Rip
T.C.J.:
In
computing
her
income
for
1996,
Karen
Fournier,
the
appellant,
included,
inter
alia,
purported
income
from
the
Province
of
Ontario
in
the
amount
of
$54,917.79,
a
retirement
allowance
from
the
Province
of
Ontario
in
the
amount
of
$4,854.66
and
employment
benefits
from
a
wage
loss
plan
in
the
amount
of
$15,608.76
and
claimed
an
amount
of
$42,500.05
as
a
deduction
in
computing
her
taxable
income.
In
assessing
Ms.
Fournier
for
1996,
the
Minister
of
National
Revenue
(“Minister”)
did
not
permit
the
appellant
to
deduct
the
amount
of
$42,500.05
on
the
basis
the
amount
was
a
“retiring
allowance”,
as
defined
by
subsection
248(1)
of
the
Income
Tax
Act
(“Act”)
and
is
to
be
included
in
income
by
virtue
of
subparagraph
56(l)(rz)(ii)
of
the
Act.
The
appellant
insists
the
amount
was
not
received
as
a
retiring
allowance
and
therefore
appeals
the
assessment.
Ms.
Fournier
started
work
for
the
Ministry
of
Transport
of
Ontario
in
January
1989
on
a
short-term
contract
and
became
a
permanent
employee
of
the
Ministry
in
October
1989.
She
first
worked
as
a
labourer
on
the
province’s
highways
and
then
as
a
sign
painter,
also
on
the
province’s
highways.
She
testified
she
was
one
of
the
first
women
to
be
so
employed.
From
March
1989
on,
Ms.
Fournier
testified,
she
was
subject
to
sexual
and
physical
harassment,
including
threats
of
death,
by
at
least
three
male
employees
of
the
Ministry
with
whom
she
worked.
She
worked
in
a
building
with
21
men
and
was
told
by
several
of
them
that
she
“wasn’t
wanted
and
they’d
get
rid”
of
her.
On
one
occasion
she
was
pushed
in
front
of
a
moving
vehicle,
on
another
occasion
a
turkey
carcass
with
a
twelve
inch
butcher
knife
through
the
neck
of
the
carcass
was
thrown
on
her
front
lawn
scaring
her
young
son
and
forcing
them
to
move
to
a
secret
location.
Ms.
Fournier
eventually
filed
a
complaint
with
her
employer
under
the
Workplace
Discrimination
and
Harassment
Prevention
Policy,
grievances
under
the
grievance
procedure
provided
in
the
Collective
Agreement
between
the
Ministry
and
the
union
representing
the
employees
and
complaints
under
the
province’s
human
rights
legislation.
By
letter
dated
December
10,
1993
the
Deputy
Minister
of
Transportation,
upon
receipt
of
the
investigator’s
report
of
Ms.
Fournier’s
complaints,
confirmed
that
many
of
her
allegations
were
substantiated.
Respondent’s
counsel
acknowledged
that
Ms.
Fournier
was
subject
to
harassment.
I
find
that
the
harassment
suffered
by
Ms.
Fournier,
only
two
examples
which
are
described
in
these
reasons,
were
serious
and
adversely
affected
her
physical
and
mental
health,
as
she
testified.
Ms.
Fournier
and
the
Ministry
of
Transportation
executed
Minutes
of
Settlement
with
respect
to
the
various
grievances
and
complaints
on
October
25,
1995.
According
to
the
Minutes
of
Settlement
the
Ministry
“agreed
to
fund
a
program
designed
to
reimburse
Ms.
Fournier
for
actual
costs
incurred
for
retraining,
re-education
and
the
possible
establishment
of
a
new
business”.
The
Ministry
agreed
to
reimburse
her
for
items
such
as
tuition,
career
training
and
counselling,
child
care
and
the
purchase
of
employment
related
equipment
so
she
could
obtain
employment
outside
the
Ontario
Public
Service,
including
self-employment.
The
maximum
amount
of
the
fund
for
Ms.
Fournier
was
“in
the
range
of
$0
to
$50,000
gross
(with
applicable
deductions
made
as
required).
Reimbursement
requests
by
Ms.
Fournier
to
the
fund
were
to
be
supported
by
receipts.
No
receipts
were
required
for
child
care
expenses
which
were
not
to
exceed
$5,000.
Ms.
Fournier
agreed
that
in
return
for
the
receipt
of
up
to
$50,000
from
the
Ministry
effective
October
27,
1995
she
would
be
placed
on
sick
leave
for
six
months
until
April
26,
1996.
