St-Onge
T.CJ
.:
The
appeal
of
Florentine
Saulniers
was
heard
on
August
7,
1996
in
the
City
of
Fredericton,
Province
of
New
Brunswick.
The
question
to
be
determined
is
whether
the
appellant’s
income
of
$41,975
is
taxable
or
tax
exempt
within
the
meaning
of
paragraph
81(1)(h)
of
the
Act
for
the
1994
taxation
year.
The
respondent
argued
that
the
appellant
did
not
meet
the
requirements
of
paragraph
81(l)(/i)
of
the
Act
for
the
following
reasons:
(a)
for
the
1994
taxation
year,
the
appellant
reported
earning
a
net
income
of
$41,975
from
the
operation
of
a
business;
(b)
during
the
period
at
issue,
the
appellant
operated
a
business
which
provided
care
to
adults
and
elderly
persons
(hereafter
referred
to
as
“recipients”),
including
board
and
lodging;
(c)
the
cost
of
the
services
provided
by
the
appellant
were
paid
directly
by
the
recipients
themselves
from
their
personal
income
derived
from
a
variety
of
sources;
(d)
the
appellant
did
not
receive
any
social
assistance
payments
as
compensation
for
the
services
rendered
to
recipients;
(e)
the
recipients
do
not
live
with
the
appellant,
but
rather
in
a
separate
building
attached
to
the
appellant’s
personal
residence;
(f)
the
appellant’s
activities
do
not
constitute
a
foster
home,
but
rather
the
operation
of
a
business
for
the
purpose
of
earning
a
profit;
(g)
the
$41,975
in
income
earned
from
the
operation
of
the
appellant’s
business
is
taxable.
At
the
hearing,
the
appellant
admitted
subparagraphs
10(a)
to
10(c)
and
denied
all
of
the
other
subparagraphs.
She
testified
that
she
operates
in
a
former
home,
which
has
an
extension
consisting
of
five
double
bedrooms,
two
bathrooms,
a
lounge
and
a
kitchen
attached
to
a
house:
the
connection
between
the
house
and
the
home
does
not
have
any
doors.
The
home
is
approved
by
the
fire
department
and
by
health
and
community
services.
She
cares
for
nine
people
between
the
ages
of
45
and
95
years
for
$700
per
month
for
room
and
board.
Seven
of
the
nine
pay
with
their
old
age
security
cheques,
while
the
Other
two,
who
are
younger
than
65
years,
receive
social
assistance.
The
latter
two
are
unable
to
sign
the
cheques
because
of
illness.
One
of
the
cheques
is
therefore
endorsed
by
the
appellant
herself
and
the
other
by
the
recipient’s
sister.
Counsel
for
the
respondent
argued
that
paragraph
81(l)(/i)
of
the
Act
did
not
apply
to
the
appellant
because
she
operated
an
income-producing
business
and
paragraph
81(1)(A)
had
replaced
two
other
provisions
of
the
Act,
namely
paragraph
56(l)(w)
which
required
a
recipient
of
social
assistance
to
include
it
in
his
income,
and
paragraph
110(l)(/)
which
enabled
him
to
deduct
it
from
his
income.
These
provisions
existed
for
foster
parents
and
that
is
why
paragraph
81(1)(À),
entitled
“Social
assistance”
stipulates:
à
social
assistance
payment
...
ordinarily
made
on
the
basis
of
a
means,
needs
or
income
test
...
to
the
extent
that
it
is
received
...
by
the
taxpayer
for
the
benefit
of
another
individual
(other
than
the
taxpayer’s
spouse
or
a
person
who
is
related
to
the
taxpayer
or
to
the
taxpayer’s
spouse),
if
(ii)
the
other
individual
resides
in
the
taxpayer’s
principal
place
of
residence,
or
the
taxpayer’s
principal
place
of
residence
is
maintained
for
use
as
the
residence
of
that
other
individual,
throughout
the
period
referred
to
in
subparagraph
(1);
The
appellant
has
two
of
nine
people
who
receive
social
assistance.
Paragraph
81(l)(/i)
does
not
apply
because
it
is
very
restrictive
and
the
appellant
operates
a
business
for
profit.
The
appellant’s
accountant
argued
that
his
client
had
no
relation
living
with
her
and
that
the
Act
did
not
limit
the
amount
of
profit
an
individual
could
earn.
It
is
true
that
paragraph
81(l)(/z)
does
not
limit
the
profit
that
an
individual
could
earn.
But
it
goes
further,
prohibiting
this
same
individual
from
receiving
social
assistance
“on
the
basis
of
a
means,
needs
or
income
test”
if
it
appears
that
the
foster
parent
has
the
means
to
care
for
a
needy
person
without
social
assistance.
It
is
very
evident
that
paragraph
81(l)(h),
while
not
very
clear,
was
not
drafted
to
exempt
from
taxation
a
business
which
reported
income
of
$35,404
in
1993
and
$41,975
in
1994,
and
to
prevent
the
application
of
subsection
9(1)
of
the
Act
which
taxes
such
income.
Accordingly,
the
appeal
is
dismissed.
Appeal
dismissed.
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