Bouchard v. R., [1998] 1 CTC 3071

Lamarre Proulx T.C.J.:

This is an appeal under the informal procedure respecting the child tax benefit.

The point at issue is whether the appellant was the person who primarily fulfilled the responsibility for care and upbringing of his son in accordance with the definition of “eligible individual” in section 122.6 of the Income Tax Act (the “Act”).

On January 20, 1994, the appellant received notice that he was not entitled to the tax benefit for his son Évolène from July 1993 to June 1994 and that he had to repay the amounts paid in respect thereof. In making this redetermination of tax benefit, the Minister of National Revenue (the

“Minister”) relied on the facts described in paragraph 20 of the Reply to the Notice of Appeal (the “Reply”) as follows:

[TRANSLATION]

(a) the appellant lived separate and apart from his former spouse Sonja Lüthi during the 1993 taxation year;

(b) the appellant and his former spouse had joint custody of their son Évolène;

(c) a study by the Department of National Health and Welfare determined that it was the appellant’s former spouse who primarily fulfilled the responsibility for the care and upbringing of the appellant’s son Évolène:

(d) the two children for whom the appellant received a child tax benefit for the months from July to September 1993 are Évolène et Geronimo;

(e) the child for whom the appellant received a child tax benefit for the months from October 1993 to April 1994 is Géronimo;

(f) in thus reviewing the information obtained from the Department of Health and Welfare Canada, the Minister revised the child tax benefit to which the appellant was entitled for the months from July 1993 to June 1994 to $117.46;

(g) the appellant thus received an excess amount of $821 up to December 1993, broken down by month as follows:

	RECEIVED		REVISED	OVERPAYMENT
July		$ 200.83	$117.46		$ 83.37
1993
Au		200.79	117.46		83.33
gust
Sep		200.79	117.46		83.33
tember
Ad	(	0.03)		(	0.03)
just
ment
Oc		117.46	117.46		0
tober
No		117.46	117.46		0
vember
De		117.46	117.46		0
cember
Transfer		571.00	0		571.00
from
1991

	RECEIVED	REVISED	OVERPAYMENT
Bal-	$1,525.76	$704.76	$821.00
ance
at
20 /01/94

21. Up to the end of June 1994, the appellant had received an excess amount of $351.16 broken down by month as follows:

	RECEIVED	REVISED	OVERPAYMENT
Bal-	$1,525.76	$ 704.76	$821.00
ance
at
20 /01/94
Jan-	58.73	117.46	( 58.73)
uary
1994
Feb-	58.73	117.46	( 58.73)
rua-
ry
March	58.73	117.46	( 58.73)
April	58.73	117.46	( 58.73)
May	0	117.46	( 117.46)
June	0	117.46	( 117.46)
Bal-	$1,760.68	$1,409.52	$351.16
ance
at
30 /06/94

The appellant, Évolène’s father, testified at the request of his counsel. Sonja Lüthi, Évolène’s mother, testified at the request of counsel for the respondent.

The parents were married on August 6, 1983. Évolène was born on April 12, 1986. Géronimo, who is mentioned in the Reply, is the appellant’s son from a first marriage. The spouses separated at the end of June 1991. At the time of the separation, the spouses lived on farmland located on Highway 132 in Kamouraska. Ms. Lüthi moved into a house located on Rang Missis- sipi, a site fairly close to the appellant’s residence. At first, the son spent a day at the home of one parent and one day at the home of the other, but the pattern that ultimately developed was one week at the home of one and one week at the home of the other.

When the child was at the home of one parent, that parent took care of him totally so that the child had two sets of many items of property such as, for example, the equipment necessary to practise hockey and baseball. Clothing was purchased for him by both parents in accordance with his needs.

In July 1993, Sonja Lüthi applied for the child tax benefit. The Department of Health and Welfare (now the Department of Human Resources Development) (the “Department”) sent a questionnaire (Exhibit I-1). The same questionnaire (Exhibit A-l) was sent to the appellant, who stated in his testimony that he was not aware of his former spouse’s application for eligibility.