During
this
six-month
period,
she
would
apply
for
long-term
disability.
As
soon
as
she
had
applied
for
longterm
disability,
she
would
be
deemed
to
no
longer
be
an
employee
of
the
Ministry
and
the
termination
of
her
employment
would
be
recorded
in
the
books
of
the
Ministry
as
a
resignation.
She
would
also
withdraw
all
grievances
and
complaints
against
the
Ministry.
In
making
payment
to
Ms.
Fournier,
the
Ministry
made
source
deductions
for
the
payments,
including
child
care,
and
issued
to
Ms.
Fournier
T4
and
T4A
slips
for
1996
showing
her
gross
income
and
deductions.
Subsection
248(1)
defines
“retiring
allowance”
to
mean:
an
amount
(other
than
a
superannuation
or
pension
benefit,
an
amount
received
as
a
consequence
of
the
death
of
an
employee
or
a
benefit
described
in
subparagraph
6(
1
)(tf)(iv))
received
(a)
on
or
after
retirement
of
a
taxpayer
from
an
office
or
employment
in
recognition
of
the
taxpayer’s
long
service,
or
(b)
in
respect
of
a
loss
of
an
office
or
employment
of
a
taxpayer,
whether
or
not
received
as,
on
account
or
in
lieu
of
payment
of,
damages
or
pursuant
to
an
order
or
judgment
of
a
competent
tribunal,
by
the
taxpayer
or,
after
the
taxpayer’s
death,
by
a
dependant
or
a
relation
of
the
taxpayer
or
by
the
legal
representative
of
the
taxpayer.
The
amounts
Ms.
Fournier
received
from
the
Ministry
were
not
received
“in
respect
of
a
loss
of
...
employment
...
on
account
of
or
in
lieu
of
payment
of,
damages”.
The
Ministry
did
not
make
any
payment,
nor
did
Ms.
Fournier
receive
any
payment,
in
respect
of
a
loss
of
employment.
The
payments
were
made
due
to
the
fact
that
employees
of
the
Ministry
were
harassing
the
appellant
and
that
the
appellant
had
a
valid
claim
for
damages
against
the
Ministry
due
to
the
actions
of
its
employees.
Whether
the
Ministry
admitted
the
appellant’s
claim
is
irrelevant
to
the
appeal
at
bar.
In
any
event,
the
Deputy
Minister
of
Transportation
acknowledged
the
boorish
and
dangerous
behaviour
of
several
of
his
Ministry’s
employees.
That
was
the
cause
of
the
appellant’s
complaints
and
grievances.
That
is
the
reason
the
Ministry
agreed
to
make
the
payments
to
Ms.
Fournier.
Ms.
Fournier
was
an
employee
of
the
Ministry
at
the
time
she
agreed
to
execute
the
Minutes
of
Settlement.
As
far
as
her
agreeing
to
resign
is
concerned,
that
is
simply
a
way
for
the
Ministry
to
get
rid
of
an
employee.
Ms.
Fournier
did
not
receive
any
payment
in
consideration
of,
or
on
account
of,
her
agreeing
to
leave
the
employment
of
the
Ministry,
she
did
not
receive
these
amounts
as
damages
for
any
stress,
medical
or
other
injuries
she
sustained
as
result
of
the
termination
of
her
employment.
The
amount
of
$42,500.05
received
by
Ms.
Fournier
from
the
Ontario
Government
is
not
income
from
a
source,
as
alleged
in
the
alternative
by
the
respondent.
The
ordinary
concept
of
income
pertains
to
recurring
receipts
and
does
not
extend
to
a
lump
sum
receipt
or
payment
because
a
source
of
income
had
been
taken
away
or
destroyed.
Similarly,
this
concept
does
not
extend
to
payments
received
by
virtue
of
damages
committed
against
the
person
of
a
taxpayer.
To
find
the
payments
received
by
Ms.
Fournier
are
taxable
under
the
general
provisions
of
subsection
3(a)
of
the
Act
would
disregard
the
fact
that
Parliament
has
chosen
to
deal
with
the
taxability
of
such
amounts,
in
the
provisions
of
the
Act
relating
to
retiring
allowances.*
The
amount
of
$42,500.05
does
not
fall
within
the
ambit
of
the
“ordinary
concept
of
income”
and
is
what
is
normally
considered
a
“recurring
receipt”.
The
amount
is
not
income
from
a
source.
The
appeal
is
therefore
allowed
with
costs,
if
any.
Appeal
allowed.
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