lesser of

(a) $1,000, and

(b) his qualified pension income received in the year.

(3) For the purposes of this section, subject to subsection (4),

(a) “pension income” received by a taxpayer in a taxation year means any amount received by him in the year

(i) as a payment out of or under a superannuation or pension fund or plan,

(b) “qualified pension income” received by a taxpayer in a taxation year means any amount described in subparagraph (a)(i) and amounts described in subparagraphs (a)(ii), (iii) and (iv) (if subparagraph (a)(iv) were read without reference to the words “if before the end of the year the taxpayer has attained the age of 65 years,”) received by the taxpayer as a consequence of the death of his spouse. (Italics mine).

She placed great emphasis on the wording of subparagraph 110.2(3)(a)(i) “as a payment out of or under a superannuation or pension fund or plan”. I find that the word “or plan” used in conjunction with the words “superan- nuation or pension fund” give the words “or plan” a very distinctive meaning clearly separate and apart from a registered retirement savings plan. The appellant had not attained the age of 65 years at the time that she withdrew the sum of $2,512.32 from her registered retirement savings plan.

Counsel for the respondent cited Pension Benefits Standards Act, RSC 1970, c P-8, at page 2, wherein the words “pension plan” were defined as follows:

“pension plan” means a superannuation or pension fund or plan organized and administered to provide pension benefits to employees employed in included employment, whether or not provision is also made for other benefits or for benefits to other persons, and includes

(a) a unit benefit plan under which pension benefits are determined by reference to length of service of an employee and to the remuneration paid or payable to an employee during the period of his service or during a selected period of his service;

(b) a money purchase plan under which pension benefits are determined on retirement or termination of service of an employee by reference to the accumulated amount of the contributions paid by or to the credit of the employee;

(c) a flat benefit plan under which pension benefits are expressed either as a fixed amount in respect of each year of an employee’s service or each year of a selected period of his service or as a fixed periodic amount; and

(d) a profit sharing pension plan, other than an employees profit sharing plan as defined by section 91 of the Income Tax Act or a deferred profit sharing plan as defined by section 94 of the Act;

Paragraph 1(1)(h) of The Pension Benefits Act—Ontario, c 342, reads as follows:

(h) “pension plan” means a superannuation or pension fund or plan organized

and administered to provide a pension benefit for employees, and includes,

(i) a unit benefit plan under which pension benefits are determined with reference to remuneration of an employee for each year of service, or for a selected number of years of service,

(ii) a money purchase plan under which pension benefits are determined at the retirement of an employee with reference to the accumulated amount of the aggregate contributions paid by or for the credit of the employee,

(iii) a flat benefit plan under which the pension benefits are expressed either as a fixed amount in respect of each year of employment or as a fixed periodic amount, and

(iv) a deferred profit sharing pension plan other than a profit sharing plan as defined in sections 51 and 53 of The Corporations Tax Act',

Reference was made to the case of C W Moncrieff v MNR, [1980] CTC 2039; 80 DTC 1035, a decision of my learned colleague Delmer E Taylor, CA. In that case a taxpayer who had not reached the age of 65 years attempted to claim a $1,000 deduction from pension income in respect of a payment out of or under a superannuation fund or plan. The appellant had purchased a life annuity with approximately $39,000-$40,000 from a registered pension plan of his company and also included in the purchase of the annuity $7,117.90 from two registered retirement savings plans. In that case when he received his first annuity payment, he sought to claim the deduction of the $1,000 as permitted under section 110 of the Act. Mr Taylor, at 2041 and 1036 respectively, stated:

It is clear from the context of section 110.2 that proceeds from an RRSP paid to an individual before that individual has attained the age of 65 years were specifically excluded from the definition of “qualified pension income”.

The sole issue in the case before me is whether an RRSP is a “plan” as referred to in paragraph 110.2(3))a) of the Act. I find that it is not.

For these reasons, I dismiss the appeal

Appeal dismissed.