While the first paragraph of the covering letter sent with the questionnaire is the same, it differs depending whether the questionnaire is addressed to the person making a new application for eligibility or to the current recipient.

I quote the first paragraph which is identical in both cases:

[TRANSLATION]

To be eligible for the child tax benefit, an individual must reside with the qualified dependant (the child) and be the person who primarily fulfils the responsibility for the child’s care and upbringing. It is as a result of the latter requirement that I am sending you this letter.

In Ms. Lüthi’s case, the second paragraph reads as follows:

In support of your claim for benefit, we need additional information to determine whether you are the parent who has primarily fulfilled the responsibility for Évolène’s care and upbringing since January 1993.

In the appellant’s case, the second paragraph reads as follows:

In support of your continued eligibility for the benefit, we need additional information to determine whether you may continue to be considered as the person who has been primarily fulfilling the responsibility for Evoléne’s care and upbringing since January 1993.

I have quoted these paragraphs for the purpose of clarification. In any case, whether or not the appellant was aware of the application filed by his former spouse has no bearing on the outcome of the instant case.

The definition of “eligible individual” reads as follows in section 122.6 of the Act:

“eligible individual” in respect of a qualified dependant at any time means a person who at that time

(a) resides with the qualified dependant,

(b) is the parent of the qualified dependant who primarily fulfils the responsibility for the care and upbringing of the qualified dependant, (c) is resident in Canada,

(d) is not described in paragraph 149(1 )(a) or (b), and

(e) is, or whose cohabiting spouse is, a Canadian citizen or a person who

(i) is a permanent resident (within the meaning assigned by the Immigration Act),

(ii) is a visitor in Canada or the holder of a permit in Canada (within the meanings assigned by the Immigration Act) who was resident in Canada throughout the 18 month period preceding that time, or

(iii) was determined before that time by the Convention Refugee Determination Division of the Immigration and Refugee Board to be a Convention refugee,

and for the purposes of this. definition,

(f) where the qualified dependant resides with the dependant’s female parent, the parent who primarily fulfils the responsibility for the care and upbringing of the qualified dependant is presumed to be the female parent,

(g) the presumption referred to in paragraph (f) does not apply in circumstances set out in regulations made by the Governor in Council on the recommendation of the Minister of Human Resources Development,

and

(h) factors to be considered in determining what constitutes care and upbringing may be set out in regulations made by the Governor in Council on the recommendation of the Minister of Human Resources Development.

Paragraph 6301 (l)(d) of the Income Tax Regulations (the ^Regulations"), Part LXIII, Child Tax Benefits, reads as follows:

(1) For the purposes of paragraph (g) of the definition “eligible individual” in section 122.6 of the Act, the presumption referred to in paragraph (f) of that definition does not apply in the circumstances where

(d) more than one notice is filed with the Minister of Human Resources Development under subsection 122.62(1) of the Act in respect of the same qualified dependant who resides with each of the persons filing the notices where such persons live at different locations.

The presumption stated in paragraph (f) of the definition of “eligible individual” therefore does not apply in view of the fact that both parents filed an application for child tax benefits in respect of their son who was living with each of them. The only point at issue in the instant case is which of the parents primarily took care of Évolène from July 1993 to June 1994.

Section 6302 of the Regulations reads as follows:

For the purposes of paragraph (h) of the definition “eligible individual” in section 122.6 of the Act, the following factors are to be considered in determining what constitutes care and upbringing of a qualified dependant:

(a) the supervision of the daily activities and needs of the qualified dependant;

(b) the maintenance of a secure environment in which the qualified dependant resides;

(c) the arrangement of, and transportation to, medical care at regular intervals and as required for the qualified dependant;

(d) the arrangement of, participation in, and transportation to, educational, recreational, athletic or similar activities in respect of the qualified dependant;

(e) the attendance to the needs of the qualified dependant when the qualified dependant is ill or otherwise in need of the attendance of another person;

(f) the attendance to the hygienic needs of the qualified dependant on a regular basis;

(g) the provision, generally, of guidance and companionship to the qualified dependant; and

(h) the existence of a court order in respect of the qualified dependant that is valid in the jurisdiction in which the qualified dependant resides.

