2970-7080 Quebec Inc. v. Canada (Attorney General), [1999] 2 CTC 247

Pinard J.:

This is a judicial review of a September 2, 1998 decision by Mr. Pierre M. Paquette, Manager, Revenue Collections Directorate in the Department of National Revenue.

The applicants in this case are 2970-7080 Quebec Inc., owner of a restaurant known as Pasta Casareccia, and five employees of that restaurant: Angela Ramadori, Lorenzo Ramadori, Sesto Ramadori, Pasquale Petrac- cone and Giuseppina Petraccone. At the hearing before me, counsel for the applicants acknowledged that Angela Ramadori should not have been made an applicant, given the following facts.

All the individual applicants paid unemployment insurance premiums under the Unemployment Insurance Act, R.S.C. 1985, c. U-1, between 1986 and 1996.

In 1993, the applicant, Angela Ramadori ceased employment at Pasta Casareccia. She applied for and received unemployment insurance benefits.

In 1997, 2970-7080 Quebec Inc. sold Pasta Casareccia, resulting in the remainder of the individual applicants becoming unemployed.

Sesto Ramadori applied for unemployment insurance benefits but was denied on the basis that he was not employed in insurable employment. As a result of this ruling, all the applicants applied for a refund of their unemployment premiums paid between 1986 and 1996. No refund was given to Angela Ramadori, as her employment was ruled insurable and as she received benefits as a result of this decision. A refund for the years after 1994 was given to the remainder of the applicants, including Pasta Casareccia based on subsection 96(1) of the Employment Insurance Act, S.C. 1996, c.

23. Subsection 96(1) states:

As a result of the refusal to refund payments made for the years prior to 1994, the applicants applied for a refund of their benefit payments under the provisions of the Fairness package legislation contained in the Income Tax Act, R.S.C. 1985 (5 Supp.), c. 1. This request was refused, however, on the basis that the Fairness package legislation only applies to income tax related applications. In his letter of refusal to the applicants, Mr. Pierre Paquette stated:

Refunds of employment insurance premiums are not issued under the Income Tax Act, but under Section 96 of the EIA which stipulates that the Minister may refund the amount that should not have been deducted or paid if the application is made within three years after the end of the year for which an overpayment was made. The Minister of National Revenue does not have the discretion to refund premiums for statute barred years. Furthermore, the provisions of the Fairness legislation only applies to income tax as it comes under the purview of the Income Tax legislation. Regretfully, it cannot be applied to the Canada Pension Plan nor the Employment Insurance Act as no similar measures exist under those legislations (sic).

It is this decision which is under judicial review in this case. The applicants wish to obtain the following remedies:

• a declaration that subsection 96(1) of the EIA allows Revenue Canada to reimburse contributions that were made by or for employees that are not dealing at arm’s length (as defined under subsection 5(3) and paragraph 5(1 )(i) of the EIA) in previous years as long as the request is made within a reasonable time after Revenue Canada ruled that their employment was not insurable;

¢ a reimbursement of the contributions that were made by the applicants during the period of November 18, 1990 to December 31, 1993.

No reimbursement is sought for the period from January I, 1986 to November 18, 1990, presumably, because during that time, regardless of the time limit, the applicants would have been employed in insurable employment.

The real issue in this judicial review is whether Mr. Pierre Paquette erred in making his decision not to reimburse the premiums paid between November 18, 1990 and December 31, 1993.

The application for judicial review is dismissed on the following grounds:

1. The reimbursement of contributions which were made by the applicants during that period of November 18, 1990 to December 31, 1993, is statute-barred by reason of subsection 96(1) of the Employment Insurance Act. This provision specifically gives the Minister the authority to refund any overpayment made by any person in a year, if an application for refund is made within three years of the end of that year. This is exactly what the Minister has done in this case. Had Mr. Paquette, for Revenue Canada, granted a refund beyond these defined prescriptions, he would have exceeded his jurisdiction. This case does not raise a question of statutory interpretation. The statute is clear on its face and this Court cannot make a finding that would be contrary to the express terms defined by law.

2. By virtue of section 99 of the Employment Insurance Act, the Fairness legislation in the Income Tax Act does not apply to the case at bar. Section 99 reads as follows:

The Fairness legislation, on its face, is explicit in referring only to overpayments which arose under provisions of the Income Tax Act. Subsection 126.1(6),! [1] to which the applicants referred, only applies to an “overpayment on account of the employer’s liability under this Part” (emphasis added). “This Part” referred to in subsection 126.1(6) is Part I of the Income Tax Act and does not include overpayment on account of a determination that employment is uninsur- able under the Employment Insurance Act.

The applicants argued in writing that the Minister has the discretion to apply provisions of the fairness package to refunds under the Employment Insurance Act. However, their only basis for this statement is the allegation that the Fairness legislation is a “discretionary relieving provision”. It is clear that section 99 of the Employment Insurance Act has specifically incorporated by reference those provisions of the Income Tax Act which will apply to Employment Insurance. The Fairness legislation relied upon by the applicants has not been incorporated by reference in section 99 to grant discretion to the Minister to extend the application of the three-year limitation period under section 96 of the Employment Insurance Act.

Subsection 220(3.1) [2] , which is the only provision of the Fairness legislation in the Income Tax Act which applies to the Employment In- surance Act, Was not referred to by the applicants. Regardless, it is not applicable in the present case.

In my opinion, therefore, it is clear that the fairness provisions do not apply to the three-year limitation under the Employment Insurance Act.

The applicants’ unjust enrichment argument resulting from the scheme of the Employment Insurance Act and the Income Tax Act with respect to refunds of U.I. premiums ought to have been raised for proper consideration in an action, like was done in other analogous matters (see, for example, Michelin Tires (Canada) Ltd. v. R. (November 26, 1998), T-871-93 (F.C.T.D.) [reported (1998), 99 G.T.C. 7015 (Fed. T.D.)] and Forest Oil Corp. v. R. (1996), [1997] I F.C. 624 (Fed. T.D.)). As far as this application for judicial review is concerned, there is no evidence that Mr. Paquette, for Revenue Canada, acted in a manner outlined in subsection 18.1(4) of the Federal Court Act such that his actions could equate to a substantiated ground for judicial review.

Consequently, the application for judicial review is dismissed with costs.

Application dismissed. ministre établit les contisations voulues concernant les intérêts et pénalités payables par le contribuable ou la société de personnes pour tenir compte de pareille annulation.