Counsel for the appellant contends that the appellant was primarily responsible for the child and, alternatively, that the appellant was on an equal footing with the mother and that the tax benefit should have been divided in two.

Counsel for the respondent argued that the appellant did not prove that he had taken care of the child Evoléne any more than the child’s mother and that he accordingly did not have the status of eligible individual. Counsel for the respondent argued that only one of the parents can have the status of eligible individual and that the benefit cannot be shared.

Counsel for both parties referred to the decision by the Federal Court of Appeal in R. v. Marshall (1996), 96 D.T.C. 6292 (Fed. C.A.), in which the Court, per Stone J.A., stated the following as regards the meaning that should be given to “eligible individual”:

This section of the Act contemplates only one parent being an “eligible individual” for the purpose of allowing the benefits. It makes no provision for prorating between two who claim to be eligible parents. Only Parliament can provide for a prorating of benefits but it has not done so.

Counsel for the appellant argued that the Federal Court of Appeal ruled in this way because the lower court had concluded that the mother was the person who primarily fulfilled the responsibility for the care and upbringing of the children, but that this decision did not apply in cases where responsibility was equally shared. On this point, he relied on the initial remarks in Marshall, supra:

In our view as it was the female partner who, on the facts as found below, was the person who “primarily fulfils the responsibility for the care and upbringing” of the children of the marriage, only that parent may be properly regarded as the person entitled to child care benefits as provided for in section 122.6 of the Income Tax Act and section 6302 of the Regulations made pursuant to that section of the statute.

Counsel for the appellant also argued that this assessment of responsibility must be made “à un moment donné” (“at any time”) according to the French version of the definition of “eligible individual” cited above, an expression which appears at the start of that definition. He raised the question as to when this assessment must be made. When is this “moment donné” (“any time”) when the degree of responsibility must be assessed? The words “at any time” are used in the English version of the same text. Although these words are not normally used in the same sense, I believe that both expressions are acceptable in the context of this definition.

The moment when a parent’s eligibility must be assessed is the month for which the child tax benefit is paid, as provided for in section 122.61 of the Act. The expression used in that section is not child tax benefit, but rather an “overpayment on account of the person’s liability under this Part” and the payment shall be “deemed to have arisen during a month in relation to which the year is the base taxation year”. The expression “base taxation year” is defined in section 122.6 of the Act as follows:

“base taxation year” in relation to a month means

(a) where the month is any of the first 6 months of a calendar year, the taxation year that ended on December 31 of the second preceding calendar year, and

(b) where the month is any of the last 6 months of a calendar year, the taxation year that ended on December 31 of the preceding calendar year.

Thus, in the instant case, the base taxation year for the last 6 months of 1993 was 1992 and the base taxation year for the first 6 months of 1994 was also 1992.

Section 122.61 of the Act is the provision that gives meaning to the words “any time” stated in the definition of “eligible individual”, because the amount payable in that month is based on the eligibility of the individual and the dependant for that month.

It is my view that Marshall, supra, clearly states that the Act does not provide for any prorating of the child tax benefit between the parents and that, for the purposes of determining who is the “eligible individual”, the Court must decide which of the two parents primarily took care of the child. This must be done on the basis of the criteria described in section 6302 of the Regulations cited above.

In many cases, the question of responsibility for care and upbringing may be a question of degree and it must especially be understood that the decision does not mean, at least as is the case in this instance, that one parent is not as good as the other. Having said that, after reading the answers to the two questionnaires and hearing both parents, I find that the determination of the Department’s analyst in favour of the mother was reasonable. I rely more particularly on the criteria stated in paragraphs 6302(a), (d) and (g) of the Regulations.

The evidence has shown that both parents were clearly concerned to provide their child with the best upbringing, but that same evidence gave me no reason to vary the Minister’s determination, which seemed to me to be reasonably well founded.

The appeal is therefore dismissed.

Appeal dismissed.